How the company behind the bar Death & Co is becoming a global brand

0:05Hello, everyone, and welcome to the Modern Retail Podcast.

0:29areas. The reason why I want to talk with Dave is because Death & Co. has done some really interesting expansions beyond just being a bar. It has a marketplace where it sells merch and other things. It's gone into the ready-to-drink space. It did some equity crowdfunding a few years ago, and I think it's a really interesting example of starting as one business but then getting more into the retail area. And I want to talk about just how Dave's approached that and how that works out when you start as one thing being a craft bar known for your really nice cocktails and then you're trying to do something a little bit different and more expansive and nationwide.

1:03But first I'll start with the weird anecdote, which is that the reason why I know Death & Co so well is I was once on a game show and I won a very small but not insignificant amount of money. And when I got that money, I actually used some of it to go to Death & Co with my friends as like a splurge. And so it's actually a very, a very meaningful thing when I got the email to talk with you because I was like, oh, that like represents this weird time like a decade ago where I got to do something fun and different. But anyway, Dave, how are you doing? Amazing. Better now that I heard that story. That's incredible.

1:33I want to know more about it. I don't know if we get to hear more about what the game show was, how you won. But wow, I'm a little speechless that you didn't, you know, I think the canned answer is like, I'm going to Disneyland. But yours was like, I'm going to Death & Co. It wasn't, it was like, not that much money. I think it was like five grand. I guess I can tell everyone. I was on Wheel of Fortune. It's not something I tell a lot of people. But like, it's like one of those weird things. I was like, living poor in New York. And I was like, I can go get like really nice cocktails with my friends and I'll pay for it.

2:00And we went to your place. So thank you for that. Wow. Well, no, thank you for that. That's amazing. So great to be here. Love the story. What an intro. I love it. Thanks. So let's start with you, Dave. What were you doing before Death & Co.? How did it all begin? And then how did that expand into what is now Gin & Luck? Before Death & Co., I was 24. Well, I was 23 when we started the project, 24 when I opened Death & Co. And so there wasn't much. There's not a lot of professional history before that. I went to school for fine art photography up in Rochester at RIT. I have always been interested and passionate about the hospitality world, specifically cocktail culture, even before there really was something there.

2:40I always wanted to know more, learn more, and was kind of on the lookout for books about spirits, cocktails from, you know, Dave Wondrich's first books to Dale DeGroff's first book to anything out there. So right after college, knew I didn't want to be an artist. I knew I wanted something that I could really quantify a little bit easier. I was either in the red or in the black, and it wasn't really up to the discretion of a critic per se, you know, or gallery owner. I wanted something that I could wrap my arms around and control. I worked for a brief period in Las Vegas as a VIP host at Rain Nightclub.

3:16Wow. So for anyone who's of my age, I'm 42 now. And if you remember the real world Las Vegas, they worked at Rain Nightclub. Yeah, I'm aging myself. And Vegas was incredibly defining for me. It was almost like my trekking around Europe and that I was there alone, didn't really know anyone, didn't have a strong community there. And in Rain and working for the Nine Group, I really, it was a good organization, but I really discovered what I didn't want to do. I was desperately seeking art, culture, community, similar to what I found in college. And a lot of friends moved to New York. I was thinking of either moving to New York or L.A.

3:52And I knew I wanted to open a bar. It was everything I was doing and reading, like I mentioned. And so they were very formative years. And I started to build this very rough kind of idea on paper, this business plan that would eventually become Death & Co. in the East Village. And this was 2006 when it first opened. Is that correct? Yeah, we opened on New Year's 2006, 2007. And it was wild. So yeah, sorry, the second part of your question is, how did we become Gin and Luck or where we are today? So there's kind of a long spans of time in between there, between when we open up Death & Co. and when we formed Gin and Luck.

