Subscribe
Details
The mention of Tequila often induces a strong reaction, and Eric Brass was no exception.
“I had the same misconception that most people have about tequila — that disgusting shot in a seedy bar at a horrible hour of the night. It’s the most misunderstood and misrepresented spirit in the world.”
But something happened on a study trip to Mexico that changed Brass’ career trajectory, leading him to co-found a premium tequila brand with just a backpack and $10,000. Today, Tequila Tromba is one of the fastest growing premium tequilas in North America.
Together with his entrepreneurship professor, Eric Morse, Brass walks through his entrepreneurial journey: from discovering real tequila, and leaving the world of finance, to creating a modern brand with traditional techniques.
Listen on Apple | Sounder
The Ivey Entrepreneur Podcast is sponsored by Connie Clerici, QS ’08, and Closing the Gap Healthcare Group, Inc.
Transcript
Changing careers and changing perceptions with Eric Brass of Tequila Tromba
SPEAKERS
Eric Brass, Eric Morse
Introduction/Outro 00:07
You're listening to the Ivey entrepreneurship podcast from the Pierre L. Morrissette Institute for entrepreneurship at the Ivey Business School. My name is Eric Morse, and I will be your host for this episode.
Eric Morse 00:17
Eric and I have known each other for quite a while he came through our program here. I've been really fortunate to be able to keep in touch with him over the years and I do mean that, to follow his journey and where he's been has been just fantastic. To see the success that they've gained over the years is really rewarding for me. So I love it. And the opportunity to share that with everybody tonight is something that I'm really excited about. Eric, I don't know if you want to just say a couple words about yourself before we really get into things, maybe a little bit more about your history, and then we'll just jump right in.
Eric Brass 00:50
Sure. Well, it's a pleasure to be here. I wish we could all be together to person. Obviously, it's such an interesting and difficult year in many ways for many people and I feel for you know, all of you folks at Western. But it does bring some opportunities and unique perspectives which we'll probably talked about later. My story is I graduated from from Ivey in 2005. Seems like yesterday, but a long time ago. I know one of the things that I did is I went down to Mexico on exchange with school. Most of my smart friends went to Hong Kong and France and Switzerland and I went to Guadalajara, Mexico to learn some Spanish, get my butt kicked a little bit and have a new interesting experience. Down there I fell in love with tequila. I thought tequila was originally made many days at Western and the seats and a bunch of the bars thought tequila was that terrible shot of that horrible bar, that seedy hour of the night and ended up trying to do for the first time and was amazed by how good tequila actually was. Came back to Canada worked a day job for about six years in asset management. Then one day, much to my mother's dismay, quit my job went for the dream and started a tequila brand called Tromba. I didn't know anything about the world of tequila, didn't know anything but boose business, didn't have any distribution.
Eric Morse 02:19
Before you go too far down that road, so you were working in asset management, right? How was it that one day decided, okay, now's the right time.
Eric Brass 02:28
Yeah, if I said it was one day and a switch went off, I'd be obviously lying. It was just a passion that I had, it was a bug inside of me. A lot of people ask me, you must have not liked your job and I loved my job. I was effectively co-managing a portfolio of stocks. My boss was terrific. My peers were awesome. But there was something inside of me when it came to doing something for myself and entrepreneurship that you probably helped build on last year of Western when I was in your class in the first year of the entrepreneurship group, and it just didn't die down. I would travel back and forth to Mexico. I'd bring back tequila and first people would say I don't want to try that, I've had a bad tequila story and then they tried tequila and were blown away and I started to get invited to parties for example, and people would say you can come, bring your tequila. I saw the opportunity there. I saw that gap in the marketplace where there wasn't an ultra premium tequila and accessible price point tequila was very top and bottom heavy. It was either about pounding your chest, look how much money I'm spending or about, close your eyes, plug your nose, hope for the best take down shot and better be lucky a smart friend of mine on exchange with a guy named Marco Cedano, or it was Rodrigo Sadano. Marco Cedano, his father was the original master distiller of a tequila brand called Don Julio. So we pitched him, we thought he tell us the butter off. It's like asking Wayne Gretzky to play in your men's team.
Eric Morse 04:06
How did you meet though? How did you meet the son?
Eric Brass 04:10
Rodrigo was in my class, he was a drinking buddy. One of the smart things I did on exchange was, I hung out with the Mexican students, not the exchange students, and he was one of the people that introduced me to tequila. Tt didn't really mean too much then that his dad was the original masters store of the great tequila brand, I couldn't even spell Don Julio let alone know what Don Julio was. But I'm a big believer that things kind of compile in your favor and the opportunities present itself and for better for worse, I think a lot better, that opportunity presented itself and the stars kind of lined up. We effectively started Tromba from there and it's just another way to kind of have stars lined up. I don't think about this too often, but when I went on exchange and my first day of the exchange program, I walked into the lobby of the exchange school in Guadalajara, Mexico and a tall lanky Australian fellow comes up to me, first guy that spoke to really. And he says, How you doing mate? Then he said were you living? I said, I don't know, I want to find a place. I don't want to live in the residence there and he said, well, how about we live together? That's a pretty preposterous thing and I said, okay, no problem. He actually became my business partner in Tromba. From that chance thing and me saying yes to being open to it and he became one of my best friends and my business partner in common, he ran the Australian market.
Eric Morse 05:48
Wow. So Eric, you went back home, you got your job and obviously, you must have kept in touch with these guys. Had you guys talked about it way back then or was it really an evolution over time that led to this?
