We acted like we were going to buy a lot of barrels.And that's how I kind of got this like fancy red carpet meeting.I mean, there was no, like, in reality, we only have four grand.
Yeah, we didn't say, but we were like, well, we'll take one barrel of each.Well, Mike was the Mattress King of New Jersey.
Yeah, I acted like Bear was like some multinational conglomerate.Yeah, this is going to be a sad project for me.Yeah.And we also have like this thing, Prestige Worldwide.It's like an entertainment business.
This is Bourbon Pursuit, the official podcast of bourbon, bringing to you the best in news, reviews and interviews with people making the bourbon whiskey industry happen.And I'm one of your hosts, Kenny Coleman.
We talk a lot about Penelope on the show because they are a prime example of how to differentiate yourself in the marketplace. because there is a sea of crowded bottles on the shelves.
And our first episode with Mike Palladini and Danny Police was back on episode 382.And now this time, we catch up with them, but this is after they've been acquired by MGP for a small sum of around $215 million.
We talk about life after acquisition and what that means to the brand, their access to whiskey, the life of it, and how their roles have changed from running it all to now leaning on a large organization with a substantial sales force.
With that, enjoy this week's episode.And now here's Fred Minnick with Above the Char.
I'm Fred Minnick, and this is Above the Char. This week's idea comes from Brian Kidwell.He basically writes me a long email talking about some cool old Dustys, like the Old Crow Traveler and some old JW Dance.
He asks the question, why can't there be an Old Crow 10-year-old single barrel or similar to Dance or JTS Brown special release?
And he basically talks about like how today's, you know, Old Crow, GW Dent and JTS Brown disrespect the heritage and how important they are.Well, Brian, that's such a long story.I'm actually writing a book about one of those three brands.
What that book is, it's about Old Crow and me and long, long story on that one.But I will just tell you that when a bourbon parent company like Jim Beam or Heaven Hill a buy up, an old trademark.
They often just take the whiskey and use the whiskey for their brands and don't really care about the brand that they bought.There's brand equity there so they don't just flat out kick it to the curb. But they don't really do anything with it.
You know, that's what happened with Old Crow.Beam barely did anything with Old Grandad, but they at least did more than they did with Old Crow.In terms of JW Dant and JTS Brown, I mean, let's face it, Heaven Hill has a lot of brands.
And Heaven Hill, for a good 20 year stretch, was basically, they were $9 to $15 bottle city. And as the bourbon popularity boom began, they began to move away some of their brands from that $9 to $12 range.
And what I noticed with Heaven Hill was they put it on the brands that they actually kind of came up with.So like Elijah Craig and Evan Williams were both brands that they invested in.
So they created the names, they created the concepts behind them, and they'd been making the whiskey since day one for both of those brands. and Parker's Heritage, Larceny, you know, two others.
Old Fitzgerald is the only brand that they purchased and they, you know, repackaged and kind of reinvented.They put that into a decanter series.The rest of them, they just kind of let, you know, languish a little bit.
But the thing is they still move and they also still have a lot of fans.And I guarantee you, Brian, that someone's going to listen to this.They're like, shut up about JW Dan.Shut up about JTS Brown.Don't let anyone know about that.
You know, it's four-year-old Heaven Hill.It's good.But, you know, the truth is a lot of these decisions are made not thinking about the history.They're thinking about the sales that they can get now.
And if you have an old, tired brand, you know, they ask, is a 25-year-old gonna buy that?Hmm.And that's the question that they answer.And they often say, no, they won't buy that old man looking brand.They're gonna buy Larceny.
And that's this week's Above the Char.If you want to be like Brian, hit me up on freddominich.com.That's freddominich.com.Click the contact button.And if I like the idea, I'll read it on the air.Till next week.Cheers.
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It's that time of the year where everybody started to make their vacation plans on visiting Kentucky, the Mecca of bourbon.And if you are coming to Kentucky, you need to make sure you visit us at Pursuit Spirits in Louisville.
We're right in the heart of Clifton, near Butchertown and Nulu, and only just a few miles away from downtown Louisville.But when you do come, you need to book your experience to go do our whole shebang.
This is the one that's really the star of the show.You get a full-on tasting, you get to do your own personal barrel selection experience, and you get to grab a whiskey thief and fill your bottle directly from the barrel.
Or do something completely brand new that nobody else is doing here in bourbon country.Plus you get a free sweet tasting glass at the end of it.
I guarantee you, you're gonna end up being one of the many people that's also leaving us a five-star review.So make sure you come and check us out.You can book your reservation by going to pursuitspirits.com and clicking the visit us button.
Hey everybody, welcome back.It's another episode of Bourbon Pursuit, the official podcast of Bourbon.I'm excited about today because we get to sit down with some guys we've gotten to know really well over the past, has been what, four years plus?
Gosh, four or five, six maybe?I don't know.Yeah, something like that.2018, 2019, something like that. Yeah, so, you know, time flies.It sure is.Yeah.I mean, we had these guys on when they were building this little brand.
They got in some trouble with having a different kind of pee on the front of their bottle and they had to go and rebrand some different things.
They didn't even have all of their different series out at that point, but they gave me a mattress at the time.
We had to get some hookups from some some mattress codes at the time and then they have just Exponentially exploded on the scene and you see everybody with inside of forums They're always talking about well, which bottle of Penelope should I go pick up this afternoon?
Yeah, no doubt.You can't scroll any bourbon real talk community or any Instagram or this now without seeing the the big P on the bottle with all the pretty flowers and You know, people would say, wow, they're an overnight success.
But these guys have worked like so hard over the past five, six years, and we've gotten to know them.They're great friends and really excited to hang out with them on the show.
Our conversations off the record are great, and I wish we could have those off on the record.But I'm excited to have them back and share what's been going on with them since their big news last year.
Yeah, I mean, if any of that doesn't know, that's exactly what happened was they were able to go and get acquired by MGP, which is those it's an insane company to be a part of.
And I'm excited to be able to talk about this today, even for further in depth.So today on the show, we bring back Mike and Danny of Penelope Bourbon.So, fellas, welcome back.
Happy to be here, boys.We're excited.
Yeah.It's great to see you.Thanks for having us.I know.Well, I guess so.How fast is that Bugatti go that you drove up in today?
Or is that the helicopter that landed earlier?Danny was in the rental forerunner.And as we're driving over here, he goes, you know, the alignment's really off on this.And the tire was literally shaking on the car on the highway coming here.
The wheels like this. Yeah, yeah, yeah.
It was not a safe drive over here.So, unfortunately, no Bugatti.Just a forerunner with bad alignment.There we go.You always have interesting driving stories when you come on the show.Danny and cars just don't go well together.No, they don't.
Not at all.Not ever. I'd say that tongue-in-cheek because obviously you all got acquired by Penelope.What was the the total amount again?215 total that was a great great exit.
Yeah, it was a fantastic exit And I think that's sort of what we'll talk about a little bit about sort of like the build-up and what life is like after that so I guess kind of give a little bit insight into the story of sort of anybody that doesn't know and hadn't followed you kind of quick give a background about
You all grew up together, you've kind of known each other for years, used to party together, and then decided to build this company.We'll start there before we kind of dive into the post stuff.
Yeah, I mean we had started, actually our six year anniversary, we just passed it, so we LLC'd the business June 28th, 2018. Both of us have always been entrepreneurial.You know, we've had different ventures.
We've worked in, you know, the startup world.Danny Dainey was in his family business in engineering.And I was, I had started a mattress company, but I had worked in various tech companies.So we had that itch.
And I remember with the mattress company, I had wanted to start Bear Mattress about five years earlier than when we had started Bear Mattress.And I was disappointed in myself because it was, it was a big product.
