In this episode, we're talking about three news items from the last week. First, we discuss at-home spin bike giant Peloton’s new video game. Then, we look into the just-announced Chicken Nuggets from Impossible Foods. And lastly, Gear Patrol's Commerce Editor, Ryan Brower, will be joining to discuss his beef with Stone Brewing's new Buena Vida "premium" hard seltzer.
Impossible Foods announces chicken nuggets, Peloton gets into the video game business, and Stone Brewing launches a "premium" hard seltzer that is anything but.
**In the initial version of this episode, it was incorrectly stated that Stone was fined by the TTB for trade practice violations. This is not true. Stone paid the TTB for tax violations as a compromise after making a mistake in their tax filings — not because of trade practice violations. We regret the mistake. — JD
Episode Navigation:
01:35 – Peloton Launches Video Games, Is Now a Full-Blown Media Company
19:00 – Impossible Foods Announces Chicken Nuggets, Coming This Fall
32:44 – Stone Brewing Buena Vida Hard Seltzer, and Why It's Shouldn't be Called "Premium"
Featured:
Via Hollywood Reporter: “The Netflix of Wellness”: Inside the Hollywoodization of Peloton
Via Engadget: Peloton launches its first exercise game for connected bike owners
Via ReviewGeek.com: Sigh… Peloton Wants to Gamify Exercise
Via Insider: People are hacking their Peloton bikes so they can watch Netflix and cheat the leaderboard ranking system
Via Bloomberg: Impossible Foods to Launch Nuggets Into Brewing Faux-Chicken Battle
Via The Beet: Impossible Foods Announces New Vegan Chicken Nuggets
Via Thrillist: What’s the Difference Between Impossible Foods and Beyond Meat?
Via Stone Brewing: Stone Brewing Announces Buenavida Hard Seltzer, Crafted for the Good Life
Nick Caruso:
This is the Gear Patrol Podcast.
Nick Caruso:
In this episode, we're talking about three news items from the last week. First, we discuss at-home spin bike giant Peloton's new video game. Then we look at the just-announced vegan chicken nuggets from Impossible Foods. And lastly, Gear Patrol's commerce editor Ryan Brower will be joining to discuss his beef with Stone Brewing's new Buenavida hard seltzer.
Nick Caruso:
Thanks for listening. If you enjoy the pod, we hope you'll subscribe and shoot us a five star review. I'm Nick Caruso, and I'm glad you're here. Let's get started.
Nick Caruso:
Welcome listeners, and welcome colleagues. Platforms editor J.D. DiGiovanni is here. J.D., are you ready to explore this week's news?
J.D. DiGiovanni:
You know it, man. I'm ready.
Nick Caruso:
Yeah, I do know it. And joining the pod for the very first time, all the way from Hotlanta, Georgia, is GP's very own platforms producer, Scott Ulrich. Scott, what's going on down south?
Scott Ulrich:
Man, I'm happy to be here. Does this mean that I've earned the title "friend of the pod?"
Nick Caruso:
Yeah, you're a friend of the P. You're an FotP.
Scott Ulrich:
I've always wanted to be a friend of a pod, so I'm thrilled to make it.
Nick Caruso:
I'm glad. You have a lot of tattoos, that could be a new one. FotP.
Scott Ulrich:
Let's do it. [inaudible 00:01:32]
Nick Caruso:
No problem. All right, so three stories, let's launch in and start with Peloton. So, we're all familiar with the high-end, high-demand spin bike maker Peloton, but that's not all the brand makes. It can, as of late, sort of be argued that because of all the classes, and all the exercise-related content that the brand offers, that Peloton is more of a media company now than it is an actual exercise bike company, through content versus equipment.
Nick Caruso:
So, the content that we're talking about, its literally award-winning content teams, ME Award content teams, super tightly scripted and highly produced videos, and these personalities leading classes, celebrities who are instructors, super dynamic, and have a big following. And on top of that, what really sparked this topic is that Peloton just announced that it's launching a video game aspect to its spinning offerings.
Nick Caruso:
J.D., let's go to you. Peloton, should we consider it a content machine now? Is it just a content machine, or whatever happened to being an exercise-forward equipment phenomenon?
J.D. DiGiovanni:
Same thing man, at this point. It really is. The thing that really got Peloton going in the first place was the kind of content. I think they launched in 2012, and one of their early offerings was an app that you could just have and be able to engage with the content in the spin classes they were offering. And in some ways, it's actually pretty unsurprising that they're actually getting to a place where they're offering video games.
J.D. DiGiovanni:
This video game in particular is a kind of like Tron, Mario Kart Rainbow Road kind of thing where you have a spinning wheel that relates to the bike that you're using. It's only available to people who hae the bike. So if you're using the Peloton app and have a subscription to content, you're not going to be able to play it. But you can score points in three different ways. You have pickups, which is like staying the same lane. You have a stream, which is rewards based off of your cadence. And you have something they're calling breakers, which is energy based on output. Energy-based output points.
J.D. DiGiovanni:
So it's essentially just incentivizing you to pedal consistently, pedal quickly. You can select different time spans in which you want to do it. But this is all very early stuff. The game is only going to be available in beta to members a little bit later this year. There are some early versions out there for press to try and other kind of folks to give a shot at.
J.D. DiGiovanni:
But I think the takeaway from this, if you want to just put a quick pin in it, is that Peloton is looking to cast a really wide net. Anyone can get on a bike and sweat, but if they're really trying to capture an audience or a series of subscribers, they need to have really great content in terms of just having fun class instructors, and then having a variety of types of content. So maybe having someone sing along with Britney early in the morning riding a bike isn't your thing, then maybe a video game is more appealing. Right?
