The Startup CPG Podcast

Taylor Cathala
In this category in spirits, maybe more specifically in like the area that I work in where it's non alcoholic mocktails, rtd cocktails, spirits, there's a lot of innovation, There's a ton. And so there's a lot of unique, super interesting things that people are producing and suppliers are making that try to stand out. And I just think at Whole Foods Market we have an opportunity to really lean into that and facilitate those partnerships and try and grow those fledgling brands. So that's been really fun as well.

00:36
Daniel Scharff
We've got spirit, how about you? Well, today we've really got spirits because we're joined by Taylor Catalaw from Whole Foods market, supporting all U.S. And Canada stores as the senior category merchant for spirits, which also includes non elk and RTD cocktails. He's been an adult beverage retail for over 13 years. But it's not just his job, it's a personal passion. And when not reviewing fun and innovative products at work, he spends time with his wife and son exploring all Sonoma county has to offer with its beautiful parks and running trails. Even if your product isn't a spirit, I think you're going to really enjoy learning about this super interesting category with me and how Taylor sources brands, focusing first on customer needs and Whole Foods Market standards and also taking into account brands distribution capabilities and which ones are local favorites.

01:24
Daniel Scharff
We also had a really interesting discussion around category trends, including what's growing in the non alk sector. Enjoy. Hey friends. Your reviews helped us become a top 0.5% world podcast. I wanted to shout out some of the reviews here. Grillicious says the podcast has given him MBA level insights into every aspect of cpg. Daniel from Front Page Retail says it helps him understand brand challenges and their most pressing needs. Boba Nutrition said it's great for anybody starting their journey or getting to the next level. Thanks so much guys. If you can rate us, go to ratethispodcast.com startupcpg thank you. All right, Taylor, a very warm welcome to the show.

02:04
Daniel Scharff
I think Whole Foods Market is really the only retailer where I actually don't need to do an intro about it because everybody listening has been into a Whole Foods or maybe even started their brand with the dream of one day getting into Whole Foods Market. So let's just go right into who is Taylor. Do you mind telling us a little bit about your career story and how you ended up at Whole Foods Market in the spirits category?

02:26
Taylor Cathala
Yeah. Well, thank you for having me. This is super exciting and really fun. So I went to college for graphic Design, media, production, motion graphics, not this. But after a couple of years of doing that, I just realized it wasn't like my fit with like the contract focused kind of work and kind of come and go mentality of it. So after I moved to San Francisco after college, I was looking for work and then kind of pivoted like, you know what, while I'm looking for work, I need to have a job while I do this to keep facilitating that. And I landed a job at Whole Foods working as the coffee, tea and housewares buyer at a store in San Francisco.

03:05
Taylor Cathala
And so after about five years of various leadership roles and moving up into different positions, I had an opportunity to go for a regional position, which at that time was Northern California and Reno. So it was pretty specific to a certain metro area. And I think after about two or three years, the role pivoted and it started to expand to more of a national view and more territory coverage by sub team type. So specifically I started with beer and spirits, but then eventually where I am now is strictly spirits, non elk mocktails and RTD cocktails that are spirits based. So the role has changed a lot over the past 13. I think I just hit 14 years. But ultimately what I've.

03:50
Taylor Cathala
What's really drawn me to Whole Foods because I was looking for other work as I was working at Whole Foods and realized like, there's kind of no ceiling at this company in the sense of like the harder you work and the more you commit to it, like you can kind of just keep working your way up and. And I thought that was really interesting and it was great for career path growth. And lucky for me, the roles that initially opened up into the more of the category management product review was beer and spirits, which is like heaven. I'm like, awesome, I love this. And now where I've landed, it's. I'm just like infatuated with spirits. And I think it's super cool. And there's so much to learn and it's kind of limitless. But yeah, that's kind of been my path.

04:27
Taylor Cathala
I didn't start going down this path, but I kind of got into this role and just like learned that I liked it a lot. So, Kevin, interested?

04:34
Daniel Scharff
Yeah. Interesting about your background with graphic design also, because at least with wine, probably different for spirits, but wine is the category where if you ask somebody what category is designed, the most important, they would often say wine, right? Because it's like so hard for a lot of people who aren't experts to differentiate the product so it's like design. Do you feel like you're. You actually use that background at all, your design sense?

04:56
Taylor Cathala
Yeah, no, totally. I think I do. Reviewing products takes a lot of different components into consideration, like, you know, distribution and where is it produced and is it relevant for the store and all that stuff. But. But it's kind of hard to not just do, like, an initial gut check with, like, how it looks without even tasting it, just like. Like, what does the bottle look like? And I think that's so important for retail to have an opportunity to do. Yes, it's important to do blind tasting on occasion, to kind of understand, like, how things rank up with each other, but in a retail environment, like, you have to kind of put yourselves in the shoes of the customer, and they're walking up to a gigantic set, and they're like, okay, what's catching my eye?

05:37
Taylor Cathala
And so I have to kind of look at it from that perspective sometimes. And Spirits is cool because there's, like, really no formula or structured bottle type. It's just like, it's all over the place. So you see a lot of really unique characteristics that, like, call out certain things or try and capture the customer in certain ways. And I definitely find, like, leaning into, like, my media background, like, there's a lot of. I give some products a lot of props where it's like, wow, that. That really. They. You can tell when somebody's put a lot of effort into, like, really making that bottle shine.

06:09
Daniel Scharff
It's so funny because if you imagine, like, going to a bar and if you don't really know a lot of brands and the bartenders, like, which one of these spirits do you want? You just kind of look. You're like, which one? Like that one? Yeah, that one looks cool. Okay. You know, I'd like. I've been in that situation a lot of times, and you know that I also remember going to a party that one of my friends hosted in SF once, where they just lined up lots of mystery bottles of vodka. All of the premium ones, probably, like, a Costco one in there also. And just literally nobody could tell. Right. And some of them are, like, three, four times the price of others. And everybody wrote down their rankings, and I don't remember which one won, but it's just.

06:45
Daniel Scharff
It's so hard for people who aren't true experts to differentiate those products. That. Yeah, really just. You can't overstate the importance of good design. Right. Like, the actual. The bottles themselves and, of course, the actual design on them.

