'There are so many celebrities and influencers that have millions of followers that can't sell a damn thing': Spritz Society's Ben Soffer on building an alcohol brand beyond its influencer roots

0:29Hello, everyone. Welcome to the Modern Retail Podcast. are you doing? Thanks for joining. I'm doing great. Thanks so much for having me. Absolutely. So first, for those who don't know, though, I'm guessing some of our listeners maybe follow you on Instagram. What's your background? How did you get to where you are right now? Yeah. So Ben Soffer, founder and CEO of Spritz Society. Thanks for using that first. I like to say that I have an online alias that no longer really makes sense, but it's still fun. But I started working in advertising and media, most specifically celebrity and influencer marketing, and at the same time built my own personal Instagram following under the now ironic alias Boy With No Job, where I have almost 2 million followers on Instagram.

1:08And there I just posted funny memes, anything that really came to me that I felt was funny, I would create. And over time, it sort of served as this side project to a life in media and marketing that my clients could understand. I have a history of working at agencies, the most notable being VaynerMedia, where I worked for Gary Vaynerchuk for a long time and learned a ton from him and everybody at Vayner. But it really became like my number one sales tool, excuse me, when I would pitch a client on a campaign or I'd let them know why a celebrity maybe was inauthentic or wouldn't work right for the brand, I could point to my account where I spoke to hundreds of thousands, if not millions of people every single day and let them know best practices.

1:55So that is my overall background. And I'm sure we'll get into how the beverage company came to be. I don't want to jump the gun, but that's sort of a brief history on Boy With No Job. Well, I wanted to ask you this, and you sort of answered it, but I wanted to get a little bit deeper. When you were in the agency world, doing celebrity influencers, working with VaynerMedia, and you said that you used your online persona as sort of the gravitas behind or sort of the rationale behind your work. Did that go into just with best practices or how you understood the space? Or did they love the idea that they were working alongside and maybe also get a mention from someone like you?

2:34Like, how did that work out? Or were those two completely separate parts of either your professional side and your Instagram side? So they were completely separate when it came to app mentions or promoting their brand. In hindsight, I should have promoted their brands more. There was no reason I didn't. But I certainly treated them as different things. It was sort of like, not to call myself Batman, but you have a different persona during the day and a different one at night. But I would openly talk about the fact that I had this persona. And ultimately, every great salesman needs something to hang their hat on.

3:08And that thing for me was the fact that I understood the space better than anybody because I'm actually living it. It's not somebody that pretends to understand the way that the algorithm is working this month or understands how to grow an account or understands just because an influencer has 50 million followers doesn't mean they're going to sell anything, right? Why is that? And it's because you build an authentic community, an authentic community that can specifically speak to different types of products. And so it gave me that credibility in the space that put me a leg above my contemporaries, if that makes sense.

3:46No, it makes a lot of sense. But I also understand why you wouldn't. Even if it isn't the right analogy, it seems like you would imagine when you're growing up, when you're becoming, you're building your profession, you want there a separation between church and state in a certain sense with who you are at night, with who you are in the day. So I totally get why you would say no at mentions. Yeah, they never even asked. And it's something that in hindsight, again, I'm such a huge fan of, and I hope brands don't see this and just think that I'm going to give them free stuff. But I'm such a fan of promoting brands that I love without them paying me because if there is the right moment down the road for me to partner with someone, it's so much more authentic if I've spoken about them before, as opposed to a brand just coming and saying, we want to tap into your audience.

4:31please promote my, I don't know, water company, but I've publicly spoken about how I like a different type of water in the past. So ultimately I'm a big fan of shouting out brands that I love, even if they're not paying me. Makes sense. Well, let's go to really the reason why we're here. How did Spritz Society come about? So it all comes back to authenticity, right? And the ready to drink category, alcohol in general is unbelievably saturated. It seems like everybody every other week is launching a new celebrity tequila. And that's because everybody read the same piece of white paper that told them that agave farms are available for one to purchase.