J.D. DiGiovanni:
And I think it makes a lot of sense. The thing I'm curious about is to see whether or not folks will actually find it appealing enough. I think that Peloton as a company is facing a huge amount of competition from a whole wide array of different companies, the primary that being iFit, the folks who run Nautilus. But I don't know, it seems kind of fun, and as someone who is a sucker for just trying to get more points on the board for anything, it would probably get me more engaged.
Scott Ulrich:
It feels really appropriately cyberpunk for the time that we're living in. Pedaling your Tron bike, and who knows how long it'll be before we're powering things with the points you gain. [crosstalk 00:06:22]
Nick Caruso:
Being the human batteries we are, like in The Matrix. [crosstalk 00:06:30]
J.D. DiGiovanni:
It was smoky in New York City as well, so I'm imagining everyone inside as the sky is just orange, just on our Tron bikes. Competing virtually with one another seems appropriate.
Nick Caruso:
Yeah, that's interesting because when I'm on the sidewalks, I think about throwing beheading discs at other pedestrians. Same thing. Also, Free Britney, by the way, hashtag Free Britney. But you're talking about points. This is an immediate tangent, but I'm curious if the points that you can earn in these games, I couldn't see if this is answered anywhere, would be anything other than just seeing where you stack up on a leaderboard or competing against yourself.
Nick Caruso:
I have a Colgate Hum toothbrush, which is one of the things we recommend, and I am a sucker for exquisite recommendations. So I got one, and you can earn points in the app whenever you brush, and you can use the points to buy stuff like replacement heads. So I brush before and after every meal, and every time I look at food so that I can keep earning. It would be neat to be able to use the points for something too, to really wrap this into a big experience.
J.D. DiGiovanni:
Yeah. There's already been mini-controversies, if you could call something like this a controversy given how low-stakes it is, about people Peloton doping. Like playing with the outputs and the meters or whatever to give themselves higher points, or higher scores when doing group classes. Some folks...
Nick Caruso:
Like hacking their bikes?
J.D. DiGiovanni:
Yeah, hacking their bikes to give themselves higher points, like mechanical doping on their own at-home exercise bikes. Because when you're riding, you get shout-outs from the instructors. They can see you on the board and be like "Yeah, you're crushing it." Like ParkSlopeBro32, and you get this huge rush or whatever. But I think it came out a little while back, and you can probably find the article and throw it in the notes, but they did the calculations on it, and people, their power output was trouncing Tour de France riders, right? There are just like random people that are somehow beating out actual mechanical efficiency of the best riders in the entire world.
Nick Caruso:
That's so funny. But it's also a very Lance Armstrong-y thing to do. It feels like Ready Player One in a way. Hacking your suit to compete better against people you will never, ever know or see.
Scott Ulrich:
Yeah, I want to learn more about the Lance Armstrong-esque fall from grace for whoever the Lance Armstrong was of the Peloton leaderboards. Discovering that they were cheating all along.
J.D. DiGiovanni:
Yeah. Having to write some sad letter to their coworkers or employers, "I'm sorry, I know I'm better than this."
Nick Caruso:
Right.
J.D. DiGiovanni:
But the kind of crazy thing about this content that Peloton's putting out is, the points are pretty low stakes for folks competing and doing this. Peloton's fighting with a bunch of other companies for a winning pot of like 3.5 billion dollars. [inaudible 00:10:05] came out with a report this year saying that the connected gym, that's kind of the term for these kinds of things, so this includes Mirror, which is a kind of reflective screen that shows workouts and has bands and things like that... and there are a handful of others like that.
J.D. DiGiovanni:
And Peloton spinning bikes with screens and wifi connections. They're worth around half a billion dollars, the market is around half a billion dollars right now, and they're expecting it to grow at a rate of 7% over the next seven years, and ending up at around $3.5 billion by 2028. So Peloton is investing a huge amount of money into just creating content that will keep people engaged and paying, I think it's $12.99 to $39 a month subscription for just that recurring revenue.
J.D. DiGiovanni:
And like I said, at the top, their competition is super fierce. Earlier this year, they spent like $420 million to buy Precor, which is another exercise equipment machine, just to improve their domestic manufacturing. Meanwhile, iFit, which is this huge fitness equipment maker that owns Nautilus, took out a $200 million investment that valued their company around $7 billion to compete with Peloton. And they've been around since the 70s, while Peloton is much younger.
J.D. DiGiovanni:
And the reason why you're seeing a lot of innovation and investment into their content studios is because the thinking is this is going to be the differentiation between who's going to win this thing, right? The bikes are more or less the same. You get on an exercise bike and you can maybe have different positions that you like better, it feels slightly different, but what people are really buying is the access to the content in a lot of ways.
J.D. DiGiovanni:
And so, in the same way that Disney Plus, and HBO, and Netflix, and X number of other streaming services are slugging it out right now and spending a huge amount of money to try and just get the coolest, buzziest show, these companies are doing much the same. And there was an interview in The Hollywood Reporter earlier this year with a lot of... it wasn't an interview, I guess it was more of just a piece on Peloton, and they were talking to the head of content over there. And they were essentially saying pretty explicitly, "We're just going to try a bunch of different stuff. We're going to push the envelope to see what kind of content we can produce."
J.D. DiGiovanni:
And so, while I think this game is interesting as a piece of news, like oh, this is a funny Tron thing that could be fun to work on, I think the real takeaway is that this is like the tip of an iceberg of a bunch of experimental stuff coming out from Peloton and other exercise platforms like it. I think we probably will continue to see a trend like this over the next year or so, if not longer.
