Craft Brewery Financial Training Podcast
Craft Brewery Financial Training Podcast
Contract Brewing and Community Building: How Soul Mega Thrives Without a Taproom
What happens when you combine accounting expertise, homebrewing passion, and entrepreneurial spirit?
For Elliott H. Johnson II, it was creating Soul Mega – a thriving beer brand that's challenging traditional craft brewery models.
In this illuminating conversation, Elliott shares his journey from making "really bad" homebrew batches to building a recognized beer brand without a physical brewery.
Soul Mega's contract brewing approach allowed them to enter the market with minimal capital investment, focusing instead on wholesale distribution and community building.
When COVID-19 hit just six months after their launch, Elliott pivoted to become "basically an Uber Eats driver for a year," personally delivering beer to maintain customer relationships.
What makes Soul Mega distinctive is their approach to creating taproom-like experiences without a physical space.
Their signature event, Mega Fest, combines a beer festival with DJ performances and community celebration – perfectly embodying their mission to "promote creative culture and inspire folks to pursue their interests and passions."
Strategic collaborations with established breweries like Stone, Port City, and Tröegs have expanded their reach, while partnerships with graffiti artists for label designs connect the brand to creative communities.
Elliott's financial background shines through in his meticulous approach to business management. He maintains a 13-week cash flow forecast, uses CRM software to track account performance, and prioritizes in-person visits to high-performing retailers.
His candid insights about navigating challenges – from finding a new contract brewer when their original partner suddenly closed to handling regulatory hurdles – provide valuable lessons for any entrepreneur.
Whether you're considering alternative brewery business models, looking to strengthen your brand connection with customers, or seeking practical strategies for sales growth without a taproom, this episode delivers actionable wisdom from someone who's making it work against the odds.
Today on the podcast, I speak with Elliot Johnson from Soul Mega. This is our brewery spotlight on the business of beer real-world insights from breweries and beer brands who are making it work. So each month, we're going to shine a spotlight on one exceptional beer business to explore what makes their business thrive. And in my conversation with Elliot, we'll go beyond the beer to uncover best practices, smart financial strategies, creative sales tactics and the real-world lessons that they've learned. So this is your front row seat to learn from peers who are building profitable, resilient breweries and beer brands and raising the bar for the industry. So for now, please enjoy this conversation with Elliot Johnson from Soul Mega.
Speaker 1:Welcome to the Craft Brewery Financial Training Podcast, where we combine beer and numbers to provide you with tips, tactics and strategies so that you can improve financial results in your brewery. I'm your host, kerry Shumway, a CPA CFO for a brewery and a former CFO for a beer distributor. I've spent the last 20 years using finance to improve financial results in our beer business. Now I'm helping other craft breweries to do the same. Are you ready to take your brewery financial results to the next level? Okay, let's get started. Just a quick note. We'll be right back to the podcast. I want to let you know about a new network for beer industry professionals. It's called the Beer Business Finance Association. It's an organization of financial pros just like you, looking to improve financial results, increase profitability, connect with your peers and share best practices. So I'd love to tell you a little bit more about this. If you are interested in learning more, please email me kerry at beerbusinessfinancecom. That's K-A-R-Y at beerbusinessfinancecom. Or you can visit bbfassociationorg that's bbfassociationorg to learn more. Hey Elliot, welcome to the podcast.
Speaker 2:Hey, good morning, kary, what's?
Speaker 1:going on Not too much. Hey, it's great to see you. I'm really looking forward to this conversation. I think you have a really unique business that is going to be interesting to share with other folks in the beer industry. So why don't you give us a little bit of background on you and your business?
Speaker 2:Okay, cool, well, I'll start with a background about myself. My name is Elliot Johnson. I Cool, Well, I'll start with a background about myself. My name is Elliot Johnson. I'm originally from Chicago.
Speaker 2:I started Soul Mega in DC in got out, I started to learn more about the? Um, the imported beers with the Belgian beers and things like that. I just kind of really enjoyed the uh kind of like endless flavor you can have with different types of beers. So, um, I got a job in accounting out of school and, um, I really just started homebrewing as a way to be like a creative outlet for me outside of like the kind of structured job I was in, and so, yeah, I bought a kit in like 2011 and started making beer at home and it was really bad. But I but you know, I was a chemist, I was a science fair nerd growing up, so I didn't mind the trial and error. But we, you know, we, we I met my co-founder in 2013 and we just ended up having a homebrew club and just making a bunch of all grain batches that eventually got really good, specifically this one particular pale ale recipe that we made, and so we would have these little tasting events where I would invite my friends over and try the beer and everyone liked this one particular recipe. And, uh, I come from a family entrepreneurs. Uh, my father worked in the beer business for like 20 years on the marketing side, but he was at a miller and course and a company called heilemann. So I kind of saw a little bit and it might have instilled me, uh, subconsciously, but I kind of liked the idea of, like, the community that was kind of built around people enjoying the beer and I was, like you know, I want to start my own company one day. I want, as well, do something I'm passionate about. So I say, okay, why don't we try to sell this pale ale recipe that that we've been everyone's used to like? So we had our first official like, uh, I'm gonna call it experiential marketing event. We essentially did a tab takeover with our homebrew kegs at a bar and we did a whole tasting with people. We had a dj and we kind of just walked folks uh through how to enjoy craft beer.