06:59
Taylor Cathala
Well, I'm. I'm sure you've seen it too with like center store and like every other product in a grocery store right now. Like everybody's kind of elevated their game and there is some truly spectacular package design out there and spirits included. And I think we see that with like the canned cocktails where it's a can format. Like there's not a lot of other opportunities. And it's like the sleek slim can, like that's it. But like, what else are they doing to it to draw attention?

07:24
Taylor Cathala
And you know, sometimes you see like bottled cocktails like an on the rocks or Dilola or something to that effect where it's like even like they're taking it to another level, which I think is really interesting for like products that are chilled sometimes, but also how they sort into like the traditional like ambient or like dry shelf set. Like they can hold their own for sure against a lot of the tequilas and vodkas traditionally that are like very diverse with their packaging format.

07:50
Daniel Scharff
Yeah, man. I certainly have seen some super cool innovations and I think the format of it and like how the bottles look and then also just a lot of technology on the printing side and the cans and digital print that I think is really changing the game, I think for early brands also to be able to get that kind of higher quality look even when they're just starting or trying new skus. So cool. Okay, I love talking about that stuff with you, but let's go back into just kind of spirits in general. So I mean, it just sounds fun. Like your job sounds like if you're like in college and having a good time and they're like, what do you want your dream job to be? Like, oh, I could be the spirits, you know, category buyer at home.

08:29
Taylor Cathala
Yeah.

08:32
Daniel Scharff
So like, what do you love so much about spirits?

08:36
Taylor Cathala
Well, when I got into this role, one of like when I was talking about when I first got into more of like a regional kind of corporate buying for like multiple stores, it was beer and spirits. But my comfort zone was beer by a long shot. I went to Chico State, like Sierra Nevada, like very near and dear to my heart. So beer was like kind of where I was at my comfort zone. Spirits was a little like intimidated because it's like it's such a diverse and broad and gigantic category that's like international. Like it's huge. Right. And so if you don't know a lot of the basics or just getting into the different types of categories, it can be a lot of information to take on at once.

09:13
Taylor Cathala
So I think for me, like Kind of being a little like unknown in that space was really exciting because I got, every time I was reviewing products, I was learning as well. And there's a lot of brands that we work with that offer a lot of educational opportunities or just you can just deep dive categories on Google, right? Like, you know, you can go as far as you want. It's like there's a lot of opportunity for learning traditional wsut, like there's tons of stuff you can do education based. And so that really drove my interest into trying to dive deeper into like what is entertaining or cool about spirits from a customer's perspective.

09:51
Taylor Cathala
Because I, you know, I was kind of in the same shoes of like a customer shopping where I'm like, I don't really know a lot, but like, what do I want? So I had an opportunity to be like, well, what are customers looking for? So then you approach it from more of a data position of like, okay, like, here's where folks are shopping, like, here's the type of price point they want. Here's the categories that are leading right now. And looking at it from an approach that way where it kind of drove my interest because there was so much to learn. And now after, I don't know, six, seven, eight years or so, I feel a bit more comfortable on the education side and understanding products and categories. But it's kind of a booming category again. Like, it's really growing really rapidly.

10:30
Taylor Cathala
So that means there tends to be a lot of innovation and newness and you know, some people take like wild swings and like you get a product that you're like, what is this? Like, what is going on? Like, and then you get an opportunity to like see if it works in a retail space. You know, I just think like in this category in spirits, maybe more specifically in like the area that I work in where it's non alcoholic mocktails, rtd, cocktails, spirits, there's a lot of innovation, there's a ton. And so there's a lot of unique, super interesting things that people are producing and suppliers are making that try to stand out. And I just think at Whole Foods Market we have an opportunity to really lean into that and facilitate those partnerships and try and grow those fledgling brands.

11:13
Taylor Cathala
So that's been really fun as well.

11:14
Daniel Scharff
It's interesting to hear about your journey as you were getting more and more educated about the spirits category with that base in beer. How much do you think consumers that shop at Whole Foods Market know about the category? Like, how many of them really are experts in their shopping, really like, you know, learning a lot about the brands and their process. And from a technical perspective, verse, they're looking for stuff that they like the taste of.

11:39
Taylor Cathala
I think we at Whole Foods Market are lucky in the sense that we have a really broad demographic of shoppers that, you know, maybe the majority are kind of a bit unfamiliar, but they know what they like, right? And they know the brands they like and they know the flavors they prefer. And they know probably if they want to get like clear liquid or like brown or yellow, like, you know, tequila or whiskey, or are they looking for like gin or vodka, Right. And then from there they probably branch out, you know, depending on their knowledge base, as deep as they want. But we also have those customers that are kind of like the seek it out folks that are looking for that brand new release or that more limited allocated item.

12:15
Taylor Cathala
So we have to try and cover all those bases to appease those customers and offer them something cool and interesting to bring them into the store. But I think in general, I think the average customer like, knows the brands they like and wants to find it at a reasonable price. And maybe if they're feeling like it's an occasion, like it's a special occasion, they might like, spend an extra $10 on that whiskey and get something a little fancy.

12:38
Taylor Cathala
Or they might take a risk on something if they had like a lot of support from a team member that was like upselling something that's like, hey, this is a brand new special release we got from the brand that you like, you know, And I think that is kind of our secret sauce, so to speak, of like the opportunity of upsell and the opportunity to have that next step if you're seeking it out, like, you have your comfort brands, let's say, like, for example, Kettle one. It's like, I love Kettle one vodka. Maybe it's the weekend and like, I have some friends over, maybe I'll try that like orange blossom flavor one. Or maybe I'll give their canned cocktails a shot. Or maybe like, you know, they'll. They'll try something maybe in a different. A different brand of vodka.

13:16
Taylor Cathala
So I think generally people know what they want and then they kind of branch out with whatever the occasion might be or their price point they're seeking out or the other one that's like, happens a lot. Like, maybe it's a gift and they're not shopping for themselves. And that tends to happen in whiskey a lot and tequila because you want to kind of like, you know, send something nice, like a special gem. So that's where I think we kind of lean on our team members in store a lot to help drive that conversation and educate the customer gently sometimes. Like, sometimes customers are very open to it, but I think having the correct assortment to allow customers to engage is the way to go. That's what we really thrive on.

13:52
Daniel Scharff
Gosh, you're totally right. I just was remembering the last time I really wanted to send a nice gift because somebody had done a beautiful thing and recommended me for an incredible job that I eventually got. And I sent them a very special bottle of Mezcal, and I was so excited to do it, and it was really well received. So, yeah, that's amazing. I also was just thinking a little bit about when you're talking about, you know, paying an extra 10 bucks for a premium whiskey, that kind of stuff. For me personally, I'm drinking a lot less than I used to. And, like, because I'm drinking a lot less, I am much more likely to make it count when I do and drink something that's like, more premium.

