'Wild' Concepts Create Loyal Consumers. This Is Why It Works.

0:10Hey folks, I'm Ray Lateef and you're listening to the number one podcast for the food and beverage industry, Taste Radio. This episode features an interview with Brad Whiting and Seth O'Malley, the co-founders of innovative non-alcoholic spirit brand, Wilderton. Yes, breakout brands, particularly those that operate in hot categories, attract attention. But a fast start doesn't guarantee long-term success. Sustainable value comes from building an authentic relationship with consumers and delivering on attributes they're seeking. It's the Wilderton way. A maker of small-batch, non-alcoholic spirits crafted from raw botanicals, Wilderton was founded by Oregon craft spirits veterans Brad Whiting and Seth O'Malley and debuted in December 2020.

0:58Derived from wild plants that are sourced globally, Wilderton markets three signature expressions, each boasting the complexity and experience of a traditional spirit, yet without alcohol. As sober curious lifestyles take hold in parts of the U.S., Wilderton has emphasized its distinctive ingredients and innovative distillation methods, an approach that is consistently winning over both teetotalers and spirit consumers who value optionality and quality when drinking. In the following interview, I spoke with Brad and Seth about their interest in non-alcoholic spirits, how they view Wilderton as differentiated from similarly positioned brands, why taste is key when communicating product attributes, and how to support, if not champion, other companies within the emerging category.

1:47Hey folks, it's Ray with Taste Radio. Right now I'm honored to be sitting down with Brad Whiting and Seth O'Malley of Wilderton. Gentlemen, how are you? Howdy, Ray. Great. Great to see you. Yeah, you're surviving tails here. Surviving is the best word to describe getting to the Friday of tails. Happy Friday to you. Yeah, well, you know, I've been more mature about my evening habits than in past events. So I feel pretty good. Although my back is off for some reason. I think I slept wrong the other day. Brad, good to see you. I saw you at Bar Convent, Brooklyn in June. And we actually talked about coming out here and sitting down, or maybe not coming out to tails, but sitting down for an interview because Willerton has a pretty remarkable story.

2:30You make a fantastic product. Well done, Seth. Thank you. And it was on the cusp of the company launching a tasting room and distillery, or at least cutting the ribbon on both. That happened on July 1st. Yeah, absolutely. So I think when Seth and I were in Brooklyn, it was the final rush of what has been a rush. We took keys of our new space back in October of 2022 from a totally blank space in eight months to having the first in the nation, 100 % non-alcoholic distillery and tasting room, which opened in Hood River, Oregon, as you mentioned, July 1st. Well, congratulations. Thank you very much.

3:12What's been the reception? It's been amazing. Everything from foot traffic of consumers to social media to the press, bartenders trade. It's been everything. we hope for and more. Who's visiting? So the location of the distillery is in a small town, our hometown of Hood River, Oregon, which is about 60 miles from Portland. It is a big summertime vacation spot for folks from Seattle, Portland, San Francisco, and beyond, a big outdoor destination. The distillery and tasting room are co-located in an area that is adjacent to breweries and restaurants. And one of the reasons we frankly put it there was in this very quickly evolving and growing non-alc space, there's still a huge amount of education and a huge percentage of consumers that don't know this category even exists.

4:03So we thought it was really important to put it somewhere, frankly, that people would trip over it as they were otherwise enjoying food and beverages that they were more familiar with. Now they see what looks in all ways to them like a traditional brewery or distillery, but offering just a whole new category of options for them. Seth, given that this was the United States' first 100 % non-alcoholic distillery, I got to think it was pretty challenging to plan it out and to actually lay out the distillery in a way that makes sense for Wilderton, whatever makes sense means. How do you go about planning?

4:39Yeah, it did have a lot of its own challenges, but I looked at it first and foremost as building a distillery. So we needed an extraction vessel for our botanicals. We needed something to heat up water. We needed a still, but there are a lot of customizations that we had to make in order for it to work for our application. We needed low temperatures. So we have a little vacuum pump on the still, for instance. We have to have the layout suitable for food production, which is a little bit different than spirits production. When you don't have alcohol in the picture, it changes sort of the layout and space constraints.

5:15So it was a little bit of a puzzle, and there's absolutely no playbook for really anything we're doing. So this was just a part of that. But I'm pretty happy with what we've put together. Is it very dissimilar from what you would see at a traditional distillery? No, I don't think it is. When you look at it, you know, you'll see a big pot still. Ours happens to be made of stainless steel instead of copper. That might stick out to some people who have done a lot of distillery tours. But by and large, we're using relatively conventional equipment. and that is really a fact that we're hanging our hat on.

