Chris Canale | Lessons Learned: How to Move Fast, Make Changes, 
and Make the Best out of COVID-19

July 30, 2020
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July 30, 2020

Chris Canale | Lessons Learned: How to Move Fast, Make Changes, 
and Make the Best out of COVID-19

This episode is a fun and straightforward conversation that goes into this history of 150 years of family business history – what it's like running a start-up company during COVID-19, what it’s like finding enjoyable work, unique and fun personal and family experiences during the pandemic, what it’s like going up against the big players in the Spirits business, and more.

My guest this week is Chris Canale. Chris founded Old Dominick Distillery four years ago, and Old Dominick produced its first batch of whiskey in 2016. This episode is a fun and straightforward conversation that goes into this history of 150 years of family business history – what it's like running a start-up company during COVID-19, what it’s like finding enjoyable work, unique and fun personal and family experiences during the pandemic, what it’s like going up against the big players in the Spirits business, and more.

I hope you enjoy this week’s episode. And as always, if you like the episode, please leave a review and share it with your friends.

  • How to gain perspective during Covid-19 (1:50)
  • How Covid-19 is accelerating change (5:40)
  • This too shall pass (7:12)
  • Getting aggressive (7:25)
  • Silver lining (8:40)
  • Tough times (9:20)
  • What running a distillery looks like (12:36)
  • Self-awareness 15:24
  • Family Business 17:57
  • Finding enjoyable work (20:15)
  • Don’t dwell on mistakes (27:23)
  • Humility (29:28)
  • Authenticity (35:23)
  • Big Players try to eat you alive (35:46)
  • Customer Service (38:22)
  • Growing into new markets (42:40)
  • Planning 12 Months out (48:19)
  • Family experiences during COVID-19 (51:54)

This episode is brought to you by Matt Haaga with State Farm Insurance.  Call Matt today at 901-443-4655, or email Matt at matt@matthaaga.com to see how he can help with your auto, home, renter's, business, and life insurance needs. Matt is licensed in the states of TN and MS.

Episode Transcript

00:00 Chris Canale: There's a dinner for the 125th anniversary of D. Canale and they made a video, so this big long video and everybody, they would ask about it, any of our employees about the longevity of this business, on how we've gone through multiple world wars, we've been through Yellow Fever epidemics. So you think like, "Well, this isn't exactly D. Canale's first rodeo through a hard time."

00:28 Sam Coates: Today's episode is brought to you by Matt Haaga, with State Farm Insurance. Matt is licensed in the State of Tennessee and Mississippi. We all know the things that you rely on most with your auto, home, renters, business and life insurance is understanding exactly what you are getting for a competitive price. If you're looking for an agency that is prompt with their communication, committed to the success of the relationship, and that values what's in your best interest then you need to call or email Matt Haaga with State Farm here in Memphis. You can email Matt at matt... With two t's @matthaaga... H-A-A-G-A.com. Matt Haaga's State Farm is licensed to provide coverages for these services in Tennessee and Mississippi. We do have listeners all around the world and all around the United States, so please make note again that this is for the state of Tennessee and Mississippi, in the United States. Now we're gonna get back to the show.

01:31 S2: My guest this week is Chris Canale. Four years ago, Chris founded Old Dominick Distillery, and Old Dominick produced its first batch of whiskey in 2016. This is a fun and straightforward conversation that goes into the history of 150 years of family business. What it's like running a startup company during COVID-19. Unique and fun, personal and family experiences during COVID-19 and what it's like going up against the big players in the spirits business and more. I hope you enjoy this week's episode and as always, if you like the episode, please leave a review and share it with your friends.

[music]

02:22 S2: Chris, great to have you, man.

02:24 CC: Thanks for having me on.

02:26 S2: Yes sir, from an ownership perspective, you're three, four, five years in on really getting to market with Old Dominick and y'all have gone through an aging process with whiskey. So you're starting 2020... Y'all have gained so much recognition and so much... Just appreciation from the Memphis community, and I'm sure that y'all have plans, and then something like COVID happens where all the restaurants are pretty much shut down for a period of time, and y'all do, do wholesale distribution and things like that. But from a personal standpoint, what's it like to deal with the things that you have to deal with and then also make changes and pivot and motivate your team just to keep pressing through something that none of us have really seen before?