Speaker 2:This is around 2017. At this point it was still like like it was. It was, it was popping in dc, but like, not really at the scale it is now, and so, um, we decided to call the brand soul mega, and the concept behind soul mega was just for us to kind of promote creative culture and inspire folks to pursue their interests and their passions. So it's kind of like you know, your soul magnifies, and so we came up with a logo and we incorporated the business in 2018 and we've been selling beer in market since september of 19 with our flagship, which is our american pale ale, the same homebrew recipe. We started, uh, brewing there that's it so, uh, yeah, it's pretty cool.
Speaker 2:So we started six months before covid. So, uh, business plan out the window immediately yeah, that's happened to quite a few.
Speaker 1:It's amazing how many breweries I've talked to that in the yeah, we opened the week before, the month before and, uh, you know what it's like you get. We get thrown these challenges and I'm sure they haven't stopped for you.
Speaker 2:That was a big one, but that was that was an interesting one and I was annoyed by it, but I am grateful, um. What I didn't mention is we were looking at how we want to enter the market. We were doing our business planning, like in 2016-17 and uh, it's like do you want to go to the taproom? Do you find a? A brewery? Like what do you do? Like we landed on contract brewing. We found that that was the lowest barrier to entry, to just grow the brand organically, and so we started brewing in September with a contract brewer. So we had packaged product with no physical space. So when COVID hit, although we kind of like avoided some of the I'm sure operational turmoils, a lot of the brick and mortars had, it happened to our customer base, so it also kind of disappeared. When all the bars shut down, yeah, and we had to pivot to direct consumer. I was basically an Uber Eats driver for like a year doing home delivery, yeah.
Speaker 1:You do what you got to do Well say a little bit more about the business model and the structure. So you've got a brand, you do what you got to do. Well, say a little bit more about the business model and the structure. So you've got a brand, you've got recipes, you've developed it, you've kind of tested it. You found a contract brewer, no taproom. So that's a different model. Maybe give us a little more detail on how exactly you get to market.
Speaker 2:Yeah, so we rely on wholesale sales, sales only and when we first started the company we were doing self-distribution, so I was pretty much handling um in the end from product development to um to the consumer's hand, and so what we do is we have, we make our recipes, we bring them to the contract brewer and they help us scale it to fit their system. Uh, they charge us to feed or produce it, package it, and then we inventory it and then we scale it to fit their system. They charge us to feed or produce it, package it, and then we inventory it and then we sell it to the wholesaler. Now, but at that point it was a retailer and so for us, because we have such a limited kind of a source of revenue, we have to think outside the box a little bit. So we rely a little bit more on like events to compliment the wholesale revenue.
Speaker 2:We do a festival called mega fest. It's like a block party slash dj fest, slash beer fest. We're actually going to have our third one on september 6th here in dc downtown anthem row, in front of the apple store, and so a lot of it is just trying to do community building at that level, like, like it would happen in a tap room, but we use uh public spaces and we also use our retail accounts so we do like events at our customer basis. So we'll do like a theme night or get a dj in there and throw an event to kind of promote our accounts nice is megafest is that that's an event that you've created um, and it's going to feature exclusively your, your brands and beers or others as well.
Speaker 2:So uh, the concept behind mega fast really was just me trying to come up with a cool way to to uh, uh physically display our brandy doses, which is like music, active lifestyle, creative arts and so, um, the concept is essentially uh, we invite other breweries as well. The first year, we focused specifically on the black owned breweries in DC and Maryland. Last year I'm sorry, 2023, we brought in other beverage vendors like wine, cider, hard kombucha, basically anyone in the mayor community which had a startup brand that was just getting off the ground. We wanted to kind of like, bring them this year. We didn't do it last year. This year it'll be our beer and then our friends that we've worked with over the past two years, so it's a sole mega and eight other vendors at um mega fest this year so it's still kind of small and we got a crazy dj lineup.
Speaker 2:There's like eight djs coming. It's a seven hour party. We're doing just like back to back to back. So I want to merge, like a dance party, in with the beer festival to kind of like bring two different groups of people together that is very cool what's tell me again the date and location uh, september 6 2025. Uh, it's at 800 k street northwest in dc. It's called anthem row. Uh, it's basically a a block in front of the carnegie library in between 7th and 9th street.
Speaker 2:That's awesome, so the venue was cool, like my. I will say this is our third year doing it. I've been pretty good at picking the obscure kind of venues and we did it at the walter reed military hospital the first year before it got redeveloped and we did it at a at a park called sandlot on the river of anacostia last year across from the nets park. So I've been trying to find cool environments. Folks like enjoy beer and like kick back. So this one's gonna have a nice kind of like um, historic look to it as far as like the architecture that's awesome.