I was like, man, I'm not going to make a mattress. That's like too big.So why don't we make like an app that helps you like sleep or something like that.
And lo and behold, there was a couple other companies that came out like Casper and things like that.And they exploded on the scene.And I was always a little disappointed I didn't take that initial risk.
I think that was probably 2013, 2012, around that time.You know, fast forward, it's 2015.We start Bear Mattress and it ended up being a really wildly successful business.And I was with my brother.They're good mattresses, by the way.
Yeah, that's right, yeah.No, they're great.I sleep on one and I'm kind of a mattress snob.So I'm very, you know, very particular.So the big idea never, we weren't afraid of the big idea.
Like if we didn't know how to do something that never, it's not something we were afraid to tackle following kind of that like initial, like, oh, we should have done this sooner with the mattresses.
So, you know, my wife and I were trying to have children for a long time.That's just obviously a huge stressful time for both of us.We find out we're having a girl, weight is lifted off our shoulders. And I just liked bourbon.
That's what I was drinking.That's what I enjoyed.You know, that's really what I was into.And so I said, Penelope bourbon.That was it.It's got a great ring to it.And it's a female name in a very masculine industry, right?
And it wasn't meant to be a product marketed towards females, just meant to be a great whiskey that's named after my daughter.
and, you know, do things that, you know, kind of incorporated, like, that were near and dear to our hearts at the time when she was being... My wife was pregnant and she was being born.Like, the flowers on the bottle, they're peonies.
So we came up with the idea when peonies were in full bloom in May.So, you know, May hits, I'm like, oh, we gotta put the peonies on there.We love that flowers.Kind of all happening at the same time.
And I was like, well, if we're gonna have a whiskey business, we need... whiskey.And so we knew nothing about the industry.I mean, we didn't, we didn't like literally nothing.And so I called, called, uh, a company out of Lawrenceburg, Indiana.
I never even heard of, by the way.And Danny remembers.So for the longest time I kept calling them M M P G. So I was like, well, I got, I got, we got this meeting at MPG should be a, you know, I got a plus one for it.It's in July.
It's, you know, and so ended up fast forward, you know, LLC, the business June 28th, And we were playing golf and Danny ends up being the plus one and ended up being a great, great plus one.
And so we've been in part, we've been in business ever since then.
I'm just connecting the dots now.That's the first time I heard the story about starting the mattress company early because when I came on, it was like, there was such a rush to get, get a product going.And that now that makes sense.
It's like we had to get to market quick.Yeah.They want to wait around.
Didn't want to wait around.Yeah.
See, we bring you together so you learn more about each other.
Yeah, no.That's what it is.It's funny.I've actually never told that story ever about that.Yeah.Cause that, that was, that's the truth.Like the, cause you know, when you think about, Hey, I'm going to go make my own bourbon.That's a big idea.
You know, it's like, well, what do you, you don't know anything about bourbon, but if you've kind of had that initial, like you can't miss it this time. then you're not going to miss it.You just go do it.We had no money.
The mattress business we always had, it was a family run business.So no outside investors.You build a business to make money.So you have to have profitability.It's not cool to not make, you know, you want to make money.That's the point of doing it.
So you have to, you build it to be sustainable.You build it to be, this could be my job for the rest of my life.And I could support my family. So those were like the kind of key, we'll call them business values, right?
Early on, like we're not doing the business to be in debt, but put it that way.Right.So yeah, we, we had started small.We went to MPG and it took me about a year.
Do they know this story by the way?
I don't know. I don't know, but it took me about a year to like, all of a sudden a light bulb went off and I just was fluent.I was like, oh, it's MGP.The G's before the P. Yeah, yeah.
I needed something that was like, like that to be like, all right, I gotta like get that cleaned up.So yeah, no, we, we started small.I mean, Danny, tell them about the blending, how it kind of came across that.Yeah.
I mean, we showed up at MPGP.Now you got me all screwed up.Yeah. We show up, we just went through all the liquid they had, all the bourbon, every mash bill on the table.I think there were years, like two years through 11 year at the time.
You imagine going in now and finding 11 year?Oh yeah.I remember you telling the story and you're like, we're not even doing anything that's 11 years old.We're not going to do that sort of stuff.Plus the cost.
We only had a certain amount of money in our pockets to buy barrels.What was the original? Oh my God.Money amount.I think we had maybe 10 grand.
I remember you would call me and be like, all right, well, if I put up like $2,000, maybe you put the two and two and you know, like two barrels.
They were like, well, the cap table has this, this and this, right?But you know, you learn.Yeah. We have to figure that out along the way.
You're friends, so it's easy to be friends and talking and hanging out, drinking a beer or whiskey or whatever, and doing your thing on 4th of July.
But it's another thing being in business with them when there's real money involved, as you guys obviously well know.It's like there's a lot more at stake, right?
It's always a complicated time with founders in the early years, as I'm sure you guys can attest to. Yeah, but we thought we were just going to pick a mash bill and put it in a bottle and turns out- Maybe, maybe.
I was, I didn't, we wanted to have our spin on it.Yeah.But if it ended up that, if that was the best product, then we would be okay with that.
But we both like different mash bills.So we just ended up starting blending them together.And then that's how we came up with our like original four grain blended bourbon.Yeah.And that was our first product, the four grain 80 proof.
Yeah, it seemed, I think we remember, maybe we had this conversation the last episode but like, it seemed like you all had, I don't know if it was insight but this intuition of like what was working in the market and like Basil Hayden's 80 proof, you know, priced under 50 or $40 and that's what you kind of started with and like,
Like Alice's Whiskey Geeks would look at that and they're like, that's the dumbest idea ever.But then you realize that like that's the brilliant idea because 90% of the market drinks that like sub 90 proof offering or whatever.
Well, we were just consumers.I mean, so we didn't have that like we weren't collectors.
We didn't... We weren't in any clubs or groups.
I mean literally we just were consumers. like 94 proof was high for me at the time.You know, I was like, oh my God.It's like rockets is hot.Yeah.
And it's kind of the journey that we took like in our product development and you know, what people call our innovation, but it was just us being a consumer and kind of going along that journey.
Our pallets, yeah, kind of expanding.
Yeah, yeah.Yeah.And two at the time you kind of had like E.H.Taylor came out their foregrain.
People are starting to like really push the name buzzword foregrain and it kind of became like, you know, a marketing term and it kind of just like timing was fortuitous that it all kind of pieced together at that time.
Yeah, it was funny because we knew like a lot of the like I didn't even know what a mash bill was.I really didn't.You should see like some of our early sell sheets. Like they don't even make sense.They didn't like, I, I know I still have them.
Like you, if you read it now, you'd be like, did he write this in crayons?Like, this is ridiculous.What are you even talking about?But that's why we didn't even have a distributor.So it's like, we were just selling it ourselves doing that.
Selling it ourselves was a huge, huge win for us.Cause we were able to, you're able to do that in Jersey. Yeah, New Jersey.
So how, yeah, kind of going back to it, we acted like we were going to buy a lot of barrels and that's how I kind of got this like fancy red carpet meeting.I mean, there was no... And you're like, in reality, we only had four grand.
Yeah, we didn't say, but we were like, well, we'll take one barrel of each.Well, Mike was the Mattress King of New Jersey.
Yeah, I acted like Bear was some multinational conglomerate.Yeah, this is gonna be a sad project for me.Yeah.And we also have this thing, Prestige Worldwide.It's an entertainment business.
Yeah, so we go there, and the whole thing, they're like, oh, if you blend these three, it's a four green.And that was like, the guy in the back's arms crossed.Well, that's a good marketing term, four green.