14:30
Daniel Scharff
I'm not going to waste my time with stuff that I'm like, oh, I don't know, maybe I'll feel worse. It won't taste as good. I'm only paying more and drinking good stuff now. Do you feel like a lot of people will do that with this big trend?

14:43
Taylor Cathala
It's interesting because I'm in the same boat, like, now with a kid and like, slowing down consumption or the consumption is happening at pretty specific times, like late at night or on the weekends, you know, And I feel a lot of customers are looking for that, like, the price, perception of value per pour or per ounce. Right? Like, so they want to. It's like, Maybe it's a $100 bottle, but the value that they get from that with the consumption or the entertainment or whatever it is worth it because they're having like a pour every two weeks, you know, and versus something that's maybe $20 that they have. And they're like, well, I'm not even drinking that much. Like, why am I doing this? You know? And it comes from a couple of different perspectives.

15:27
Taylor Cathala
Like, you know, maybe folks like in our age range, like, are just consuming less alcohol, but they still enjoy the occasion. And then there's other folks that maybe on the younger side that are just becoming 21 or whatever that just don't drink, but they still like the environment, and they are looking for something to kind of scratch that itch or engage or participate. Right? So it's been super interesting for the Past two years with how non elk has like grown into itself. Well, I guess more than two years. But like it's really ramped up recently to see how suppliers that are making these products are kind of accommodating that lifestyle. And I. You see it everywhere, right? Which is you can just look at the way that like non alcoholic, like sodas are evolving. There's like the prebiotic sodas or whatever, right. Like there's.

16:17
Taylor Cathala
They're very diverse and they're very unique. And sometimes it's like, well, it's $4 for a single can of a soda. Like. Yeah, like it's a special occasion. Like it. It's great. You know, and I tell.

16:29
Daniel Scharff
I have a couple of those special occasions every day. I've got a bunch of $4 soda in my fridge.

16:33
Taylor Cathala
I love it for sure. But that I see that happen with people purchasing spirits as well, where we have seen a little bit more of a boon in like the mid tier luxury tiers of spirits. And people might be consuming less. Yeah, I think that a lot of signs point to that, but they're elevating their experience when they do and that's kind of where it lands.

16:53
Daniel Scharff
So that's really interesting to hear you say what is your overall view on non alk? Like what's, how much do you see it growing and how is it changing your set?

17:04
Taylor Cathala
It's growing very fast and it's growing very fast, very quickly. And I think if you equate it to back in like 2016, like when. Or 2015 when like white Claw was really hitting it hard, like that just exploded so fast. And I think there's been kind of a recognition of how that happened in the non op space and maybe a little bit more calculated trajectory with a lot of like the way non op is growing, like they're a little bit more careful to expand into more states like suppliers. It is. They don't want to just like put it all out there and then realize we can't supply what we said we could send. That's a problem. But I think the really interesting thing is that with non alcoholic drink like mocktails specifically, that's my space.

17:48
Taylor Cathala
The ones that are doing well lean into known cocktail names and types. And they also take into account that many of these consumers that are buying non alcoholic products, mocktails, et cetera, also still buy spirits. And so it's an opportunity to like engage with like that flavor profile. But then you can have it like with lunch or you can have it like at 2pm or whatever or after work and you like, I got to go pick up the kids. Like, I'm not looking to like have a drink right now, but you know, this is like kind of a nice elevated lime soda that kind of has like a margarita flavor that's cool or a little salinity or something.

18:24
Taylor Cathala
So those are the ones that are like really growing well, that mimic existing cocktail types that are recognizable by customers because those customers are more often than not the same people that are buying vodka or canned cosmo or canned margarita or whatever to like make their cocktails at home. Sometimes, like when it's like, okay, we have some guests over, like it's the weekend, like we can actually like make some alcoholic drinks, like cool. But they recognize those flavors and they want to engage with them. And it is growing in our sets too. It's really cool to see like our traditionally like spirits like regulated ABC like licensed area that's like getting some non alcoholic stuff in there. And it's really cool to engage with customers with like the fun uniqueness of that.

19:10
Daniel Scharff
So one question on that. If I'm drinking an alcoholic drink, for some reason I don't have a big qualm with getting like a sugary old fashioned. But if it doesn't have alcohol, I'm like, what? No, I don't want to drink all that sugar. How much do you think the nutritional content matters for the non alk and the mocktails versus an alcoholic drink?

19:30
Taylor Cathala
I think there is that like 100 calorie per serving kind of ceiling with a lot of it. Most of them though, I think they float around like 30 to 70 calories. So they're quite low. But I think pushing past 100 calories per serving is maybe. I haven't seen a lot of that. I think the market's correcting itself. I got it. I just haven't seen a lot of non alcoholic products that are like 350 calories. Like, I just haven't seen it because I think there's. Everybody's well aware that they're more. They don't want to drink alcohol, these customers, but they're also health conscious in the sense of like, if I'm going to have a lot of calories, maybe it's like from my dinner, not from my drink.

20:09
Taylor Cathala
And I would say the interesting thing about like non alcoholic, high proof cocktails, there's not a lot of those because it's very difficult to emulate that high sugar and high alcohol bite because it's a balance. Whenever you're Making cocktails. It's a balance of, like, is it a strong spirit? Like, you have some sweet in there or some sour. Bitter, whatever. And if you can't balance the spirit flavor, it kind of falls flat. That's why a lot of these non flavors are Margarita, Cosmo, Paloma Spritz. Like, that's. That's kind of the game. It's bubbly and has a little flavor, and, like, it's just kind of fun.

20:46
Daniel Scharff
All right, makes sense. So just getting back to your set and how you manage it, what do you hope that all of your friends at Whole Foods Market will say, Taylor does this great. About the overall spirit set?