Speaker 1:That sounds fun. Yeah, yeah, so if anybody's listening and can get out, yeah check us out.
Speaker 2:Yeah, september 6th mega fest, we're gonna have soul mega beer. Uh, we're dropping the lineup today. I can tell you a little bit of people are coming. Uh, we invited a lot of breweries but, um, we're gonna have browse. Gonna be there um, allagash. Uh, liquid intrusion. Um, blue jacket Liquid Intrusion. Blue Jacket they're based in DC, port City is coming. We've got a cider company called Dope Cider out of Youngstown, ohio, and the Black Brew Movement which is going to pour for Black Beauty out of Maryland, andland, and black viking, and I'm missing one more. But check our, check our website. We'll post it there. That's awesome.
Speaker 1:Make itcom yeah, we'll link to that for people. That's great. I love that. So that's a very cool business model. I think that'll give people some things you know to think about, because I, as we were talking about I you know I get that question a lot. It's like do you know any breweries that are don't have a physical brew, that do contract brew, that are going direct to wholesale? And you know, don't hear a lot of that because the traditional model is right tap room, small brew house, you know, scale it another one, get the distro eventually.
Speaker 2:Yeah, yeah know, if you have the capital and and and and your market dictates fair rental, rental value or you can buy a property, I think it's still worth to pursue it. But because we didn't have it, I think for me and our and my co-founder we had to kind of turn our brains off on trying to be a traditional brewery and put on like the brand hat first. So I never say that we're a brewery. I know some people who contract brew say that I just say beer company or beer brand, because uh, soul mega is kind of like a lifestyle at this point. Um, when we get a physical tap room, it'll be an extension of the brand but it won't be the brand in itself. You know gotcha. So running a business is tough, starting one is is tough and you know it's, it's the brand in itself, you know.
Speaker 1:Gotcha so running a business is tough, starting one is tough and you know the beer industry is a bit of a challenge these days. But you know, let's talk about some positives, right? What are some? You know, maybe biggest win or wins over the last 12 months for you guys.
Speaker 2:Okay, well, you know, this 12 months has been very eye-opening for me specifically, not only actually getting an actual distributor now, that helped us grow into the Maryland-Delaware market, so we're covering three territories right now. Small footprint, but we have a lot of runway. We did two really cool collabs over the past 12 months one with Stone in Port City. We did a West Coast IPA with lemon peel and Thai basil. It was really good. And we did an alt beer with Troggs just recently, about a month ago. So we got two big kind of like craft established brands that we work with and I got a chance to talk to the staff and sort of facilities and it was an amazing experience. Another one I think is pretty cool is we were in Whole Foods before but now we're back and we're also in Total Wine. So we've got two pretty solid chains that are supporting the craft beer movement that you can buy our beer at now.
Speaker 2:And also we took the brand international for the first time in the second quarter, with our beer being featured at the barcelona beer festival this past april, and I got a chance to do a talk to the spanish people in english about american beer. I got I tried my best to give them the the biggest picture I could as far as our stats, what our growth rate looks like right now, our industry size. But I walked them through our pale ale, our ipa and a stout from a company called Cajun Fire down in Louisiana. It was pretty cool. I got some feedback from the European market on what they thought about our beer, what they're drinking out there. They're on the hazy craze right now so that was kind of cool to see.
Speaker 1:That's interesting. You know, the international market is another area where I think people, you know, the traditional approach right in the beer business is, you know, go deep, don't go wide, meaning own your you know hometown, own your city, own your county and maybe eventually get your state and then Ben, but I'm not sure if that traditional model is still holding up when you can kind of skip. I'm not sure if that traditional model is still holding up when you can kind of skip, and particularly, as you just said, international. I've been hearing more and more about that that. You know there's a real, you know, thirst for American beers over there.
Speaker 2:Yeah, you know it's funny because I think about this all the time, specifically with my buddy who owns the company down in Louisiana, cajun Fire. He's kind of really in on that, typically in the Asian market, and so I can't tell if it's like if our international interest has grown because of all the work the people before us went into, like owning their market and like growing their brand and such that level. But I think if economics makes sense, why not? Why not try to just, you know it may not be something you do forever, forever, but if it can make an impact and you can find an opportunity that may be less crowded. I mean, obviously you know how many breweries are in america right now. I think when we started there was 6 000 and maybe less than that.
Speaker 2:We started home, started the brand like 2015, 2014, 2017 and that is like what? Nine and a half, almost ten, yep, and so yeah, and so they're. And I don't even know if that's, if I don't know what the sweet spot is. I I posed that question to one of my other friends. I said how many breweries are supposed to be in america? Is it seven thousand? Is it ten? Because you know some of them are. They make less than 500 barrels a year almost and they're in like small brew pubs. So like like the neighborhood bar, need to be the new regional eventually, or do they need to stay in their own, their hometown, and let someone else do that? I?