Eric Brass 06:02
No, we never even joked about it. I mean, if you would have told me back when I was an exchange that I would effectively be running a tequila brand, I would say you're absolutely out of your mind. Certain stars just cut the lining and opportunities presented itself and putting yourself in an uncomfortable position like me going down on exchange was a game changer for me. A lot of ways that still impacts me today. I'm a big believer of doing that both personally and professionally. Because I had a lot of friends that went to places, this has to be obviously exchange related, but went to Sweden, for example, where two of my best friends were going and I would have had my family there and I would have had effectively, my social life lined up. But instead I picked Guadalajara, Mexico, and it opened up that exchange for Ivey and I think it closed straight after I was there.
Eric Morse 06:51
I don't think it was your fault but I think that is true.
Eric Brass 06:56
But I didn't know any Spanish, I didn't know anything about Mexico, and I just decided to have a go and do something different and challenge myself. From that challenge. It's all of this arose where if I would have picked quote unquote, the safe route then who knows? Who knows?
Eric Morse 07:16
You guys, I guess, start talking again, just catching up. Where did the idea come from and was it your idea, was it one of the others, how did it come up and what were kind of the first steps?
Eric Brass 07:31
I went back to Toronto, my roommate, business partner, Nick went back down to Melbourne, Australia and we both saw the epiphany that we could bring when we brought good tequila back to them after we either bought stuff in store or brought it back from Mexico. We both just absolutely loved the spirit and there was such a great misconception still is today about what tequila actually is that it can actually be sipped, enjoyed, savor. Now, it's obviously a much more of an evolved market. It was really about following something we loved. We weren't alcoholics by any stretch of the imagination, despite my background. We really did love that opportunity. And again, we saw that gap in the marketplace that the big players just were not addressing. For us, so many people said, you're completely out of your mind, I remember my boss's face when I told her that I was going to do this. I could see it. Are you crazy? Because it was not the safe bet it was not on quote unquote, the smart bet. When I graduated from, from school in 2005, and even even five, six years later, entrepreneurship wasn't nearly as sexy and as developed as it is today. There was one guy that just did the entrepreneurship route and people said, is he out of his mind? He's gonna start a wind farm and he was wildly successful. I think it was an incredible thing in terms, it was obviously the right thing to do was to leave a very cushy job in asset management and do this and it wasn't it wasn't a one day thing. It was a progression of ideas and I can't quite point to one epiphany moment but it took me a good amount of time to work up the courage to actually actually do it and take no salary for two years and working in my parents basement and storage unit in their garage and I know all that stuff.
Eric Morse 09:26
I remember you telling the story of kind of going down and convincing the master distiller to join you and make the jump here. Could you share some of that with with everybody?
Eric Brass 09:39
Yeah, I mean, so again, like Marco Cedano, the guy that we were effectively looking to bring on as our master store again, it is literally like asking the Wayne Gretzky to play in your men's team, you're expecting him to tell you to go bugger off, right. Effectively with him, we gave him an opportunity that he never had before. We didn't want him to be our distillery, we want him to be our partner. He said, he was the original master distiller for Cream Tequila for 17 years and when he left, all he got was a watch for his efforts, which a nice watch, which ended up being robbed at gunpoint, which is another story altogether but he got to watch. He felt, rightly or wrongly that he was instrumental in building that brand, which is worth in the billions today. He's didn't want to make that mistake again. He's not a money hungry guy. His legacy is nowhere attached that brand, he wanted his legacy attached this brand, he said, make me a partner, make me part of this brand, part of this tequila and rule number two, no gringos in the kitchen. Give me control to do what I want to do, I'm going to bring my son Rodrigo in, your drinking buddy from school. What's really nice is, usually it's not a legacy business in the sense where it's passed on from grandfather to father, to son, it's father and son building it together. So it's their family legacy as much as it's mine and those were the two main conditions that he asked for. We had about 10 grand, and we raised, you know, I call it pity money from friends and family. We had about 10, grand, leftover and effective after our first production run what with our backpacks, bar by bar, bottle by bottle, and build Tromba to number two in Canada, number two in Australia.
Eric Morse 11:22
That's amazing. And I know this isn't an overnight success. I know you had bottles of Tromba in your backpack going bar to bar trying to get people to carry it and can you just tell us a little bit about how you got, you know, it's a tough business to break into, how did you start to get it out there and start to see some of the acceptance. I'm like, most people, and I'm guessing most people on the call, they've had to tequila but it was either, as you said late night, before the bar closed, or it was in a margarita or you know, something else. So not kind of sewers of fine tequila. Yours was actually a revelation to me, I hadn't really had a great tequila and I think you were the one just pretended scotch. Drink it the same way and you'll be fine and it's wonderful. It's sure not what I kind of knew. So how did you convince people that, hey, you need a high quality tequila here in North America?