20:59
Taylor Cathala
Well, I will say it is a shared effort. Like, there's a lot of folks on our team doing a lot, but I think ultimately driving innovation, driving interest, getting customers engaged and finding and helping them find something exciting where they're like, whoa, I didn't know that is a thing. Or, you know, and selfishly, sure, maybe they spend a little bit extra to, like, get that cool thing. But tying into that, maybe that cool new innovation is GMO free corn. Or maybe it is regenerative agriculture. Or maybe it's organic whiskey that's, like, relatively uncommon. Or maybe it's, you know, like, all these different things. Or maybe it's like a. Like you said, like a Mezcal, right? Like, maybe there's a little story behind that Mezcal where it's like, a very small family farm. It's labor of love.

21:45
Taylor Cathala
Like, if you just see the production of Mezcal, it's just like, wow. It is, like, one of the most, like, grueling, like, harvesting processes out there. Like, it's really incredible what people do to supply a single bottle of Mezcal. And so there's always a really cool story behind it. So I think, like, if people come into our stores and they see a product that drives some interest into, you know, the heart of the story, like, what the family has done, maybe the innovation is, like, some cool new, like, technology that's removing alcohol, or maybe it is driving some regenerative or GMO free or anything that's, like, potentially has the opportunity to, like, grow that further in the marketplace and kind of seep out and maybe expand it to more retailers.

22:33
Taylor Cathala
And I think there is a lot of cool opportunity right now in spirits, especially with how product is harvested and regenerative. It goes a long ways.

22:42
Daniel Scharff
Yeah. I'm so excited to see innovations, especially in regenerative over the next couple years. I know we're going to See a lot. So, okay, so you talked about this a little bit before, but like, take me through a customer's decision tree. When they're in the spirit set, like, how do they go from looking at the big beautiful spirit set to actually landing on an item that they put in their cart?

23:02
Taylor Cathala
So typically the customer decision tree with spirits is going to be whether it's a brown liquid or clear, and then from there they'll make the decision of are they making cocktails? So do they need maybe something more affordable? Do they go towards the bottom to kind of pick something like a 1.75 liter? That's for batch cocktails, maybe, or maybe it's a special occasion so they want to have something that's a little bit more high tier. And so the way that we see it, customers are, well, they're predominantly shopping for what they like, right? And even if it's for a gift, it kind of a little bit is like, well, what do I know that I like? And what could that relate to the person I'm giving this to? But ultimately you want to pull them into the set from a certain, like, binary.

23:46
Taylor Cathala
Like, is it like, what type of liquid is it first? And then really it's just like, what price point are they looking at? And then from there, with maybe a little support from the team member on site, like, what are they looking for? A specific flavor profile. I think whiskey is like a fun one because maybe the customer is like, I like rye whiskey, right? That's what they think. When they come in, they're like, I know, I like rye whiskey. I like spicy. I like a little mint, maybe a little finish in there. But you have all these options of like, okay, well, there's like scotch too. Do you like a little smokiness maybe, or do you like, maybe your rye whiskey is like in a really charred barrel. So, like, maybe you like it a little bit more smoky, but less peat.

24:22
Taylor Cathala
So I think really what it comes down to is the customer is shopping for, which I think a lot of, like, categories might be like this, where they're shopping for, like, what their occasion is. And I think with spirits, you. You're buying a bottle, if it is for you, that'll last a while. And so you want to make sure that you have that opportunity to keep using it, and then it applies for whatever you're trying to make.

24:42
Daniel Scharff
And how much are consumers relying on your store associates to help them make those decisions when they're not sure, especially if they're buying a gift?

24:49
Taylor Cathala
Probably not, right? Because I Worked in stores for a while too. So like, in my experiences at a store, rarely do you have a customer just walk up to you and be like, what should I get? That's pretty uncommon. Usually they kind of like are in a section where they're like, they've been kind of just like staring at the tequila section for a while and you like to give them like a couple of seconds just to like engage, take it in, kind of determine like where they're at and then like offer some suggestions or just like, hey, like, need any help finding that thing you're looking for or what do you typically like? I, I, I always used to like to ask like, what's your favorite brand? Or what's your favorite tequila? You know, depending on where they're at.

25:28
Taylor Cathala
And then from there, depending on if we sell it or if we have it, you can kind of branch out and give them a little like feeler. Like, well, if you want something that's more creamy and subtle, like a nice blanco, or you want something that's more like oak flavor, maybe like an. And yeah, like for the most part, customers do know what they want, feel pretty confidently in that, but you can give them a little wiggle room to make that decision. And not that it's strictly about upselling like at all, but it's more about making sure they find something they enjoy, they don't have a buyer's remorse and they walk away. Maybe more educated, maybe they walk away happy. They got a good value.

26:02
Daniel Scharff
Got it. Okay. And so, you know, sometimes I see these data points that are like, tequila finally replaces vodka as top selling type of liquor in the US how much of that do you pay attention to? Do you see that in your stores and how does that impact your assortment to a degree?

26:19
Taylor Cathala
I mean, it's obvious. It's definitely a data point that we look at, even though it might be a little bit too broad for our retail. But I think there's value in understanding how the larger consumer base is kind of like leaning. The main thing that we try and take into account for like our spirits review is we know our space in store and we don't have a lot of space for spirits in our stores. And so we have to take into account, like, we have to hit those large need states that most customers have like, got to have the vodka's, got to have the tequilas and the whiskeys and the cordials and brandy. Like you gotta have like the broad spectrum of stuff covered.

26:57
Taylor Cathala
But then once you get a little bit more nuanced you can kind of cater to that specific metro or state or even county. Like, there's a lot of situations like that to, you know, it guides our hand a little bit, but ultimately it's not, like, indicative of, like, how we change our sets or anything, because, yeah, I mean, it's. I'm grateful to work at Whole Foods Market because our customer base is just so broad and tends to be a little bit more adventurous with, like, kind of reaching for that next step, which is really fun in spirits because it, like, that's kind of like how all those products work. You have like, oh, like, we're admit, like, my favorite brand is like, a 30 whiskey. You have, like, the world is your oyster with, like, the next whiskey you want to, like, jump into.

27:41
Taylor Cathala
Like, there's so many options. So it's really fun to engage and, like, place those products in a certain way on the set. That kind of guides them to another. Maybe to another brand that is like, whoa. I didn't know I liked that so much.

27:54
Daniel Scharff
I don't know why, but I was just thinking about, like, the evolution of all the drinks that I favored at different times in my life. Like, when I was in college. At that point, what was luxury to me was like, Jack Daniels. Right. And whereas now, like, I might drink that in a bar, having a good time, nostalgic. But, like, what's luxury to me is a very different thing. I was like, we should plot that out on that, like, evolution of man graphic that you see often with, like, you know, from monkey to standing human and with, like, the different kinds.