5:47You know, this is an actual still. We are using, you know, kind of old school analog processes. We have some customizations that, you know, we could talk about for people who are really curious about those details. But really what's important is that it is an actual distillery. We are carrying out the transformation from raw ingredients, raw materials to finished product under that same roof and people can watch that happen. That was really important to us. We're not using, you know, flavor chemicals that we sourced from a lab in New Jersey. I'm going to challenge you here because I recently did an interview with a tequila maker.

6:22And I had mentioned I'm going to be sitting down with you guys. And he said, how do you distill a non-alcoholic spirit? And he's been doing this forever. So in 60 seconds, can you explain the process? Because I think 60 seconds is all people might give you. Sure. Well, as long as I get to argue with him, I would tell him, However long his family has been distilling tequila, it's not as long as the ancient Egyptians were distilling plants into essential oils and hydrosols that the first applications of distillation actually did not include alcohol. The first point I'd like to make to people when they raise this question, and it's very common, is that distillation will concentrate alcohol if it's there to begin with, but distillation does not generate alcohol.

7:05Now, what it does without alcohol is it will concentrate flavors and aromas. So what we do, you know, what we use distillation for is we, you know, make an extract that is relatively dilute. And we take that extract and we distill it. And in that process, we take, let's say one gallon and we turn it into about 20 ounces. So we're reducing and kind of amplifying those flavors in that process without getting into any more detail. It's a process of concentration. I think that was exactly 60 seconds. I'd add in, Ray, that comment from a seasoned alcohol distiller actually has a lot of resonance to me when I was originally coming up with this idea and looking for a person or a partner to help do it.

7:50And having worked with a lot of distilleries, worked in and around and with other distilleries for a long time, when I had this idea, I started knocking on doors. and their answers were exactly the same as what your recent guest had is we make we make alcohol why are you talking to me and much like Seth said it really is just a broadening of the perspective of what distillation can do and has done historically but within a rubric that brings it back very closely to the craft spirit which we view that we are creating a craft spirit in all ways except that it doesn't have alcohol so. Brad you've been in this business for some time I'm not the non-alcoholic spirit business, that's relatively new, but you've been involved in beverage alcohol for some time.

8:34Talk about your background and your interest in getting into this space. Yeah, for sure, Ray. So before founding Wilderton in 2019, I spent 14 years at a company in Oregon called Hood River Distillers. Hood River Distillers has a long, long history going back to 1934. And I joined at a very interesting time where we as a team built the Pendleton whiskey brand into a very successful brand. And along the way, we're able to acquire a few iconic craft distilleries in the Pacific Northwest, including Clear Creek Distillery in Portland and Big Gin up in Seattle. And my roles through those 14 years were primarily focused around sourcing all of the bulk spirits that the different brands used, and then having the honor to run the two small craft distilleries that we acquired.

9:27So through that time, I both had the opportunity to visit distilleries around the world, really fall in love with the cultures that had grown up around those different types of spirits. And so when I left Hood River Distillers in 2018 and was looking for what I wanted to do next, I think the natural and first thought I had was to create a whiskey brand. But frankly, there was sort of the, let's call it a stereotypical two-pronged approach where that was probably not going to be, you know, what my mid-40s body and young family needed was spending six nights a week drinking whiskey in bars. And at the same time, from my business degree, just looking at, frankly, what Ben Branson had created in Seedlip and being really intrigued with kind of what was coming next in adult drinking and frankly feel very fortunate to have been and continue to be on this sort of leading edge of what is really a generational shift in how folks are consuming alcohol and having social drinking experiences.

10:32What's been great about this journey and the ups and downs that come with it is that it really was a twofold approach. It was creating a product that, frankly, I would want to swap in and out with my alcoholic consumptions. I'm not sober. That's not why I created this business, although certainly folks who have chosen to be sober are big supporters of this category. Really, it was a combination of something, frankly, that I wanted to drink and I didn't see available, but also certainly was a huge, huge business opportunity that we're all starting to see the early signs of coming to fruition. You drink alcohol.

