EAST - Earnings call transcript Q3 2021 | Eastside Distilling, Inc.

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Operator

Good afternoon, and welcome to the Eastside Distilling Third Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be opportunity to ask question. [Operator Instruction] Please note, this event is being recorded. I would now like to turn the conference over to Amy Brassard, Corporate Secretary. ahead. go Please

Amy Brassard

and afternoon, financial today Good the thank for issued Eastside you quarter today's moderator Thank Earlier, in call. discuss everyone, a Eastside us Eastside Distilling, with Brassard to I'm quarter for be Distilling's joining your XXXX. for XXXX you. third Amy and I'll results financial third release. results press

Gwin, the discuss Eastside's company's today's on are results us and these Mr. Financial call Officer; Chief to Geoffrey and Officer. Chairman Paul Joining Chief Executive Block, Mr.

their remarks, open will we questions. the your Following call to

model or begin of should, Before the be amended, the XXXX may the expectations, the plans, harbor Exchange discussed pursuant meaning future management Act of statements. preceded are prepared strategies that plan success success may, include, The and or by Section are that and amended, strategic company's in related or describe in Private generally XXA with concern are XXXX. that a the ability future, to going as on Such including we those to not Reform the matters provisions differ of and the assets, and to entities statements XXE draft, results execute such report from Exchange products in matters limited plans, as for Distilling Eastside forward-looking results to business the risks the pertaining but XX, customers, forward-looking statements the with for the company's time to, Act information Securities the development, results statements as Commission. continue eventually in statements with and expected, Section and or described cautioned forward-looking are could of success remarks, to to obtain materially we Certain actual acquired by and of ability the projected. record multitude Securities circumstances, are Securities Securities and integrating Listeners Exchange subject to December statements within product and the cause Securities new uncertainties risks submit from obtaining market, Litigation or information events its statements. this words such anticipates, materially to such differ time of XXXX and forward-looking XXXX, may Act that will related uncertainties the projected future in filings acceptance the financial planned, Form cause of call made safe risks conference of on Commission, all capital, filed following of ability the company's year company's and XX-K to the ended annual the the in involve

the with turn that said, to proceed. over Now to call please I'd Paul, Block. Paul like

Paul Block

our call all to and support joining earnings QX Certainly Thank of participants interest company. the as I'd appreciate thank to you, strive today. and build the like and Eastside your your fix, we grow Distilling continued Amy, for in

new working fund we printing, investment throughout now the can capital Now for We canned needed digital and and company significant streams operations balance marketplace and marketing. changes first canned I must nice much We capital to the increase we spend of time discretionary cash especially spirits the have needed today, progress, of to despite liquidity and for turnaround, obstacles craft. over on can fund revenue to run fuel the inventory it's tomorrow this year. in can make say, continue all the year, build grow the for sales like to for our sheet. to and a in the adequate to

for broadly balance underinvested initiatives significantly sheet and burn spirits due its know, years in has brands cash you to growth issues. As and curtailed is company the many

structure. The loan to terms and made we've liquidity, loans, extinguish them debt much notes and maturing significant partners. in company to strategic substituting improved addition continues In and progress stack with the

work value. continue of in stewards on we to his diligently good detail accelerate capital, balance Geoff overview. Gwin, will your the As sheet to give our more CFO,

coattails we was summer was due we canning the longer Despite up a we and was decrease stream, bit craft So and revenue performance and short progress forecasted, did craft we pasteurization a ride the Therefore, demand. beer and the first division. track today, QX bit X-year on revenue material from down remain plan. beer X have accelerated than by our in what and lift XX%, is craft initiative, similar emerging facility to to QX will do filling a capability believe for bigger XXXX as on move craft We QX be XXXX fixed peak pandemic to purchases. driving mobile XXXX, now serviced a in COVID the in the the growth running year-on-year deliver like will just for outlined on and of XX%. I'd experiencing facility operational strategic We the the and for softness bottling the QX production with facility of second in we're could XXXX. down Unfortunately, operational near-term primarily our craft in be raw seasonal was QX. as term, weeks softer our fixed to the consolidated the COVID

a fixed is significant with facilities, of stages purchase scale. the chain canned of we're GX. supply in a In closing Gallo the with final agreement subsidiary to GX addition