I go, well, put it on the front of the label. Perfect.I love it.But we were like, we'll take one barrel of each.One barrel of 99 corn, one barrel of the 45 wheat, one barrel of the 21 rye.And they almost fell over in their chairs.
They were like, whoa, one of each.That was at the time.That's it.Can't even fill a pallet.I think at the time the wheat was pretty like the cheapest probably because it was It was two year.
But we, I remember this was where the light bulb, because we were coming at this with no outside perspective, but I couldn't wrap my head around the fact that, oh, the six year was good.Don't get me wrong.
The six year was great, but it was like, well, what if I go, we buy whatever, how many barrels we make our product and we sell it.We want to make the exact same product.Because in my mind, I'm just thinking like a Basil Hayden model, right?
I'm like, well, I got to be able to make the same product.And then he's like, well, we might not have the barrels. And I go, well, that's an issue.I go, where do you have the highest volume?
He's like, well, obviously the two-year-old stuff and the three-year-old stuff.Then I started thinking about it more with Danny and we were talking about it.This is in that initial blending thing.I think we were by ourselves at the time in the room.
And I was like, look, Rome wasn't built in a day.Let's start young and make sure we have a consistent product we can sell. And then as we grow and mature and understand it, and it's cheaper, by the way, to the barrels world.Oh yeah.
Significantly cheaper.So it was like made more sense for us, but not even understanding like the dynamics of like, okay, we're from New Jersey.We don't know anything about whiskey and we have an 80 proof and it's two years old.
Like, but we still thought that was like, whatever dude, it's a bourbon company.Like we did it.They were cool as hell.And so that's what we did.We started, we, uh, they got us up to six barrels, two of each mash bill.It was a big negotiation.
Started with six barrels, found a co-packer where we could bottle it here.It was actually here in Louisville.And yeah, man, we, Got that stuff bottled, put it on a truck, brought it to our facility.
It was, you know, it was probably about the, you know, 95% smaller than this.I mean, than your facility.It was a really small place.1200 square feet, I think, total.Put those cases in our car and just sold them in New Jersey for about nine months.
So six barrels, that would be what, like, 1500 bottles somewhere in there.
Yeah, but we lost the first day of production too.Right.The first day of production tasted like jalapeno.Oh, yeah.
If you want to hear that story, go back and listen to the first episode.That was a whole fiasco.It really was.And then so over time, you kind of saw this and you pivoted as well.Like you found other trends that were happening.
I think you've also told us before that, you know, Toasted was kind of that rocket ship moment for you as well.
So kind of talk about what it was to start getting out of just 80 proof.And were you listening to consumers?Was it social media?Like what made you start pivoting and start looking at different products and getting beyond just the 80 proof staple?
Yeah, I mean, it's interesting.
I mean, we didn't obviously have any like we didn't like purchase software that was telling us like, hey, this is what's the trends are social media is probably just scrolling and like what you had mentioned what's happening in forums.
What are people talking about?And I think initially we had released barrel strength. So we went from an 80 proof to a barrel strength.It's like going from like, you're running a race at the turtle and then a rabbit, right?
It's like the total polar opposites.We did that because we liked barrel strength.As a consumer, we were like, wow, that tastes really good.We should do that.
There was two key things that really changed for us was, it was kind of in that right around the time COVID started was when we knew we wanted to go from having just the warehouse to actually having like a spot where we could blend and rectify, right?
Where we can actually like put a bottle together. So we fast tracked that part of our building.There was a whole separate room.Danny, you know, being an engineer was able to whip that up in like, what, two months.
I mean, it was the world's most cost effective bottling line.You guys might actually have beaten us in the cost efficiency department, which is awesome.But because guess what?It's clean and it works, right?And your capacity matters.
It's all that matters.And your capacity is probably great here.So that was like for us.And that was a huge moment.I think we've talked about this over the years too.Like that was a big moment being closer to the barrels.
and being able to like really do R&D.And then, you know, I'll let Danny go into the Toasted, actually the product itself, but it was pretty clear that Mictors and Elijah Craig, in particular, really Mictors, did a great, great job.
Building up that name toasted.I mean, that's they I think they probably were probably the first ones to really use it, right?Yeah.Yeah.I was like in 2013, 2014.Yeah.First one that came out.
So, but there were what we had saw and this is just from like scrolling Instagram and just talking to people is that there was so much pent up demand for a toasted offering that was readily available.That was clear as day.
I mean, so they've done, they have those not, it's nothing to do with their products or anything like that, other than the fact that they built up a lot of pent up demand.And I was technically in bourbon at this time, right?
I'm like full-time in bourbon and I couldn't even get like Michter's toasted. Or I could if I wanted to spend like $900 a bottle for it, like at a, you know, it was like, this is crazy.
The first product out of the gate, out of our facility was a toasted offering.So.Yeah.
So Danny, talk about that.You're like, all right, we're going to come out with toasted.What's our toasted going to be like?And do you like call up MPG or going to be like, Hey, we want to do this.
Can you tell us how to do this?Or like who are you reaching out to? I was at the warehouse one day and then a pallet shows up and it had four new oak barrels on it.
So Mike actually had a conversation with this guy Rob at Spayside and they were running a deal like buy three barrels, get one for free.Feels like a tire discount.
It was a president's day sale.Exactly.Mattress world.
Yeah, I was going to say, mattress world, they know exactly what's going on here.
I knew what Rob was doing, I'm up to it.
So I'm like, what are these for?He's like, I don't know, let's do a toasted.I was like, all right.You know, we just finally figured out how to like blend our barrel strength right.We just did a cast finish.We did a rosé cast finish.
And then I'm like, What are we going to do with it?He's like, I don't know.Let's see how it tastes.So we like worked up some blends and filled these four barrels.Each one of them were a different chard and toast level.
And we let it sit, you know, like five days go by, we taste it like, oh, that's pretty good.We had some retailers in the warehouse one day. And it was like seven days, this was our R&D project.
And they're tasting through the barrels, they're like, oh, I want this.Can I buy this barrel?Mike's like, sure.I was like, that's our R&D project.I was like, we're supposed to let it go, you know, 30 days, 60 days, whatever.I'm a seller.
ABC, always be close.ABC, yep. I was like, well, there goes that experiment.
But it actually turned out that they were all pretty good because we thought we were going to pick one char level or one toasted level and like just that would be the toasted product.But we released them in all different kind of shapes and sizes.
So, you know, we do four releases a year of our toasted and they're all different char and toast levels.And it's just kind of like as it finishes, you pull it when it's ready kind of thing.There's no like set time.
It depends on depends on the time of year that you you are trying to make it.But It was just a fun experiment.I remember it got our warehouse really pumped up.
Everybody there was excited because we just kept buying more barrels and doing different char levels and people would be like, oh, did you taste the char forward?Yeah, that was great.But that excitement kind of translated to the consumer as well.
We started seeing that on the internet.
And our distribution for the markets, we were in maybe, maybe 10 markets at the time.You could see what it did to the distribution.It just catapulted it and we were doing well.
Like our products were doing like pulling as is, but that would took it to another, like another different kind of trajectory.And the velocity was extremely high.
Yeah.That was definitely a big like moment for sure.
Yeah, who come up with the rosé idea?Because I think that was my wife.
I mean, we were looking at, we were just testing different finishes.Sherry's, cognacs, things like, you know, like traditional finishes.His wife's walking by one day because we're talking about, well, what should we do?A sherry?Should we do a cognac?
She's like, what about a rosé?And then we're like, hmm.Nobody does that.
Yeah.Have I ever told you guys a story about why we started down the cast finish route?
No, I guess not.No, tell us now.
Go ahead.It's pretty fun.Drop it on us.I hear what we haven't told.This is a good story.So we had two products at the time.This is 20, late 2019, probably the winter of 2019.Yes, because remember that was the, it was like, we're in Christmas time.