28:22
Taylor Cathala
It's interesting to look at, like, price tiers and like, mid luxury, ultra premium. Like, to think of it subjectively like that, where it's like, you know, how you think of it's primarily based on, like, price point. But, like, that is interesting because similar for me in college, like, I was not buying any spirit that was more than like, 15. It's like, just. No, but the way that I would look at those things, like that $25 vodka, like, that's maybe a special occasion, but now it's like, we have like, $50 vodkas, and you're like, that is a special occasion.

28:54
Daniel Scharff
Yeah. Oh, man. I. I also. Well, another major trend, I think we all have to acknowledge is the celebrity influence spirits trend. Right. Like, I, without knowingly for sure, I'm influenced by it because I was. I do drink Casamigos, which I think I started drinking before knowing that it was a George Clooney production, but it was everywhere. Yeah. And like, can I really tell the difference? I don't know. But like, yeah, it's everywhere. And so now you know, there's big money in exits for celebrities and then you see a lot more celebrities, like kind of launching one after another. When you probably get approached a lot by brands that have celebrities attached or celebrity founders, how does that. I mean, obviously, like they're going to be able to drive a lot of awareness right off the bat.

29:37
Taylor Cathala
Right.

29:38
Daniel Scharff
And probably it's a high quality product because there's a lot of intentionality going into it. How do you think about that when you get those kind of approaches?

29:45
Taylor Cathala
Well, I mean, we do review every item objectively. Like, we don't. Like, I could see how it's easy to get into a slippery slope of being like, well that's cool. Like, I would love to like lean into that because X Celebrity or something, like it doesn't behoove the customer though. It really doesn't. Like, and so we. Do you have to review those products objectively first. Like, do we need a another $40 whiskey? Like, do we? And then if the answer is yes, it's like, okay, like let's lean into why this one might better than some others. But there's no denying that the awareness is just through the roof. And so that does kind of play into our decision making. But I think the most important piece that customers see pretty flagrantly is the item authentication.

30:35
Taylor Cathala
And is it like, is there an ownership level or an endorsement level from ex celebrity that's like very clear and apparent and like consistent? Because yeah, like there's always been some kind of take on like a celebrity touching a product and like endorsing it or whatever. But I think most recently with this trend in spirits, it's like full on ownership. Like this is our product, like, this is us. Like went to the farms and picked out the tequila or whatever. Or like, you know, I help cultivate like the cut the rye. Like, you know, like there's all this engagement and I think that goes a long ways and I think those are like extra selling points. Like they genuinely are.

31:14
Daniel Scharff
I feel like people know also the difference between a celebrity who's just kind of gotten paid to endorse something or maybe they're even involved but just kind of for money versus a celebrity who's very invested in a product. Like, okay, if you take Logan Paul with Prime, like I remember in the early days seeing pictures of him with the truck, like going around and doing deliveries and he was like very associated with It. I don't know if this is totally true, but at least thinking of it, that's my perspective of it is like, yeah, he was involved first. I've seen some other celebrities that, like, I don't know, it wasn't, like, obvious why they had such a connection with the brand, but maybe they had it just kind of like, casually endorsing it. And then I don't know.

31:53
Daniel Scharff
I've also talked to other people who worked at brands that had celebrities and ambassadors or maybe even as, like, you know, named founders. But they're like, yeah, I don't know. They don't do that much to really support the brand. And I don't know, then we don't have the money because we have to pay them all this stuff to actually invest in marketing.

32:09
Taylor Cathala
Well, a big piece that we consider for product placement in our stores is maybe right up there is like, number one is like, is distribution solid? Like, are we good? Like, because when we pull the trigger to set up these sets and build these out, we don't want stores to be in a position where they're, like, waiting for X State to, like, have it activated. So kind of like one of the hidden perks of those celebrity brands is they typically launch hard and fast, and they're like, we're rolling because they have so much engagement with their distribution partner or whatever. Like, so. So that is a really important factor that we consider for every single brand, and it tends to be pretty well locked in with most celebrity brands. So it's a key factor that we look at.

32:56
Taylor Cathala
But again, like, it is, you know, there's a little bit of, like, subjective, like, gut feeling you take into, like, doing category management, of course. But you have to still review. Like, is this what a customer wants? And would a customer recognize this? Would they see it advertise somewhere? Like, it's, you know, there's a lot of other components that I think are hidden benefits with some celebrity brands, but, like, for the most part, I'd say. And they're few and far between, so it doesn't really sway our hands much. But there are some really great ones. So I'm not trying to, like, downplay them. There's some really great, like, celebrities and endorse brands that are, like, highly engaged and they do great. Like, it's fun. It's a win.

33:34
Daniel Scharff
So you mentioned the distribution part. I am a novice when it comes to spirits distribution. Probably a lot of people listening are also, just, like, okay in food. Like, I know. Okay. If you want to work with whole Foods like a lot of brands would work with unfi, that's kind of how it goes. But in spirits, it's a little bit different. You have all these state regulations and there are different distributors who do that. Can you just give me the very brief overview of how distribution works with you guys?

33:58
Taylor Cathala
Well, a lot of it is still connected to prohibition. It's like giving the states the ownership to do it has kind of turned into having to understand like, yeah, every single different state is different. And that can range from whether or not we can even sell spirits in that state all the way to what percentage of alcohol we are allowed to put in our stores. Can't cross state lines. That's probably the biggest one. So that does put a damper on like trying to do broad purchasing decisions where you're not able to say, like, I want this on the west coast. So, like, okay, like which states? Because you can't just do that.

34:34
Taylor Cathala
But you know, I think, and it's been one of the most exciting things, I will say with my job, kind of switching to be more like whole country with spirit specifically is kind of getting like a really in depth geography class, like, about learning every single state deviation and like locality of certain brands and how they sell in certain areas. ABV regulations, alcohol by weight versus alcohol by volume. Like, differences, like, it's just, it's diverse. And I think there's about. I was guessing, I think it's like nine to 14 control states or so, but we can still sell into a handful of them. But it's interesting. We're like, let's use a state like California where we have most of our licenses for spirits. But I don't know, we have like 20 to 30 distributor partners roughly covering all sorts of areas.