Nick Caruso:
Yeah.
Scott Ulrich:
I've got to say, I've been kind of a Peloton hater for a while now. My mom has one, my sister-in-law has one. They love it. I've tried it, and there's just something missing there for me. I guess a lot of that is the prohibitive cost, and especially the monthly cost. It's like, I pay $10 a month for a Planet Fitness membership, where they have a dozen exercise bikes, and a bunch of other things. And I can go do that. And there just hasn't been enough there to bring me to Peloton. And there's always been something weirdly, kind of distinctly sad about the screens that show you, oh, you're pedaling through the Mediterranean Coast right now. And it's like, no I'm not, I'm in my unfinished basement.
Scott Ulrich:
I just haven't been sold on that, and that's always felt weird and sad to me. So I've always been very far off from buying a Peloton, and I don't think that this is enough, but this is the sort of thing that makes me turn my head and say, "Huh, that does seem fun." Especially if the game does look fun, making it a competition more than just competing with other people pedaling. That is something that I'd be more interested in.
Nick Caruso:
Yeah. So the cost is an interesting thing, that is kind of what I was going to address too. But to your point, J.D., about streaming services. It's almost the exact same thing, because streaming services are making up right now for us not being able to go to movie theaters for a long time, and they scrambled to do that. And part of that equation was just throwing spaghetti at a wall and seeing what sticks.
Nick Caruso:
And that's what these exercise machines, connected machines have done for gyms, right? People couldn't go to the gym over the last year, so they started using these things. But even all of that considered, that kind of investment, that growth and that profit is really wild. Something we haven't touched on because it's sort of a given is that these things are very expensive upfront, or seem like it, right?
Nick Caruso:
And so these companies, what they're selling is that you are getting a better value long-term if you invest in this upfront and pay for the classes than you would if you go to a gym, so we have to keep you engaged. That's why they need to keep you engaged, not just so people have what they need, but to make good on their promise. It's a really interesting sort of calculus.
J.D. DiGiovanni:
Yeah. Totally. And it's part of the reason why they were able to raise as much capital as they were. I was doing a lot of reading on the history of the company, and when this founder, his name has slipped my mind for a moment here... John Foley, was going around trying to get money to start this business, everyone was saying... "Okay, so it's an expensive piece of hardware, how do you get the growth out of it?" Or something like that.
J.D. DiGiovanni:
And he's like, "Well, content." It's how you keep coming back and how you have a monthly subscription. But I'm curious to see if it sticks. This period of time, the past year and a half, has been so crazy for so many different things, and I think the food industry and services like gyms have just been going through everything. It's still an open question if people are going to return to their old habits, or if saving time and being able to work out in your garage on your Peloton is really the move.
J.D. DiGiovanni:
So I think it's a big question in general for all kinds of companies like this, and outside of the question of whether or not they can produce good enough content, and my guess is that they can, if you have a content studio full of 19 Emmy Award winners or something like that, you're probably going to do a pretty good job. But will people want it? Maybe they'll convince the Scotts of the world to plug in and sweat it out, but I don't know, it's still to be seen.
Scott Ulrich:
They just need to make that game fun. A lot of people make games, and there a bunch of games I can download for free right now, and I don't. So I think that'll be the difference maker, is the game a gimmick, or is it an actual fun thing you can do?
Nick Caruso:
Yeah. And to a point you made yesterday, J.D., when you mentioned the story, exercise is inherently gamified. So this is kind of a smooth transition for a lot of exercisers. I thought that was a great point.
Nick Caruso:
You mentioned the food industry, which is a pretty solid segue into our second story, so we're going to do that now. Thank you so much. I'm always listening for a good segue. But the next story we've got on the docket is the just-announced Impossible chicken nugget. These are of course being launched by the plant-based meat company Impossible Foods, we're all familiar with that company and its ilk. It follows their announcement of vegan chicken earlier this month. I think they're chicken tenders, Scott, you can correct me if I'm wrong.
Nick Caruso:
But Impossible Foods announced that Impossible chicken nuggets will be available in restaurants in the fall. I know we'll sort of parse apart the differences between the two brands' products, but first, Scott... I hate to put you on the spot, the Scott Spot, but as our official vegan representative on this panel, I want to ask you directly, how does this announcement affect that ongoing battle for market dominance between Impossible Foods and Beyond Meat? Those are the titans of this category, and they're fighting it out. So what does this do to that?
Scott Ulrich:
Right. First, I'd like to thank you for announcing that I am vegan, because as a vegan I would make sure to let you know that I'm vegan. So you got that out of the way for me, so thanks for that.
Nick Caruso:
You did it anyway, though. Keep that in mind.
Scott Ulrich:
I'll just reiterate, I am vegan. But this is, as you can imagine, it's super exciting news for people that are vegan and miss chicken nuggets. I'm really excited. But what is interesting is that this is coming on the heels of actually Beyond Meat's chicken tenders being launched earlier this month. So Impossible announced chicken nuggets this week, and it was only just earlier this month that Beyond announced their chicken tenders.
Scott Ulrich:
And the Beyond Meat chicken is already out in various restaurants across the U.S., whereas it sounds like Impossible Meat is looking to shop this within the food service industry before moving it to retail. And that's interesting because it really feels like Impossible and Beyond are duking it out right now, trying to get into as many chain restaurants as they can, specifically fast food.