11:09You also drink non-alcoholic spirits. Who is the primary consumer for Wilder's Inn at this point? Is it someone who is just looking for different drinking occasions on different days, or is it primarily someone who just doesn't drink alcohol? The earliest adopters in this category are certainly folks who are abstaining from alcohol for whatever reason that that is. But our view is that by far the largest opportunity are looking for a more holistic and healthy way to approach alcohol and are often shifting either in the same night between alcohol and non-alc or certain days of the week. And, you know, there's some interesting data.

11:45And I believe it was Nielsen that had this, but, you know, Plus or minus 80 % of folks who are consuming non-alcoholic spirits also do drink. So the huge opportunity and largest market share are folks who do still drink alcohol to some extent. Seth, when I'm looking at your lineup, you have some really beautiful, and I've tried, I think, almost every Wilderton expression. Your Aperteevo is my favorite. but you have an aperitivo, more specifically a bittersweet aperitivo, a luster, and an earthen. Are these expressions related to a traditional alcohol category, or are they sort of new expressions of what you perceive to be an analog to alcohol?

12:34I guess I'll just talk about sort of how the three were conceived. So the first two products were earthen and luster, and when Brad and I were initially ideating this brand and thinking about what we wanted to bring to the table. We quickly decided that we were uninterested in creating something that is defined by a lack of alcohol, but otherwise seeks to be, you know, a replica. For me, you know, as a distiller, that is my trade and that is my background. I'm humble to all of the facts of biology and chemistry that make a whiskey a whiskey and believe that fermentation and the production of alcohol is really essential to that end result.

13:12So when we looked at the non-alc category, instead of seeing it as a space for replicating alcohol without the alcohol, I saw it more as a positive opportunity to create new flavor traditions, to create new categories and new sensory experiences that were really material first. And what I mean by that is that if they are going to be based around water, you should select ingredients that do well with that and that come through and express well using that medium. Earthen and luster were our first two expressions, and those were really our commitment to non-analogs. They are first of their kind. Of course, you know, luster is bright and botanical, so we like to say that, you know, if you must, you can think of it as playing the same role that a gin might play.

13:57The earthen, on the other hand, it's got a really extended finish. It has some color. Our color actually It comes from, you know, botanical pigments. And you might use that for a short drink, like a Sazerac variation or something. You can think of it like you would think of an aged spirit. Now, the aperitivo was a little bit of a departure from that initial paradigm, which was, you know, completely non-analog to more of an overt kind of homage to the Italian red bitters. And the reason that I felt comfortable doing that was that I realized that it was possible to make a really incredible aperitivo without using alcohol.

14:32and my background initially was in tea. So I started off with water extraction. I got into botanical spirits after that and started creating, you know, absinthe and amari and genepi. And something that I learned through all of that is that these bitter botanicals, the things that really characterize an amaro or, you know, an aperitivo really come through wonderfully in water. And so I started just toying around with it and realized, oh, wow, this is possible. Not only can we make a successful aperitivo, but we can make an awesome aperitivo that doesn't have alcohol. Were these blends made to be versatile?

15:08In other words, can you drink the luster neat or on ice? Or is it specifically something where you're creating beverages that are made to be mixed? In general, I would say that they're designed to be mixed. We do have people who will pour them on ice and enjoy them that way. The aperitivo, because of its, you know, its kind of distinctive body and palate, is more well-suited to that. But for the most part, we design these for cocktail applications. We believe that the main future of the NA Spirits world has to do with people drinking non-out cocktails. And we are seeking to provide home bartenders or professional bartenders tools for simple cocktails.

15:50And we build a lot of complexity into them so that you can make a simple cocktail that's very rewarding. I mean, to me, it would seem like it is challenging for a consumer to learn how to make a good cocktail. Even if you are giving them a great base spirit, non-alcoholic spirit, it seems like it might be challenging or intimidating for some folks to do it on their own, to do it at home. How do you take the intimidation out of that process? Yeah, absolutely. And you hit a key consideration and evolution that we've had as a brand in the time we've been in market, we in the industry often underestimate how challenging it is for consumers to make even the most simple traditional alcoholic cocktail.

16:33I remember once a consumer was adamant that they needed to understand how to make a gin and tonic. And I think as we think about that, and even if people have challenges with those traditional cocktails, understanding our products and how to use them is that next leap forward. And one of the things that we've really honed in on for our end consumer messaging, whether that flows through our point of sale, whether it flows through serve suggestions on the bottle and the website, are tying each of the three expressions to a single mixer as really the easiest entry point for that product. So Lustre, as Seth mentioned, has some similar applications of a gin, even though is not trying to be a gin.