03:08 CC: We got started, I guess here... I think we started distilling in the spring of 2017, this project started back in 2015. With this crisis, I guess... Just to put things into perspective and I always try to keep them in perspective. This company... Not the distillery itself, but D. Canale and company, our family company. We started back in 1866 and I've got a copy of a 125th anniversary video from, I guess that would be... Oh geez, what would that be, 1981? 1991, I'm sorry. There was a dinner for the 125th anniversary of D. Canale. And they made a video.

03:42 CC: So this big long video and everybody they would ask about it, any of our employees about the longevity of this business, on how we've gone through multiple world wars, we've been through Yellow Fever epidemics. So you kinda think like, "Well, this isn't exactly D. Canale first Rodeo through a hard time." But it's definitely my first time. [chuckle] But I do try to keep things into perspective, you don't have to look very far back, just a generation or two, and these things happen, a lot. These just enormous worldwide challenges that we go through. But honestly, from our perspective, COVID has actually enabled us to step back a little bit and think about things that we had rushed into before. Or things that we frankly hadn't thought through, or lots of things like that. We're taking a totally fresh look at the marketplace. From a business standpoint, we're off, obviously.

04:36 CC: The Memphis market is doing well for us, but we're off. In all the other markets that we're in, but the Memphis community has supported us, thank goodness. And we've been doing everything we can to support it. But putting on the COVID glasses definitely... If that's a term, but it definitely changes your perspective, your point of view and has allowed us to see things in a different light, a little more clearly, and so we've been able to pivot. We're changing the way we view the marketplace, we changed the way... Our sales team structure has changed now. And we've been able to make some financial decisions that would've been hard in any other scenario, but with COVID, I think we're probably not the only business that has done this but it allows you to step back and almost take a fresh start with everything you do. And for a startup business, that's really a huge opportunity.

05:26 CC: 'Cause you put so much time and resources and passion into something, so that when you're three years in... Like we are. It almost seems like you're stuck with what you built, it's hard to take a step back or to make a cut over here, or to make an investment in this line of business over here because you're stuck on a path, you've invested in it. But with this, three years into a start-up business, we have an opportunity to point at this line of business over here and say, "You know what? That's not working, never was working." It's a sunk cost, lots of sunk costs. We've been identifying those and cutting those and in the meantime, we've been identifying in ways the market has changed... Has been changing, but now that COVID is here, it's changing so fast with online marketing and with curbside pick-up and all these things that we were behind on, and we're not gonna be behind on anymore. Because they... I think the situation is, nothing else has accelerated the way business will be done in the future so...

06:23 S2: Yeah, that's rich. From your personal perspective in how you experience these things like emotionally or late at night or after work or during the day, and then how you have clarity with your thinking to how you kinda boots on the ground during the day, I know you've got a great team, but what advice can you share or what does that look like to where you're kinda getting higher level thinking, amidst a lot of short-term ambiguity operationally or from a strategic perspective, how can you get higher level thinking and then execute those pivots or changes, while keeping your sanity? I guess.

07:00 CC: Well, I can't say that I didn't go through a couple of weeks of laying at night going, "Oh God, what are we gonna do?" 'Cause you don't even know what's gonna happen the next day. There was a period there where everyday was scarier than the last. But I guess... I don't know if I had any advice or anything, if I were telling my kids that we're facing something like this, this to shall pass. And there comes a point where it keeps pushing you and you're able to sort of retrench a little bit. And you start seeing the end of it, you start seeing the other side of it. And then you can start getting aggressive, going back on the offence. But again, it's that opportunity that you have at that point to go forward in a smarter way. But yeah, I'm not gonna sit here and... That was not rosy, definitely for the month of March, and even in the first part of April I was just... I felt like we were just getting our butts kicked.

07:47 S2: Yeah.