Scott Ulrich:
Not unlike Coke and Pepsi, honestly. It seems like a lot of these chains and brands are choosing one and running with it. So you see, right now, Taco Bell, KFC, Pizza Hut is courting Beyond Meat, and it sounds like they're testing it, whereas Impossible Meat landed Burger King, and you can get an Impossible Whopper at any Burger King in the States. So it definitely seems like they're just trying to race each other. Which is exciting, because competition is good, especially in this space.
Scott Ulrich:
Between the two, I got to say I really do prefer Impossible. It's made from soy and potato protein, but it has a compound called heme, and that's an iron ion that gives Impossible meat apparently its meaty flavor. And when you bite into it, I'm not sure if you guys have tried it, but it really does taste a lot like meat. Still regularly when I order an Impossible burger, I'm looking like, "Are you sure you got this right? This isn't a beef patty?" It still tricks me, whereas Beyond, it tastes fundamentally a little bit different from meat, and not totally foreign either.
Scott Ulrich:
I do like Beyond Meat, I will eat it, I'm glad that it's an option, but my main issue is that the taste really just sticks with you. And I'm sorry if this is gross, but four out of five times when I eat Beyond Meat, I'm just burping that flavor for like the next hour or two. It's really pretty unpleasant.
J.D. DiGiovanni:
I don't know, it kind of sounds like you're getting more taste per bite if it is sticking around. Seems like a value proposition.
Scott Ulrich:
You can make that argument...
Nick Caruso:
Thanks for bringing that up again.
Scott Ulrich:
I feel like Beyond is not the flavor you want there, it's like the ketchup and onions you put on there, and then when it's just Beyond coming back up, it's not as nice. So they're both rushing to get stuff out there, but Beyond Meat definitely seems like it's leading the charge. You can find their products at Del Taco, Carl's Jr., like I said they're testing it at Taco Bell and KFC.
Scott Ulrich:
And even McDonald's. McDonald's is working on McPlant, which is kind of its own thing, but it sounds like all signs are pointing to them sourcing it from Beyond Meat. That's not confirmed, but that's what most people are theorizing. So, with this chicken stuff, I actually accidentally tried the Beyond chicken tenders earlier this month. We were in Minnesota...
Nick Caruso:
What do you mean accidentally?
Scott Ulrich:
I didn't even know it was Beyond Meat. We were in Minnesota, we were looking at Postmates and we landed on this pizza place that had a vegan option. And so they sent us a buffalo mozzarella chicken pizza with vegan cheese and stuff. And I have to say it was probably the best vegan pizza I have had, and a lot of the credit is due to the Beyond Meat that was on there. And I didn't even realize it was Beyond until later on.
Scott Ulrich:
But I'm pretty wary of a lot of vegan chicken. A lot of old products like Gardein and Morningstar, they've been around for a long time, and their stuff is just not as good. You can see the chicken comparison, but it's just so different, and it's kind of chewy, and just not really the same. But with Beyond and Impossible, it really feels like they are doing everything they can to make this chemically identical to meat.
Nick Caruso:
What I want to know, did you eat meat previously and you've decided to become a vegan? So you actually have a frame of reference there?
Scott Ulrich:
Yes. I had meat last about a year and a half ago, and we went vegan. So I haven't had it since, but it's still fresh on the mind.
J.D. DiGiovanni:
I get chicken... I'm so ashamed to admit this, it's so gross. I get chicken from the local supermarket. I get the Purdue Farms chicken, and it's precooked and in like a Ziploc bag. It is so unnatural and gross.
Nick Caruso:
I didn't know where you were going with that, but that is not what I expected. That was extreme.
J.D. DiGiovanni:
I essentially just buy a bag of protein, and put it on my salads and pretend it's... I don't know man, it saves time. I live in a studio, I was saying earlier. Everything smells like chicken for a while after I cook it, so I just buy it precooked like a lazy man that I am. But I think knowing Impossible burger and Beyond Meat, they've been out for a long time, I just haven't had that much interest in buying them. But chicken, actually, I'm kind of curious about trying it out.
J.D. DiGiovanni:
The thing I was surprised about in reading this is the whole thing with Impossible and Beyond is like, oh, we have heme, and so it tastes more like meat, because it's similar to hemoglobin or blood, right? But there's no heme in these chicken tenders. And so I'm kind of surprised, like... what's the differentiating factor between this and some old school vegetarian stuff, right, that my friend's parents ate when I was in Northern California?
J.D. DiGiovanni:
Scott, do you have any... what's going on? Do you have any perspective on what they're doing differently, or are they just being like the cool kids on the block with the same old stuff?
Scott Ulrich:
Sure. My guess is, I feel like chicken is less meaty than beef. That's how we think of it. Beef has that really meaty flavor, and chicken, it is meat, but it's just different. And I've only tried the Beyond chicken ones, and was it a perfect replica of chicken? No, but it was a lot closer to chicken tenders without... it wasn't weird. They managed to make it just like, I get that this is different, it is a different taste, but it's still really good.
Scott Ulrich:
And I'm super excited to try the Impossible brand, because I do prefer the Impossible beef, and I hope that they bring that same heat to chicken. They're making it from texturized soy and sunflower oil, and what's really interesting about it is they earned accreditation from the USDA for child nutrition. So this would potentially open them up to be able to distribute their products to schools all over the nation.
Scott Ulrich:
Which is really crazy to think about, because I don't know if you all remember, but the chicken nuggets from back in my day in the lunch room, even as a third-grader, were very, very gross.
Nick Caruso:
Oh, god. Dinosaur shapes.