Speaker 1:don't know. Yeah, well, it's a lot of. I mean, I think in my experience, a lot of it is just where you are less about the total numbers. In other words, there's certain markets that just are totally saturated and there's others like wow, there's really an opportunity here. So it seems very market specific location, location, location, right, kind of that still holds up, I think um no, you're right.
Speaker 2:I think that's a good point. Um, because you know, look at a play, like you know. You look at illinois and you know, or the midwest versus like portland or san diego or seattle, it's like yeah there's certain spots, it's just but yeah well, let's, let's shift and talk about.
Speaker 1:You mentioned you. You went, uh, you were an accountant. This is, uh, you're my, you're my people here. I love it, yeah, yeah I studied.
Speaker 2:I studied business in undergrad and I got a job at aerospace company when I graduated doing financial management operations and um preparing a financial statement for um stakeholders and so and I I I won't say this I I was more of a broad business major. I had accounting classes. I really did not like accounting that much. It was like I like to be more big picture, more like on the forecast side. So I did that for about six years and then I transitioned more into like budget and like corporate planning, so more on the strategy side. So that's pretty much my career has been since 2000 and like 15 or so it's just financial planning for companies.
Speaker 2:And then I started the soul maker, like my side hustle.
Speaker 1:So what are like speaking of, like the finance side, like financial performance, like what metrics do you look at, like how do you define success or how do you set goals using particular metrics?
Speaker 2:you know, um, it's a great question because I um, the metrics I was using at work are way different than these, so I had to learn it. So so shout out to to you and your program, uh, your business finance, like just learning from what you guys are putting out there. So I just look at right. Right now I'm looking at, uh, you know, the budget, the plan versus actual. I've got a 13 week uh cashflow statement that I'm pretty much checking like every day and I'm using, um, our distributor reports, uh, to do sales forecasting, specifically on where, I think, learning the rate of sale of the individual accounts, but also who didn't buy after a certain part of time, and using that to just look at our inventory levels as well. So I'm kind of tracking. I want to learn more KPIs actually. So I'm excited to dig deep into your course materials because I know that there's a lot of other areas that could be covering them. So I'm looking at right now.
Speaker 1:Yeah, We'll definitely go through those. But I mean you're right on with the cashflow tracker. I mean that's essential, that's the most important one.
Speaker 2:I was managing it in the P&L at first, but then, as I started to like look at options and like lines of credit and how bad stuff's not on the balance on the pnl it's uh affecting the balance sheet and cash flow statement, I kind of have to monitor. I'm looking more at the cash flow now. It's like how much money am I going to have at the end of the week, for today, you know, and so, um, I've been running with that for uh since the beginning of the year. It's been very helpful yeah, cash is.
Speaker 1:Cash is king, no doubt about it. So let's talk about. You know sales growth is a challenge in the beer business these days. So how are you driving? You know sales at retail, I know you. So you, you contract a beer. You work with a wholesaler. You know the wholesaler's job obviously is to call on these accounts. But you know, as the brand owner of the beer company, you know you have a role to play there too. Like, how do you, how do you go?
Speaker 2:I'm in the market pretty much. I try to get in the market at least three days a week or at some form of fashion, whether that be a touch point on a phone call or an email or a physical visit. So what I've been doing is, when we were self-distributing, I was managing about 40 accounts myself with my own personal relationships I had built from being a customer in a lot of those bars, uh, at my younger ages. But uh, now that we're over, you know we're in over 100 locations. I can't really touch all of them in the frequency I want to. So I focus on, kind of like, our top performers and what I'll do is I work with them closely on promo events, print materials, signage. Sometimes I help out with, like they call them, spins and liquor industry. But I'll go in and maybe, like one of our accounts, we do an event the third Sunday of every month where we split the DJ costs and everyone is special on our beer.
Speaker 2:So I just try to find ways to kind of bring awareness to the account, because if the folks know where our beer is and it's a cool vibe, then that's great, and we're in a lot of cool bars. So my main thing is kind of putting the spotlight on the bars we're in because I think they're cool and it matches with our brand, and then helping them kind of educate the customer on the beer. I do tasting with the staff sometimes if we have a new product I'll walk them through how to describe it. Um, just pretty much a lot of the uh kind of on physical, like hands-on field stuff, yeah, um, and that's kind of all I know.
Speaker 1:How many accounts do you have now? I mean, you mentioned 40 when you were self-distributed, I think we're. I just checked on Monday. I think we're at 138. And how many are you able to? Kind of physically? I like how you're sort of like I want to go to the places that are going to make a difference.
Speaker 2:How do you kind of identify where to go and how, how frequently? So my my original. I've been testing out different theories. Now I'll tell you right, I haven't landed on one that I've felt like is my routine. I'm still learning.