35:25
Taylor Cathala
And then you go to a state like Iowa where it's control state. Like you have one distributor, it's the state. And so it's really interesting to build a set where you have one distributor that's controlled by the state versus California, where you can kind of like, you know, dig around and see like what offerings certain distributors have that might work for your set. So it's a very big component of the job. It's, I think, a little bit easier than beer. Beer is tricky because then you get into like distribution by county and that gets just like a myriad of pivots and changes, especially when you're trying to do assortment. But yeah, it's been really interesting to learn how different states operate and what you can and can't do.

36:07
Daniel Scharff
That's so interesting. All right, Taylor, let's get to the good stuff. Now I know every brand who's listening is like, all right, come on. But tell me how I actually get in touch with Taylor, because I want to get in those stores and I want to get in the Whole Foods Market set. What advice do you have to brands? We know that there is the legendary Whole Foods Market supplier portal that has tons of info on there. So, so brands can probably go there and get info about, you know, when the review was happening, all that stuff. But, you know, you're also a really accessible guy. I see you at some of the trade shows and, you know, you're really approachable for brands. Like, you know, what are all the tips that you would give to a brand?

36:42
Taylor Cathala
So I think just to lay down some context, the supplier portal, like you mentioned, it's been through a few iterations, but it has been around for a while and it's been around for quite a while for grocery. And many suppliers out there are familiar with the process and they know what to do. Adult beverage in its entirety was kind of like the final frontier of like getting into a system like that. So I completely understand. There's a lot of legacy brands out there that probably still feel that the most accurate way to get in touch with our merchants is via email, which is okay, like that's, we're happy to divert. It's only relatively recently that we've really dumped all of our resources into the portal as well.

37:22
Taylor Cathala
So the first thing, if you're a supplier looking to get into Whole Foods Market, you would go to our portal and just make an account. And then from there, if it's specifically spirits, or in this case my category, which is non elk or RTD at this moment, like go to the spirits section and we just have a very simple submit a Whole Foods Market pitch deck. It's a one page slide, PowerPoint, really basic. And ultimately what that allows me to do is on the back end, I can review those slides and get like a really quick glimpse about the brands and whether or not to and basically evaluate where that brand may make sense for us with some of the adjustments we've done in our team and you know, going like enterprise we call it, which is this whole country coverage.

38:06
Taylor Cathala
Not so much like region based, more like we just cover the whole territory, like the whole country. It's a lot of brands. It's just impossible to manage that flow in email. So, you know, if you don't get a response from me, it's just because I haven't caught up, but I would say the portal is the best way to get access and pathway to potentially get reviewed. And one caveat I like to make is like local brands that make an item that's only really relevant for a single store, or maybe they don't have any distribution, like they're just kind of close to the store so they can like drop it off. If you have like one store coverage or if you're, I don't know, Diageo, Suntory, whatever, like, and you have an item that covers the entire country, everybody gets reviewed the same. Like it's.

38:49
Taylor Cathala
We don't give leniency to certain brands or the other. It's the only way to stay objective and to have everybody consolidate their product submissions into a simple format. Because that's what I'm doing literally right now after this call is I'm like going dark and like deep diving into my silo of just like reviewing brands for spring. And the reason that I can do that because over the course of the past few months, suppliers have been uploading their single page pitch decks and then I can review all. Like, I think I had like 680 of them together. Like if I'm going back and looking at emails or if I'm like having to open up some Google Docs, things somebody shared to me, like, it ain't happening, it's just, I just can't. Right. And so that is, I hate.

39:31
Taylor Cathala
I know sometimes it has like a negative stipulation just to like send them to the portal, but in this case it is the way and we actively use it, we are actively engaged with it. You can get access to like demo information, reporting information, store lists, all that. The second thing I'd say here, or maybe the last thing is just know your audience. We have very strict quality standards that we adhere to and there's no deviation. Like, so just those ingredients are for the most part all posted online to review. So before you are submitting, just make sure that you've given that a complete full look.

40:08
Taylor Cathala
Our portal does have more information on that if they want to deep dive that and also the store list in the sense of make sure that the product you're pitching for, like we have a decent amount of stores in that area or it's relevant in like a general state, metro area. Because I think those kind of things will help guide the decision making process for you in a better way. If you just understand like, oh, we're really excited about submitting this product. It's like, okay, but like right on Your front label, it says artificial colors, like, you know, like, yeah. So put a little bit of due diligence to making sure like you really want, you're putting your best foot forward. I would imagine that goes for any retailer out there. Like just know your audience, like, who are you submitting to?

40:50
Taylor Cathala
What's the scope of their retail establishment, how many, what's like the general, like size of their sets and what's their store count per state? So for us in spirits, we have, oh gosh, I want to say like 520 Whole Foods stores, 523 something in that range. For spirits, we only have 160 licensed stores. Most are in California. A decent amount are in Illinois and Washington and Louisiana. And then like the other like 17 or 18 states, you know, three to four stores. But we don't review them any differently. Like it's just being aware that like the volume is going to be a little different. Like California obviously is the focus. But if you wanted to get in California, that's where the bulk of the licenses are. But doesn't change the fact that we have one store in Wyoming that like.

41:35
Taylor Cathala
And there's a lot of great spirits there, like for sure.

41:38
Daniel Scharff
That's amazing. So when you're getting those pitches in the submission portal, what's the most compelling kind of information you could see in somebody's submission deck?

41:49
Taylor Cathala
I do look for locally relevant brands. That's near the top. When we go into a round review, like I am right now, we kind of have a general list of what our need states are. What do we generally, after we've reviewed the past couple years of information and data and all that jazz, what are we really seeking out to change, to remove or to update on this next one? Right. Just really speaking, really basically, like, what are we trying to do? So that's kind of like our Cliff Notes, so to speak about. Like when I go into these 600 plus items that we're reviewing or brands, which ones line up with our need states.

42:29
Taylor Cathala
And I'd say generally most things are reviewed that way, but when it comes to like local and hyper local, they're kind of immune from that in the sense of if there's a distillery that's right next door to our store in Reno, Nevada, it's probably going to be relevant. Like just. It just is. Right. And so maybe they have like a really cool gin and a vodka. Okay. Like it will probably still do pretty well. Like we want to make sure there's representation for locality without overexpanding or over Saturating our set. Right. We don't want to have like a set that's full of gin when really a couple, like, tell the story.