This in QX craft absolutely throughout shortages we year. recall, digital canned at as in QX. is also agreed-upon printer and receive have you cann’s many adequate component now this us caused our We If issues for canned guaranteed critical operational bring it price of aluminum an an supply throughout XXXX. at

printer small The to that fixed second receive XXXX. ability that line the we a small purchase another secure the plan operation. We the XXXX, line we until first accommodate facility will fixed printer, -- X, or and This has a will as craft craft rent XX,XXX-square-foot XXXX. and the facility have Portland December X, new in later April facility to also of for abated with house

Now growth digital with recall was unit the mix the for printing facilities flat leading mobile and you those of business charge. the the growth in relatively craft plan, who of X-year fixed

mentioned, offset the we're mobile As short-term accelerating the unit. business in of unit, business start-up fixed to softness facility the the

by customers we accommodate smaller further new printer mobile using the supply attract and forward. canned X planned, customers in lines revenue will In and shift runs. overall be boost that revenue for to the to will craft As to wanting demand, small and current small drive market an mobile effort to customers mobile serve craft adding we'll the

-- market, and the lines, for line the Spokane lines, larger the the used will will of new used One in mobile will be moved facility to second be Milwaukee. to be fixed

speed new We agile revenue the new printer, for add mobile, the QX plan the of conditions, to continue XXXX. and reoccurring full-time to stream the of we by need execution of with market be meets lines to for build To that craft new our strategic market a and employees to operational fuel respond additional objectives. for XX

Now the execution. opportunity growth the has turning Spirits of headwinds to not for division, the changed and just speed

those is EQ remember, Spirits X-liter results, X%. the For the QX they down case volume that reviewed

in discontinued for California, no third XXXX with the products year-on-year. normalized Vodka of when sell-in Potato quarter the Portland sellout However, for up XXXX of X% volume onetime is actually and

X%, our even issues not would QX of more supply have Now distributors achieve goal the and and the our spirits slower the conversion to on for been higher growth Azunia a states. priority of course, if robust, than is volume of chain much wholesale the rate in

the to For year. company stock unfortunately of lingering due experienced Azunia, liquidity limited we periods throughout out of

bottles the Mexican of portfolio longer now our XXXX, full out-of-stocks, a our bottle We're finalizing us have leading and the is to players due agreement short- high long-term COVID-XX solution of addition supply X-year of Solutions no for Eastside, big a available the to in summer demand of to currently OI Packaging a and In supplier and with bottle Azunia. our supplier bottle informed issues. that glass we

We continue success on reduce our have and to our in Mexico and supply. supply Mexican relative we'll to more costs, with discussion forward production, going to information optimize and work increase our distiller

we've fish. mega to made where convert our I large Classic, we of where and terms to small distributors will big distributors, goal craft-focused the are X. our green has a from to our which the as We've Colorado R&DC fish made R&DC change change before, light, January in effective distributors to in Texas be we from are In recently wholesale just been mentioned

XXXX. Our has February Arizona, in Azunia sorry, now to XXXX, and I'm of which is focus to California, to shifted targeted change -- April which in change to targeted to then is

our logic change announced have point Although are targeted Portland of digital in portfolio Texas additional product Bourbon continued and new purchase, tremendous conference Burnside this Portland the with product the just give call, reported now will To distributor Potato to sponsorship in Blazers, the the hitting We've streets visibility end, on products market. I just Vodka. and which Eastside from Trail the focus sponsorship us opportunity sales marketing. with micro in our brand sampling, we event last

sales we product both In music anticipate addition, at games the for concerts. basketball Moda these and Center

to of reconnect point enjoy purchase handcrafted continues consumers' local the is simultaneously directly of connect point and the we sale. consumers target correlate consumers this experiential the to opportunity And all, most consumers brand is of the to strategy distinct features Eastside events at the for sample with products that an with Our spirits Spirits. with on of important with have opportunity level important, lifestyle. with Equally

other securing retail sponsorship in event beach across the to and California, and run Cinco de merchandising Coast tie pursuing to priority Mayo markets. Hood cleanup promotion Heal are like and in We Bay the sales all Oregon

fruition. biggest our to announce to and they continue will events come as We sponsorships

stay product a Portland both on by cocktails finalizing of XX% like and we're volume. While cola ready-to-drink very focused to with our spirit honey Azunia, and lemonade, now and and alcohol plan Burnside brands, is distinct bourbon attribute Burnside Potato