Speaker 2:But I look at the top 10 uh on and off-prem as far as sales, uh for the year or the quarter, um, first, and so the ones who are like, the ones who are consistently buying at the high level, they get phone calls pretty much. One guy said he needs to see me. He's like don't come in, I need to see you. Other people want to see me. I have to ask them and I've been creating little profiles in my CRM system on each account. I have a new software I picked up at CDC. I've been using that to kind of like track like who, like what they prefer.
Speaker 2:But between identifying who's our high performers, I'm also checking out who are the like lower performers. How do I get them bumped up? So I'll go in and see them and it really starts with an introduction. Most people don't know who you are, they just know their sales rep from the distro side. So it's cool to put a face to the product. But that's kind of what I've been trying to do now. It's like, especially as we're growing and we're getting new accounts that I've never heard of, I always go in and introduce myself. What I thought was helpful in the Baltimore markets was doing tastings in the liquor stores, kind of around the on-prem accounts that we've had, just to get you know people. You know they buy a beer and they're out. They may buy it at home, but I try to do tasting the liquor stores and then do like promo events on the on-prems nice yeah what uh?
Speaker 1:since you mentioned the crm, what is what crm are you are you using? Now, I'm using uh brew, okay nice, yeah, brew.
Speaker 2:I uh, and I don't want to bash you, but I had. I had another one. But what CRM are you using? Now? I'm using Brew, okay, nice, yeah, brew, and I don't want to bash you, but I had another one. But I found that the one I was using before was more expensive and really geared towards, like, brewery owners. It wasn't geared for people who are in the field and trying to keep track of, like, the actual account. So I'll be using that one and it's cool. It gives you a little task list. You can see on the map where your accounts are. I need that. I want to see a color coding of like if someone's turning red they haven't bought in X amount of whatever. It kind of shows you that really quickly. And I had to build a lot of that in the other one by downloading stuff out of the software and building it in Excel. It was just like not intuitive. So I like Bruce a lot.
Speaker 1:No, that's great. Same with plugs. What's that? Yeah, no, that's fine. I mean, I think people like this is the thing like. My sort of general feeling on software is that you know you get what you put into it right. A lot of times it's like, but sure, there can be softwares that just don't hit the mark. You know, maybe they're not good at CRM, but they are good at, you know, the production side of brew or whatnot. But that's helpful though. So it's brew. I think it's brew with two W's right.
Speaker 2:Yep, two W's. They're actually based out of Europe, they're a European company, but after getting the demo, they've been around for almost 30 years. They got to be doing something right. It's like 20 something years. So after I played around with it and compared it to my other one, I realized it was just more friendly on what I needed to be. As far as the sales side, for now it has a production component too, but I'm not going to touch it. Yeah.
Speaker 1:Yeah, well, I think that's that's absolutely true, because I think most of the softwares that you hear about and you know we name names here I mean there's, like you know, beer, 30 ecos, um, that are, uh, you know old beer. They're very good at so inventory management, production, you know kpis and whatnot, um, but you know you might argue that it's yeah, it's heavied up on kind of the production side as opposed to I'm trying to sell this stuff. I need to know who's buying, who's not, where I need to go prioritize 80-20, this stuff. So that's great that folks check that out.
Speaker 2:Yeah, so now I'm getting my powers. Before I was managing my little Excel spreadsheet with no distro. Our distributor uses NCOPIS now so I can get reports from them. I have the other software now I can actually pull their data in there and run. I can run two sets of books. I guess I can see the performance of my account now on the sales side, but I can also see like the company performance on the wholesale sales side to my actual customers that hits my bank account. So it's cool.
Speaker 1:Yeah, that's. The tricky part is like when you're selling to a wholesaler, it's like, well, who's your customer? Yeah, the wholesaler is, but ultimately, if they're not selling through to the retailer and the retailer, so it's this whole like chain that has to happen and to have visibility throughout that chain is super important as a as a business owner, as a brand owner, because you need to know is this thing moving? Is it stuck? What's going on?
Speaker 2:you know, and all of our, every month, every year, in every beginning of the year, I do like this like the annual strategic planning document. Now I'm the only employee of the company, so I'm really just talking to myself, but I'm trying to get in into practice of communicating, if I ever get, when I get employees. But yeah, I always say it's two. You have two customers. You have the business customer and the brand customer. The business customer is like for us it's our wholesale partners, like they are our customer, like we work with them, because that's how we create commerce. But also you have the brand customer, which is the end user or the drinker, and the establishment which they go to. So you kind of got to hit them both at the same same time but different, different ways. Yep, so it's important to get the beer from your warehouse to the bar, but then, once it's in the bar, it has to be consumed at a rate that's satisfactory to all parties yep, yep, absolutely.
Speaker 1:Um, let's talk a bit about that, like on, from a marketing perspective, because at a rate that's satisfactory to all parties. Yep, absolutely, let's talk a bit about that from a marketing perspective, because you're selling to different customers along the chain, whether it's wholesale or retail or customer. Everybody's got to kind of get. What is this brand and why should I buy it? And what makes it different? Maybe, from a marketing perspective, have there been any initiatives, anything that's made an impact or worked well for you guys? Or maybe just generally, what kind of marketing approaches do you take now?