Eric Brass 12:19
It's funny. A couple advantages that I didn't realize were advantages back then that there are certainly advantages today. Number one is, we started with no money, right. We started with effectively 10 grand in marketing. We had to be really out of the box and think differently, quote, unquote, outside of the industry standards as to how to effectively penetrate the marketplace. Because if somebody would have given me, two, three, million bucks to start off, to be quite honest, I probably would have wasted two or three million dollars, would have had a heck of a time doing it but that's not what building shareholder value is for your peers and for yourself. That discipline costs to think outside the box and effectively build a culture within Tromba that is our ally base that effectively is there today. I think one of the things that we had in our favor as being a small company, and it's probably testament to anybody that wants to start their own companies. The kind of advantage we have is that we're agile. We have that agility where we can go and turn on a dime and effectively cater against what the industry says we should do. I remember giving our business plan to a industry expert and he took it and then he gave it back to me a week later. I think it had more reading content than black ink and words like impossible can't happen need at least a million dollars to watch the Toronto market. He wasn't wrong but we didn't know that he was right and that allowed us to effectively open up our eyes to do things in a different way. So well, the big boys would go and they would beeline for the bar manager for example, to sell their product, we would be lined for the bartender and their thought process. Well, the bartender doesn't have the say it's a bar manager, there's a produc,t but our thought processes were things are changing the bartender if you get the bartender on your side, any bar worth their salt is going to convince the bar manager they need to buy this product and who's pushing the product to the customers. It's the bar manager and we literally went bar by bar, bottle by bottle, and continue to do that. If we would have overanalyze things and what within industry experts, we would have gotten nowhere. We would have done the same thing that the big boys do, got a pissing match capital wise and would have lasted no time with them at all. So thinking outside the box, being agile, really for us it's out working our competition out loving our customer base. We just showed so much goodwill and so much love to, you know, to the hospitality community. Not every time you get paid back, but you know, seven to 10 times you do and when somebody discovers, for example, about tequila from your product, or first educated about your product, or any sort of product, they build that inherent loyalty to your brand, right. I fell in love with tequila with Tromba. I I fell in love with this juice with x, x company, and education training, out loving our customers, no thinking our competitors were worthy. Didn't quite pay very much attention to us until we started to get some scale and then we were quite a nuisance.
Eric Morse 15:35
Yeah and I know it took a while. And but as you said, both in Canada and Australia, fastest growing tequila brand in the market for I don't know how many years and that's led to getting picked up in the US. I know, it was public, announced that you just signed a really great agreement with a distribution company out of the US. Can you tell us a little bit about how that came about and how you were able to secure you know, a really great distributor?
Eric Brass 16:01
Yeah. So we will be aligned actually, within about a week and a half February 1st with Sazerac United States. For those aren't as familiar with Sazerac. They are the largest bourbon cellar in the world, I believe. They're the number two or number three player in terms of liquor in the United States and some states are number one. They're massive. For us, it was a tremendous shift when it came to COVID. Where, you know, we come March of last year, we were very bar restaurant focus brand, right. 70% of our sales are in the what's called the on premise bars and restaurants and it doesn't take a genius to figure out that when COVID hit, that's a very bad place to be. So our sales didn't go down, 30, 40%, and on premise they went to zero, over a period of, you know, like that. And in some provinces, and states, they still are pretty close to zero in the world of on premise. So we made a lot of changes during COVID. One of the changes was partnering with a larger player, and we had been approached quite a bit over the last year and a half. We wanted to remain independence, we wanted to effectively, carve our own way, we know that there's no such thing as a free lunch. What we realized when it came to COVID is, the current impact of COVID is one thing, but the after impact of COVID is structurally going to make it very difficult for brands like ourselves, which are strong independence to grow that fast. I don't want to bore you with exactly why but the US distribution structure is set up where our suppliers have a lot more clothes with distributors and it's always been the case. It's going to be more and more and more focused on the largest order suppliers after COVID, because they have a lot of ground to make up. Something that we would have said, heck no, two years ago, we said heck yes to. Effectively because the rules of the game have shifted and what became strategically unappealing to us 12 months ago, became strategically appealing to us. Not from a point of desperation or anything like that, because those guys, they could have picked 1000 other products but it came from the point of structural shifts within the industry that we had to recognize and couldn't bury our heads in the sand and say, we don't want to do this because of an ideology. And what we've seen, I mean, it kicks off again, very shortly and we've seen already, they've already pre sold a heck of a lot of products and are picking up we've actually watching are ready to drink portfolio as well but they're also picking up across the United States. It also checks another box for us to move more into retail, right or to grow more into large scale liquor stores, what you can do as an independent, but if you have big brother Sazerac behind you, it makes life a heck of a lot easier to execute.
Eric Morse 19:15
Now was that part of the decision behind going with some additional products that as you said, I know they're tequila based, but you have more skews out there now. Was that partly because of the distributor or was that a decision you made before that?
Eric Brass 19:28
No, it was a decision we made before that and you know better to be lucky than smart. We ended up watching one of our ready to drink our Tromba and soda and the lcbo actually with with a bat, so different different partners, in effect in June of this year, so obviously readies drink has been a good place to be in the summertime of a pandemic. One of the things as soon as we were always thinking about our teas, but as soon as the pandemic you know, kind of kicked off, we really thought about the ready to drink and another way to affectly continue to move the brand towards, you know, what is going to be a medium term new reality. And so in addition to the Tromba and soda, we launched a margarita, they are launching a margarita, we're launching diploma all US based and Sazerac effectively put a gun to our head, and they said, if you're going to launch it, we want it all. So, to your question, we didn't think about launching it, we thought it was kind of seated before but having a partner like that, in a space that's getting more and more crowded, makes us a lot more confident to launch it and gives us again, the distribution that we need both retail and with the distributors to effectively move products. And one of the things I've learned is having a insomniacs, they're not a distributor, they're an importer, supplier. Having a distributor, a big distributor, take your product now care if it's liquor, or if it's food, if it's whatever it is, whatever widget you're making, that can sometimes be the kiss of death, because distributors are not in business, generally speaking, to detail your product that belongs to the brand owner. And so having Sazerac with us to push things through the distributor, gives us a chance for success we have to execute on where if we're doing that ourselves, that's a lot, a lot of manpower, to the distributor workflow. You know, I've seen it so many times, it's the kiss of death, sometimes you get a big distribution deal and then the product sits in the warehouse with a distributor.