Scott Ulrich:
Chunky... yeah. I wasn't a fan. I don't know. Obviously, as a vegan, I'm super excited. I'm excited to have a chicken nugget that I can eat, that hopefully will be sold to some nationwide chain that I can go and buy them at. But I think that people that aren't vegan should be excited about it too, because this is the way the world is moving. Impossible Foods, they've said their mission is to completely replace the use of animals as a food technology by 2034.
Scott Ulrich:
And I'm not necessarily looking for world domination... I'm a little bit skeptical of that goal and how fast it can happen.
Nick Caruso:
You're not, huh?
Scott Ulrich:
Well, maybe not publicly.
J.D. DiGiovanni:
You heard it here first.
Nick Caruso:
Scott doth protest too much.
Scott Ulrich:
I won't be mad if we take over the world. Especially considering that animal agriculture is the second largest contributor to climate change, and we're seeing the effects of that every day. It's on the news now more than ever. Only emissions from fossil fuels does more harm to the environment. 70 billion animals are raised annually for human consumption, and beyond just being sad about an animal dying, the resources necessary to produce feed for those animals, that takes a huge toll.
Scott Ulrich:
You have to grow so many plants that could just feed humans for these animals. To get them to the right place, you have to have a place to put them, you have to do something with their waste. You can't do anything with their methane output. But that makes a huge impact. And so this stuff coming out and being sold to fast food restaurants, it's super exciting because you don't need to go to a weird vegan restaurant anymore to get a plant-based meal, you can go to Burger King. And that's really exciting, especially when the food is really not that different.
J.D. DiGiovanni:
Speaking of resources, how expensive are these compared to regular chicken?
Nick Caruso:
Great question.
J.D. DiGiovanni:
Or meat? I honestly never just had [crosstalk 00:30:28]
Nick Caruso:
Compared to a bag of cooked chicken, you mean?
J.D. DiGiovanni:
Yeah. Dude, that stuff's cheap, I'll be honest. It's a little more expensive than it would be if I could buy just the chicken breasts, but it's cheap, man. I don't know, I guess I'm a Scrooge, but Scott, am I going to be paying more money if I'm trying to get this chicken? Or even just the Beyond Meat and stuff like that.
Scott Ulrich:
I'm holding my breath. I have to imagine it will be a significant upcharge. For Impossible Meat it's usually a little bit more expensive. If you go to a restaurant, it's usually like a dollar or two upcharge. But a large part of that is because of subsidies. The government heavily subsidizes beef and a lot of animal agriculture. So yeah, there's an upcharge currently with that stuff, and there probably will be with this stuff as it comes out. I don't really recall the upcharge for the Beyond chicken I had. But yeah, there'll probably be a little bit of an upcharge there.
Nick Caruso:
But as things expand, prices always come down. Maybe not to bagged chicken levels, but we can expect it to lower a little bit.
Scott Ulrich:
And it's crazy how far that can take one of these brands. They're worth a lot as it is, but I remember Impossible Meat coming onto my radar in maybe 2017. I wasn't vegan, I didn't really bother to care. I tried one, it was like, okay, cool. But when they landed the Burger King thing, it's like they're all over. And now when we're on a road trip, it's so nice to be able to just not have to locate somewhere with vegan options. You see a Burger King sign on the highway and you can pull over.
Nick Caruso:
Right on. If only you had something refreshing to wash it down with. Which is a perfect... maybe a less than perfect segue.
J.D. DiGiovanni:
You're on a roll.
Nick Caruso:
You think so? Well, let's move on to the third segment, then. We're going to invite Ryan in and pick it up there.
Nick Caruso:
Okay, our last topic today is hard seltzer. And for this segment we are welcoming our colleague Ryan Brower, a consummate beer connoisseur. Ryan, welcome to the pod. How are things?
Ryan Brower:
Things are good. How's everybody doing? It's nice to be chatting with you all again.
Nick Caruso:
Yeah, it's kind of a rarity these days that we can all get together.
Ryan Brower:
Yeah, I don't know this grouping of four, I haven't had the pleasure yet, in a while.
Nick Caruso:
Yeah, fair warning.
J.D. DiGiovanni:
Friend of the pod, as well.
Nick Caruso:
That's right, another second friend of the pod. And fair warning, Scott was talking about literally taking over the world earlier, so you are now complicit in the plot. Hate to tell you.
Scott Ulrich:
Well Ryan, as a fellow vegan, I'm in good company. Ryan was an inspiration to me in my transition to veganism, so shout-out to Ryan.
Ryan Brower:
Oh yeah, there we go. Glad it's still going well for you.
Scott Ulrich:
Yeah, definitely.
Nick Caruso:
First beer, veganism... next, the world, right? That's literally what's happening here.
Nick Caruso:
So Ryan, you are the guest of honor for a specific reason, and this segment needs a slightly more behind-the-scenes context to explain it. You're here to talk about hard seltzer for many reasons. You're a beer guy, you have railed against hard seltzer in the past, but you recently went on what I would call a brief but epic Slack rant about a new product from craft beer maker Stone Brewing. It's called Buenavida Hard Seltzer, it's a lot like other hard seltzers we've come to know. They're intensely popular right now, it's 100 calories per serving, 5% ABV, two grams of carbs, four flavors. Interestingly, packaged only in glass bottles, which the company claims is a first.
Nick Caruso:
But to set the tone a bit more, co-founder of Stone, Greg Koch, was quoted in the company's actual press release for this product as saying, quote, "I admit that I was on the leading edge of the hard seltzer skepticism, and I know that I'm likely to get merciless shit over us releasing a hard seltzer." Which kind of perfectly tees up you, Ryan, who began the conversation on Slack by saying, quote, "Hell must have frozen over." So, that maybe gives people a little taste of what this conversation may be about.