Speaker 2:You know, I have a buddy of mine that does all of our video content and he's really big on storytelling, which I'm trying to get better at. But I think that just looking at benchmarks, I think that helps. I think the more the consumer can kind of resonate with the brand and see themselves how they relate. I think it always helps, um, for us. I found strategic partnerships to be pretty helpful for us. So like, for example, um, um, uh, even with mega fest we're throwing like uh, we partnered up with the dj group. They picked the lineup, so we're getting a lot of, like, their crowd involved.
Speaker 2:Um, I think that, um, we did a campaign like I, I tried, I tried to do a camp official campaign launch for our dark lager. It was called the. Uh, our black locker was called rhythm and beauty and we had created to kind of celebrate uh, black women and we did this whole campaign. We highlighted certain uh black women in different industries who were pretty avid beer drinkers and we did a whole shoot and we rolled it out, uh, over time with a playlist and I got a lot of good feedback. Um, we had, we had the beer available in select stores at first to kind of test it and then we rolled out the bigger batch into, like the distro channel.
Speaker 2:I thought that was cool. So I'm down to play around a lot of stuff. I think a lot of our stuff comes with collaboration. Like we work with DJs, we work with graffiti artists. All of our different beers have local graffiti artists on the label and and they're big name people and I want to do a better job of kind of promoting them, because they're doing like buildings and stuff for sports teams and all that, but they're also making labels for our beer. That's pretty cool, but I think for us it's just trying to talk about the Soul Mega brand more and how the consumer can align with it, and then doing sponsorships and partnerships has been pretty helpful for us as well.
Speaker 2:Yeah, I like that, that we sponsor a run club kind of explains to the runners that, uh, beer is a good carb load after a run. So we did a marathon one time. We had like it was basically like a kegger where we were basically throwing a party at the end of the marathon and I was so shocked how fast these people consumed two kegs of beer. They were done by noon. It was crazy. It started running at like five in the morning.
Speaker 1:So just doing stuff like that, just buying stuff, trying to see what works yeah you know, what I think is interesting too is you know that it wasn't that long ago that people had their favorite brands, right, it was like, oh, I drink this or I drink that, and, to your point, they kind of resonated with the brand. That brand represented, what they thought was cool or what they, how they identified with it or whatever. But in that's clearly shifted right now. I think it's more like well, I shop based on oh, you like IPAs, you know, oh, I like. Well, actually, I like light lagers.
Speaker 1:And you know, honestly, I remember this conversation, probably 10 or 15 years ago, that this was the warning from you know the people that would be like watch out for it, don't become like wine, you know not to. You know harsh on wine, but it's like wine has become oh, I like Cabernets, or I like a Sauvignon Blanc, I like a red or a white. You know it's like it's brand and nobody, there's no brand loyalty, I guess, right, and that's sort of an obvious statement. But I think what you're saying is well, why couldn't there be, you know? Cause that's kind of how you connect with the consumers.
Speaker 2:Like, that's cool to me and I want to be a part of that, and so I love, I love that you're, you know you're approaching it that way where it's not just story sure, inviting them into the story, but also like a really kind of cool story, you know yeah, yeah, you know, I, I go back and forth, uh with our creative guy that we have on that we work with uh, because like I'm still like, like you said, like you know, I'm an ipa guy, but I'm almost like, for what I don't want to do is have too many options out there as a contract brewer. So I was kind of thinking at one point. I was like maybe we just need to have one beer for now. Like how you people say I like Heineken, okay, you like Belgian, or Stella, you like a Belgian lager? Right, like that's pretty, one beer is called Stella. Stella became its own beer. Basically, even though we know it's a lager, no one says I have a Stella lager, they just call it Stella. Same thing with, like Budweiser, even with Stone, their IPA is called Stone IPA. That's their, that's the one they you know.
Speaker 2:So I was kind of like well, maybe we should have like consumer loyalty, like they have so many preferences. Now someone may want to drink a light lager on tuesday and want to drink a wheat beer on wednesday. I don't make a wheat beer, so like you're not going to have a soul make a beer on wednesday if you like to drink wheat beers on wednesday. So I I don't want to be the guy that has all the flavors and not have a tap room because that's the best place to do it. There, right, you can get to get the board, get the menu, you let people experiment. But if you're just doing wholesale only, you can't really afford to take those gambles, especially on what kind of bad side that you have.
Speaker 2:So I've been trying to play around with what sticks. We have two cores right now, an IPA and a pale ale, but for the longest it was just our pale ale. We just got the IPA this year, so we only have one beer, which I was like, kind of like limiting me, but also it was like I just got to make sure we have a strong footing. It's a nice, easy drinking beer. People don't really know the pale ale style. I think it's a great style of beer but it's been cannibalized by sours and IPAs and now you know the light lager craze, but I think it's still. You know it's five and a half percent.