be in our place and Organic and of develop Margarita a increasing Eastside to all our also brands Cherry these in our Eastside more cocktail. accomplishments approach concentrating Azunia Cranberry X spirits, the returning will in focus We we our Whiskey on and QX states. top priority to methodical With or the continue primary ready-to-drink of focus launching X XXXX,

distribution markets, physical now can and effective fully and our in now plan, is and purchase plans. targeting critical accelerating is Again, the execution. most to time strategy product, forward velocity success our supports for We are to liquidity. for the operating sheet point place in deliberate from execute more we per liquidity element With setting adequate promotions manner balance lift that's now thrive distribution. in and build measuring Eastside move of objectives overall With it's a kick a and programs established, of

questions, CFO, we line who hear first will before Geoff performance the the specific for quarter review from let's year-to-date. open and Gwin, Now our

Geoff Gwin

call. and quarter our Paul, let third me you, Thank welcome add to my

growth. our of for XX-K repeat heard take our discussion fiscal to with Moreover, to million we sheet When recall we were address liabilities and year, fix, how of $X our you results cash us the it reported the like build balance current You with liberty balances address fixed our XXXX I'd $XX year-end, million have liabilities. have of all finished and start to and than cash those less prepared if in and grow, my depleted

with an ABL imminent maturity business Among our have cash, the consuming as plans. maturing notes was to liabilities, well quarter. still Now these of we second time our as deploy face business that current facility upcoming a unsecured in more we

private that notes that unproductive the in One company, completion initial the us led work address giving hard through inventory which stakeholders of an the R&R liquidity quarter, convertible debt the business. broad cash the deal, to closing note of included and into a first range working first to second pay and of with which was injected in component critical began placement much of and quarter down That completed engaged we we successful in reported The maturities. So successful a plan. deal the financing a needed money-losing upcoming sale quarter. we

was have X-year So to like to more increase their huge And the work we we thank approval an that take recognize in for the of strategy. management, strategic large that then, us strategic the plan third continued I'd report confidence plan in to finalization of that to invest we plan a the the last and we most milestones, confidence and investors vote a company's which In exhaustive significant growth quarter, Since voted I'm in number and of the August, referring the probably begin go the Paul and I to been the a to company. achieve allowed stakeholders happy team which investing share appreciate. future. have Board to moment partnerships improving in these liquidity shareholders of sheet, the blueprint immediately That's Those count. the the and to embraced in on balance seen year. since to have effort started and

the successes, partner the equipment that that opportunity craft early header key an starting some by So cost. the investment with quarter, a to largest see we our third since we Riviera of -- a plan proceeds X from at in business purchase fact deal. I'll of warrant hedge summarize transformation million to cann the with quarter the was printing referred we the equity in This funded Paul the investment cards have is The Redneck pulled made single forward. $X.X accelerate

$X equity to us institutional dilution. and do the over Riley a The reverse raise at inquiry quarter. X in we placed via continue investors equity and In low immediate the placement, equity limiting total, stock ATM. costs, than very blocks rather allows ATM B. program disruptive the we raised ATM launched and Second, engaged million and success, dilutive from likely of we've ATM. with significant had an transactional through This

another we nearly we debt. have Series the private and raised preferred, stakeholder. in the to I close of consider another it's million a million and In In where $X given QX quarter, million addition, of started huge the in which preferred cash maturing successfully placed we in transaction equity $X with subsequent important in B success $X.X a total, was

XX.X We can shares have on you million. count. increases share just carefully keeping who our are outstanding managed as today, in of a share to I and totaled our that like issuance And of minimum report many the focused

since have debt short-term Now longer million, by started it $XX.X year. it either down out or refinancing paying we reduced the we

the final a $X.X even assets, capital. hand, line, of senior of valuable more next to facility Group, a on and today, whiskey. Looking will repayment more with with growth provide the see stages cash million which we news backed That off by including ABL our And loan we year, out there. liquidity our progress and add is along we're closing finish Lending announced more as in

close are and to documentation, in more We due late diligence through November, loan December. early probably there the expect likely

does As largely we assuming leave of $XX cash the more $X.X or Once our will ABL Now the full where is of digital we line for this line. today? activity the in see closed, have prepaid million company and use million, the today, expand first our all liquidity ABL over printer. to