07:48 CC: So, we did a campaign called... It was #RaiseSpirits. I don't know if you've seen that but we were given [07:54] ____ a bottle to a fund that was being administered by the Community Foundation. And we did a single barrel release. It was just two barrels but I gave a bottle to each of our employees and brought them a note with it that I hope they never open it and I hope they put it on their shelf. So that 30 years from now or even a next generation, it's on the shelf that they can look at that bottle and remember, "We've been through some hard times before."

08:19 S2: Right.

08:20 CC: And they can feel okay. So, all these things passed and it's tough but with all these things, I think there's lots of silver linings to look at too, both on a professional and a family level. So...

08:31 S2: Have you always been that way? Or do you feel like your experience or thinking is grown to where you kinda maintain more hope through things like this that are unexpected, and then know that you're gonna see silver linings on that backside of it?

08:44 CC: Well, when you go through a few of these, whether it's a pandemic or some interesting jobs that you've had or bad bosses or whatever, you've had in the past and just tough times, you always get through them, right?

09:00 S2: Yeah.

09:00 CC: One way out, and it's through it, you always get through it. But I do think maybe I'm wired a little different. I know there's lots of people that are wired like me, but if you had people that are so resilient on one end of the spectrum, and then people that plan their lives, years out in advance, and when things don't go their way, they just don't know what to do. I do think there's two ends of the spectrum there, and I think it takes all kinds of people to make the world go around. If everybody was like me, we probably wouldn't get anywhere. But like this, I think that being able to be really nimble and be able to turn on a dime and just leave everything else behind, I think that's a quality that I have, but again, I'm not saying I'm better than anybody else by any means. But if you look at our head distiller, Alex Castle, she is my total opposite and we would not have had that success that we have today without her. So I think in different situations, different character sets are more applicable.

09:57 S2: How did you meet Alex? Can you talk a little bit about... It's hard to really get a ton of information because obviously you're privately held, but one thing that seems like a really clear thing that's just seen over and over is like, A, your respect for Alex, your appreciation for her, and I'm just like how she compliments you with where your strengths are and where you add value, and then her ability, that kinda... And how it all sets that. So how did you meet her, how did she come to Memphis?

10:24 CC: We've done a very long search for a head distiller. We've been at it for probably eight months or nine months. And [chuckle] we're meeting a lot of interesting people but first of all, at the time, it was hard to get somebody that wanted to be in the spirits making business that'd wanna live in Memphis. They wanted to live in Kentucky, or New York or California. So we were not high on very many people's list. But the people that we did interview were very... I'm not judging anybody, but they're very hip... Hipsters, you know?

10:55 S2: Yeah.

10:54 CC: [10:55] ____ whiskey because they thought it was cool, right? Now they wore those... I don't even know what you call them, the hats with the snap in the front. They all had creative facial hair and these...

11:03 S2: Rocky Balboa hats, what he wears?

11:05 CC: Exactly.

11:05 S2: Like those Kangol hats?

[chuckle]

11:07 CC: Yeah. So, you know it was interesting folks and they wanted to be creative and they thought that's what being a distiller was all about was being creative and all that kinda stuff. But in reality, running a distillery is... It's very process-driven, it takes somebody like Alex Castle to run. Basically a distillery... Same thing happens everyday. Once you dial in a formula it is a science to make sure that absolutely nothing changes because part of quality control is consistency. So for somebody that wants to be creative, this is just not a place for them. So Alex is actually one of the only people we interviewed, that was an engineer by background. And she's done this before, she came from Wild Turkey. She ran an entire shift there, at the time she was 28 years old. Believe she has her Master's in Chemical Engineering, she helped build a distillery in Lexington, and then Wild Turkey picked her up. But at the age of 28, she was in charge of an entire production shift, obviously that says a lot, but... Yeah, she impressed us from the get-go. But again, very detail-oriented, and we knew right away that we could trust her to take care of this place and the equipment and very clear that she would be a good ambassador for the brand. A very classy person, high integrity, she's wonderful. And so... Yeah, we're lucky to have her.