43:03
Taylor Cathala
But we put a lot of effort into allowing ourselves to be nimble with some of the brands that might need a couple of extra steps or a little bit of handholding just to like, get through our process. And I think that's important so that we appeal to those customers that live in that community. And maybe, I mean, Right. You can't discount trying to promote a carbon footprint reduction when they're only taking their product like, right next door, like in that example. Right. But so I think there's a lot of benefit to we have our need states. Like, maybe it's like, oh, mid tier whiskey. We want to like, look for more mid tier whiskey or maybe some more canned cocktails. Sure.

43:39
Taylor Cathala
But you can't discount the fact that like a couple of stores that are local to a distillery that are making really cool rum should probably still look into that. Like, that's still going to beneficial. And then again, like, there's things like, you know, I'm sure you browse a whole bunch of trade publications too. Like, like I do. And I think, you know, maybe you catch wind of some new brand that's coming up or a new flavor profile that's kind of like showing a lot of interest and so you kind of seek those out. Maybe I didn't even get it in the pitch decks that were sent to me. Like, maybe I'm. I'm really nosy when it comes to that. Like, I will email people's Contact Us page. Like, have you ever considered selling at Whole Foods? You know, that sounds like the best.

44:17
Daniel Scharff
Email in the world to get from your contact page.

44:20
Taylor Cathala
Sometimes it works out, sometimes it doesn't. But, you know, and they're like, no.

44:23
Daniel Scharff
This must be spam. There's no way.

44:25
Taylor Cathala
There's no way. Right. Some of our best partnerships have come from that. Like, it's kind of funny, but I think just being aware for us, like, really representing our community, I think is a big play. But also making sure that there's those other customers that come through our stores that like, it's kind of one, like, that's my brand. Like, sure. And that's cool. Like, fine. Like, love it. Like, we'll make sure that we like, have a representation of those national brands and like a broad assortment that covers a lot of our customer base. But we want to make sure that we're appealing to those customers that kind of want to take the next step. Or maybe that Kettle One shopper that still buys Kettle One wants to try like a local vodka next. Or maybe they have both.

45:04
Taylor Cathala
Like a lot of people buy both.

45:06
Daniel Scharff
So that makes a lot of sense. I just was kind of reflecting on why people support local brands a lot more because they unquestionably do. I'm from Maryland. People would talk about, you know, dogfish at brewery and want to buy that because people liked it and it was local. And I mean, I think, you know, people just love supporting startups from founders they know. Like I've been demoing and erewhon and seeing people grabbing a product like, oh, I once met the founder of this one and that's really cool. Just like some kind of familiarity. It represents a little bit of you. You have had an experience with them that's somehow positive. That which, you know, hard to replace that with a national brand where unless you have some kind of experience with.

45:45
Daniel Scharff
Yeah, like Kettle was the drink that you drank in college with all your friends and that's the one you're loyal to, right?

45:50
Taylor Cathala
For sure. Yeah. Yeah. And I would say like adding into that like what we're looking for, like suggestions for submissions from suppliers. Like it is beneficial to go into the supplier portal and review our spirit stores and see where they are because yeah, like if you have like this really awesome distillery in a certain county in Illinois, but we have no stores anywhere near it's going to be tough to review that in a way that like, yeah, it's local to the state of Illinois. That's great. But we have a lot of producers in Illinois and that are close and so just being aware of like what you're pitching, where you're pitching it to and just knowing your audience.

46:28
Daniel Scharff
Yeah, okay. That makes a lot of sense. So, okay, once brands are lucky enough to make it on your set, are there any specific data hurdles that you want to see around Velocity? I'm not so familiar with what a good benchmark is for the spirits category.

46:44
Taylor Cathala
Nothing really worth like objectively saying out loud frankly, like, because I'm. There is no brand that's going to come out of the blue and like surpass Tito's. It's not going to happen. So. So to put a benchmark out there for some brand new local brand that's trying to sell their gin or their local whiskey, it doesn't offer like a fair balance. But the things that I do look at, I do want to see relatively good sales traction after we've put them in the set. I want to See engagement. And so our demo system is like, really empowering suppliers to, like, lean into that and, like, do what they can to, like, engage with the store, promote their brands, engage with customers. What are they doing with social, like, how are they getting themselves out there, like, outside of the store?

47:31
Taylor Cathala
We love, you know, partnering with, like, very fledgling, innovative brands that are just starting out. But I would just say don't put all of your eggs in one basket because it puts us in a position sometimes of like, well, if it's Whole Foods Market is the only retailer you're seeking out and trying to get into, it doesn't really broaden your horizons to maybe expand to another state. And that is something that we like to see. Like, we want to start with a brand that can maybe is just in one store, but eventually, if it's working well and you're showing good growth, I'd love to see you get into more states and to potentially offer you to more, like, neighboring states that might be relevant for the brand.

48:08
Taylor Cathala
So, yeah, I think no particular metric, but I do want to see engagement with whether it's demos, whether it's social promotions, like having the ability to offer promotions. So, like, lean into that. Yeah, those are kind of the things I look at more carefully. I mean, we have all of our data, right? It's like, I know what I'm looking at. Like, if it's zero sales every two months and it's like, that's a problem.

48:31
Daniel Scharff
Yep, that's. It's interesting to hear you say that.

48:33
Taylor Cathala
So if it's showing case turn, if it's showing good depletion, if relatively low days on hand at the store because it can just re buy over and over. Like, those are good signs.

48:44
Daniel Scharff
Yeah, it's interesting to hear you say that. I worked in the Mayo category for a while, and you would look at the data and it's like, well, Hellman sold 80 units and your brand sold one. But that's okay, actually, because, yeah, you're not going to be selling 80 units and you grew from 1 to 1.5 the next quarter. Great. Good job. Okay, like, let's make it happen. Let's give you another facing. Like, whoa. Okay.

49:05
Taylor Cathala
Yeah, so it's.

49:06
Daniel Scharff
You just kind of. That. That blew my mind when I got into the category. Like, oh, that's okay. And like, yeah, show traction and growth. So, yeah, really important. So, Taylor, a couple takeaways I drew from this conversation with you that were super interesting to me, which is. So when you're Doing your review, it seems like you're really focused first on the customer needs. You know, what are people really looking for these days? It's very much driven by Whole Foods Market standards. And just like, really, that's the fundamental way you're going to look at every product that gets submitted.