Yeah.So in my town, we got asked to do our, like, I was trying to do whiskey dinners, right?Like, I'm like, I live in, like, I live in my town in Rumpstead.I'm like, none of these restaurants.I'm like, I get it.
They're bringing in Four Roses and, like, the Big Dogs.That's fine.But, like, what about, like, I live here.Come on.I'm in it.I'm in the game. We always tell the people around here, we're like, don't you want to support local?
Like I was trying to like totally milk it.And so they're like, well, here's the real deal.You only have two products.
So it's easier for, to bring in like someone like that has like four expressions, then you've got a flight and then you could wrap a dinner around it and blah, blah, blah, blah.
I was like, all right, well, what if I was to tell you we have three products? And they were like, yeah, we could do a dinner.That's, and that was maybe like October.I was like, all right, done.Let's plan it for December.I'm going to need two months.
Let's do it in December.So that, we already had the relationship with Rob.I go, Rob, we have literally no R&D budget.Actually the word, we didn't even, the word budget never even, that wasn't even, it was like a foreign concept.
It was just like, we have no money.Okay.That was, that was the conversation.He's like, well, here's what I could do. He's like, I have these like 255 liter, you know, they're kind of like this, you know.Pretty massive.
Three and a half feet long type thing.When they're filled, you can't, I mean, they're heavy.They're heavy when they're filled, but they're not, they're manageable.He's like, I got an Olorosa sherry and a cognac, just roll with it.
We bought those, and keep in mind, 55 liter, they weren't that expensive.We can get that over the finish line.Get that, we fill those things up right away.And we're like, all right, this is it.So we're tasting the sherry.We had our little thief.
And so we had our four grain, we had our barrel strength, and now we had a sherry cast.It was basically our barrel strength.We took emptied bottles and poured it in there.And so now we had a Penelope sherry cast finish.
And so we showed up to the dinner and the guy was like, all right, where's the third bottle?I go, nah, dude, it's in the, and we rolled dollied it in on the 50 cent theater.It was so cool.People were like, this is amazing.
Yeah, I mean, definitely not something you're supposed to do. But it was really cool.Like, so yeah, like, and they, and it actually went over extremely well.
Everyone was like, and for the third offering, it was like, we were on like the price is right.Like the curtain was dropped and we had this 55 liter, we dolly it in and we thief it out and poured it in everyone's glass.
And people loved it, by the way, they really, really did.And so later that was it.That was like our big moment.Like, okay, cast finishes are cool.People are, they're exciting, they're fun.And that's kind of what led down the path to the Rosé.
But the best part about the story was, On the way home after that dinner, Danny took home the 55 liter and it spilled all over his car.
It fried all the electronics in the car.Another car story.The main computers under the passenger seat.And it just like, I used to, I would put the seatbelt around it in the back seat.
And it just kind of like fell forward and the bunk fell out and it was just going, I'm like, man, it smells like fricking bourbon in here.I'm like, oh, it just must be from the dinner.And then the whole thing dumped out in the car.
The dealer was like, what the hell happened here?I've never seen this before.And that, like a sherry finish has got a nice little, the car smelled to the day I got rid of it.
It just smelled, it couldn't get that smell of sherry finished whiskey out of there.
It was definitely a top five dinner of the year.It was a good finish though, we're going to bring it back.
But the Sherry Finch never made it to market.We're going to bring it back.
We're bringing it back.Okay.Yeah, we're going to bring that back.Yeah, we got some cool things planned for next year.No, we'll save that a little bit until later here.
So you've got this thing, you finally realize there's something in finishes, and I think that's really where a lot of the attraction came from the broader market, right?
With the architect series, with what was the, the vino de naranja, Valencia, Valencia, like all these, everything inside there, people really started chasing after them.
And is that where you all saw, like, this is where the promised land is when we start moving this way.And this is where the brain is going to start being built.
Yes.We spent an exorbitant amount of time in the market doing dinners, just talking to people, talking to like how many tech, I mean, getting phone calls and chatting with people, people like it was so clear as day.That's what consumers want it.
At least I call it the kind of early adopters of whiskey, right?The people that are, really in the know and followed new and emerging brands, right?That will kind of want to see what the new and coolest things are.
And that's a huge, that's an important segment.That's what the early adopters leads to the mainstream, right?So capture that and keep moving your way into mainstream, but it takes time to do that. It was so clear.That's what the market wanted.
And this was in 2020.And so we didn't want to do the, the same old, same old.And my wife, you know, the name is Penelope.My wife loves Rose.She was my Carrie said it in passing.We were on the phone in the kitchen.She was like, what about a Rose?
And, you know, we didn't even know.Rosé is not a... It's not really barrel-aged.It's finished in stainless steel.But we ended up making it work, and that was our first one.But I was even talking about this last night.
It was interesting, because at the time, 2020, bourbon was going through this hockey stick moment.I mean, it was taking off. Right.I mean, it was really taking off.
But then within that hockey stick of the broader bourbon market, there were these like sub markets that were even accelerating bourbon that much more.And that was like Cass finishes was even a that was like a vertical leap.Right.
It wasn't even a hockey stick.It was like a straight line up. It was interesting.So yeah, I think we were able to really being super agile as a business and make these kind of quick adjustments.
If we wanted to roll out a product, we could roll out a product, you know, and that, and it was fun to do that.I think that's what we liked.
Right.Yeah.And I mean, we started with a four grain MGP product, right.That was a blended four grain of three different mash bills.I think that alone too, was kind of a differentiator at the time, especially I remember when we started in 2000,
19, there was a lot of MGP on the market.I mean, there still is, right?But our foregrain was just a little bit different.And I remember when we started selling, going to a store and be like, this is my bourbon.And they'd be like, oh, what is it?
Well, we source from a distillery called MGP.And they're like, oh, MGP.No, it's a different one.It's MPG.
Yeah, they're out of France.
I'm like, just try it. And then they'd taste it and be like, oh, this tastes different.And I was like, well, it's a blend of three different mash bills.It's a four grain.So like, it was enough.Having that differentiator.
Yeah.Then we'd be like, look, I'll come in on a Friday.I'll sell out three cases.They're like, yeah, that's fine.That's how we did it.That's right.I mean, and we did go to different stores and do that.
So you have like initial success and you said you're like, how do you take it from 10 states and then like go from, you know, at the time, say 2020, you're doing how many cases a year?
I don't even remember.Wait, wait, what end of 2020?Like 2019, 2020.Oh, gosh.What was it?6,000 cases at the end of 2019?
Yeah, something like that.And then to like, where do you get acquired, which was what, $75,000, $90,000, somewhere in there?Probably not a liberty to go too deep into that, but yeah.
No problem.But it was a good number.Yeah.
Sure.Yeah.It was a good amount.So how do you go from that, you know, saying you're, you just, you don't have any money.It takes a lot of capital to buy barrels, put them out in the market, you know, glass, this and that.
How do you go from, you know, that small to like just explosive hockey stick growth and be able to funding all that? So how do you go from that?
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It takes a lot of capital to buy barrels, put them out in the market, you know, glass, this and that.How do you go from, you know, that small to like just explosive hockey stick growth and be able to funding all that.
Yeah, that's a good question.
I don't even know.Happened so quick.
Next thing you know, we're in Nashville at dinner with a bank and trying to get a million dollar loan.Seriously.I asked another founder, cause it was clear, like we didn't, we made it this far.Like it was in 2020, mid 2020.
We were like, if we get raised capital, it's a different business.Like then it's like, I'm doing PowerPoints every quarter and explaining why our margins are this and not this, right?It's like, that's not fun.So I talked to another founder.