Eric Morse 21:31
Yeah, I think it's funny you say that, because I see the same thing. I think too many entrepreneurs think, okay, we're done, we've succeeded, we got it into the distributor, right? Your works really just starting at that point, you've got to make sure it's pulling through the distributors to be successful. You talked a little bit about COVID and really had to pivot the business. Are there other kind of changes you've made during COVID? Or, you know, kind of lessons learned through this period that you could share?
Eric Brass 21:59
Yeah, I mean, has been quite a few. So obviously, the tactical shift from retail to or from from on premise to retails one, obviously, the Sazerac deal is another new SKUs. We actually are right now toying with another point, we do have the product but we actually started creating from our, the waste of our gavi plant, he started to make single use disposable, environmentally friendly products. So straws, cups, cutlery, all that type of stuff. That's a sister company actually working to continue to expand that iron. But that's been really, really interesting, because there's a massive waste problem that happens with tequila and there's a massive call to action right now when it comes to providing sustainable solutions. We effectively became better be lucky than smart, a friend of a friend made straws out of corn and sugar and he said, Can I try it with your with your waste, and, you know, sustainability is really important to us. And we gave him our waste. And he made a strong, that absolutely blew my mind. I mean, it doesn't take a genius to figure out there's a straw problem in the world, you're the devil for us plastic, or the devil, he just paper. And so the straw doesn't get soggy, it's using hot and cold beverages and from that effectively, we invested in in a factory down there. And, you know, because we have to control our own destiny and we partnered with Cisco and the United States and effectively now have a whole sustainable disposable line is a sister company, in combination with with Tromba and we probably wouldn't have done that if it wasn't for COVID, because, you know, I never thought I'd say the word wrapped cutlery in the same sentence but everything now has to be you know. That sustainability theme is not going away, it's getting more and more. Now, the customization, the ability to adapt to be agile and make products that people want. That's what we've effectively done. It's been a really, really interesting part of our business.
Eric Morse 24:05
That's very cool. I'm assuming all the same partners still involved with the business at this point?
Eric Brass 24:10
Amazingly enough, all the same partners and that's, I think, really, really interesting for us where we do disagree on a lot of things, but we all tend to agree on the larger goal and how we want to operate the business and you know, our personalities and I know so many peers that have effectively had partnerships break down and things happen here as you probably know, yeah, like a lot more than I do. But we've been able to have the same founders involved in that level of trust between each one of us has been a recipe for success I could leave any one of them with my bank account details come back in a year and every every cent will be there with with the small amount of interest the banks are now paying.
Eric Morse 24:50
Yeah, so it's clearly what happens when you meet you know, over tequila late nights at a bar. It always works. I've got a couple more questions for you Eric but if you're in the audience and do have some questions yourself, go ahead and type them in and we'll try and get to as many as we can here in just a minute. I know you're going to tell me you've made a lot but if you think back at some of the pivotal mistakes, perhaps, that you made in this journey, and maybe if you could share one or two of the mistakes and kind of what you learned and how you were able to recover and move forward.
Eric Brass 25:26
Yeah. I certainly made a ton of mistakes and make mistakes every day. Thankfully, I'm a big believer and just trying to be instead of trying to be very, very intelligent, trying to just be not stupid. Not saying anything, it's a Charlie Munger one where you know, it's a strong swimmers who drown, right? So if you try to be too clever sometimes and I know a lot of of the companies that blow up is because people take uncalculated risks, that farm on things, and sometimes it works out But a lot of times, a lot of times it doesn't they're not they're not stupid by any stretch of the imagination, just wrong risk at the wrong time. So thankfully, I haven't made one big mistake that's cost the company, you know, millions of dollars. I think a big mistake I've made that I can think about quite clearly is the way I used to hire. And, you know, it might be a bit early for front, you know, some aspiring entrepreneurs, but maybe not. I used to think that if I get somebody super experienced the great contact list or Rolodex as big as we used to say, I can kind of ignore the downside of things and one of the things that I can't overemphasize is always higher, whether it's, you know, whether it's somebody running your sales, or even someone down the line, make sure that cultural aspect is aligned. Because I have, again, hire. I knew that the person didn't believe in what we were doing to an extent or wouldn't buy in, and very talented. But I said, you know, what the short term impacts of getting those contacts getting those sales up and impact it's going to have and in our brand is going to wait overweigh that, and there is a short term, sugar high you get from having that person involved. But in my experience, it always doesn't work out. Because that person has had experience of doing x really, really well, for 20 years, they've done x really, really well and you're doing why because things have changed. Good luck in that person to go from x to y. There's an old military accent where education is easier than re-education, or in simplistic terms, trying to teach an old dog new tricks. I haven't been been successful with doing that and every single time it's cost me a lot. I'd also say on the on the hiring side, I made the same mistake hiring, what I called rumblers. So because it seems pretty simple. You say to you know, the person can be a bit of a pain, or can bring the staff down, or be pessimistic, but they're so talented, they do so much for sales, all that stuff, that's going to mitigate that. It's like a cancer, it eats on the culture of everybody else and that's always really, really important to us is making sure that our team comes in, they love what they're doing, they have a passion for work. Our turnover rate, when it comes to your brand team is extraordinarily low. I mean, we don't have people that a lot of cases leave the brand on the brand side of things, the same side of things, because we always try to make the environments, you work really special and strong. So I can point to a bunch of other mistakes I've made on the hiring side of things. I think that's probably one the most important things that an entrepreneur or CEO can do is hire really, really good people that align with your culture, and that make it enjoyable to come to work.