49:37
Daniel Scharff
Heavy prioritization on local, when you can, taking advantage again of the kind of products that customers are going to be fond with, really prioritizing brands that have their stuff together on distribution, making sure that they're going to be able to get the product there without a lot of hiccups. I know you guys don't mess around with out of stocks and having, you know, customers not find things that they're looking for. Anything else that you really would highlight or like, hey, I wish every brand would know this about Whole Foods Market when they're submitting to us.

50:06
Taylor Cathala
I think the main thing is probably just leaning into a little bit more deeper dive into the quality standards component. So, yes, we do have like 99.9% of the stuff we can't sell in Whole Foods hosted on our publicly available website. However, specifically, non elk mocktails, RTD cocktails, they tend to be very dense on the quality standards review. And they can range from having like just 10 to 15 FIDs or gross documents per SKU, which is like kind of wild. But I understand why, like, it's fine. But we have like an incredible team on our quality standards crew that like deep dive these things that I have no idea about.

50:51
Taylor Cathala
So what I would say is on that quality standard side, like, do your homework, review what's on our posted unacceptable ingredients list, but have your fids and your gross documents, like ready to go if you have like a really nuanced, unique RTD cocktail or mocktail because they're going to be needed in order to move forward. And that process can. It'll take as long as you make it take. So if you're ready to go, like, here's all of our stuff, like, we finally got through compliance or we got into compliance. Make sure that you have that at the ready because that'll just make it go all the faster.

51:25
Daniel Scharff
That is a pro tip. And I've been down this road with Whole Foods Market before also where so grass, like, you can check the grass website and see all of the ingredients there that are generally regarded as safe grass. And like, if all of your ingredients are on that list, you're, you know, at least your ingredients are grass at that point. And if you have some cool new ingredient that's not on there. Like, you better be careful about it. Like, if you build this brand to go into Whole Foods, you might want to check with somebody first about that thing. And then like, because you can run your own grass study, you can pay somebody to do that and it's very expensive and it takes a long time. So if it's not on there, you might want to double check that.

52:03
Daniel Scharff
One last question for you, Taylor, which is about social media following. So I often get this question from brands of like, how much is a retailer going to care if I have 20,000 followers or 100,000 followers? The way you were talking about it earlier, you're like, I want to see some engagement. Like, you have that. Or you're going to do demos or you're going to do something like. Yeah. What do you think? Do you even look at a brand social media following when they submit?

52:29
Taylor Cathala
Yep.

52:30
Daniel Scharff
What do you. And okay, so you do look at it. All right.

52:32
Taylor Cathala
I would say, I would say a lot of the most innovative brands and suppliers, especially like in the mocktail space and the canned cocktail space, they might have like, no website and their website is their social media. Like, especially if they're brand new and that's okay. Like, that. I'm. I will not hold that against you. Like, if you're just getting started and yet you have an awesome product, like, we will help you do the legwork to get the next steps going. But yeah, so there is a lot of opportunity. It's a little nuanced in alcohol, like, because of ABC and tight house laws and all. Like, it gets a little clunky. But we have a team for that. So don't worry. They can help guide you through that.

53:12
Taylor Cathala
If that's a path you want to take about, like posting something for Whole Foods Market or mentioning Whole Foods Market name usage, all that kind of stuff. The cool thing about working in mocktails is that's not the case. And it's like promoting a soda brand. Like, and so there's a lot more leeway to partner with brands socially and do collaborative posting in store. Engagement sometimes can happen. This is all vetted by our media team and marketing team. So. But there are those opportunities. And I wouldn't. If you don't have any social presence, like, don't worry. Like, it's like, first things first. Like, is the product going to work for our stores and our customers? Like, just straight up. But there are added benefits of if you're really engaged with your social media account and there's A lot of followers or whatever in that community.

54:01
Taylor Cathala
Like, that's a good sign. That means that tells me, like, wow, like, this new brand that I haven't heard of before, that's in Massachusetts, that has like a hundred thousand followers and is really only sold in Massachusetts, like, this is probably going to be a pretty good win for our stores. But, yeah, so, like, it's not a make or break, but I think there's a lot of awesome engagement that happens naturally with those shoppers that aren't even in our stores yet that are already talking about the brand and, like, doing stuff with it.

54:28
Taylor Cathala
And then it, like, pulls them to the store maybe just because they think that it's sold at Whole Foods or, you know, depending on if they're assuming they're posting correctly and they're, like, just referencing multiple retailers that they can, like, sold at, you know, X amount of stores and all that. So, yeah, I definitely do. Yes, definitely. It's a big play.

54:47
Daniel Scharff
All right. Yeah, that's super interesting to hear that. Thank you. And so, just as we close up here, is there a good way to. For brands to follow along with you, to maybe, like, follow you on LinkedIn or.

54:58
Taylor Cathala
I'm open to it. I am on LinkedIn for the most part. I accept everything. The stuff that I don't accept is more of, like, it's not my category or I can just tell it's not clean. But yeah, I would say, like, happy to connect on LinkedIn. Sure. But if it's going to be a submission, just make sure that it is through our supplier portal. I don't do, like, formal round review through LinkedIn. It's just not connected to work. So. But I'll happily respond to you if you email me and just say, like, email my work email.

55:24
Daniel Scharff
Amazing. All right, Taylor, thank you. I just really appreciate you making yourself accessible and sharing all of this knowledge, which is what every single brand who's submitting would love to learn. So that's incredible that we're able to share that here on the startup CPG podcast. So thank you very much and I'm really excited to see you. I know you'll be making an appearance at Bevnet and Brewbound, and we'll be really excited to see you also at Expo West. So lots of cool chances for brands to get to shake your hand in person as well.

55:54
Taylor Cathala
All right, thank you so much. This has been really fun. Love talking to you.

55:58
Daniel Scharff
All right, thank you. Bye, everyone.

56:00
Taylor Cathala
See you later.

56:02
Daniel Scharff
All right, everybody, thank you so much for listening to our podcast. If you loved it, I would so appreciate it if you could leave us a review. You could do it right now. If you're an Apple podcast, you can scroll to the bottom of our Startup CPG Podcast page and click on Write a Review. Leave your company name in there. I will try to read it out. If you're in Spotify, you can click on about and then the Star Rating icon. If you are a service provider that would like to appear on the Startup CPG podcast, you can email us@partnersartupcpg.com lastly, if you found yourself grooving along to the music it is My Band. You can visit our website and listen to more. It is super fantastic. Thank you everybody. See you next time.