And he was like, I'm going to I'm going to give you a little secret number here.And it was to a bank in Tennessee that really understood barrels.And keep in mind, we're only two years old at the time.
It's hard to get a bank loan when you're two years old.Doesn't matter how much growth you have.Like, it's tricky to get a good bank loan. Yeah, that you're not, you know, I'm not where you're not paying.
Like the text messages you get, you want a business, like, you know, loan for interest.
You remember we went to one of the like bigger banks to get a loan.You know, we were two years in business.That's what they wanted.Remember we got that loan.It was like, I could buy like 10 barrels with this.Yeah.This is going to get me very far.
Yeah. We were able to secure a loan from a local bank in Nashville, and it was like a million-dollar asset-based loan using the barrels as security.So that was huge.I mean, we went through that million immediately.
And was that the way that you sort of saw the initial cash flow happen?Yeah.
It's always going towards the future.Like the, it was basically, it wasn't even new distillate.It was like barrels for like maybe two runs ahead and glass and just any raw, it was purely raw materials.
It wasn't any other, it wasn't like, Hey, we're going to invest in a commercial.It was just like, we needed a product to sell. That was the main moment.And then after that one, we got a much, much, much bigger line with Truist.
That's probably about a year later.Yeah.
And so that was kind of the thing that I was going down is like how you manage the cashflow for this as well, because it is a very capital intensive business.
So knowing exactly what you're coming in, what you're putting out, what's your, what's your monthly burn rate is everything like that.Everybody wants to be paid up front, but then. On the backside, nobody pays you for 60 to 120 days.
We had our moments.And then you get product down the market, but then you got to spend money to get it off the market and this and that.I just don't think people understand that churn.
How hard that is.Yeah, yeah.How hard that is.I lost a lot of sleep over that stuff.I'd call Mike and be like, Mike, what are we going to do?We got to do this, we got to do this.You worry too much. Just pop us in, you'll be all right.
Yeah, I was like, don't worry.Meanwhile, I logged into QuickBooks like four times in five years.Like I just, QuickBooks, I'm like, eh.I don't really like the dashboard set up on the, it wasn't a good, it wasn't.I don't like the numbers I'm reading.
But I would, Danny, I kind of feel bad.He took the brunt of that stress, because I was more carefree, like, look, these are very good problems to have. I've always been more of an optimist and I just would be like, just go keep selling.
And then really it was a mutual tag team effort on the accounts receivable.Like we got to get paid.That's how the world works.We have to get paid.And it's not like to pay ourselves.It was to literally
pay the loan or pay down the loan or pay for barrels or pay our supply chain.
That was a grind.That sucked.Even our like our production schedules and things like that, like it was just so perfectly timed with cash flow and like when how much product we made, when we made it. Yes.And then we would like start innovating.
I'd be like, Oh my God, another skew.Like, cause that's just a whole nother kind of cash flow.Problems and cash.Yeah.Right.
Oh gosh.Remember the first batch of Valencia?Yeah.We thought Valencia was going to be like a 90 day turn.This thing ended up going for 12 months. That wasn't in the, that wasn't planned.I mean, VDN is such a potent wine.Like if you drink- So rich.
It's richer than sherry.So your immediate thought is like, this thing's going to hit quick.Like not maybe as quick as say like an Umbriana, but it's going to hit quick. It was so bad after 90 days, like awful bad.
And we were like, whoa, we cannot afford a miss on a cast finish of barrels we're importing from Espana.I'm like, this is nuts.And it just went to bed.
I don't know.And we're on batch three and it's like the first couple months, it just tastes like awful.And then it goes, it has to go through a summer.
And it's like something happens between July and August and it like switches in like a day and then it finally tastes good.But he kept asking me, well, what's going on with Valencia?Because he wanted to sell it.
Mostly because he'd been telling the distributors about this new product we have, all this stuff.I'm like, it doesn't taste good.
And he's like, don't ship it if it doesn't taste good.
The next week, you know, he'd come to the warehouse and see the barrel.Oh, like, when are we, when are we dumping this?So I ended up shipping the barrels back down to Kentucky.So they were out of sight, out of mind.
And then he stopped, he stopped asking.And then finally it was like August and I'm like, oh, I forgot about those barrels.So I got a sample sent up and I was like, all right, now we have something.Remember you taste it and you're like, all right.
Now we're onto something.
One thing too, I think people probably don't understand or appreciate is how much effort you guys put out like in the market doing visits with stores, like every time I go a store owner tells me that, oh, Mike Palladini calls me all the time, you know, he just picks up the phone, calls me or you do like, you know, in-store tastings and this and that, like talk about all the work that you ought to do in the market to get, you know, that pulled through and whatnot.
We had no marketing budget.We didn't spend anything on marketing because you can't compete dollar for dollar with Diageo in true traditional marketing sense.You just can't.Like, what, am I going to put up a billboard?
That's not going to help me move a case.Where you could beat Diageo so they could go and spend a billion dollars out in the field or in national marketing. sweepstakes or whatever you want to do.
But if you catch a consumer as they're coming in to buy a product right before they buy it, you got them right there.So in-store tastings were monumentally important for us.High-quality in-store tastings.
Like Danny, myself, we built a team around that.We had an amazing group of people that supported us all throughout the country.They were part of our family, they were part of the team, and we treated them as such.
And yeah, they're still part of it to this day. And yeah, man, we won in the field, which I think is an overlooked element.
I think in spirits in general, I think there's generally tends to be a heavy, heavy reliance on a distributor to go and do the job that you're supposed to do.
And we would always say like, look, if the product's not selling, that's like no one's fault but our own. These bottles don't sell themselves off the shelf.
Don't matter how we get the P could be made of gold and people could take the P off and you got gold.It's still not going to sell.You got to go out there and sell it yourself.That's just how we did it.
Yeah.And to, you know, a lot of brands would start building on on-premise first and then move to the off-premise and you all were kind of, I wouldn't touch on-premise with a 10.
I mean, maybe that I doing a whiskey dinner here or there, but. I'd rather just, no, yeah.I couldn't wrap my head around it.I burned some calories on it.
Yeah, we were so lean.It was like Mike, me, and two other people at the time when we first started.Yeah.
And we just, we didn't have the time to work with on-premise because you go in and you make the relationship with bar managers or whatever, and then you find- 30 days later, they're They're gone.
Yeah, they move around too and it was just a it was a heavy heavy lift and we just kind of had to focus our limited resources in different places Yeah, I know how it goes.
I mean on premise still to this day is gonna be hard unless it's like It's comes down to a cost per ounce game.
Yeah, so if you're really gonna I mean on premise you can get some some maybe some wins here and there maybe like a regional hospitality group that really gets behind you you have a good relationship with them in reality to win on premise at scale it's going to come down to the product quality and the cost per ounce and it's hard to compete with
The Evan Williams and the Four Roses.It's really, really hard.So how much effort do you want to put into that versus the off-premise where, you know, trying to get, you know, Fourth of July, you know, end caps at a major retailer type thing.
So to this day, I think we still kind of always look at that, you know, that's always a predicament you always want to try to tackle.
And so to keep the timeline flowing here a little bit, at what point did you say, well, and by the way, it kind of just like go into your minds and your head here.
Were you scaling the business knowing that like, we want to exit out of this one day and this is what we're going to work towards?
No, we, I don't think the, I mean, we didn't even have a, it's not like we had an investment bank.I mean, we, I'm trying to think when it was, it was probably 2022. We had come to a point, we already had the truest loan.
I think we knew like we needed a strategic partner.Like if we were gonna, I mean, our goal was to get to a million cases.So if you're gonna get to a million cases, you're gonna have to have international, like real international capabilities.