Nick Caruso:
But I want to pose the first question to you, Ryan. Can you tell us what your specific... this is kind of alluding to the last segment too... your specific beef, or fake beef with Stone introducing this hard seltzer is?
Ryan Brower:
Yeah. I think everybody knows at this point that I am the guy at GP that is anti-seltzer. And let me put it out there. I have no problem with Stone or any brewery making hard seltzer. There's a time and a place for it. It was a $4.5 billion product in 2020, and it's clearly what people want to drink right now, no matter how much side-eye I give somebody. My gripe with how Stone presented this to the public though, is basically because they called it a "premium seltzer." And saying this is, quote, "a new era of quality hard seltzers."
Ryan Brower:
But the problem is, it's all more or less the same. Hard seltzer is basically just sugar and a little bit of natural fruit or preservatives, and alcohol. It's sparkling water plus alcohol at its very basics. So the fact that we're calling this premium, and it's going to be some new era is just... don't market speak to people, actually tell people, "Hey, we're doing this because there's an opportunity here. We see it's what people want, we want to diversify our customer base and bring more people into our tent, and give people an opportunity to see what we're about."
J.D. DiGiovanni:
Yeah. I think the one thing I found myself wondering as I was looking at this is, I know I would buy Stone as a beer, but I don't really know why I'd buy seltzer from them. This kind of speaks to your point too, Ryan, about a lot of the stuff being pretty similar. Stone as a brewer has a kind of premium product, but then I'm pretty content drinking Bud Light seltzer, right?
J.D. DiGiovanni:
I did this past weekend at a Yankees and Red Sox game. It was fine, it tasted like watermelon or something, I forget what, doesn't really matter.
Nick Caruso:
How many did you have? Jesus.
J.D. DiGiovanni:
I guess that's another conversation. But yeah, is there really any way to find some kind of differentiation? Because I know, Ryan, you're talking about this stuff's all more or less the same. But isn't Coke and Pepsi also pretty similar?
Ryan Brower:
Exactly, and this is what it comes down to, it comes down to marketing, essentially. Basically, seltzer is water with table sugar, and/or some sort of corn sugar that gets fermented by the yeast that gets created, and then it gets packaged and carbonated. And that's basically it. The really only differences you're going to find from any seltzer to another is maybe they used a different type of alcohol, and maybe they used real fruit instead of preservatives or freeze dried fruit, or natural flavors.
Ryan Brower:
Those are really the only differences when it comes down to it. I just don't get it. This is a continual thing, breweries coming out with a hard seltzer and acting like they're changing the world by giving the world a hard seltzer. That is not what's happening, you're just adding another drink to your portfolio. And this whole hype train of "We're finally doing this now!" And it's like, I'm happy for you, you've got something that's made $4.5 billion last year, and you can take that and hopefully continue to do the things that you do in a premium way.
Ryan Brower:
So that's kind of my crux with that really, is just don't piss on my shoe and call it rain.
J.D. DiGiovanni:
That's a folksy saying, I love that.
Nick Caruso:
They can finally afford to go to space, which is good for them. Congratulations.
Scott Ulrich:
Yeah, I've got no issue with hard seltzer. I don't have a particularly good taste in beer or beverages like that. I feel like I'd be the target audience. No qualms with it. But every one that I tried from whatever brand, they all taste the same. It's just that super synthetic taste that is just not very good. I want to like one. I like the idea of them. But they all just have that same synthetic taste, whether it is a Bud Light seltzer, or whether it's from some craft brewery. It's the same thing every time.
Nick Caruso:
I came across a Reddit thread that was titled "Hard seltzer is ruining the beer selection at my usual spot." And of course these are like beer nerds, really big old nerdy guys. And one response to it was "What you're feeling right now is exactly how beer drinkers who don't like IPA have been feeling for the last 10 years. I'm not a big hard seltzer guy by any means, but the stores have to stock what people want to buy."
Nick Caruso:
I don't meant to change the through line of this conversation, but it is really important what you brought up, Ryan, is this is a very popular thing right now. And you're not suggesting that you're personally attacked by this stuff, you're just making the differentiation between a really premium company claiming that this is a different kind of product, right?
Ryan Brower:
Yeah, exactly. Like I said, at the end of the day, if a brewery can grow their tent and provide someone that doesn't necessarily like an IPA an opportunity to come and enjoy beer at their brewery or buy beer from them, or some sort of beverage, that's a good thing. I am a fan of Stone, I have no qualms with them. I want to see them keep doing what they do, because they do it very well.
Ryan Brower:
But it's the fact that we're sitting here pretending like this is some groundbreaking thing. Seltzer is great in the fact that it doesn't have carbs, so it's gluten free, it's got less calories, lower alcohol usually, it's convenient, they're almost always in a can except for the Stone one is in a glass, and it's a little more balanced for social drinking. I think you could drink a few of those as opposed to drinking a few double IPAs at a barbecue, and you're going to have a different experience. It's a lot more mellow.
Ryan Brower:
And to your point, Nick, seltzer is a growing thing, and it's good that breweries are recognizing, hey, this is an opportunity, A, to expand our customer base, keep us afloat, and pay for the things that we're really good at. But be honest about that, don't try to package it up and market it in some way, that's just not... it's the same thing.
Ryan Brower:
One data point I want to provide about how big seltzer has gotten. IRI is an organization that tracks chain retail sales. In 2018, hard seltzers represented just over 1% of the total U.S. market in those chains. Today, that figure is almost 8%.