4:27So Gin and Luck, we formed in 2018. And we really formed it around, we were already well on our way opening up Death & Co. Denver and had that funded. And I wanted to create a unified hospitality landscape where we could have all of these entrepreneurial pursuits, all of our death and co-growth under one company, because I really believe that we were creating something a little different for the hospitality space. This wasn't a hospitality group with an assemblage of different brands, unique brands. We're creating one, largely one unified brand. And the opportunity in the scalability of the business, I thought, was much greater than if we had just this diverse portfolio of bars and restaurants.

5:06So that's when we created Gin & Luck. And everything in between, we created a hospitality consulting company there called Proprietors LLC. We opened over 50 different projects for clients all over the world with proprietors. We opened a number of bars in partnership with other groups. We had a little bar in the Lower East Side called 151, another one called Nightcap, the Normandy Club and Honeycutt and Walker Inn in LA, all through kind of different partnerships and different means, all of which we consolidated or otherwise sold off when we were like, you know, really gin and luck is the way that we want to move forward and growing and scaling Death & Co.

5:39And this kind of this brand world is what we want to do. So yeah, that took us to 2018. And we've been going ever since. Wow. And so before 2018, did you have a grand plan of scalability? Or was it just that you had all these sort of ancillary things that came up? And then you're like, wait, we can actually do something that's a little more centralized and has more of a business model and business plan aligned with it? Yeah, I think our business, like so many, when you look back, it seems like a fairly linear path, or at least an understandable path. But cut to 2006, 2007, when we opened Death & Co.

6:13So as I mentioned, I went to school for fine art. I didn't have a business degree, still don't. And so it was really a lot of try something, succeed, reflect on it, try something, fail, reflect on it, and iterate consistently based upon those successes and failures. And that kind of led us from one decision to the next, as most people do and as most people go through life and create their businesses. And so the plan going forward pretty quickly was really to continue on Death & Co. in some way, shape, or form. we knew pretty fast that we had captured some sort of lightning in a bottle there. And we didn't know what we didn't know how I knew that there was a lot I didn't know.

6:51And that's why we started this consulting company proprietors LLC. So other people could pay us to get better at this thing we love to do, which was open bars, create cocktail programs, place make connect people through cocktail anchored hospitality, which is what we feel like we do. And yeah, and so the idea to scale has been there almost since, I don't know, about day one. In the early days, I wanted to create a great neighborhood bar. I didn't want to create a global brand. I was an art school kid. I was ambitious, but I didn't have that wildly large of an ego to say, you know what? I'm going to create the best thing ever.

7:25I'm like, man, I just want to create something that really resonates. And as it started to resonate, I really wanted to have the privilege to continue to iterate on it, to grow it and scale it. And that's what we've been able to do. Can you get, for those who don't know, and we've sort of hit on it a little bit, and the way that I've always thought of Death & Co. is that you were one of the first really cool players in the craft cocktail space where you really did really innovative things and you made a name for yourself to do that. But how would you describe what the essence of the Death & Co.

7:52brand or what people think of as the bar? Yeah, I mean, we call ourselves a modern classic cocktail bar. And so I don't think of us as having any particular shtick or gimmick or concept per se. You know, at the end of the day, I hope people just think of us as a damn good bar. That said, we have a really great culinary program. We have great kitchen talent at each of our locations. Food is very important to our brand of hospitality. So you can sit and really lose yourself in the moment and be incredibly kind of reflective and present with the person or people that you're with. And yeah, you know, we were very much right time, right place.

8:29We opened up, as you said, New Year's Eve 2006, 2007. There were very few other players in New York. at that time, but there were some, there were five or six really exceptional bars. And when we opened up, I posted an ad on Craigslist for help on it. And I had a few little quirky hoops that I wanted people to jump through, like name as many bidders as you could name, et cetera. I had a very clear picture of what I wanted to create and who I wanted to try to attract. And we got wildly lucky in who we were able to hire. And Phil Ward, who was the We had bartender at Flatiron Lounge. And then at Pegu Club, he came on board pretty quickly.