12:26 S2: So, you made... I guess, D. Canale sold to the Handy family in 2010, and then 2013, you decided that you wanted to start Old Dominick. And so that's when y'all started construction, right? And then it was finished in 2016, isn't that correct?

12:45 CC: Yep.

12:46 S2: Okay, when you were interviewing Alex, what year was that, what year did she come on board?

12:51 CC: I wanna say probably mid-2015.

12:55 S2: Okay, so it's about... Still a year before construction was finished and production was starting?

13:00 CC: Yeah, it may even been early, 2015. She was on board a good 18 months. So she was on board through the entire distillery construction and had a big hand in the layout of the facility and it was kinda her kitchen, she's gonna be the cook, she needs to layout her own kitchen.

13:13 S2: You sound like really good at letting your key people do what they need to do, and then also be... Get the recognition that they need... Did you learn that? Those first years with D. Canale before it sold, or... I mean, does somebody teach you that? Like how do you know? You seem very hands-on, but then you also seem... Even with that, the way you described it with Alex, like where she's got skin in the game, she's got buy-in, sounds impressive.

13:40 CC: Yeah. Well, [chuckle] I think a lot of it's just knowing where your own weakness are, frankly. But no, we've always... Our company, our family has always placed a lot of value on our employees, we're basically one big family. And one thing is absolutely for sure, it takes everybody. Granddad had a plaque on his desk that said, "No one of us is as smart as all of us." And now it lives on my uncle's desk, which is now my cousin's desk, he works here. But I think that, if you don't have the self-awareness to know that you don't know everything and you absolutely never will, then you won't be able to hire really good people and give them the room that they need to grow and the opportunity to create their own place. 'Cause it's not all about me, for sure. And I want her to have all the recognition that she's been getting, which is wonderful, she's done a wonderful job. I don't see any other way to do it, frankly. You know?

14:42 S2: Yeah. I was thinking last night just about your experience with the beverage company before, and obviously just there being obviously a lot of distribution there, not being the same thing as Old Dominick but some similarities in that kinda infrastructure. Can you talk about any of the value, not from making it any easier, I don't mean about that at all, but I just mean about at least having some sort of framework with going all in on another startup in whiskey when you had some sort of experience with D. Canale before?

15:14 CC: Yeah, I started working at the Budweiser facility when I was 12 in the summertime which... Yeah, I started working there when I was 12. And my first boss was a guy named Oscar Popper. And a guy like Oscar Popper who had been working at D. Canale he was the... Basically he was the janitor. We had this ginormous ice machine, we bagged pallets and pallets of 50 pound bags of ice everyday that we'd give to people when they'd buy a keg. So he'd bagged ice in the morning and he would run the sweeper, which is a mechanical you'd ride on it to clean the big warehouse. Clean all the warehouse, dealt with the trash. But he was my first boss. But he'd been there forever. Didn't talk very clearly, but he worked his tail off and treated me like I was his own son. You would think like boss's son would come in, go to work for someone like Oscar and I think that if I were Oscar, I would have some preconceived notion about what the boss's son was gonna act like or wouldn't be just right off the bat as accepting as he was of me. Anyway, he was my first boss, and like I said, he treated me like it was dad. So I've worked in the warehouse for... Geez, every summer up until college and then started going out on route trucks.

16:24 CC: So I got out in the marketplace and got to interact with customers. And so we had 200 employees, we called on 1600 accounts and knew every one of them by name, not just the manager, but like the receiving clerk, at Kroger that's who makes the decisions in a Kroger store. So, a relationship driven business and that's what I grew up in. So when we came around to selling it, the decision was made to start talking about selling it, that was probably about 2008. Sold it. I went to work in the financial services industry for a couple of years, I worked in the timber business for a couple of years. But we no longer had an operating business in the city of Memphis and we're still here, D. Canales are still here, but we had 12 employees instead of 200. And even more than that, when we had the food division, which got sold in 1999, we had 400 employees now all of a sudden we had 12. No customers in the city, no personal relationships, no nothing. Which to me was extremely valuable. There's kind of an intangible value of being woven into the fabric of your community. And on top of that, I didn't really like the financial services business. [chuckle] And I didn't really like the prospect of sitting around my entire life managing investments, especially dealing with people that are, again, mostly in New York and California, that manage investments.