Speaker 1:it's easy drinking and people seem to like it so, yeah, you know, when you're going to wholesale, I mean that's I think the strategy is smart is like you got to keep it simple for you and for the wholesaler, because obviously, depending on the wholesale, their books are huge and you know, keep it simple. Maybe one or two packages, one, one brand to start. Let's get this thing going and you can always expand from there. But I think if you look at most successful breweries, that's sort of a key success factor Simplicity, a flagship brand, and then sure you can have other kind of flanker brands along with that. But you really need something that's going to be your lead seller, because ultimately at wholesale they're going to sell what sells and you you got to kind of stay in that lane, at least until you can kind of get get that critical mass yeah, that's the one thing I think I can't if I can give any advice to anyone.
Speaker 2:Starting off, it's like and it's it is it does suck because, like some states don't allow you to do self-disclosure you have to go through. But it does kind of suck that like you kind of have to bend the knee and make what sells versus what, like you may want to make, and I I hope that craft beer comes back to the narrative of craft we're pushing that it's all mega. It's like it's not supposed to be some mass-produced like uh, shelf competitive, ten dollar or whatever you should be able to produced like shelf competitive, $10 or whatever. You should be able to say like we made this with these ingredients and this is why it tastes like this, and do more of the story behind it, because that may educate the consumer on how they decide to buy things in the future.
Speaker 2:Some people don't buy things because they want the cheapest option, but also some people want to actually know what they're consuming, and so I hope the crowd can keep that kind of level of like uniqueness to it where it's like no, no, no. Like this is not just a two-row whatever light lager. It's like this is, you know, a japanese rice lager. Or like this is a polish pilsner. Like we use a french hop, like you know, dress just it up.
Speaker 1:Yeah, absolutely. Well, I think that's just incumbent upon us to kind of continue to tell those stories and help people connect with the brands, not just, again, the style, and to give them a little bit more than just, hey, here's a cold beer, chug it down, you know, because there's a time and a place for that, for sure. But, yeah, I think that's gonna continue to be the differentiating factor as to why people will come over to craft is like they can see that this is like wow, this was made for you, this was like something that's a little unique, you know, and this is the story of soul mega and this is why. So it's this whole whole, not just a branding exercise, but, again, I think, telling this, telling the story and why someone would, you know, want to be, you know, part of that yeah, even like I I talked to, um, certain different guys, people, oh, I don't, I don't drink beer.
Speaker 2:It's like why, uh, it tastes nasty. It's like, what have you had? And they'll say like corona or something. I'm okay. Like, do you like dessert? And they're like, yeah, here, try this. Uh, barrel-aged stout or something. And they're like, oh, my god, and it's and it's strong, they can get one and feel a little buzz. So we, we tried that with our dark lager. We put it in a different, a serving glass, like almost like a red wine glass, it's a wide mouth glass and, uh, like, the women were ordering it, uh, and they liked it, but they weren't trying to drink it at first when they saw it, like, uh, in the pint glass. And so we did a little experiment, one of our events that we just dropped into a different glass and then ran it on special and the people were ordering it like cool stuff, like that, you know yeah, no, that makes a difference.
Speaker 1:you gotta meet people where they are, and I think that's right is that people can be turned off for different reasons, and maybe it's like I don't gotta chug that whole thing. But you know, if you present it in a fashion where, like, oh yeah, I usually drink wine, that looks like you know, let me so making it approachable.
Speaker 2:Yeah.
Speaker 1:I think that's important too. So as a business owner, you faced a million challenges. I'm sure Is there any one or or series of challenges that that come to mind that you can share with folks and what it was and how you overcame it. We like these stories of all right, there's an obstacle. How do I get around it, go over it or go through it?
Speaker 2:Yeah, I have obstacles all the time. When we were starting off it was just the whole COVID thing and how to pivot from the business model of having retailers and doing events there to pivoting to doing direct-to-consumer home delivery. Capital emergencies all the time where I may have misgaged something or, heaven forbid, someone doesn't pay you on time. How do you plug the gap? So I think for me, the biggest one I could say in the past year or so, I think, with us, we had our original contract brewer that went out of business on a very short notice and so I had to like, do a calling around. I would say one of my business lessons. I probably made the wrong judgment calls. I was hell bent on making this one beer that ended up becoming out of season so it took longer to sell. But I think that would be one Us having to pivot from one contract brewer to another one and still meeting the demands of our retailers. That was in shelf space and you just kind of have to be communicative and I had to tell everybody look, we're not going to have beer for four weeks and they're like what it's like, don't like, but I got you like, like I'll still support, like you know, I will still promote your brand or your, your place, but like, don't drop us please. Right, and just having that open, honest conversation.