I assets stand current at over X.X. For ratio those that like That's That's ratios, X.X. $XX.X and our distant of current $XX million liabilities. at as December million of was, memory, mentioned, a now we

than to and over closed, Our a company net less is have -- our years. cash, current a debt, is maturity or And due around million, higher, on meaningful CN year, less that's stays our stock the the $X.X the debt would is ABL this cash assuming price improvement. repay which hand in out price next in significant X

been has balance most investment in for fixed And loaded the and been growth. summary, it's importantly, sheet So rebuilt.

cash and income to turn the statement Now flow. let's

$X.X year. quarter recycled demand pandemic said, our majority And craft sales hit $X.X prior due year. net excise $X.X commissions, is compared flat in the and our sales million filling year. sales net million to for of services that to division as Spirit spirits third The cans lower taxes. million, discounts and Paul from includes Remember, to were last decline were the prior of to down canning to the

year, volumes positive. we'd last as in sell-in PTV be the for adjust release. reported We the you quarter If Paul press stated, the

particularly margin your a like a I'd margin on point to gross However, brand our to attention gross performance, basis. on

and that priced SKUs reserve. and the higher-margin was The shortages, are reverse, profitability. category, build I on to profitability case to in the in foreside of increases focus our X,XXX supply lower with gave selling Azunia, more lower like volume margins was we into better milestone. faced profit the an go And have out on quarter lower don't stock share position price black brands the brand, out-of-stock a lower XXX normally in important saw higher-value increase all spirit SKUs liter is we're -- and due make imported, that to our and and pull year-over-year raw material In to gross stock of and serve from and spirits, and new an a gross products. enviable that. we reminder, we barrels and the as in sales we were Again, that the very shift for premium due fact we control over X but over but to of have the brown much Azunia point we chain, stock margin a margin SKUs. working on due want specifics Burnside despite a by less supply Now here

consolidated reduction position. So in the had gross largely a in a spirits gross in for improved a basis, made reduction discounts, even though on shortfall with up we we margin revenues, craft

is venture higher gross margin just here's the will to I So milestone. successfully at spirits levels. to need say more. sell We being repositioned

Now down statement. OpEx in SG&A. expense had with improvements the better moving in meaningful performance We income

operations and from XX% than year. of $X.X provided reconciliation EBITDA a was million, the a prior loss was press better year's and EBITDA loss a million the over $XXX,XXX, release. improvement of EBITDA we in $X.X And Our adjusted last adjusted have

that more to So please details. refer for

warrant EPS exercise as net required we fact to a want pull recorded GAAP that year. to call shareholders and And up pushing the Our in $X.XX losses dividend forward the attributable common was I loss that a deemed versus per occurred out treat treatment quarter. share the $X.XX last as the of loss for the the quarter was

progress. for to details income that. across made quarter, balance, report financial looking the statement -- You our the on substantial can On refer we've the this

believe of build in the progress in with track craft and tangible growth quarters will volume see our canning, more in we we spirits growth and our more see immediate to ahead. on pivot fixed like impact we'd are thesis While the

all this Now let's with for you over Operator? said, questions. that to turn

Operator

[Operator Instructions] with from Capital. Kelvin ahead. Our Seetoh first Slingshot go comes question Please

Kelvin Seetoh

got Great from hear lot execution. to I ever fantastic again. done. It's a you

I It's it your and something the the think always earnings informative team. I of quality educational. call think differentiates I appreciate, is and

turnaround of So I'll start stage we off our are currently? by which asking at

Paul Block

But This is other the last there's much part or also been of end. taking we Paul. has in turnaround the skeletons X have the mitigating due behind care back think it your that list the mean, get It's things and do. of investment pretty have of the been risks just our us. some are call, and Yes, -- position I we're year said of I cash other the great. say the would as in the that, towards I we're and issues and to a sheet, a all closet. at X I and in is most we to in than team you just now where biggest to of honestly, balance your on

XX%. back So got say it in the I'd We've to XX% of we're complete XX% now.

Kelvin Seetoh

we excitement second, what way this on Is Branding to incredible outcomes parts are to Poland willing the potential team, spend elaborate more in we given more it? there bring fixed ar Trail with I the And are on are we to the social are we example, it? about going seems And now. Blazers. marketing that the media are to it would deal to as dollars now, think right For X kudos think, well? General, Also, sheet balance my from to we signed have the seeking Number But and where Officer, an and one, deal? this some our right that you question. right

Paul Block

Yes.

have markets right think in is Okay. marketing we the Well, the distribution. I where spend

about that's us you thinking Now Oregon. why see

even we'll we go. awareness. per by visibility, lot consumers. XXX of but And distribution can and and that more And tremendous distribution of engage give on I think right where cost room contact over of build top we awareness, have be market have in though base, lot can market, growth. point and will unaided the way sample I to Trailblazers probably which is a very of double able it. Oregon, the there's a Oregon's us hopefully, is for cost-effective, to The spending our our We in is mean, we great, points a

marketing the go right Gap] I spend So [Audio think to way is the in market.