Eric Morse 28:50
Yeah, attitude and culture really important. I love the idea of trying to stay away from the grumblers because they pull everybody down, right?
Eric Brass 28:57
They really do and it's almost a death by paper cut it really, every day just knocks on him.
Eric Morse 29:05
Alright, so we're kind of covering some lessons learned as well as we go through that, which is the sign of any good entrepreneur, we learned from our mistakes, right? If you were to say there were two or three things maybe to pass along, I don't want to put a number on it but any kind of lessons learned that you'd wanted to share with the group?
Eric Brass 29:22
I mean, there's so many. I would say just to aspiring entrepreneurs it's not supposed to be easy. Anybody that says it's easy is effectively is lying to you or has ulterior motives. It's hard no matter what field to go into. And passion and persistence really does conquer so much. A big part of our success and I try to hire people that also embody This is folks that get told no, I mean, I've been told no more times than I can count, and usually not in such a polite and polite way but it's going from that sale to the next sale with the exact same amount of enthusiasm and drive that makes you successful. And, it's all about believing in your product, believing in your brand, and continuing to work harder than the next person. Also, I would say, it's really, really important to know if you talk to any kind of business person, but musician, actor, author, comedian, be different, bring something unique to the marketplace. mimicking things is just a regression to the mean. You have to effectively get out of your comfort zone, and be different and challenge yourself. That's another thing that has always helped me and I think it started with me going down to Mexico, putting myself in uncomfortable positions, challenging myself to effectively do things I didn't want to do, as effectively made me not only better professional, but a better person and given me a wider perspective as to what what's going on in the marketplace.
Eric Morse 31:05
Yeah, fantastic. I think it's a great lesson. We have a number of questions, if you don't mind. I'll read them out here for you and so Aaron Lee, wants to thank you for taking the time to speak with them tonight, would you say that your corporate work experience helped with running the business? Or would you suggest students in similar spots? If you knew, would you have pursued it earlier?
Eric Brass 31:27
That's a really good question. I was in a unique position where I was managing a portfolio of stocks and equities. So I would go and I would dig into the companies and figure out the internal drivers on them and realize now how much the CEOs were effectively feeding me bs all the time. For me, it really worked out, I got to kind of, quote unquote, work on somebody else's dime, I think it depends on what you want to do and who your bosses, I had a tremendous boss, I learned a lot from. She's a female in the finance world, which it was there for30 plus years and that's an amazing accomplishment, given how difficult it was for a female 30 years ago to rise up in the world of finance and that's because she had to be better than her male counterparts to effectively to succeed. She gave me so many life lessons, and so many things that effectively helped me one of the things she told me was, which is helped me today, and certainly helps me with some of the cultural aspects I deal with in some countries but she said why do most companies fail? What's the greatest destroyer of value and I said, a lack of lack of cash flow. Textbook answer, probably learned from it andshe said, No. I said, profitability? She said, No. I said, well, what is it, she said, ego. She's seen more businesses and more money being burned based on your logical, irrational and ego based decisions. Lessons like that you can take that lesson, take it out of the textbook, and put it into any business environment you want have been tremendously valuable, invaluable to me and I think about that conversation, to this day, when I'm having a difficult conversation with folks that I know, rely a little bit too much ego for their decision making process. So what I would say is, do something you enjoy. Number one, to me, it sounds pretty intuitive, but don't follow the money. And if you do have a path, if you're smart enough, sort of I was having path as to what you want to do, try to link that up, because that passion will effectively bleed through. I would also say that today, there's so much more resources for entrepreneurs to go out of school and have a crack at it. There's funds available and all that stuff that didn't exist nearly as much back in 2005. Nobody would give me a nickel to start something, but I think it's wonderful.
Eric Morse 34:00
Yeah, thanks, Eric. I think that idea of humility is really important for entrepreneurs because that means you're open to learning and and I really do believe to be successful as an entrepreneur, it's can you learn quick enough to keep up with the business? And, clearly you've got that, kudos to you for that really interesting question from Justin Duff. At the moment, the waste from a Gabi, from your tequila products is feeling your sustainable straw venture. What happens if the straw venture material outpaces the tequila production?
Eric Brass 34:30
This is a very good question. Fortunately, or unfortunately, depends on kind of what side you want to take it. That's not really a short term issue. bcause it's on our waste. There's t hole lot of waste going on the world of tequila, so that raw material is not really unfortunately going anywhere. and it creates a lot of environmental problems in Mexico. I havent' probably ever heard about it because Mexico isn't sustainable is not really at the forefront of some of the things that goes on down there. Its' a very logical assumption to think it's sort of it's a risk, but that is not a short medium and probably not a long term risk.
Eric Morse 35:07
This is anonymous. So I'm not sure why, the question seems pretty fair. Was there ever a time you didn't think the company was going to make it and if so, how did you overcome that?