Speaker 2:I had a regulatory issue, um one time where I was just unaware of what was required of me and I had like a tax thing with the IRS where I didn't fill out like a certain form but it was like hey, it had accrued over years. There was penalties with it. I would say that was very stressful, but I ended up getting out of it just through again, picking up the phone and actually talking to somebody and explaining to them like, hey, like I legit did not know this, like I just started the business three years ago, like like they kind of waved it. But yeah, so the flexibly losing the contract brewer and having Uncle Sam pressing me out was probably my two biggest challenges so far. Those are big ones, no doubt. Yeah, yeah, so, yeah. So that was like I was it took.
Speaker 1:It took me about five months to get that handled, but we got it done well. It's funny because it's like it's there's always going to be problems, there's always going to be challenges and some team that are insurmountable. But I like your approach, which is I'm going to face it head on. You know, we're going to talk about this, we're not going to ignore it. Uh, I, I don't want to talk about it, but I, you know, the alternative seems, uh, not not like a good one.
Speaker 2:So, yeah, I applaud you for that, thank you and you know it's uh, it's a skill that I had to learn just through my career and you know, uh, as a business professional, it was like we had, you know, I worked for aerospace company, we had launch projects and like all types of stuff, and like, sometimes you have to have the hard conversations about, like what we can and can't do, and so it sucks.
Speaker 2:But I will say it's like waking up and doing the hardest thing in the morning and getting over with, as best as face, it head on, because as soon as you start delaying it, um, not only does it snowball, but it also could create kind of a divide in the audiences. So, um, I think people would appreciate it, even at a human level, just explaining it with an individual or an organization. It's like, hey, like this is what we can do and maybe not focus on what you're not or can't do. You know, but if you can't do what they're asking, what can you do? In general, I find that to be something very helpful is kind of keep that mindset Not what you can't do, but what can you do.
Speaker 1:Absolutely. I've heard different variations on this, but there's some sort of direct correlation between your level of success and how many hard conversations you're willing to have, because it doesn't seem super intuitive, but that's kind of a thing is like. You know, you got to face these things head on, you got to deal with the challenges, you got to figure out a way and then, I think, have a little bit of faith maybe in humanity, that you know people aren't necessarily always here to enforce the letter of the law or every single rule there's. You know there's always exceptions or ways around it or or whatnot, but they're not going to happen unless you have those hard conversations.
Speaker 2:So yeah, exactly that's good stuff, I think. I think the system is designed to like keep you in the box, but like it's also designed so you can figure out how to re-engineer it if you need to.
Speaker 1:That's right, that's right. I mean, hey, let's, let's get back to craps roots. I mean it's all about, you know, innovation and being scrappy and entrepreneurship, and so those skills are needed now as as much as they've ever been, probably more than ever right now.
Speaker 2:Yeah, yeah, exactly, especially in these times, I guess I know our industry is going through uh, uh, turbulence, if you will, uh, and so this is kind of like for me I was, you know, my one of my best friends like, oh my god, where are you in beer? Like this is this, is crazy. Like beer is over, no one's drinking anymore, and I'm like, well, hold on. Like this is an opportunity to get super creative in an industry that I think is still young in a way. Right, I mean not the beer industry, but the craft beer industry in itself.
Speaker 2:Like the idea of it is young to me, and at least when I think about, like, american history of beer. So, um, you know, we got people celebrating 30 years and it's like, oh my god, these guys have been around forever, but that was 30 years not that long ago, especially making beer in america for over 100 years, you know. So, uh, I think there's opportunity. People get super creative in the way they haven't before and I think, um, we're gonna see probably an influx and then some people may drop off, but I still think that craft has opportunity to grow. I would agree Well.
Speaker 1:Elliot, this has been awesome. Thanks so much for sharing about your business, your branding, giving people a lot to think about here. So if folks want to either learn more about you or get in touch or maybe go to the mega fest you know what's what's the best way to do that.
Speaker 2:Well, you know, soulmegacom S-O-U-L-M-E-G-Acom has information about our beer. Where to find it? How to contact me? If you go to contact us, I get all the emails as well as information about Megafest. We're also on Instagram at soulmega S-O-U-L-N-E-G-A dot U-S, and so those are our two kind of main forms of communication. We have a mailing list. You can join from the Instagram page or our website, and so please join for our mailing list. We drop all of our content there first. And, yeah, check us out at Megafest September 6th in Washington DC, 800 K Street Northwest in Anthem Row.
Speaker 1:Love it. Elliot, thanks so much for your time, really appreciate it.
Speaker 2:Yeah, thank you, man. I was really honored to come on your show man. Thank you for all the work you're doing and helping people like me kind of get up to speed on the actual beer business. I definitely appreciate it.
Speaker 1:Thank you for listening to the Craft Brewery Financial Training Podcast, where we combine beer and numbers so that you can improve financial results in your brewery. For more resources, tools, guides and online courses, visit craftbreweryfinancialtrainingcom. And don't forget to sign up for the world-famous Craft Brewery Financial Training newsletter. Until next time, get out there and improve financial results in your brewery today.