17:46 CC: I'd talk to them on the phone, get on a plane, go shake hands in New York once a month, just did not do it for me. So, this business, Old Dominick was the first opportunity that came along for us to recreate... Well, an opportunity to get back involved in the city, and it's been a lot of fun. It's a lot different, more different than I thought it would be than the beer business for sure but it's still a people business. And I guess maybe most businesses are people businesses, but the liquor business is similar, was identical to the beer business in that respect but that's it. [chuckle] That's all. The way the business is done, the transactional nature of it's different, it's a little more sophisticated than the beer business was. Liquor guys are just like Clark, your friend Clark who works with us. He's a little more sophisticated than our beer guys were 20 years ago. So... Little more sophisticated. Now, that's really saying something too, so. But we've had a lot of fun, we've learned a lot and I think we got a lot of good things to come, we got a good product and a good team that's motivated and we're in a good spot.

18:47 S2: Man, that's great. Like something I was talking about with Kathy Pope, who's with the Mid-south food bank, she was talking about how she was a teacher for several years and then she went into a non-profit and went down to the Gulf Coast but your story about when you all sold D. Canale and then you worked for the timber business, and then you worked in investments. I think it's just very encouraging because everybody's at different phases of life and everybody just... There's things where people really enjoy it and they feel fulfillment out of it and then there's times where people are just really not wanting to do what they're doing and they just don't know what to do about it and I just think it's cool how... I mean you sound so rooted in your family's history, you sound so rooted in customer service, you sound so rooted in surrounding yourself with a good team. Yeah, times like right now are hard but just kinda like digging in and then figuring out where do we need to move and zig and zag and then let's just keep running with it. And there's a sense of just contentment kinda with the process and with how things are going and I think it's just encouraging to hear you kinda talk through it.

19:54 CC: That's good. I'm glad to hear it, that it sounds that way.

[chuckle]

19:58 CC: That's good. It didn't always feel that way every day but I stand by that claim, there's no doubt and we've got all the pieces in place, at least all the importance ones so... Or we believe we do but thank you for the kind words, that's very nice.

20:11 S2: What would you say, from a production standpoint or a kinda get-to-market standpoint, three, four years in, What are things that you could pass on that you've learned at this point three, four years ago that it would have been valuable to know then?

20:27 CC: Well, we've made plenty of mistakes and what would I tell myself five years ago? Honestly, not a whole lot different. I think I could definitely have saved myself a lot of money in some things that were good ideas or felt like good ideas but didn't work out, but they were well-founded ideas but they just didn't work out. But I think we've kept the right attitude that when we've... When something hadn't gone right, we've made sure we learned something from it. Frankly, I know we've made plenty of mistakes but I don't know that I would say that we should have done anything different. Yeah, I sound strange but...

21:00 S2: No, but I mean it's also pretty fast. That's a pretty narrow period of time and there's also been a ton of growth and just a ton of activities so that might have been an unfair question to ask to a certain degree. But it's almost like if there's too many mistakes, of what you should have done differently within a period of three or four years, probably it wouldn't be around, so. [chuckle]

21:22 CC: Yeah, yeah. Well, if you don't make any mistakes, you don't have any opportunities to learn, right? Just don't make the same mistake twice.

21:29 S2: Yeah, from kind of an ownership standpoint or leadership, like Old Dominick has done an incredible job. Any entrepreneur or anybody that has any responsibility knows that there's stuff that they're having to work through or navigate, where it's just not perfect, that needs to be dealt with, there's issues, there's their services that don't go out etcetera. What advice can you give on just maintaining optimism, a confidence in the brand, confidence in the product, while also knowing the things that gotta get fixed and just not letting those issues kinda deter momentum and energy in really getting the product to market and really growing it and having a really good positive effort behind the branding of it.