Kelvin Seetoh

generate canning the more you mobile coming pasteurizer margin for printing For together and help more share this with with the could partnership with in and to will how with us craft sales capture GX, digital and canned canning?

Paul Block

you beverage drinks, only. think energy focused when mobile, been all, throughout as beer And that's teas, of enormous just of market Kombucha, States United alcoholic has RTDs, growing, the on mobile first Well, beverages. there's the said, canning Yes. coffee, Kevin I craft think an

segment. and giving of one overall, segment beverage beer been the craft So beer about spirits stomach up craft that's segment only wine. been And has of craft forget mobile served the share to has pandemic small really the to

and the What dialed doing it in it's the And quickly nature, by so bit with the up little now service the just What from craft great beverage of is beer rescinded. just able we're its very a near a had mobile pandemic it being kind heyday to to business. term. more pivoting entire just business did unit operation we're is

RTDs. of big not We can the like beverages Monster start we're the look certainly do so but storage, different to lot smaller Kombuchas. of or coffee can like pasteurized to do you going or tea. can we have others, you carbonated beverages cold And beyond to and Anheuser-Busch when types service and fillers, filling type other when the can going at even a move we pasteurization, And higher into we're And have just we and can players. service you malt Now more. service cold some guys, of

there a some So a opens underserved. marketplace fixed different in with up marketplace the it significantly, pasteurization growing and -- that of is is and facility

depending are cans. of go digital paper or biodegradable. those, they're case paper because on the print use, to In wraps. these using silk ink the They plastic their sleeve, not they the are They're not wraps, sleeves using too, not many lot really into landfill. biodegradable. plastic printing, of with beverages And printing, creates you a smaller it a innovation technological either when Now overlay the screening

overlay now cost you digital still opportunity friendly, something an with So idea the bigger to you user target service environmentally expanded an that's have now a printing, to move and mark. market into friendly, when the same

the because on For already canned our market, that labels be we applying digital paper line innovation. also been have printed. will this will won't -- the lines an move to putting allow and mobile It printing will the be faster labels

And in efficiency so down won't competitive the also the printing. that cost the users mobile other It to for give because digital come will will market lines. us advantage mobile mobile the increase they want will use against a line, and purveyors the in have

the will term, it in advantage. So be a near competitive tremendous

not we're our and while underserved, our on that again, markets can a into are and exponential growth focus about and softness, So short-term we are of growing, we that ecstatic point is have clearly difference. know leaning accelerated

answers too winded. question, long So hopefully, not your that

Geoff Gwin

reminded were is, still to the with trying they it tremendous. market the made marketing mean them marketing is I this argue. I and of that as current opposed part anything going point cann’s. And mean not that things to how market that the unlike and cann’s more energy the on chain that's to packaging craft of if they even they to that long of how of mentioning and attack product forms when in And on One is infancy. on the fantastic. consumer the uses. this the significant And machine are focusing one a one would in that I evolution category do that history tackle beverage supply was grocery creating are Kelvin understand machine was throw something a us I for when drink Monster they just working their It's for and of advertising appreciated, is with in this company just other into forms about season they're is can market end in the is that always of store, story the the with by put pivot. Hansens other at the of one a the new points was printing advantage basically we're sale else -- the what out of and I'm underappreciated allow let digital

quantify, hard mean that I does year it's spear. what tip of a think really is look year. think different going craft next So to but completely I it's than And for the to us? this

Kelvin Seetoh

think And bringing described is both what markets. itself you I new exciting, up

I'll just last question. go So one

currently that one are serving, could feedback shift? on digital ground us customers provide pasteurized also how squeeze and gotten on I and you've the some the And them? Eastside you value-add share they with For the thought to is canning printing have, like adapting navigating thoughts that the of another craft the to to can that that

Paul Block

things Well, these I loans. at like. -- the brewers the has one Geoff, can craft been respond PPV space take has can unintended that what's been you with in if in, that. chime interesting, market of think been a shot an I small But consequence the mobile

out government a to used those lot And buy their given to small have own a of of purveyors. has equipment. the them lot loans So loans

So that's foresee. really could something an consequence nobody unintended was that that

own their invested but equipment. So -- really a a lot not of them have shifted their to in significant just amount has a over lot,

with forgo certainly, to back up, Secondly, they can keg can their on-premise opening business and go the business.