You're gonna need like some big help on the distributor front to like really get you the pods in each market.And we didn't want, I mean, just think about the cost of like, growing and building and managing.It just wasn't in our model.
Explain what a POD is for folks that might not know that acronym.Yeah, so a POD is, actually, I don't even know.I'm just kidding.That's a good question.I got you on this one.No, so it's a point of distribution.
So if this is our foregrain and Danny's holding our barrel strength, and this goes to the liquor barn in Louisville, that is two PODs in that store, but one account.So one account, two PODs. So you want to get that billboard.
So we fortunately had a nice core offering of when at the time now is four grain barrel strength architect and toasted.So we had a nice billboard.That's four pods per one account plus LTOs every quarter.
We were still running the business like we were building a generational business though.We were. you know, working to be profitable.
Even at the time before the acquisition, or even up to the time of the acquisition, like we were looking at land in Kentucky, like we were looking... Oh yeah, we had a realtor and everything.Yeah.
I think you introduced me to him.
Yeah.We were looking at building an infrastructure, because our infrastructure in New Jersey had a lifespan of about a year and a half left on it, right?Where we were going to outgrow it, so that it was like the clock was ticking.
Right, where we would have to invest some money into either infrastructure or we'd have to work with like a strategic partner like he was talking about.Yeah.
And then so at what point did you say, well, let's have these conversations?Did somebody reach out to you?Did you reach out to somebody else?How'd that sort of happen?
Well, it's really started with a cold email or a cold LinkedIn message.And I don't even really, I'm not, I'm not on LinkedIn often, but like as much as QuickBooks. Yeah.I'm actually on LinkedIn probably a little bit more.I'm on Instagram the most.
Yeah.It was, uh, the investment bank reached out to us and that kind of prompted the, like, oh, okay, this is the process.Let's, let's go down this, this rabbit hole.And then we signed with a bank to go down a strategic partnership route.
And then, you know, we actually.At the time we got started receiving some phone calls from, for some folks and that's kind of how it all started.And that was in 2023.
Yeah.When those phone calls, one of them was MGP and. How was their offer compared to somebody else's and how did you look at them and say, well, this is going to be a much better partnership than going with somebody else?
Felt from, I remember from the first call, it just felt like, just felt right.We had, I mean, we had been your customer customer.
We knew a lot of the team on the, on the bulk sales side, but it just felt like it was a, it's a big corporate company, right.It's publicly traded, but when you get to really know it, it's, it's kind of a small homey feeling there.
And we, and we, we really were excited about it.Our attention was all on them.I mean, we flew out to St.Louis and, and cause you know, Luxco is the branded spirits division under, you know, MGP ingredients is the overarching parent company.
So when you go to Luxco, I mean, it's, it's a pretty awesome place.I mean, it's, it was a family run business for many, many, many years.I think it was like almost like 60 years or something like that.
with Don and Lux and then David Bratcher and the whole team.And it's like Danny said, we went there and it was like a much older, more mature version of where I would have seen Penelope being fast forward 50 years.
Like the interactions with the bottling line staff as we're like kind of going through it.Everybody knew everybody and it was like, oh, how'd your kid do at the game the other day?Oh, great, okay.Like it was like that kind of vibe.
And we were all in, like we wanted to make that work.Like we were, at that point we were like, this is, this is the best and this is an awesome fit for us.
But we had received some calls before that, the MGP call and they didn't really, the calls didn't really go anywhere.So like we were just cautious.
It wasn't like you can't get too excited about something that might not even work out.
We didn't know if it was going to work.But it was fun.
Yeah.You're right.I think one time we talked, you said it almost took about a year from initial talks to the day it was publicly announced.
No, it was a lot shorter than that.Was it shorter than that?Six months-ish, maybe a little bit longer than that.It's a long six months.It's a long six months.
It's a long six months of trying to keep things quiet, under wraps and everything like that.
That was probably one of the more stressful times.You're excited, but it's extremely stressful.
Yeah.There's so many things that could not work out, you know, or that you just don't know which way it's going to go. Oh yeah.And I had, we had bought a house in October.I don't know how you did that.
So keep in mind, we were moving at the same time.
So, oh my God, we, we, well, and I, so I had to sell my old house, move into my new house and close on the deal and like announce the deal all within the same week. That was a tough week.That was a tough week.What were you stressed about?
Like, if it fell through, like, are you nervous about the future of your company, or are you just, like... Everything.Yeah.Personal, professional.There's, like, a laundry list of things to do.
And, you know, to my wife's point, it's like, hey, are the movers grabbing, like, the couches today?Is that today?Like, she's asking me, and I'm like... Can you please manage this project without me?I'm like, I have no idea.Like, I have no idea.
I have no idea if the movers are coming.
They I can you want me to call them.I'm gonna call them right now and like it was just like just an Incredible amount of stress.
I remember being with Danny at Derby or we were at Oaks together He flew in and you didn't make it for some reason and he was moving Yeah That's what it was, it was that way.
We were chatting, but you were on your phone a lot and this and that, and like, you seemed off, you know, from our normal, and then like, I think it was like the very next Monday, that Monday it got announced, and I was like, well, son of a bitch, you know, no wonder, it all makes sense.
And in the last couple weeks, I mean, it's 24-7, seven days a week, there's like teams of people working on making it happen. You're on calls at midnight with like a bunch of people like attorneys.
Yeah Yeah, just like power zooms at like midnight.
You're like what there's like 25 people on this zoom and it's 1230 a.m So the week after we close and he moves and he's closes on his house.We're in Nashville.Oh my gosh in the market I've been traveling with Mike for five years
No, we were staying here in Louisville.Remember, we had to go travel.We had an event.
We were driving to Tennessee that morning.Yeah, because we had lunch with you that day.Yeah, it was that night.You guys definitely never heard this story.Okay.So for five years, my voice just cracked.Getting nervous?It was a good crack.
For five years we're traveling, right?And we're usually hanging out, like have a whiskey at the hotel bar till midnight, 1 a.m.sometimes.It's like 10.30 that night and he's like, I'm gonna go to bed.
I was like, that's weird, that's never happened before. So, all right, see you in the morning.So, wake up in the morning and tell him, all right, we're gonna meet in the lobby at 8 a.m.
I wake up, I go get him a breakfast sandwich, I'm waiting in the lobby.Like, no mic.I'm like, all right.Usually I give him like a 15 minute buffer.It usually takes long showers.So, nothing after 15 minutes.So, I start texting him, where you at?
I start calling him.30 minutes go by, no mic.Calling, calling, no answer. I go to the front desk.I'm like, Hey, can you call this room?She calls and you know how loud the phones are in the rooms.No answer.So 45 minutes are going by.
So she's like, do you want me to get security?I was like, well, let me go up to the room.So I go up to the room and I'm just pounding on door.No answer.I'm like, Like where the hell could he be?There's no way he's in there.
And hours, now it's an hour.So I get security, they come up, and they unlock his door, and it opens a little, but he's got the little thingy on.The latch.
Better to be safe than sorry.I've seen a lot of datelines.
Latch that thing. So security's going, hey security, like no answer.I'm like, oh my God, where's Mike?Did he hang himself in the room?I was like, did he seem upset yesterday?Like just whole sorts of things.Worst case scenarios.Yeah.
So security guy's like, I gotta go get the bolt cutters.I'll be back.So he comes back.Now we're like, it's an hour and 20 minutes.And while he's gone, I'm like, come on, Mike, wake up.
And then he comes up with the bolt cutters and he goes, you might not want to be around for this.I was like, oh my God, Mike's dead.And I'm like, what do I tell Carrie?Like, I'm like, all these thoughts are going through my head.
I'm like, do you think they still want to close on the business?And the guy cuts the bolt thingy and goes in the room and I just hear Mike go, I'm awake, I'm awake, I'm awake.