5:08And if you want to start a tequila, you can. And what that led to was just inauthenticity across the board with people launching products that either they don't drink or don't make sense for them. And ultimately, we saw the rise of the ready to drink beverage space about three years ago being pioneered by the hard seltzers of the world, like White Claws and Trulies, off the backs of a lack of transparency where consumers didn't even understand what the base alcohol was and what they were drinking. So this was sort of that first moment where it was like, okay, if White Claw can do, I don't know, I read something like$4 billion that year in sales by telling people that it's hard seltzer when in reality it's a malt-based beer water, like that's what hard seltzer was, then there's certainly the opportunity to make something that tastes great.

5:57But what is that going to be? Is it going to be a vodka base? Is it going to be a tequila base? Is it going to be a wine base? And we knew that, again, reading something that somebody put together based on industry trends, that anything that you read on industry trends is going to tell you the trend from last year, right? Because nobody can predict what's going on today and nobody can talk about what's going on today and predict what's going on in the future. So we knew that the only way to authentically launch a brand was to go directly to our audience and ask them what was missing from this market.

6:26So we put together a Google form asking thousands and thousands of our followers their opinions on logos, flavors, can designs, alcohol percentage, alcohol base. And we called that R &D group the Spritz Society. So the name of the brand, Spritz Society, comes from the empathetic approach we took to building it through community in which they told us to launch a wine base. And if you look at the wine category, everybody's telling you not to launch wine, that wine is declining when in actuality wine is declining because of a lack of innovation and we're bringing innovation to an archaic category.

6:56Wine, if it tastes great, can be an unbelievable vehicle in a ready-to-drink can because people love wine. I love a glass of Pinot Grigio. Our millennial female followers do as well. We also love a spritz. But ultimately, why should we have to go from a glass of wine to a vodka-based hard seltzer? Why can't we go from a glass of wine to a wine-based sparkling cocktail that actually tastes great? And the answer was, you can. You just need to hire a world-class beverage scientist and make something that you're proud of. Prioritize the R &D process as opposed to prioritizing how much money you can throw at a project, spend on marketing, but leave consumers wanting more.

7:38So that was the impetus for Spritz Society, and And I'm proud to say that we've built five award-winning flavors. We won USA Today's Best Can Cocktail of 2022. Fingers crossed we're currently in the lead for 2023 as well. That's a testament to our community and it's a testament to the products we've made. So walk me through the timeline. You made the Google Form. You started the community. You asked for their feedback. And then you went to R &D to make a product. How long did this all take from start to when you had something you could actually sell? It's a great question. The brand launched August of 21.

8:14We sent out that Google form nine months before that. So we're looking at maybe late 2020. And it took us about nine months through the mail during COVID. You couldn't go in person and try samples of products. You had to send in your feedback, wait for something to come in the mail. We worked with somebody that actually doesn't live in the United States. So they had to clear customs every time. And so that process took a little longer than I think it needed to. But rounds and rounds and rounds of approval from their feedback to product that was sellable. So with a wine base, does that, and I should know the answer to this question, but I don't, does it have to operate by the three-tier system or do you bypass that?

9:05So it's a unique quality of wine. And one of the reasons why we launched or were excited to launch with a wine base was that you can avoid the three-tier system direct to consumer. So direct to consumer, we own our own licenses. We ship to 46 states. And what was so valuable about that was that we did the opposite of what most alcohol brands do. Most alcohol brands launch in three tier with a distributor. And by the way, is your audience familiar with that terminology or do you want me to explain there? I mean, you can give a, you can give, I feel like a lot of them are, but if you want to give a quick little summary of it.

9:40There's just, there's just the three tier system where you have suppliers, distributors, and retailers. And because alcohol is a bit archaic, you have to go through these different levels to actually sell your product. If you are wine, you can operate the way that any other Shopify site operates, as long as you have your own licenses and you have your own winery, which we do. So Spritz Society is able to ship and gather first party data on its customers from day one, which allowed us to then methodically open wholesale markets and not just go national. What we found is that brands often on day one say, I don't know who my consumer is.

10:20I don't know where we're going to get pull. So let's launch nationally and figure it out in real time. And instead what we did was we did that, but online and then took the top 10 States from a direct to consumer perspective, went back, brought on distributors and launched retail. So to answer your question, we do have to go through the three tier system for what will be the end result of this brand, which is a wholesale business, but to serve as to, we use direct to consumer now as a flywheel for retail. So if you want to order it online and you don't live in a state where it's available, you still can do that.