Eric Brass 35:18
Oh, yeah. 100 percent. I remember, there's one story where we effectively gave loaned a slushie, machine to a bar and restaurant in Toronto, and the slushy guy was there and he was installing it and he said before he left or infection plugged in, he had to get paid. We looked at our I told my account to pay him and he said, You don't have any money. So what do you mean, he goes, you don't have any money in the bank? I said, What do I do? I mean, he's there, he's gonna take the machine out. I mean, this guy, this isn't good terms and it's going to be it's going to be a terrible impact on the fact that not only am I going to eat more, it's going to spread all that stuff and actually had to basically borrow the money from my accountant who was nice. I mean, all the time was, there was that uncomfortable excitement early on, when we didn't know what was gonna happen the next day. There was a lot of times, we're just like, because our competitors are multi billion dollar corporations with hundreds, if not 1000s of people on the ground around the world, hundreds of millions of dollars of marketing budgets, how the hell are we going to compete with them? With me on the street, my partner in Australia, two backpacks and a couple bottles? I mean, on paper, we had no chance. How do we persevere from it? Someone once told me to always kind of be childlike when it comes to business. That doesn't mean throwing temper tantrums, but that means effectively, throwing away, taking your past problems, hopefully learning from it, but moving on very, very quickly, and having that mentality to adapt and adjust and saying, okay, not holding any grudges or worrying about what happened the past but just continue to move on to the to the future. There was all kinds of times where you wonder what the heck's gonna happen with this brand? But also it was kind of really nice as well, because when you started a business, those first initial wins the first bars you get first listing you get in the liquor store. I mean, those are huge. You are ecstatic. You can't like, we haven't gotten that and in some ways you do miss that a little bit, because it's just it's an incredible feeling. Remember, we got to the lcbo. I sat out on sort of my parents gonna set up the deck, just basically stare into the sky for a good 40, 45 minutes. But yeah, it's interesting times for sure.
Eric Morse 38:12
Cool. I have a question here from Deborah Kennedy on the on the product, actually. So what's the point difference of your tequila that makes the consumer want to buy it over the competition? Why is yours good?
Eric Brass 38:24
I think it's effectively in a lot of cases, the brands in the bottle, so who's making it, you know, you have, you know, it's still around tequila, which is very rare, if not non existent in the world of, of tequila, he's making it with his son, handcrafted batch by batch. Effectively, it's not only is it the product, but how we message it. So we're very, very big in terms of education, training, telling that story, in big in terms of word of mouth, as well. We find that even today, with all the elements in terms of digital and social, telling that story, whether it be again, watch it through social or through word of mouth recommendation has been a huge key to success and one of the things that's been very successful for us, which we think will be very successful, again, is that bartender alliance. That bartender storytelling, and hospitality right now is in the dumps but we're seeing in really, really interesting recovery going on in some states in the US and in Australia, for example, they came out of their lockdown and shouldn't be any big surprise that the Australians went went a bit bananas and started drinking like it was no tomorrow and going out and eating and we didn't just see it with you know, the 20 year olds, we saw it with kind of every demographic was going out and sales went from, you know, we would sell it in a month and a half. In the last year we sell in a week. We're selling in a week now in Australia, and it hasn't slowed down. In some ways, the world will change in some way the world will go back to normal and I think the world of hospitality is going to be impaired for the next six to eight months. But after that, it's going to be really, really exciting place to be again.
Eric Morse 40:11
Cool. Well, that's exciting. Neeraj Gandhi wants to know, what advice would you give yourself if you were starting over?
Eric Brass 40:20
Think, again, there's so many mistakes that I've made. I think that hiring pieces is just would have saved me a hell of a lot of headaches and forget about the money. When you hire poorly, not only is there is there a monetary cost, but there's that intangible costs that some people can never recover from because if you spend the time, the effort, that person builds a brand, that person brings their relationships and forge new relationships, which may or probably not be around after that person's gone. I think it's effectively, it's stay the course as well, because starting a business is extremely difficult, especially in this environment. There's so much I could tell myself, I think that hiring piece is probably the biggest mistake that I made. I didn't just make it once. I'm not that smart, I made it two or three times because that temptation is just so incredibly strong.
Eric Morse 41:22
A couple of questions that are kind of related to that. We're in the COVID, lockdown, you have parts of the company in Mexico, parts of the company here, probably in the States or soon, I'm not sure. How do you foster a culture in a remote environment like that?
Eric Brass 41:40
It's obviously very difficult, because it is such a face to face interaction and relationship based business like most businesses are you effectively do the best you can you schedule, you have as much communication, through zoom or even through the phone with your team as possible, you do a lot more check ins with them and effectively try to share as many wins as possible coming through and it's a really interesting time to effectively build culture, and get on this main plan with your team. But we've actually been able to do quite well with the team and thankfully, we have a team of professionals and folks that effectively that have been around the block a few times and can adapt to all kinds of crazy things. I just think that good people as well are generally speaking resilient, and they'll find a way to get to get things done and weeding out those grumblers and weeding out those bad apples, if I would have had them involved in the organization now it would have made that culture building and fostering that stuff a heck of a lot more difficult because I usually am down at the factory at least once a quarter and I haven't been down there since since March or sorry, before that, it's been over a year. I have such a wonderful team down in Mexico in such a great office down there and that's my business partners are that we haven't missed a beat in a lot of respects. And it's also me getting more involved in the process not micromanaging because I'm a big believer of decentralized management as well as letting people effectively hiring great people let them have their own way to do things and not over be overbearing on control. I think that's an old school and a poor way to manage. But I think it stems from having the right people on board from from day one, when this pandemic hit, we were luckily to effectively have gotten rid of some bad apples beforehand.
Eric Morse 43:37
Just as an outside observer, I think your business grew up in some ways, doing really good jobs, telling stories, whether it was to the bartender and making sure that those stories were told again and again and again and and that can go so far and helping you build that culture when everybody knows those stories and can pass them on to the new kid as they join the business. I think you've done a great job with that as
Eric Brass 44:04
I appreciate that. Storytelling and a reason for being as to why you're here is a very important factor because the world probably doesn't need another tequila
Eric Morse 44:12
It did. It clearly did. a quick question for you. This is again, anonymous. It's a really interesting question. What are some of the ways you stayed organized or kept your thinking clear, even when maybe it wasn't clear what the next step should be?