17:17So Luster and Tonic, Earthen, likewise has some of those dark spirits kind of tones. So Earthen, we pair with ginger ale and then the Bittersweet Aperitivo playing very similarly into a spritz occasion with club soda. So what's been very, very successful over the last year is really, if we want to call it, dumbing it down or making it very, very simple for that end consumer to understand, especially if they're picking up at retail, the perfect shelf set for us would have luster and tonic water literally right next to each other, have each of those three connections next to each other. So consumer grabs those two products, take it home and have a delicious cocktail with just mixing two ingredients.

17:56Keep it simple, but very complex beverages, very complex non-alcoholic spirits. And your price point reflects the complexity that goes into each of these. They're line priced at$37 on your website. The average consumer who isn't familiar with non-alcoholic spirits or who doesn't necessarily know what goes into the process might balk at a price like that, say$37, there's no alcohol on this. How do you explain that to them? We get that question not infrequently. The technical answer is that our process, and Seth may speak more eloquently than I would to this, water is a decent extractive medium for botanicals, but not as powerful of an extractive media as ethanol is.

18:42So we end up using somewhere between 10 and 15 times more botanicals for the same amount of product than a traditional spirit would. So our input costs are radically higher. And in the end, both our in-house production process and that differential in input costs really put us at a super premium price point for a traditional spirit. And frankly, the resistance that we've gotten from that is more fleeting than frankly I expected. I thought there'd be more pushback to that. And I think that maybe a one-step-removed question about that is as we have seen and been very successful in getting non-alc cocktails onto bar menus, what we've really seen even over the last couple of years is a compression in the differential of pricing between alcoholic cocktails and non-alcoholic cocktails on menus to the point where certainly in Portland and Seattle, our home markets, there are many accounts that now have line price, their elk and non-alc cocktails, and 201 are not getting pushback from their consumers.

19:49That's a really interesting sort of learning about the consumer who is looking for an elevated non-alc drink is that, you know, kind of one of my mantras has always been is that a, you know, a cocktail is really about interesting products, you know, thoughtfully put together and beautifully presented. And it's always been that there's a supposition that there's alcohol in there, but folks who are going out that want an elevated drinking experience, but don't want alcohol are not assuming there's a discount there. They're getting the same beauty story, thoughtful combination in a, in a Wilderton cocktail that they'd get from an alcoholic cocktail and are not seeing, you know, at least at many accounts, assuming a discount would apply to that.

20:35We're here at Sales of the Cocktail and a vast majority of the people here are on the front lines, so to speak. They are the bartenders, they're the influencers who are going to convince consumers to drink a particular type of spirit or a cocktail. When you are speaking to the trade, what's convincing them? What's getting them interested in working with Wilderton? So there's a couple of answers to that question. There's what is getting them interested in working with non-alc in general and then Wilderton specifically. For the larger category of non-alcoholic spirits and wine and beer, really there are two plays there.

21:16And this kind of comes into some of our selling stories. The first is just that hospitality, you know, if you own or work in a bar or restaurant, you're in the hospitality industry. You're not in the alcohol industry. And if arguably 25-ish percent of people that are coming into your establishment would rather not have alcohol and you're not offering them an elevated opportunity, you're just not providing good hospitality. So I think there's an inclusive hospitality play. And then frankly, there's also a financial play. And if a bar can sell a$14 non-out cocktail instead of a$3 soda water. I think both of those are compelling arguments, both from the financial side and from the hospitality side.

21:58When it comes to Wilderton specifically, the two things that we're really seeing resonating are the fact that we do make it in-house. Most bartenders will, you know, go to the mat looking at why or how a whiskey is made and, you know, whether it was sourced or made in-house and whether the grain was grown locally and this and that. And now we are bringing them a non-alc option that has that same level of story, frankly, that nobody else does. And also the somewhat unique flavors and aromas that Seth has driven into these products allows the bartender who at the end of the day are artists a new palette to work from.

22:40And the intensity of our flavors can really work as the base of a cocktail as opposed to just being kind of a modifier. And that, again, is different from many of the other products in the industry. So I think hitting the bartender on both the art and opportunity side, as well as the craft side has been really powerful for us. I would add that we also offer the trade something that they value very highly, which is an enriching educational experience. And we're looking to do this, you know, even on a grander scale, the more people we can get out to our distillery and tasting room where we can show them around and show them how we make things.