When there no tack holders go were raw top. cann material. been for first ability that There is pack no shorter think lot was of across United a started, the COVID brewers So what's that's obviously third on are to really that runs, efficient. happened purchase thing, corrugated, the the has small are And their availability. no States less smaller which running runs, I shifted

bought impact deck. was touch so go a everybody corrugated And just actually, because we had And and on we us have the because supply. supply cans it from really a didn't and

for us looked all just they to supply. So their

more quantity bottles. our both have their loosens That's cans I with Now up supply And we they're very XXXX, now locked price. loaded and on and Same the for all a buying own said, a different. our bit. lot as as

different I a using and opened changed shifting servicing they're their towards towards lot that more equipment own more has package on-premise think of a own years So now shifting and up. type is They're their buying shifting over material. more they're the I think towards

have those all trends changed. So that are

months Our -- we in QX I place accelerated market X-year a X has bit significantly year. trend that been last -- the pivot mean It's it is trend X little put timely. we did or when have the just the plan. different. going was we're against are ago that

If at it's in the we've trend, you in a out it's now trend ever flat -- QX are had our and look increase at QX. been since craft, look flat pretty small you and pretty you'll be over flat summer, if QX, will our QX

variation been And the biggest I the the think has all really, that's the throughout mobile for lift So country. scanners same occurred. that's

shift brewers the think take -- kegs the will equipment. will those quickest raw of be in that through through material craft own winners. and will I to purchase the And responsibility that more the pivot their So on occur

Kelvin Seetoh

I think have. I that's all

and I is, faced exciting. forward is amazing And I'm following and plan growth ahead. built the how think Eastside to looking has from the business where it

Paul Block

thank Well, you.

I of we've just us, behind expenses getting But internally, or XX% out another. sometimes We're we one good quality relentless, more. are not things on quantity. X XX%. margins distribution, up know spirits, after got knocking sometimes inside, And operating issues out the think some issues of And XX I X Geoff it's X doing like down said, the

encouragement. your we and the So external view appreciate

So thank you.

Operator

and [Operator Instructions] GIM from ahead. The question is next with Seetoh go Kelvin Please Partners.

Kelvin Seetoh

company see stabilized I'd that to that like all, of I'm of our sort happy say has First itself. to

losses bit, down of done. put kudos And effort and the margins. the operating profits gross the our have guys strong is in And to have stabilizing to terms turnaround Paul show remain revenues did it's or that the more actually a and gross that you think Even widen. not Geoffrey. but little less though testament our come I in

to think that verticals growth I I are good now pursue want we very go have the in So after. shape questions really a two we my to on end.

of is though quarter, we our distribution all, strategy. our First kept that seems our spirits this it even affected losses by have badly tight business

assessment a happened event on can the whether So the give and could an onetime going distributors, so accurate us understand to you this color forward? more what make we spirits trajectory about that is

Paul Block

distributors bigger terms little a or our transitioning in from Yes. of bit our Well, slower bigger it's been distributors. engaging just

onetime past off-premise which, focus. the that's So pivot, and on- about would forward terms was sense we over we accounts, of because the this think mostly basically -- targeting we talked a lower race of lower onetime weren't that's getting realized were day a talking large calls, believe distribution, distribution distributors I but we that as of get and were made chain unsustainable even a pricing that that in price, to say getting to we're out our distribution, the actually, we in lot the bottom. lot our so to because about products speak, lot of getting our time, I to and prior We other I event, through Board just as And velocity. it's when national a strategic a a

and That time engaging but that our large down changed taking good completely our premium, they're distributors going consumers. means that more focused just the And PPV in brought what at his our on our and -- hadn't shifting the he special, where to bigger And to salesperson that working up Azunia more I was they the street, aren't targeting because engagement these give not good be orders, one XX%, were our out in accounts, engagement his from means that working was the month-on-month right distributor on in distributor we've to only in So because street, be craft-oriented. is retailers really was was let talking And or the more frequent. chains Texas, the off-premise yet. the to really from distributor. -- at the me strategy told and to large sometimes distributor just and but me with were Burnside most focus distributors because being be up more of distributors example. more they're or open changed our our that really sales, sales October, not we September him to market. and the And

to this QX about big of year, engaged spirits. big operating think way the our either is you strategy for next should or marry we'll distributors our converted by distributors our So have