10:56But ultimately, direct-to-consumer is priced completely differently. And that's not us just collecting margin. It's very, very expensive to ship product in the mail. I'm sure I don't have to tell you that. Alcohol is heavy. So a four-pack online, for example, is$20. But in store, it's$12.99. So my hope is that the California customer decides not to buy the four-pack online. Rather, they choose to buy it at BevMo or they choose to buy it at Total Wine or Whole Foods, because I'd rather support the retailer than our own Shopify site. I wanted to ask, because I love that you've launched DTC. That's something that we've seen other spirits brands do, some with success, some without success.

11:33But I feel like you had the backing, you had the community, but you also had your social account. Do you think it is possible to launch that way? Or were you just in a really advantageous situation where you had an audience built in that was going to give you that direct sales feedback? it's com it's completely impossible to launch a direct-to-consumer alcohol business without a community behind it it doesn't need to be your own community you can partner with a celebrity that's authentic that leverages their community but to get your name out there would cost you so much money and the price it takes to ship alcohol i think it's completely prohibitive personally got it no that makes a lot of sense and it's like we're seeing so many celebrity or influencer founded brands these days.

12:20And I think it's sort of using that thesis. Some are better thought out than others, I would say, or they think if they put a name onto a brand, it's going to suddenly work. But I think that goes back to what you were saying about authenticity. Yeah. And ultimately, it's so much less expensive. If you have a community, then you can get people to try a product online without ever experiencing it in person because they trust you and your credibility versus if you don't have that community, there's no lever of credibility that's going to educate you on why you should give this product a chance unless you're dumping money into paid media.

12:56And then you could win or you could lose. And even those that win are caught in this rat race of, I need to spend 200 grand to make 250 grand and how sustainable is that? And then all of a sudden, Apple or it's like somebody can just, Facebook can just pull the curtain out, right? And you're done, right? So I think community is unbelievably important at the core of building a brand. And if you can use an adjacent community to fill out the funnel of a new brand community that you're building, it gives you a huge leg up for direct-to-consumer. Can you talk about your initial forays into wholesale distribution?

13:40when you were meeting with a major distributor, were you pointing to your DTC sales and your community statistics to show that this would have the legs to stand? How were you able to do all that? Yes, and I'm happy you brought that up because the other thing that direct-to-consumer gave us was credibility for wholesale. Because without it, the space is so crowded. Distributors every single day are saying no to thousands of RTDs. because everybody is looking at what we're doing, for example, and saying, oh, I can do that. I can make a product. I can get distribution. Look at the multiples on exits.

14:18Everybody's looking at the exact same thing, right? And so ultimately distributors have to look at products with a far closer, more keen eye and say, is this something that if we help place it on shelf, will it move? Because if not, we just wasted our time. The big distributors aren't concerned with how much money am I going to make this month off the brand? They're worried about how much money am I going to make over the next five years off this brand or 10 years off this brand? Does this brand have legs? So ultimately we took the direct to consumer data, for example, that said that 20 % of our audience was buying from New York.

14:56We then went to Southern Glazer as our distributor and we said, look, we already have proven sales in this market. When we go and turn it on with you and sell locally into independent liquor stores, on-premise venues, stadiums. It's going to pull because the audience is there. On top of that, we are going to support these retailers with meet and greets, with events, with parties, with social promotion, with all of the non-traditional ways that you can pull leverage marketing. And on top of that, we're going to support it with a regular marketing budget for point of sale materials, for tastings, for whatever it may be.

15:32There's no substitute for traditional marketing, but there is a special sauce that comes from having social platforms that makes you more attractive to retailers and ultimately allowed Southern Glazers, for example, to feel comfortable in taking us on. I wanted to ask about that. So let's use the New York example. Did you have to tweak anything in terms of the actual product or the packaging or the aesthetic in order to make it palatable? Or I don't know if palatable is the right word, but to make it so that it spoke to a more generalized audience than people who already knew what they were ordering?