22:10 CC: Well, I would say you wanna learn from your mistakes but not dwell on them for very long at all, glean what you can learn and then come up with a new plan immediately and get everybody committed to it. I'm big on collaboration. I think that sometimes a small price of collaboration is that sometimes everybody talks in circles and nobody really knows where they're going but eventually you will find your way out. So that's just part of being nimble. Yeah, things go wrong but you gotta just not dwell on them. Learn your mistakes, come up with a new plan, and for the golfers out there, once you decide what your shot's gonna be, you gotta be 100% committed to it or it's not gonna go well.

22:52 S2: How do you kind of think about your key people or anybody that's with you, that's under your responsibility for all of us acknowledging our humanity and that we're all gonna make mistakes? What are the things that you kinda look through or think about to where if it's just not a good fit or if that person just can't produce versus not dwelling on it, moving on, letting it go, learning from it, etcetera but then also when it's just... When that individual, that... Etcetera, it's just not gonna work? How has that kind of played out with your own leadership?

23:23 CC: We've only run into problems when there is a problem with humility. I get humbled every day but I think that's the main thing I look for. In retrospect, I've always looked for that, somebody that's teachable and also understands that they're gonna make mistakes and somebody that's honest, somebody that's willing to work hard and is willing to make mistakes and willing to be responsible for them but just has the mission, first and foremost, over themselves but I think humility checks all those boxes. I think it is the one thing you can look for in a person that can kinda guarantee all those things are gonna go well and yeah. Anytime I had any problems in the past, which has been very few, has been when we've had somebody that they don't fit because they're not just a humble person and they can't work with the team. If we've ever had that any problems, that's been it. They just doesn't have the ability of working with the team because they've got their own thoughts, which is great, bring your own thoughts but you better be ready to get them shot down and you better be ready to just accept that you're wrong. And I do it or I try to do it all the time and I try to keep myself accountable in that regard, that I don't ever run away from being somebody that is very easy to recognize when I'm wrong. But I think when it comes to teams and teams being able to work well together, that's the one thing that's gonna stand in the way.

24:44 S2: So y'all have got a restaurant, I'm not sure if they're doing take out, I don't live downtown. But you've got a restaurant, you got a wedding venue, you've got an incredible facility downtown, how much of that had you thought through on the front end strategically, planning to kinda build that out over time and how much of that has just kind of evolved over the last four years?

25:04 CC: To shore things up. Yeah, so originally, this whole concept, came along, because we had a bunch of Old Dominick stuff in our conference room at our corporate office, which is above Huey's on Second Street, down there. And our conference room has moved or our office has moved over the years. We've moved from down on North Front in the early 1900s, and then we moved downtown. I guess we've been in the NBC building, which became the SunTrust building on Union. And then we moved accross street to where we are now. But we've had all this stuff accumulating in our conference room, the D. Canale conference room for over a century. And those things happened as we launched a new product at Anheuser-Busch, like if we had some specialty Budweiser can that had pictures of Clydesdale's on it or one that was gold instead of white. We'd stick it on the shelf in the conference room. So we got lots of stuff like that, and we were in a meeting with a guy from New York, an investment banker on something completely unrelated and he's the guy who saw that stuff on the shelf and said, "What's that?" And "Oh, we used to be in the whiskey business before prohibition." And he thought about it for awhile and kinda just scratched his chin and within, a week later, he came back with an offer for the brand. And he had some friends at Fortune Brands, which is a big conglomerate, publicly traded company that owns lots of brands.

26:20 CC: And he wanted to sell our brand, just a story for Fortune Brands. That was kind of where it started and that's where the idea came from and we kicked it around, "Well, what if we just did this ourselves?" We got a century and a half of distribution experience, maybe we should look at this. And we did. And our first thought... Getting to your question was we were just gonna do it probably. So we're just gonna go buy bulk whiskey from Kentucky and bottle it and put a Old Dominick label on it and that was that. We thought we could do something with that. 'cause that's exactly what Fortune Brands was gonna do. They were just gonna put somebody else's whiskey, and put Old Dominick on the label. And it would not have been authentic.