Eric Brass 44:28
Wow, that is a very, very good question. How are the ways I've come? I think a few things. Number one, I always try to reserve some time during the day to think. Which means close my computer, grab a pen and paper, or actually one of the pencil guy and effectively write things down and turn off the noise because you can get into data with day to day distractions. Having that time to think and reflect and plan is big, set goals, set long term goals as to where you want to go and try to figure out a map as to how you want to get there, the map will never work out, I promise you that. A lot of those times those goals, if you want the bad enough, we'll just have to take an interesting time and find yourself a mentor. Find yourself somebody who if you have problems, to effectively bounce ideas off of unfortunate that my father was an entrepreneur and built his business out of selling, you know, in 77 extension cords out of the trunk of his car, and built it up to medium sized business and ended up ended up exiting the business for 10 minutes, what is a great exit. He's a guy that's been there and done that. Having somebody to give you that advice that effectively is you know, that it's been there is really, really helpful. I always encourage young entrepreneurs to find themselves a mentor, and somebody they can effectively share things with and in giving them that path and whether it's encouragement or advice. It's super, super helpful.
Eric Morse 46:11
Well, I have kind of a comment, I think you answered his question, but I'm going to tell you the comment anyways. It's from Cristaval Deproy. Congratulations, Eric as a Mexican, it's super interesting to see tequila flourishing in other parts of the world and how a new strategy helps you position the brand in countries like Canada and Australia. So congratulations on that. His question was what would you have done differently back then knowing what you know now. Any thing you might add to that?
46:37
It's a really difficult question. I think that it's hard for me to answer because we didn't make a big, calculated and stake and I would have liked to say that we would have liked to go out and been more aggressive in funding the company getting this more capital to effectively start but I think that that could have effectively been a kiss of death for us as well. Because again, as I said before, if we would have had all that capital in the business, our ROI culture would have probably never materialized. I'm a big believer again of life. If you want something and you plan for it life, giving you those opportunities and setting you up and I don't think we would be here today, if we didn't, if we did things drastically different than we did just kind of starting.
Eric Morse 47:25
Yeah. Okay, I have a question here from Bruce Lamb and I have to ask him, because he wouldn't let me forget if I didn't. Word of mouth, advertising is huge, obviously. Do you also do a lot of social media or digital marketing for the brand?
Eric Brass 47:40
We do. We have a team that effectively does that. We probably should have been doing a better job pre-COVID, because our main pillar was on the barn restaurants, scene where that storytelling was happening. But obviously COVID has accelerated from bar restaurant to digital and to social. It's something that we're certainly looking at continually improving, we have improved it, I don't think it's where we want it to be yet. But also, you know, ecommerce has obviously, doesn't take a genius to purity commerces has changed the landscape for not only liquor but pretty much every product now and that's been an area where we're putting a lot of budget as well as to improve our ecommerce improve our prove our social and partnering with Sazerac is one of the reasons as well as doing that, as they do have effectively those very small platforms most are more so on the ecommerce side, where if you want to order a bottle of Tromba in Los Angeles, you effectively put an order through in 30 minutes, it's at your doorstep, hopefully with some delicious Margarita mix but yeah, no, it's obviously the world's ship that and I think it will probably ship back a little bit more towards hospitality and stuff like that. I think that'll be a strong place, but I don't think ecommerce and social will give up that much ground.
Eric Morse 49:02
Okay. What do you think is different in today's world? Somebody wants to start a craft spirit company, then perhaps when you started?
Eric Brass 49:11
Oh, wow. It's completely different. I mean, we tried to pitch some institutions starting Tromba. We were effectively laughed out of the room. I mean, investment banks and venture capitals and capital companies and stuff like that they wouldn't touch spirits with a 10 foot pole. I think now that the amount of exits that have gone on to the development of craft spirits, and the growth has attracted a lot of investors, institutional investors and obviously individual investors, and it used to be folks that wanted to get into the business because it's a sexy, fun business to be involved with, say I own a piece of vodka and a piece of tequila. Now, there's folks that do that still, but there's a lot more folks that say, hey, this is a really really great investment. Not only can you have fun and be proud of this investment, but also you can affectly make good money off it. One of my main things is, I'm a big believer of making as much money for your shareholders as possible. If you make money for your shareholders, you never have to worry about anything again, in your life, because you make money for them once they'll come back, and they'll continue to effectively give you capital whenever you need it and give you support. Having a great shareholder base is super, super important. Looking back on it, we did pitch some VCs they did tell us about Roth, but thank God they did, because generally speaking, they be effectively in our face, making us do ridiculous quarterly due diligence, and would try to tell us how to run the company based on quote, unquote, with the industry says, thank goodness that we built a shareholder base of really remarkable supportive folks and again my job is not to make as much money for me personally, my job is to make as much money for shareholders. So anything I ever want to do again, if I want to do something again, I have a wonderful base of supporters of shareholders.
Eric Morse 51:03
Cool. That leads right into the next question. I was gonna ask you from Assa Malhotra. If you were going to go for another venture, what would it be? Maybe your partner shouldn't be listening to this one.
Eric Brass 51:16
I don't know. I mean, we'll see probably not in the liquor space, but maybe something on the sustainable space, because I think it's something that I'm passionate about and it's and I think people are looking for solutions right now, when it comes to effectively sustainable and environmentally friendly products. So I think that those two boxes, definitely check for me, but I don't know. I mean, it's too It's too early to tell, because I'm still in love with Tromba and it's still my baby and I have no plan to exit over the short term. Maybe ask me that question two or three years if something changes.