16:03Or did you do these sort of on-the - ground marketing campaigns? And do you think that's scalable, I guess, is the second part of that question? It's scalable through authentic communities. So ultimately, it's making sure that if you don't know who I am or Claudia is, that we continue to surround you with ambassadors that are relevant to you so that you always have a touch point that's relevant for the brand. And I'll give you an example. Two months ago, we launched, or maybe it was last month, we launched a collaboration with Lauren Bostic. She is the Skinny Confidential and owns Dear Media. We went to her community and had her ask her community, what flavor sprit society do you want me to represent.

16:46They picked pink lemonade. We dropped pink lemonade. We sold out of pink lemonade in 48 hours. What was amazing about that was not the sales, but that confidentially, or I guess not confidentially, we're on a podcast. Sorry about that. We had 60 % net new customers, right? So I now have 60 % of this large group of people where I can now introduce them to the core brand through a welcome flow and let them know where it's available locally. And now people will feel that new cohort will feel a connection to Spritz Society because of Lauren. And we're going to continue to do that. And a great way to do that is through collabs, both with brands on the personal brand ambassador, influencer level.

17:31We brought on Shannon Ford. Shannon Ford is an influencer. She lives in Tennessee. Amazing engagement. friend of our family, and she is going to be our Tennessee brand ambassador. We're launching the state of Tennessee on May 4th. So to create an authentic relationship with Spritz Society in Tennessee, Shannon is now the face of that market. So we are continuing to leverage authentic ways to bring this product to a new audience, knowing that if it's just us as the faces, we're going to lose. We're using our faces to help push it up, but ultimately it's going to take so much more of a groundswell to bring it to the place that we all know it can get to, if that makes sense.

18:17How do you choose or analyze the collaborations that you do? Do you have a rubric? It seems like these are people that you know, you've probably been working with for years and that helps, but let's say you want to expand to a new audience that doesn't fit the confines of what has traditionally been a Spritz Society customer. How do you find who's the right collab for that? First and foremost, can you convert? I touched on this early on, but there are so many celebrities and influencers that have millions of followers that can't sell a damn thing. And it's pretty unbelievable. Like somebody with 50 million followers will post a product and give a link and nobody will buy it because their audience is not trained to trust their recommendations.

18:58their audiences may be trained to watch their movies or buy the clothing that they're wearing, but they're not trained to trust the credibility of the person that's speaking because that's not how their account operates. So first and foremost, talking to them or to their agent about give me conversion metrics, let me see past campaigns. For me, I think that if you have a strong audio platform. If you have a podcast that's weekly, daily, and you get consistent listeners, you're going to convert because you are a part of this person's daily habit at this point. So I love going after podcasters, Lauren, podcaster, Shannon, podcaster, The Morning Toast, Claudia, my wife, co-founder of the brand.

19:44We didn't even touch on her, but we launched this brand really through her community. The Morning Toast audience or Rebranded to the Toast reaches millions and millions of people every month, right? So ultimately they go live every single day and we're a part of their habits. So when Claudia recommended that she brought this product to market, her community trusted it. And we delivered on that trust by giving them a great product. But if I were to, and when we do expand into new audiences, it'll be looking at, ideally you have a strong podcast. You convert when brands pay you and you're relevant.

20:21You post frequently. Your engagement is high. And I can spot, as I'm sure can you, fake followers, fake engagements, fake likes all day. All that you have to do is go through the comments and see what they're saying. And ultimately, it's just buying into that real audience and making sure that the person that's promoting it is authentically drinking the product. So we introduced Shannon to the brand months and months and months ago. Last weekend, she was drinking it at Stagecoach with Claudia because it's in the house. Like we actually drink the product. So when our friends and family are around it, they also drink the product.

20:59So she's a great fit. But needless to say, that new person and that new audience would need to find an authentic way that they would need to like the product. It would need to be authentic to them. Got it. Got it. Makes sense. Are you in eight states right now? Is that correct? Yeah. Well, by the time this podcast comes out, we'll be in nine. Nine. Got it. Nine wholesale states. New York, Florida, California, Texas, Georgia, Alabama, Massachusetts, Illinois, Tennessee. Wow. That's a good thing off the top of your head. Although I'm sure you think about those a lot. I literally looked through the map in my head.