9:05He was one of the first people I interviewed. And I interviewed him once. And then he interviewed me, I think, three times after that before he agreed to come on board. And then with him, that was a huge seal of approval. And we started to attract other great talent. Some people were completely green or for the most part, you know, so Joaquin Simo, who is now, you know, if you're a big cocktail fan, he's kind of a household name. He was working the brunch shift at Stanton Social. great bartender and just like the perfect hospitality professional. He's the nicest guy you'll ever meet in the world.

9:34So he came on board, Brian Miller, Jessica Gonzalez, a great bartender. She was actually working the floor for us at the time, just really great folks. And then the person who's now my business partner and the COO of our company, Alex Day came on pretty shortly after we opened and he had a Sunday swing shift for almost like an entire year before he got more shifts. And he's the person who I started Proprietors LLC, our consulting company together. And he's really been kind of my partner in crime through all of this crazy growth. So yeah, it's pretty fortunate in who we were able to attract. Wow, yeah.

10:08You know, I feel like the usual track for a bar or, you know, a restaurant is just to open more locations. And I think that you've done that, but you've also had other things. Like I mentioned earlier, you have your online marketplace. You've gone into Ready to Drink. Frank, when did that become part of the equation? And how did you think about those other expansion areas? Yeah, I think it's a great question. We've tried to be very intentional about where our priorities are and how this whole kind of ecosystem works. And there's a couple different ways I think about it, a couple different ways that we sort of illustrate it on paper as well.

10:45And so our primary economic engines and the focus points of our business really are our brick and mortars. And today we have four Death & Co doors. So we have Death & Co East Village, Death & Co Denver, Death & Co LA, and most recently, about a year plus ago, Death & Co DC. Next year, we'll be adding a new brand called Close Company. We'll be opening up Close Company, Nashville, Atlanta, a great and exciting licensing deal in Las Vegas for Close Company, and then Death & Co Seattle. We'll also be opening up a new hotel in partnership with Ryan Diggins, who owns the Ramble Hotel, where Death & Co Denver is.

11:18And so in full partnership in that hotel, we'll be leading the F &B, but really participating in the entire hotel ecosystem. That said, all of those things that I just listed, even though there are a lot, it's still cocktail-focused, cocktail-anchored hospitality, right? It's ops. It's operations. Everything else that we do, so our marketplace, even our social, the books, the ready-to-drink cocktails, we're working on a new education platform. all of those things, for the most part, we view as a true standalone business. So it can't just be a loss leader for us. And again, we don't monetize our social.

11:54So that's kind of the one outlier there. However, all of these things, really, their true purpose is to, you know, help sort of spin the flywheel or help kind of drive bodies in through our door, help build the brand awareness and keep our doors, our primary economic engines, our primary businesses, busy, healthy, and thriving. They have the ancillary benefit of also, you know, within that brand awareness of attracting future staff, ensuring that our brand is held in a certain regard, people want to work for us, etc. So that's kind of how we viewed this ecosystem. And again, I mentioned that we kind of view things in two ways.

12:27So I think of all of these things that we just mentioned as almost the foundational elements that support the house that we build on top. Or, you know, the alternative, if you're a Jim Collins fan, And these are all elements of the flywheel, right? So, you know, our successful brick and mortars allows us to make more stuff within our marketplace. That allows us to create more brand awareness. That allows us to drive more bodies through the door. That allows us to be on the radars of more developers. That allows us to get better deals and open up new doors, etc. And so it goes in kind of an amplifying effect.

12:59So that's really kind of how we see these additional businesses. And I also think, you know, they're unique differentiators for us. And so when people think of some of the other bars out there, it's one other thing that we can be doing that kind of separates us from some of our peer set. That was something I wanted to ask. I feel like there's another example that people often point to when you look at hospitality establishments expanding, and that's Momofuku, which now is really in the CPG space. I've never asked them directly, but I feel like the idea that I get from that is that they really want to be more of a CPG brand, and it's less about the restaurants.