But like we were yelling and screaming and pounding on that door for an hour and we couldn't wake him up.That was physical exhaustion finally catching up.
Yeah.I mean and then I get I'm up and it was like an hour and a half late.Come on.Give me a break.I wasn't dead. So I get ready and I'm in a great mood.I got a great night's sleep.I'm like, the wind is behind my back.
I'm almost like skipping to the car.Danny's in panic mode.I'm whistling.I'm like, God.
He thought he was going to have to have one of those.
I look at Danny.I'm like, Danny, that glass is half full.And so I get in the car and he just takes the breakfast sandwich and throws it at me. The one he got from you.
Like your cold breakfast sandwich.
Just take your damn breakfast sandwich and just chuck that at me.
You know what you put me through?Oh my god.I was like, he's definitely dead.That's hilarious.Yeah, that was a good story.
Well, I'm just excited to see how it all led up and I'm sure a lot of people kind of want to know post-acquisition now that You know, you kind of had this happen.
I'm sure there's a lot of stuff going on of how do you communicate this to your internal teams and are they happy with it?And how do you move the business forward and, and everything like that.
And then now that we're here, are we a year later than it was announced?
Right?Something like that.Yeah.
Okay.As you can tell, my timeline's a little bit off here, but what has been life after acquisition?
As an entrepreneur and as a startup, you're wearing all the hats, you're doing everything, you're looking at the QuickBooks, you're trying to figure out where I'm going to market and where I'm doing this.What's like afterwards?
Is there a light at the end of the tunnel?I guess that's what I'm asking here is, does access to something get easier?Are there aspects of the business that you no longer have to worry about?Kind of what it is.
I'd say like the first six months following the acquisition was also a very stressful time because it's kind of this organized.
I mean, they actually were, Luxco's done a lot of acquisitions, so they're pretty savvy on like post acquisition integration, which was immensely helpful.
But things like getting the sales team set up within the sales org and, you know, the operational side and how we're going to be managing production.
And there's just a lot of questions and meetings and things that, you know, we talked about pre-close that we were now trying to put into motion post-close.So that was probably six months of a lot of figuring out mutually, which was great.
Like it was a very mutual. What's the best path forward?Like, and it wasn't just like me saying it or Danny saying something, it was like a whole round table.That was a lot of work getting that migrated.
The end goal was for really Danny and I to keep innovating, keep creating great products and continue being the face of the brand.Like we shouldn't have to worry about purchasing barrels on the secondary market or did we run payroll this week?
Did we file the correct state report?Did we file like a lot, but you know how like you guys know that stuff is backbreakingly tedious. But now we're all one team.I mean, it's been a while.It's been a year.I mean, we're, we're one team.
It's like, there was no like pre Penelope.I mean, we could talk about it, but like, it's one fully functioning team now across all these different departments.And it's, it's been awesome.
And I'd say like, like probably within the last couple of months, probably right around, I'd say Christmas.So like winter is when it was like, wow, like, all right, I think we're kind of in a, in our groove.
We're finding our groove 2024 cause you know, 2024 would have been planned in like summer of 23.
So that, you know, 2024 might have a couple of bumps here and there as we're, but then, you know, looking forward towards the next five years, I mean, it's going to be pretty dialed in.I mean, there's, there's some great products we have coming out.
The team is kind of fully functioning as one unit within Luxco.So it took some time to get there, but I think now we're in a great spot.
Your standpoint, because it seems like you're in charge of the blending, the product that goes into the bottle.
And so have you embraced like them coming in and saying like, oh, have you thought about this way or have you taught them, you know, this is how you should do something?How's that relationship to work?
Actually, really well.They're pretty open to anything and everything.They're just like, tell us how you did it and what you want to do.And like you said, yeah, they've thrown out some pointers on, well, maybe we could do something like this.
I'm like, yeah, sure, if it works, but they've really kind of left product innovation and kind of like the development of it to us, which has been really nice.And it was nice to get back to product.
Because towards the end there, it was like, I got to, you know, it'd be like 10 o'clock on a Wednesday, like, shit, I got to run payroll, you know.
Or just dealing with cash flow and all that stuff and it couldn't really sit down and really focus on product like we used to in the beginning.And now we're back to that.And now we have time.
I was able to run an experiment on our architect and do different trials on them.We actually adjusted the product a little in the last two builds that we did.And that was because we had the time to do the R&D to really dial it in.
Yeah, but even like little things, which I think are cool is a big, big thing that Danny's been working on.
And this is crazy because it's MGP is a big company that the Ross and Squibb distillery up there in Lawrenceburg, but like he's found a way working with the production and operations team to, to start doing their first four grain distillate coming out of there.
And Danny was obviously we make a four grain. Things like that, it's like- That's exciting.Everything we wanted and hoped for has come to fruition.And I mean that, like, absolutely, sincerely.
I mean, it's just that gut and, like, we both knew this from that first initial call, like, it felt right, it felt real, it felt genuine, and it definitely has, for sure.So is the goal still a million cases?
You know, it's funny, I was just talking about that.Yeah, I mean, look, I just had this conversation.It's like, well, great.You get to a million cases, but.Then you have to go to 2 million cases.But maybe that's not the trajectory of the brand.Right.
And I'm not saying that we don't know the answer to that quite yet, but it's like maybe the brand is a half a million case like that.And that like maybe that's the brand.Maybe that is what the brand is.And that's OK.
That's a it's you're going to get that half million every year and you're going to get it for now until the rest of eternity.That's an awesome.
Problem that I think we could record a whole nother podcast, but topic popped up in my head It's like is there an opportunity in the market to have another million case brand or is it too crowded now?
We have to have all these small boutique niche brands and whatnot I I think if you have an exorbitant amount of money and say you don't even own the distillery Oh, you can go build the distillery.
I guess whatever you don't need to I mean you can go find whiskey and And we can get you the number for the MGP bulk sales department.There we go.That's right.I'll be ABC.
If you're okay sacrificing the margin as a new brand, hey, I'll work off a low margin.Remember, it's the cost per ounce.And you want to dial in a heavy marketing spend for on-premise.I think if you capture on-premise, you can get to a million cases.
And it's like, at that point, you're looking at 3% growth.And that's great because that's a lot of volume.It's a shit load of volume.
Tons of volume.A little bit different than what a lot of us are working with there.
That's a good question, though, because it's like it could be like music is these days where, you know, there's there's not a lot of like these mega artists.Yeah.You know, now music is all about only Taylor Swift.Yeah, yeah, exactly.
You just have Taylor Swift and then you have a bunch of like these little micro, you know, music cultures because everything's so accessible these days in music.Right.With Spotify and all that stuff.
And so you don't have to rely on the radio to get stuff out there.Whiskey could be the same way.
I'm sure there's a lot of whiskey geeks out here that probably want to ask this question is that when you all did go inside the walls there, did access really start opening up and you all kind of got like carte blanche of whatever is inside of MGP's inventory?
I mean, well, we have keys to the distillery now.
Yeah, that's pretty cool.And even I got one.They're like, are you sure?
Sweet.Yeah, that's kind of cool.You have to sign a waiver every time you walk in.I will not touch anything.
No, I don't even have to sign in.You just scan it and in you go.
Nice.Yeah, it's pretty cool. It's kind of interesting because we were developing product based on what our access was, you know, as a customer.And that dictated kind of how we made the product and what we made.
So having now access to a lot of age stuff or basically like any batches that we want. it kind of changes how we think about making product, which has been fun and interesting.We started getting access to 10 plus year old barrels.
We're trying to figure out how to use them this year.So we're rolling out this, we're calling it the state collection.And it's basically our 10 plus year age stock.