27:00 CC: It is for us but that's how we were gonna start. And then we started studying the market and getting into the details, doing some due diligence on whiskey trends and all that kind of stuff, and we started realizing that authenticity is actually exactly what people are looking for today. And so we realized if we're gonna do this, we're gonna have to have our own facility. So then we talked about, "What do we need?" Well, 5,000 square feet to fit this equipment, 10,000 square feet to fit this equipment. We started to shop around for properties. We found some warehouses way up North Memphis we found... Let's see, some empty land up on the Wolf River Harbor. We looked President's Island. We even talked about going out in the country like in East Shelby County and just building a facility out there, out of the way of everything.

27:46 CC: And we've driven by this building where we are today... Oh gosh, I mean dozens... I mean all my life been driving by here and it would look like kinda like a strip mall, you don't even realize how big this place is from the street. And so this had the for sale sign in the window. And so figured, "What the heck, I'll go in there." And we go in and just, once you come in... As this building slopes towards the river, it's one story in the front, but as you slope toward the river, you get another four in the back. And you get the gravitational flow, and you have this one room with a 30-foot ceiling, where the stills would have fit. I was like, "Damn, this actually lays out pretty well." But the room's way to big for us we don't need 55,000 square feet."

28:27 CC: At the time, it was what we were thinking and then we started laying out some initial floor plans of what we might put in here. And as things go, the bigger your house is the more stuff you end up getting. So, you never have a house so big that you have three empty rooms, you just fill it up. So, a year later, after going through plans, now we've got this huge tasting room and we've got a multi-purpose room, we got this room that I'm in right now, which is the upstairs wedding venue room and room for a restaurant and we've just laid out these big plans and went from a concept of having like a $2 million facility to all of a sudden it was like a $15 million facility.

29:03 CC: But damn, it sure seemed cool. I don't know it just kept evolving. But the scale that we... One thing about it though, is if you're gonna be in this business, you can't go in it real small. I mean, the big guys will just eat you alive. There's these huge companies out there. And like if to be a local brewer was possible. If you can sell just your beer in your local community, if you wanna be a small crafter you can sell beer in the City of Memphis, you can do that. 'Cause people drink a lot of beer. When you think about how long a six pack of beer lasts on the shelf of your refrigerator. Okay, now how long does a bottle of whiskey...

29:39 S2: Depends, yeah.

29:40 CC: Yeah, is that right. Well, in my house, it doesn't last very long. Maybe for a day or two. I know in the weekend it'll last me from lunch until 5 o'clock. Different for a bottle of whiskey. So to be a craft distillery... A local craft distillery really just catering to your community is... That's not a feasible business model, it doesn't work. There's not enough volume there to justify your existence. So to do that, to really be... To have a feasible business plan, you have to be at least sort of a regional player. And you have to start at a certain scale, it's kinda like, go big or go home.

30:14 S2: From a production standpoint on how many bottles you can produce or barrels you can produce, is that what you mean by that?

30:20 CC: Yes. Production and also marketing and visibility, a sales team, you gotta have big markets that you're in. I can go sign a deal with a distributor in New York tomorrow and send a couple of pallets of Old Dominick up there and most likely it's probably just gonna sit on the shelf. 'Cause I'm not promoting it, we're not out there building relationships... That's the main thing, you gotta build relationships with your customers, and it's one handshake at a time and building them on a... Literally, account by account by account basis.

30:50 S2: Did you know this before? For example, what you just shared about New York and sending a couple barrels up there. But it would sit on a shelf and the only way to really... And I know you have salesmen in other markets. But did you know that just because of your previous experience, or have you learned that more clearly over the last few years?

31:07 CC: Well, that's what we did with Budweiser. Then it was Budweiser...

31:11 S2: Yeah.