13:37But it seems like it's sort of the other way around with you. Would you say that's true? I would. I would say that's true. You know, if we were a restaurant brand, I would probably be telling you a different story. Because, you know, we don't have the same opportunities that a restaurant brand does because of the Tide House laws. And for those who don't know, the entire legal around or the entire laws, entire legal around liquor in the U.S. is all kind of a patchwork quilt post-prohibition. So there's still all these holdover things that are unique to America. For instance, if you launch a new spirit, you have to launch it in every single state.

14:09But what I was referring to in Tide House Laws is because we're on liquor licenses, we own, you know, bars, restaurants, we can't have ownership in the production or ownership of a distilled spirit or the distribution of spirits. And so we don't. We have a unique kind of arms distant relationship with our branded ready to drink cocktails. So we're not Raos. We can't be Raos and make that or Carbone or Momofuku. We, you know, we can't make a grocery line of spirits that you can go shop for in your liquor store. Can you talk a little bit about the hotel? I was reading about it, and it sounds like a really...

14:43So is the idea that it's in Seattle, right? It will be like a standalone hotel that is Death & Co branded? So our next Death & Co is going to be in Seattle. That's going to be a small, fairly traditional Death & Co. Our hotel is going to be... Our hotel that's in partnership with Ryan Diggins is through our new 50-50 JV company, joint venture company, called Midnight Attura Hotels. So through Midnight Attura Hotels, we own a portion of the real estate. So the actual building itself, and then the management company. So we bought a building, MA Capital, part of this, you know, Midnight Auteur Ventures, bought a building in Savannah, and it's a former municipal building.

15:20And we're turning it into a 44-room hotel, pool on the roof, thriving F &B anchored lobby, small little neighborhood bar in the lower level in the basement, and then a little kind of bar F &B amenity up on the pool level on the roof. So that's going to be opening up this spring. It's not going to be Death & Co branded. each hotel that we're doing will carry a unique brand. So this one is going to be called Municipal Grand. And then the F &B within it, the food and beverage within it, will each carry their own unique name as well. And so I wanted to ask, because you have this, and then you have the other new set of bars that are opening next year.

15:54And by the way, the amount of things you're opening next year is wild. And so that must be very stressful. But what is the opportunity with making these new brands and new names? And how do you think they will differ aesthetically from what Death & Co is known for? Yeah, absolutely. Another really great question. And it is seemingly in conflict with what I said earlier in the show, where I said, we're not going to create a whole crazy disparate world of brands. We try to be really focused within it. So we're creating one new brand that we will completely kind of own and control, which is Close Company.

16:31So Close Company is differentiated from Death & Co in a number of different ways. We see the opportunity for Close Company to grow into a host of different markets that aren't quite right for Death & Co. So we believe Death & Co lives in what I call marquee cities, marquee markets. So Seattle, Chicago, Miami, potentially Boston, you know, there's a handful of other cities that we want to grow into in the US. Toronto, potentially, Mexico City, a larger number, obviously, when you look internationally. But these are, you know, kind of flagship-esque cities. Close Company is a little bit more of a riff off of a couple spots that we've done previously, most notably Normandy Club.

17:10So Normandy Club is still one of my favorite bars that we've done outside of Death & Co. And it's a bar that we created, still open today, a bar that we created in LA. A little bit more of kind of a fun neighborhood cocktail bar. Super approachable, a little bit more maximizing efficiencies. I don't want to say like, you know, high volume bar, nothing like that, because it still feels like a fun, relaxing space to be in, but just a little bit more approachable in a lot of ways than Death & Co. Death & Co is very much run like a restaurant. So there's a host, there's reservations, it's almost exclusively seated, very little standing, if at all, in some of our properties.

17:47And so we wanted to create a differentiated brand that can go into different markets and that we could also grow into markets that we have Death & Co's in. So we saw a lot of opportunity for a sister property that is closely affiliated and closely branded to Death & Co. That's really the expanse of what we intend to create within our cocktail bar world. Under Midnight Auteur, because it's a 50-50 company, and because there is the inevitability of the real estate sale of these buildings, some acquisitions may come with their own management company that want to take over the entire operation. So and we've seen this happen before real estate company will come in, they have a great operator that's part of the real estate ownership group.