23:17because I think that it is genuinely interesting to bartenders, the palette of ingredients that we're working with, our approach. Bartenders are more educated and more discerning than they've ever been. And they want to have those conversations about, you know, flavor nuances and how this got there and how you put this together. And that is the world that I inhabit. And when I can connect with bartenders about sort of that craft, I think that really deepens their appreciation for our product. Brad, you had mentioned, and I'm not sure this is a industry number, you said 25 % of people walking into a particular establishment might not be drinking alcohol.

24:01Is that a number that you pulled from a particular source? That number originated, I believe, with an IWSR study. That was a quoted number supported by anecdotal evidence, yeah. And is that number growing? I mean, I would assume it is, but is it growing and who are the people that are populating and growing that number? I don't have data to say that it's growing. Again, anecdotally, I would feel that it's growing as we're seeing more and more of those options pop up on menus. I think that's part of this challenge and whether it's that or challenge and opportunity we have at the early phase of this industry is awareness.

24:39And until folks see these options on their grocery store shelves, on a bar menu, I think we're solving a need for the people that almost didn't even know they needed it until they see it in front of their face as an option. And yeah, I think what's been really interesting, again, in Portland, Seattle, and now San Francisco, as we're expanding on the West Coast, is as those non-alc menus are growing, we all know in the industry that if a menu item doesn't sell, it doesn't stay on the menu. And we are very, very proud that we almost never lose a menu placement. And again, whether it's our product or athletic beer or an interesting non-alc wine, the more menu space that is getting devoted to those categories is a de facto, I think, metric of the growing opportunity and number of people that are calling for them.

25:34It seems like one of the advantages that the non-alcoholic spirit, beer, and wine categories have over, I guess, the high test stuff is that you can ship it and you have no problem shipping it and you can sell the products in alternative retail channels in non-traditional settings. You mentioned athletic beer, Brad, And it's interesting because I see that in so many places that I just didn't expect to see beer. Have you targeted alternative retail, non-traditional settings for alcohol products to sell Wilderton? There's definitely a long-term opportunity there. Frankly, for us as a small company with limited bandwidth, we see our highest initial opportunity in traditional alcoholic venues.

26:22One interesting sort of side note to that is our Bittersweet Aperitivo plays amazingly well with coffee, cold brew coffee. And so we are starting to see coffee shops offering essentially a non-out cocktail version of their cold brew. So for us, that's the initial kind of entry point there. But certainly I think athletics is a great example where you're now seeing a non-alc beer in a cold case at a sandwich shop at lunch that does not have an elk license. One thing I would challenge you on is kind of a funny side note when you say we can ship it anywhere without any problems. Is... Forgot about glass.

27:04Yeah. So Seth and I both had a lot of blind spots coming from the elk world. to the non-alc space. And one of them was manifested the first winter that we had the brand. And as everybody knows, if they put their favorite bottle of vodka in the freezer, it's not going to freeze. But if you put a water bottle in the freezer, it's going to freeze. And all of a sudden, the first January, almost 20 % of our DTC shipments exploded somewhere between Oregon and their destination. So always something you're not thinking about. So entrepreneurship is a series of lessons in so many ways. Absolutely. Seth, you talked about inviting folks to the distillery in the tasting room to learn about the brand.

27:48And that seems like a great way to use the limited resources that a small company has. But, you know, I'm here at Tails and we're here and I see these big activations for competing brands. And it seems like there's a lot of impact that awareness, just general awareness can have. I guess, how do you balance the two? How do you think about investment in an activation that's going to gain a lot of eyeballs versus, again, these smaller one-off opportunities? Well, I will start by saying that you're correct that an event like this really favors those with virtually unlimited resources. and the investment that it takes to really get front and center at Tails is just beyond what we can do right now.

28:38So there's that kind of practical answer. We did throw an event. We did a botanical game show at Preservation Hall. It was quaint and it was campy, but it was really fun. We did cash prizes and asked people. How did I miss this? Cash prizes. Cash prizes. Big cash prizes. Ray, you too could have walked out with cash money. Actually, I don't think I could have. I would have had some questions back at home, yes. But were you the host? Were you the game show host, Brad? No, no. Seth put on his finest seersucker suit and became somebody that Alex Trebek only could have wished he was. Oh, okay. So, Tangent, Alex Trebek was your inspiration for this?