J.D. DiGiovanni:
That's crazy.
Nick Caruso:
Whoa.
J.D. DiGiovanni:
I guess to maybe play a bit of a Gargoyles advocate, because I guess it's Stones' thing... I think I'd be pretty concerned for Stone if they were like, "Yeah, here's this thing, it's pretty popular but we're not that into it. Check it out if you want." If you're launching a new product, you kind of have to show up and be like, "Yeah, this stuff's great because we're making it."
J.D. DiGiovanni:
I have to imagine there's a certain amount of cynical, okay, you need to show up, you need to pound your chest a little bit. But I guess I would also hope, and maybe I'm being naïve here, that they have to also believe that to a certain extent too, right? They're a group of people that have putting out drinks that they believe in when it comes to beer, and I got to imagine even just by habit that the people that are involved in the development of that drink had some kind of goal that they were trying to meet with that.
J.D. DiGiovanni:
So I don't know, I think, Ryan, your skepticism about the product tracks to me, and I think the idea too about the craft as an ideal about how you approach something and how you produce something, is it's harder to sell that when you're doing something that is relatively much simpler when it comes to seltzer versus beer. But i almost want to give Stone a bit more of the benefit to the doubt, that they produced something that they really believe in and that they think is good. I'm genuinely curious about trying it now, in large part because of this conversation.
J.D. DiGiovanni:
But I wonder if there is a world out there for the more discerning seltzer drinker. What is the delta between the Bud Light that I was drinking at a baseball game and something that comes in a glass bottle? I don't know. I guess I'm almost feeling weirdly defensive of this company I don't know that well.
Ryan Brower:
Yeah. You've got a very valid point there, J.D., because at the end of the day, being boisterous and over the top is what Stone does, and Greg Koch has been his whole life. He refers to himself as the Beer Jesus.
Nick Caruso:
You're kidding me.
Ryan Brower:
They are a very brazen... no, I'm not kidding you. There is a documentary called Beer Jesus about him.
J.D. DiGiovanni:
Sacrilegious.
Ryan Brower:
Yeah, it was on Amazon Prime for a while. To give him credit, he basically made aggressive, in-your-face IPAs a thing for a long time in America. You can't deny that. I have a ton of respect, and i still go back to those beers. It's great to go back to those beers and drink them. The problem is they're going through a lot of changes right now, they're realizing that they're kind of stuck in the 2010s and they're having to adapt.
Ryan Brower:
And not as many people want to drink those aggressive IPAs. They put out a decent amount of hazy IPAs though too, they've adapted in the form of IPA maker. But when it comes to other styles, this is where they're kind of trying to recognize that we need to do a little bit more. So Buenavida, they actually came out with a salt and lime lager, I believe, so this is a spinoff off of that brand.
Ryan Brower:
I believe that was two years ago. So they're trying to make that its own little brand and say "This is the new Stone" kind of thing. We're producing a nice light lager for the summertime, and we've got a seltzer now too. And to your point, J.D., they're going to market how they've always marketed everything, aggressive, in-your-face, this is the best thing ever. So I give them credit for that. I guess I'm just like, I've gotten so many of those press releases and seen so many of those Instagram posts from legit craft breweries, and even small local breweries too, that just say the same thing. It's not like you're able to distinguish, okay, we used this yeast strain that we fermented in this house, or we've chosen this hop that nobody's ever really used yet and it's very refined and it's got these properties.
Ryan Brower:
It's all the same stuff. Part of it is I'm just tired of hearing that your seltzer's any better than the 70% of seltzer that's being accounted for in the market, which is White Claw, Truly, Bud Light, and Corona. Those are the top four in sales, and the rest all below that are kind of fending to climb up the ladder, and there's hundreds of them.
Scott Ulrich:
My absolute favorite thing that I've seen in the hard seltzer sphere is that Vizzy brand, which the entire ad approach seems to just be like, "The only hard seltzer with antioxidant vitamin C." And they even have these ads where it's like, oh, you have two choices that were the same, and one of them had vitamin C, wouldn't you choose the vitamin C one? Which feels so cynical, but also so true that I really just kind of have to respect it. Just like, come on piggies, come get your slop, your hard seltzer, we poured some vitamin C on top of it. There you go.
J.D. DiGiovanni:
You could probably trick me with it if you put some DCAAs in it.
Nick Caruso:
Or some fake chicken chunks. It is kind of a question of marketing in a lot of ways. That's kind of what you're railing against here a bit, Ryan, and you take all these elements, put them together, you get Greg's Beer Jesus and maybe needing a new slogan, they can do something like "It's a miracle, we're turning hard seltzer into harder seltzer." Do you think that...
Nick Caruso:
I tried. I tried.
Ryan Brower:
I will give some credit and I will say that what Evil Twin has done out of the New York City area, they're based in Ridgewood, Queens, also I think they opened a brewery in Dumbo as well this summer. But they, last year... I think it was last winter, because I remember our colleague Will Price flipped his lid over this stuff. Basically, they leaned into this so hard and said, "We're going to do pastry seltzers, imperial pastry seltzers." And they started putting stuff in there like marshmallows, raspberries, all these decadent things trying to mimic, almost mocking the pastry stouts that happened, where they're like dessert stouts.
Ryan Brower:
And we got some, they're calling them Evil Water Imperial Seltzers. And they do different flavors all the time, and... it was fine. I remember Will lost it though, and loved it. And I could see why, it's almost just owning the fact that this is a little absurd and ridiculous how popular this stuff is, and I can throw a bunch of stuff into it and people are going to eat it up, like you said, Scott.