18:32And they're like, great, we're kicking you guys out completely. That's okay with us, because we have close company and death and co over here, and they're protected. So no one else is ever going to operate those outside of our own selection and select licensing deals. And then on the midnight tour side, we also own the IP, the intellectual property that we're creating for these new hotels. So they have to buy us out of the IP as well. So we're making sure that we're capturing every element of the value that we're creating, and that we're, you know, protecting our most valuable assets, which we believe are Death & Co and Close Company in the future, future growth of those brands.

19:05So it sounds like a lot, but that's kind of how we view the three different pieces here. No, it makes a lot of sense. Can you talk a little bit more just about the licensing? Because the way that you talked about it earlier, it seems like, and maybe this is a huge oversimplification, but you do a lot of licensing because you can't get into certain businesses because you're predominantly a cocktail bar. But like, I imagine that there are other reasons why you'd want to license and work with other partners. How do you go about doing that? Yeah, so our licensing space is actually pretty limited. So we have kind of a unique consulting arrangement with the RTDs.

19:42So it's relatively comparable to licensing, but not directly licensing. Our only licensing deals that we have right now, we have two international licensing deals. And we're working with a phenomenal international operator. So Australia Venue Co, we're working with them on two different death and co's to bring death and co to Brisbane and to Melbourne. And the reason we're doing those as licensing deals is because we know we can't be everywhere all at once, even though we desperately try to be and probably rack up a few too many miles. And we have the opportunity to learn from some of the best in the world.

20:18And I really believe Australia Venue Co is one of the best operators I've ever met anywhere in the world. They have 220 venues all throughout Australia and New Zealand. They are exceptional at what they do. So we get the opportunity to learn from them and to open a business, two businesses, in fact, with them and show international appeal of our brands so that we can show that there's phenomenal future potential when we look to potentially sell the company or bring on a larger capital partner in the future. And then locally in the US, the only licensing deal we have is in Las Vegas. And Las Vegas is a very unique market.

20:52So we typically wouldn't license within the US. But to go into Las Vegas, they have incredible F &B, internal F &B machines. And so we're going into a major casino on the Las Vegas Strip with some of the best F &B operators, I think, again, in the entire world that are going to be executing our new brand, close company in that casino. And it is kind of the anti Vegas bar. It's going to be so small in this massive casino. I'm just I'm so excited for it. It's going to be really fun. I mean, is it daunting? Or how much diligence do you do with these with these licensing partners? Because you're giving up a certain amount of control and the entire.

21:29It's all about the branding. It's all about your reputation. So how do you go about that? Yeah, no, you're exactly right. It is daunting. And we do a huge amount. There's a bunch of reasons we're comfortable going into Australia. It's a fairly similar drinking culture. We speak the language, even though it is potentially couldn't be further away. There's a lot of ease of doing business there, you know, other than the time difference in the long flight. The reason why we're comfortable with Australia Venue Co is because we've known some of their key folks for probably 15 years or so now. So their head of training used to be an operator in New York.

22:03So we've known him for a very long time since the early days of Death & Co. Have always looked up to him. He's always been a great operator. And then we've spent a good amount of time on the ground there in Australia, learning about their company, seeing all of their operations and really getting a sense and a feel of how they do business. And then also talking to other folks that they've worked with, they have one other licensing deal, a different international group that they brought into Australia, not in the cocktail space. And so we very slowly became comfortable with it. And we feel like there's a great mutual value add to it.

22:33And similarly, in Las Vegas, I've been talking to these folks that we're now working with for probably 10 years, and I've known most of them for 15 or 16 years. And so I've been very, very reticent to go into Las Vegas. I've always wanted to. But having that experience of living and working in Las Vegas, I just couldn't quite see how we would land there. I didn't see how the Death & Co brand would land there and creating this new closed company brand and then having almost every phenomenal person that we knew in Las Vegas go on to this new team because they just got a massive infusion of capital in this casino.