-- Potato in Now have not things we And and these about consequences? selling unintended take Vodka, talked Portland it's through. always or longer selling when

the sell change, try into distributor went it California. started was put team and it I Vodka Ark. California. on of cases that always our And there X,XXX and to was Portland until large a know we we old in personnel based into Potato Vodka of have of Potato the even the distributors our It until One Lost Raiders didn't of there more promotions Portland like very one new joke members was in

nimble, more more work going and closely. us smaller are with agile, much going to be be more to the they're distributors to going they're So

pivot And you the low margin person So said, to an Oregon comprehensive I think a but the for to want can anecdotal work on-premise this being really I company. day. work attracts I'll Eastside? was craft-oriented you give story. said, price, to low I other special what at short on-premise one to you more a about And way anywhere. from do said, really "Why she strategic interviewing Eastside, is

folks working now. You're some big for

products You work can work pride just place. want that and for makes said for to sell company This special doesn't I because quality. to I alone another products right the a and in quantity want is suppliers is their perfect. And big

couple where way. to want distribution well take our more bringing that's and we going on be is we'll network months. So our feel I by go a QX, And like to

Kelvin Seetoh

and our us. with with are awesome shift That's us that that hear. opportunity to aligned grow more are is incentivized is onetime ahead into Right. distributors It tremendous plan X-year more to this making because seems really to we together are

from have done. that's hearing that the great filing My you, So last we be Paul. would question regarding

has partnership over Frito-Lay company, seen recent we've revenue billion of worth rate more and PepsiCo a like alcoholic a entering parent billion. $XX Coca-Cola And We PepsiCo actually companies years, in space. with announced Frito-Lay. is the its And and run the $XXX have than

it's an So And announced year, to really with Company well earlier a all Beer known the across this are partnership offering. world. [indisicernible] create PepsiCo Boston sold and

wondering So do Frito-Lay, do to with this a here? just land And partnership a them? I distiller, $XX partnerships see . us booking enough what with with craft to caned market million us we for similar work they this have are how was model doing we what makes decide them

Paul Block

are is is think I on and but saying use, the comes going would do about I to it's and profile think it's why product with the the first very just of a the it what's you product a want Frito-Lay they we bit And of me in and which next my to that's And and execute they that every and interpretation approach, to to deliver you'd very again, know their we as them micro craftsmanship. . I with unique word, money X I for And us. to flavor is think, makes That's and In discovery, working those to perhaps always marketing us. we're next marketing things use. think choose do that word us what's I targeted special, possible, every nice we who them. really they're And at But micro down other like And one to and keep it to have and X we share the in Well, they us and what's ask I we that look possibilities. And now it have spending ability. want We're that need on would it with focused this that. a can to well. handcrafted, kind little they micro choose the word, special says something on and we're other maybe build guys our very This are appreciate it's has to it regard is special. chapter. tremendous what to then And they're kind to of manner. we a complement marketing measure close on I Well, a possible those of would with us. and I like are want together. to capabilities them strategies think somebody and come work are regard, very would that, feel need

Kelvin Seetoh

market such Well, future actually is pursue the and that together getting it this alignment large and more looks a when have more company can you our values them. partner with the really for exciting of grow you like and has

So call. yes, earnings excited I'll forward be next to to look the

Operator

concludes session. question-and-answer to Paul turn This remarks. Block any like our would conference to . back I for closing the over

Paul Block

your your be much. most Well, your support you shareholders. thank very importantly, to work to good appreciate I interest We And diligently as continuing and be capital. of will and time, your stewards all Geoff

the things you and stood we I and is that of said I seeing think really operating we trying appreciate curtail that loss. that If -- we're to have to during a the can one is that really loss We'll to out report exciting business we earnings time maintain you much the operating I drive think model. an over annual revenue reasonable call. more have next do

with a holiday and talking we great have season, then. look So you. forward Thank to you

Operator

has now you for presentation. concluded. Thank The conference attending today's

now disconnect. may You

Eastside Distilling (BLNE) 16 Nov 212021 Q3 Earnings call transcript