Nick Caruso:
So that brings me to one of my other questions I wanted to ask you, Ryan. If, gun to your head, you have to drink a seltzer, and you get your choice of the entire category, what do you choose? What do you personally reach for?
Ryan Brower:
Oh.
Nick Caruso:
Someone put a gun to Ryan's head.
Ryan Brower:
I honestly, no lie, I've never had a Truly or a White Claw. I have never had one.
J.D. DiGiovanni:
You're missing out.
Ryan Brower:
I guess maybe I would try it for that reason. I enjoyed the Evil Twin, it was okay. Threes did one earlier this year, it kind of sounded like a Sprite almost, like a lemony lime, which sounded interesting. It probably depends on what mood I'm in too, because I'm someone who's like, I believe there's a time and place for every type of beer. That's from a Bud Light to the most decadent Imperial IPA. So if I'm in a mood where I wanted to drink a Bud Light, I'd probably just drink a crappy micro like White Claw or something.
Ryan Brower:
If I want to drink something a little more, I guess you could call it interesting, go with one of the Evil Twin, like marshmallow, raspberry, imperial seltzers.
Nick Caruso:
That's fair. I hear there's a new one in glass bottles too, to consider.
Ryan Brower:
Stone, yeah. I am curious, I would like to try it. And I give them credit, they're going through a big transition right now. The beer world is not what it was in the 2010s and the 2000s, and trying to navigate that as a fairly large, nationally distributed brewery whose thing was being loud, aggressive, in-your-face, and we're at a time and place in the world where those characteristics maybe aren't as great to have as a brand anymore.
Ryan Brower:
So they're trying to make that transition, and the fact that they're recognizing that hey, we can make this thing, bring more people into the tent, and that'll allow us to continue to make the things we really love and that beer drinkers know us for, is ultimately a good thing.
Nick Caruso:
Yeah, right on.
J.D. DiGiovanni:
This may not make it to the pod, but I will just add in too that I know they've had a trash past five years. In 2016, they laid off like 5% of their workforce. I remember just meeting a bunch of guys who were just like, "Yeah, I used to do media for Stone and now I'm running my own little ad business" or whatever. And then they laid off 300 people over the pandemic.
Nick Caruso:
Oh my god.
J.D. DiGiovanni:
And this year they're agreeing to pay the federal government like $1.8 million for penalties I guess, I don't know exactly what. It just seems like this kind of once mighty brewery is just having trouble. And I'm hesitant to say that, to talk too specifically or say that some company's having a tough time without talking about specifics, or knowing the specifics, frankly. But I could frankly see this too as also just being like, all right, enough with the cute shit, we need to put out some seltzer and make some money because laying people off sucks.
Ryan Brower:
Yeah. That's part of it too. Ultimately I think Greg Koch is a very opinionated person an always has been and always will be, and there's something to be said for sticking to your guns and this is what I think. But I think the decision came from the finance department if we're being honest. You need to sell the shit that people are drinking right now, and that's hard seltzer. Yeah, and they are. Kind of to speak to that, J.D., they bet really big on this. They attempted to overhaul a brewery outside of Berlin. That's kind of what the documentary I referenced was about. They sunk a lot of money into it and they did a lot of work, and Greg's big bet was, I helped create the American beer palette, and I'm going to then bring it back to the homeland of beer, Germany.
Ryan Brower:
And it failed. It failed miserably. People loved the beer, but it was just too costly of an endeavor. And it was unfortunate, and I think that kind of snowballed a lot of the issues they're dealing with now. Stone IPA his been in decline for three years in chain retail stores tracked by IRI. So they're having difficulties with what people knew them for, so I hope this is the tide starting to turn and them recognizing that we need to make some changes here, and we need to be a bit more inclusive, and we can't just be this aggressive IPA, in-your-face brewery anymore. Who knows.
Nick Caruso:
All right, well let's wrap it up there. Ryan, we're going to keep an eye on your Slack rants moving forward in case there's more we can add to our conversations here. You're a content creator.
Ryan Brower:
Thank you.
Nick Caruso:
Well, good. Thank you for being here as a special guest. Thank you, Scott, for joining, both of you new friends of the pod, FotP.
Ryan Brower:
Thank you for having me.
Nick Caruso:
Friends of the Pod Squad? Friends of the Pod Squad. We're going to be taking over the world, it doesn't matter what we're called. And J.D., thanks for being here as always.
J.D. DiGiovanni:
Of course.
Nick Caruso:
And thank you for listening, I suppose I should've started with that, to our dear listeners. And if you want any information about anything we talked about, dropping a bunch of links down in the show notes. We mentioned all sorts of stuff, so you can read up there on Gear Patrol and beyond. And if you want to get in touch with us, I hope you will hit us up on social media. Our handle everywhere is @GearPatrol, and that's one word. You can comment on articles on the site, GearPatrol.com, and you can email us at Podcast@GearPatrol.com.
Nick Caruso:
And if you enjoyed this episode or any previous episodes, or don't want to miss an episode, which I hope you don't, make sure to subscribe to the pod, and please rate it. Drop us those five stars so we can take over the world, FotP! And we'll be successful, we'll get in a lot of ears and everybody's going to be real happy about it. So thank you again for being here guys, thank you for listening, everyone. I'm Nick Caruso, and until next time, take care.
Nick Caruso:
That was it.
Scott Ulrich:
All right.
Ryan Brower:
Hey, thank you.
Nick Caruso:
It just ends with a whisper.
Ryan Brower:
I had fun.