21:32I'm like, don't miss one as you climb up from the Southeast into the Northeast and then over to Tennessee. Well, I was going through the map too, and I was like, oh, it's only New York. And then I zoomed in. I was like, oh, it's New York and Massachusetts. That's great. And California. Sorry. All the way on the West Coast by itself, California. Right now, what's the distribution? Or where are you seeing the greatest velocity of sales growth? Is it on the wholesale accounts or is DTC still king? Or how is that makeup going now that you're going full into wholesale? 100 % wholesale. And the main driver is grocery and will continue to be grocery.

22:07Grocery is where you're looking for this product. Big Box eventually will be great as well. We are launching in 70 Walmarts as we speak. Again, this news will be public, but 70 Walmarts in Florida, which we're very excited about. Target is a brand that's circled or a retailer that's circled that we know would be the perfect fit for this brand. But today it's grocery. Our number one account in the country is HEB, the largest independent grocer in the state of Texas. We were fortunate enough to get cold box placement in 200 of their stores and are flying. It's just the right demo. It's the right placement for the product.

22:52A lot of it has to do with, are you visible to the customer that's coming in and looking for it? And we are properly merchandised in HEBs. We're also doing a ton of tasting. Again, I mentioned that social does not change what you need to do from a traditional marketing perspective. And liquid to lips is still king. If you have a great product and somebody tries it, they're going to take more of it home. And so we found a lot of great success specifically in HEB doing tastings. How do you ensure that you get the right merchandising placement? Because I think this is a problem. And you might be unique because you had a little bit more power behind you than maybe another startup brand.

23:32But I know so many companies that they had a Walmart partnership, they had a Target partnership, and this was great. But then suddenly they were placed in this really awful aisle, and then it didn't sell through. How do you approach that? Well, one, I'll let you know if that happens. But based on the shelf sets. You're not in health care yet or anything like that? No, no. Based on the shelf sets that I've seen, I think that we're going to have fine placement in Walmart. That said, often young brands think that the distributor is going to do their job for them, and they won't. It is 100 % on the brand to have area sales managers in these markets whose job it is to make sure that not only are you properly merchandised, but that you know the store owner or manager by name, that there is some one-to-one connection with the store.

24:26because if there isn't, then there is no reason to pay attention to you. And working every single day with the, not the higher ups at the distributor, but the distributor reps and making sure that the reps who call on those accounts know, okay, sure, I have to think about Constellation. I have to think about Pinot Ricard and I have to think about Diageo, but I also have to think about Spritz Society because they're really great people. They work really hard. They're working the market every day and I want to support the growth of their young brand. But if you're founders that sit in a completely different state and don't have anybody on the ground to help motivate the distributor and the retailer, you have no chance.

25:00And we were fortunate enough from day one to have really great advisors that told us, okay, maybe historically the distributor has been the one to build your brand. They don't do that anymore. Distributors will not build your brand. Distributors will help take the brand that you've built and make it beyond your wildest dream successful, but they need a nucleus. And you need to build that nucleus yourself for the first bit. What does expansion look like? You mentioned new flavors, but like, is it always going to be sort of the core beverage in the can or how do you see that changing over time? So the goal first and foremost today is being laser focused on building the Spritz Society brand to be a household name amongst sparkling wine cocktails.

25:48So can we build that brand to, again, be completely separate from its founders, from its ambassadors, where you see Spritz Society and you immediately associate it with premium canned cocktails. From there, we could innovate into really any other sector that we want within beverage, whether that's non-alc, whether that's bottles like 750s, whether that's tap, whatever it may be. But for today, the focus is on building out within this category that has an unbelievable amount of growth opportunities and becoming a household name. That's the focus today. Makes sense. I wanted to ask one thing, and this is sort of left field, but I had in my notes.

26:36I saw that you guys have done some interesting, I don't know if this is the right word in the industry, but like concessions partnerships like with on transportation. So with Blade and with United, is that correct? It is. So what how do you what is your thesis behind those? Are those just sort of top level branding? I assume they don't sell through that much, though. Maybe I'm incorrect about that. What is the thesis behind doing that type of partnership? So what's unique about our brand is that we are both an alcohol company and a media property. So for United, most people have to pay for play.