Eric Morse 51:58
Cool. We just have time maybe for two more questions I have one I think is interesting. Noah Hendricks, thanks for being here. They're, a little bit lost as to what happened in the middle part of your story. So you're, you're what running around bar to bar with your backpacks and now you've got this great partner and supply. When did you start to scale? And maybe what were some of the things that tip that for you?
Eric Brass 52:21
It was really slow to build. I believe you build your brand was really bar by bar, bottle by bottle and when you do that, you build it right, the foundation is really, really strong. We would never really compete on price because if you do, then you're effectively commoditize your brand. People always pay more for a model of Tromba and, you know, our competitors. When did it when did it scale? I mean, it's really difficult because we never got one big, probably Sazerac feels probably, what is our biggest we've ever had, but it just effectively, it grew and it grew, and it grew slowly, and so on and I can't tell you what it was but there is a tipping point where we did hit where I think kind of when I knew it was I was sitting at a bar and having a drink, I'm obviously having a Tromba and they know who I am and the person next to me sits down then says can I have, two take your Trombas on the rocks? And I look over the person. I said, well, it's not my friend, it's not my cousin, I don't know who this person is. Which is exceptional. How do we build and then effectively, my belief is to go, you know, be regionally strong, versus national and mediocre. So we watched Ontario watched in Melbourne, we really just watched in Toronto, Melbourne, built up those cities, built up a groundswell there, if you're not successful in your own backyard, you're not going to be successful anywhere else, then effectively took our product to Chicago, built it up there, then took it to New York, because we took it to Chicago first because if you tell somebody in Chicago, you launched in there before New York, they care if you tell somebody in New York, you watch there before Chicago and say I don't give a shit. And so it was effectively just going around telling the story bar by bar, bottle by bottle. A lot of people say we grew really fast, but it was really hard work doing the blocking and tackling and not getting tempted by shortcuts and then effectively building that base, and people do talk, and that word of mouth does does produce a groundswell and from there, we expanded to Florida and Los Angeles and Texas, and until the Sazerac deal effectively came along and now we're going to be available nationally with triple the skews that we had last year but that middle part of the story is there's not one specific thing, we didn't get one deal that effectively transformed the company. It was just a lot of hard work a lot of people putting their blood sweat and tears into the business to build it up bar by bar, bottle by bottle, keeping that passion and really love them what they were doing.
Eric Morse 54:58
Cool. I think that's a great answer and I think a great lesson for everybody. There's never a magic pill, it's a lot of hard work and keep after it. You're able to step back a little bit now and watch the guy next to you order your product cut. That's really cool. You know, I love that. All right, we're kind of out of time. Any any last words that you wanted to share with everybody?
Eric Brass 55:17
First of all, thank you very much for having me in the forum and the really, really good questions. Some of them very thought provoking, they'll probably still be thinking about that later tonight. But I think as much as it pains me to do this via computer versus, you know, doing it in person, I think it's a really interesting time and in some ways, a wonderful time to be an aspiring entrepreneur. I think that what I've seen in the last year has been a whole lot of disruption with the world being shaken up, more so than I've seen probably in the last 10 years and Eric, you're probably in the same boat as I am and I've seen effectively what I always found was when I started Tromba and probably when you entrepreneurs go and start your own business, you're generally speaking talking to a buyer that effectively has a misalignment of needs, where you're an entrepreneur, you need to effectively provide a wonderful solutions, that's groundbreaking and they need to effectively they're incentivized to grow 5%, 10%, 15% mind their manners, put their head down, and make sure their margins are okay. As an entrepreneur, if you grow 5%, 10%, 15%, you're dead. You're not in business anymore. So you're trying to effectively shove a solution to somebody that is pretty risk averse, wants to just not get fired. What's happened in the last year, it's just been the eye opening of, I think every industry of people looking for new solutions, looking for ways to effectively improve their business and they're looking to both young and old to find those solutions. I want to, for you entrepreneurs think about what the world needs and what you're passionate about, and look at providing those solutions to the world and, as I said before, it's the game's changed in a wonderful way where, again, when I left school, one guy in my class who we thought was a lunatic became an entrepreneur, because there was no infrastructure for it. Now, there's a tremendous amount of infrastructures, tremendous amount of funds that will that are entrepreneurial based in terms of giving capital, buyers are a lot more accepting to new and innovative things. I mean, right now, effectively, a pause button has been hit with a lot of industries, where they can go and they can take the time and look at new solutions. So as one hand where it's really crappy that we're doing this through a computer screen another hand, what a really, really, really interesting time. I would argue, hopefully, once the generational time to have the opportunity to be disruptive, in a world of entrepreneurship and if it doesn't work, what you learned a heck of a lot, figure out what mistakes were and move on from there.
Eric Morse 58:08
Eric, thanks. I think we're really lucky to have you with us tonight. I really appreciate everything you've said words of wisdom for everybody. I think that was really important. Love the closing. I want to thank everybody that joined us this evening and those of you in the business plan competition. I want to wish you the best of luck tomorrow in what you're doing and it is an exciting time. The world's going through a lot of pain and a lot of suffering but there's a lot of opportunity as we start to turn the corner and come out of this and it's time to be looking and it can be an exciting time. Let's run that one and keep it going and Eric thanks again, so much and continued success. Everybody, get out there and try a real tequila, Tromba tequila, and we'll take it from there.
Introduction/Outro 58:54
You've been listening to the Ivey entrepreneur podcast. To ensure that you never miss an episode, subscribe to the show on your favorite podcast player or visit ivey.ca forward slash entrepreneurship. Thank you so much for listening. Until next time.