Yes, all those.Yeah, you want to drop any more hints there?This will be a few months before it even comes out.It's coming soon.
We know a cherry finish is coming out too.
Well, I'll tell you about that.25 is exciting because now, like you said, Dan, imagine having all this time to just innovate and think about products.
I got the little gerbil upstairs he's cranking on that wheel and so does Danny and so it's been nice that it's fun like this is what we when we were thinking back to like 2019 and 2020 and rolling out Toasted and Architect and Barrel Strength and the label like that was the most exciting and the most fun we had when we were building the company was around the innovation and oh this is cool and it tastes good too it's like a double win.
But yeah, so the estate collection is we originally, we had a founder's reserve, which was light whiskey.So we had a 13 year and then we released a 15 year, but that was kind of sitting on an island, right?It was like, okay, it's on its own.
And then we had a private select nine year.And one of the coolest parts about the Luxco thing was too, was when we, so we would say we released a Penelope nine year in 2022 pre-acquisition.
we would just be like, this is a hundred percent one and done folks.Like I highly doubt we're going to get access to this again.So enjoy it while it lasts and legitimately it's not coming back.
But with, with bigger companies, how they, they don't view things like one-off that's more like, so I remember one of the first interactions with operations was around this nine year.
And it was a really good story because like, I was like, this is great.This exciting, it's a great product, but they were a little nervous.And I was like, well, I don't get it.This is so cool.Like it's coming.
And then it turns out they need to think about how they make that product now for the next 10 years.So that's what, that's not my problem anymore.Exactly.I, that's like another light bulb goes off.
You're like, Oh, that's like, yeah, like we got to have it for the next 10 years, obviously. So it's like things, but then we had, so we had private, so like sitting on an island.
So, and then we had, I got access to these really cool single barrels of the 10 years that were just sink.Like I wanted to do a single barrel offering like bottled as a single barrel, just, you know, I don't know.It's kind of cool.
And they're 10 years and we can sift through kind of quite a few of them to see which ones will meet the criteria. So then we came up with the estate collection.It's like, got like a peony crest.It's, you know, nicer packaging.
It's a custom glass bottle, which we've never done.So we put together within the estate collection is our private select nine-year, which is a blend of Kentucky, Indiana juice, our 10-year single barrel of 21 and 36 rye.
And then we have our founder's reserve, which is always just cool, random barrels we come across.And that's the 11-year 95 wheat whiskey, which is really cool.
So that's this year's estate collection, and we'll release it all simultaneously at the same time.
Mike really wanted to design a crest.That was the whole essence behind that.You want a willow crest?
I was always jealous of that willow crest.
I love that crest.It's cool.And now you've gotten to this point, you're like, I'm making my own.
Yeah, a little flower in it.It's not like a lion or anything.Peony.Yeah, it's a little peony.
So we got that, but then, you know, as we're looking into 25, like we've been working on this Cuban rum finish for quite some time and going with our Cooper series, so Havana.
And then, you know, we're introducing at the start of 25, we have American light whiskey, bumping that up to 17 year, bringing back Rio, but in a larger quantity. So like people can actually get it.
We're gonna be introducing we yet to be named a cigar series product We've been working with a lot of cigar manufacturers.We went out to Vegas the trade show.So that was fun
And we have a, it's going to be, it's a product that's really not, it's not just another cigar blend.Like I'm not a huge cigars.It's created by cigar manufacturers.So it's, it's kind of not me saying, Hey, this is a great cigar.
This is what you should pair it with.
It's somebody else telling you.It's real perfect, like real master blenders of tobacco and cigars.Telling us what pairs and kind of creating a really cool series around, around that, but not us telling you this is pairs well, because
Yeah, I finished it in nine different casks.I promise it goes well with them.
No, this is truly a really cool thing.We took the opposite approach and letting them tell us.And I think it's going to, people are going to really like it.Yeah.
Yeah.I mean, over the course of seven months, we would be having these, we'd be getting them samples.They'd be giving us samples.We'd have these zoom meetings with people in Nicaragua.
Yeah, they got like, they're in like a, like literally mosquito tents and stuff like that.It's wild.And then the one time that everybody was together from around the world was at this Vegas cigar convention.
So we basically, we shipped in like boxes and boxes of whiskey, like different mash bills and all, all the different like raw components. Four gigantic boxes of whiskey.Like a lot.Yeah.
And then we all met up at like the cigar lounge and we had a room.We're all sitting around and we're, it was fun.You know, they're, they're like handing out cigars.We're making blends, kind of passing them around and.
And we had Donnie there, Adam was there, we had some folks that have been close to the brand for a while there.
But just locked ourselves in a room and for a couple hours just blended together a bunch of different things and smoked cigars and tried to pair them and really understand.
Remember I was double fisting?So I don't smoke cigars, so... Do you have a Zen in while you're doing that?
I remember having like a medium and then like a bold.I don't even know if I'm using the right, but it was like two of them and you're just trying to pair it.And they're like, no, and they're telling me like, you see what you're getting?
And I'm like about to like pass out.My tongue's on fire right now.It's just like peppery.I'm like, I get it.I see it.I really do.Oh.
Yeah.A lot of smoke that night.Just don't come out with the Zen pairing.I got that idea already.A Zen cast finish.That's right.Well, guys, this has been really fun.
I know there's a lot of people that are in the industry that are building brands as well.And knowing that you will have built something very successful and it's something that a lot of people probably want to emulate.
In your own words, what do you think has been one key to your success that wouldn't have been there without it?
Danny, take it away.Oh, okay.I think building the brand to be a sustainable, healthy business was always kind of numero uno one kind of priority that we had.
From a company perspective, I think your founding team, your core founders have got to be in lockstep and dialed in on key responsibilities.
You know, heck, Danny with production and ops, and I'm on the sales and marketing side, really in our own lanes, but going 110% was immensely helpful.
And you know, for me, I just goes back to don't underestimate the field and the relationships in the field, because those are the folks that are either buying it off the retail shelves or the folks that are selling it for you on their behalf at their stores.
And those folks are the reason why we even have a brand.And so just that's where the fun's at.That's where all the fun's at.
Yeah. I mean, we still have, we have a great- I know you are still traveling like crazy.Yeah.Yeah.All that counts and- I was eating Wisconsin cheese curd in a hotel room last night.
Like my bourbon week and all those guys.Yeah.
Well, Michael Paladini, Danny Police, thank you again for coming on here, sharing your story, kind of giving folks an insight because it had been a few years since you've been on and now we get to kind of see the post side and it's been good to understand more about that.
We always value your friendship.
Here as well and understanding the stories of what you all have gone through because we're building our own stories Maybe not as many car stories, you know And you know congratulations man, you guys are building something very special we're working.
Well, thank you.It's awesome Grab a bottle of that double oak.Yeah, we'll get you take won't get you a charge.Yeah You are definitely You already mentioned that payout.Yeah.
Well, I'd say for everybody that comes on the show, if you want to give anybody an idea of where they can find out more about Penelope, where I can buy the products, learn more about you, how they do it.
PenelopeBourbon.com.You can order online there.We're also available, not quite nationwide, but pretty much with the exception of a few markets at a lot of stores.Sorry, Alaska.
I just saw that interactive map on Instagram.My wife was like, this is pretty cool.It was cool, right?
So go to Instagram, it'll show you which states they're in.There you go.
Perfect way to do it.Yep.Well, fellas, thank you again for coming on the show.If you want to know more about our previous episode, make sure you go to bourbonpursuit.com.
You can type in the word Penelope and you can find this and also other old episodes that we had actually had these guys on.But make sure you follow us, subscribe to Bourbon Pursuit wherever you get your podcasts.But with that, cheers, everybody.
We'll see you next time.Toodles.
