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Cutwater Spirits Co-Founder on the company’s hopes of becoming a household name with the unveiling of their Super Bowl ad

Yuseff Cherney, Cutwater Spirits Co-Founder joins the Yahoo Finance Live panel to discuss the canned cocktail outlook and the debut of Cutwater Spirits first ever Super Bowl ad.

Video Transcript

AKIKO FUJITA: Well, from sports betting operators not the only ones looking to cash in on the Super Bowl. San Diego-based Cutwater Spirits buying up a coveted 30-second ad spot to build on its brand's momentum. Let's bring in Yuseff Cherney. He is co-founder of Cutwater Spirits.

Yuseff, let me start with that ad buy. Because we had a guest on earlier who was talking about what Super Bowl ads, the impact it can really have, just given that not as many people are tied to the TV anymore and consume the game in so many different ways. Why that decision for Cutwater, and what do you see in terms of being able to build on your brand?

YUSEFF CHERNEY: Well, I think even though we're distributed across 37 states in the US, that the name Cutwater doesn't really-- it's not really a household name yet. And that's what we're shooting for. You know, the bigger brands like Anheuser-Busch, especially Budweiser, pulling out this year to focus on some awareness for COVID relief, we kind of were able to sneak in there and get an ad.

And I think our brand might be a little bit better served because there isn't this widespread knowledge of Cutwater, even though we think there is here in San Diego, where quite a lot of folks here know who we are and know our spiritual home here in San Diego and have visited our restaurant and maybe toured our distillery as well. But the nation as a whole, and it's still getting the word out. And this is a great way to get the word out to a lot of people all at once.

ZACK GUZMAN: Yeah, Yuseff, I was excited. I was in Scottsdale, looking forward to trying one of the cocktails in a can. I wanted the margarita Drizly order. They brought the gin and tonic. Not necessarily a gin and tonic guy myself, so I want to revisit it when I get there.

But when we look at maybe the space, as you're saying, I mean, the growth in what you guys are trying to do has been pretty nuts compared to what we've seen in the beer category. Talk to me about where that's coming from, why you think consumers are kind of piling into the space, and what Cutwater brings to the table to kind of differentiate from the other offerings out there on the market.

YUSEFF CHERNEY: Well, I think it's-- the beer industry has had this convenience of packaging for so long, you know? You can go get a pint at the bar, but to get a can or a bottle is really a convenient way to enjoy a beer, you know. So we kind of broke into this market of real spirit, you know, real drinks in cans that were easy to bring to a party or a tailgate or wherever you needed to be. And that kind of spurred on the whole Cutwater campaign. It's this way of kind of disconnecting and enjoying an actual cocktail.

And we've seen the advancement in the seltzer industry. And, you know, for me, it's kind of a little bit strange in terms of what exactly is a seltzer, you know? And for somebody that's used to going to a bar, you're ordering a margarita, you're ordering a gin and tonic, rum and cola, all these drinks that have spirits in them. And distilled spirits are what we focus on.

So we're making those here in San Diego. They are going right into the cans in our factory here. We're running about 400 cans minute off our line. And it's all made with what we're actually producing in the stills right here. So, you know, this industry is fairly new.

We came about as a rendition of Cutwater back in the Ballast Point days, you know, about 14 years ago. And we started canning cocktails even back then. Cutwater's been around since-- for four years now. So relatively new company, but we had our roots all the way back in the Ballast Point days with the cans there as well. And, you know, just the parallel of being from a brewing environment just really lends itself to going through this canned version that's just ultimately portable and convenient.

AKIKO FUJITA: Yuseff, we've been talking a lot about the growth of alcohol delivery, especially during the pandemic. Today, we were talking about wine. Yesterday, it was Drizly CEO Cory Rellas joining us. I wonder from a distillery standpoint, what kind of opportunity that presents for you. You were saying you want to be able to get your name out even further. I imagine this allows you to reach maybe some customers you couldn't have before.

YUSEFF CHERNEY: Yeah, for sure. I mean, any time we get this kind of national exposure, it's not only the Super Bowl ad, it's things like this. I mean, we've got a huge media blitz the last week or two, just from a local company getting an ad in the biggest game of the year. So, you know, it's not just the Super Bowl awareness. It's all the-- you know, we've been written up in the local newspaper. We've been on several local news channels. That's huge for us as well, just for this awareness.

And a lot of folks don't realize what a canned cocktail is. They've only had maybe renditions of them way back in the day that they might not have suited their fancy. And the biggest thing is getting our product in front of people, getting them to taste it. And once they do, everyone's realizing, wait a second. This tastes like a cocktail I would make at home or get at a bar. And it's-- and I don't have to go through the steps there. It's as easy as filling up a cooler and inviting the family over and cracking one of these open.

So, you know, just the whole process that we developed in creating these, from the spirits that go into it, to the actual mixers and sodas, it's kind of revolutionary in terms of they're real standard cocktails that you'd expect to get if you--

ZACK GUZMAN: Well-- I imagine the other piece of that, too, is that you can't really go out and get them in a lot of the areas of the country, you know, in lockdown. You can't go to your favorite bar and get a cocktail like you normally would. So this is a good opportunity for growth, and I can understand the investment there.

But talk to me, too, lastly before we let you go, kind of the distribution plan that you talked about. Obviously being based in California seems like a little bit more West Coast specific here. But what kind of production plans or distribution plans maybe do you gain by teaming up with an Anheuser-Busch here to roll out? And what does that expansion look like?

YUSEFF CHERNEY: Yeah, the distributor aspect of the partnership is huge. You know, that's one thing that we definitely considered as one of the strongest points of this partnership here, and getting out into their distribution network and becoming like-- almost like that beer part of their cocktail spirits line, which we were actually the first in the US to be part of-- the first spirits company to be part of their system.

So there was a little bit of hiccups here and there because it is a different legal method of distributing spirits versus beer. But now that that machine is starting to roll, we're getting to see those benefits in, you know, 37 states, hopefully soon to be more. But we're going to markets that want us there. We're not trying to force the product into markets that aren't going to move. So you're seeing us in places that are demanding the product. And we're going into stadiums and large venues.

And the sporting industry is just a huge venue for us to kind of capitalize on that convenience of the can, getting it out into people's hands without having to mix cocktails. When you're standing in line 20 deep, you can just be handed a can at an event. It's a huge thing. So hopefully we get that market back, you know, as COVID hopefully gets away from us here, and we return back to the normalcy of going to concerts and sporting events and all that stuff.

ZACK GUZMAN: Yeah, and hopefully, we can move away from having to rely on maybe some of our friends who have no business making cocktails themselves so that we could turn back to the can. Yuseff Cherney, Cutwater Spirits co-founder, appreciate you coming on here to chat with us today. We'll keep our eyes out for that Super Bowl ad. Be well.