31:12 CC: So slightly more well-known brand than Old Dominick is, but we... We dominated every single account we were in... We had the best people. And we had the most coverage, we were in every account at least once a day, of course. We were dropping 500 cases of Budweiser in every account we went in, weekly. We had the personal relationships and making friends is our business was actually... I wish that was our saying. I thought it was... 'cause that was kind of our slogan at D. Canale beverages, which was our Anheuser-Busch distributors still. Making friends is our business. It was wonderful, it's exactly what. We can tell our salesmen... I mean that's their number one priority on a daily basis is to go make friends with every single customer you have. Be their friend, don't just walk in and try to sell them something. Go in there and try to build a genuine relationship, learn about their family, find out what they need. If there's opportunities to do things for them, listen for things that you can do for them. And act upon those. Really try to be a true friend to them. And that is what enabled that company to succeed because we absolutely dominated in that regard, and we... As a result, we kinda did what we wanted to do, in all the accounts, go in and "I need that tab" "Oh yeah, no problem."

32:23 S2: Yeah.

32:23 CC: [32:23] ____.

32:25 S2: Right.

32:26 CC: That's very important. That's in our DNA. So yeah, we understood it from that regard. It's different, in this industry in the liquor industry because you just can't quite have that level of coverage. So our friend, Sifany again, he definitely understands that, always has... He calls me old because I'm kinda old school. I like to go in and actually... I don't have a Facebook account. If I do... I might, I might actually, it's really old, probably got a picture of my twelve year old when he was three, he says he can support his accounts through those kinda means and a... I just like to see people face-to-face, but... All that's very important.

33:00 S2: Would you maybe share anything, any specifics, you talked about the big guys can eat you alive if you don't go big or go home from the start. Can you talk about some ways that somebody like Old Dominick coming here, with just so much visibility, so there's an emotional appeal to it, and then obviously the product, there's a commitment to the quality of the product. And then ya'll have got the capital to come in big. Can you talk about maybe some of the stuff that you kinda have to deal with from big boys trying to prevent you from getting to market and taking market share?

33:33 CC: Yeah, well, their pricing power is the main thing. You know every distributor, we deal with distributors. This, Tennessee being a franchise state. I think ah jeez, I think 36 of the states are franchise states where a supplier like us has to sell to a distributor first and then the distributor turns around and deals with the retailers, so every distributor has got several big brands like they'll have Jack Daniels, or they've got Tito's, or they've got Ketel One, or you name it. And so when we come in, and here it's been much easier, we've got a great distributor here in Memphis and people kind of already knew us a little bit from the Budweiser days.

34:11 CC: You know. So we had a little bit of an advantage here, but when we go to Atlanta. When you come in and you're like, "Hey, I'm Old Dominick," and your distributor, especially today. There are so many new brands in this craft movement that's going on, I'll be curious to see what this battle looks like on the other side of COVID but it's hard to get your distributors attention. And they're really the ones with the key relationships, they hold the power to make your brand succeed or not succeed, 100%. So once you have an agreement, which is almost binding for life, it's like a marriage, you can't get out of an agreement with a distributor. Once you're in bed with them, you can't get out, and if they don't do their job, and we've learned how to help them do their job. We know, there's a trick to that too, but they can just kinda bury you, they just don't focus on you.

35:00 S2: Really.

35:00 CC: And then it gets hard because you know, if they've got Tito's, for example, and you can make all this progress. The distributor ups and you... And say you're getting them restaurant groups, and gotten picked up, seen some big retail chains and things are going really well, and then the end of the year comes around. And the Tito's guy comes into town, and Tito's says "Alright, I need 50 case displays in this store, this store, this store." And they could just totally take all your momentum because they've got so much pricing power. And then, on top of that, they can come in and they can do 50 case drops in every single liquor store and price it like $12.99 just to bury you, if you start making progress and you get on their radar... And they tried to do it here and didn't have much success in Memphis, knock on wood, but they can put programs together and start throwing a lot more money around than you can. You get on their radar, and they will bury you in a minute, so that's the deal craft brands have.

35:50 S2: Man, I mean there's so many lessons here about any industry, about just how things work and how people will just keep you out, but I guess one thing that I was thinking about, I mean there's even like celebrities. Obviously a lot of celebrities that make lots of different products, they never take off, it sounds like just because if you're not the one, two, or three that's controlling a lot of the market share, it's just gonna be hard to get in, and if you don't have that emotional appeal or those relationships to really kinda gain critical mass, then it just seems like that's just an absolutely must to really start gaining traction and then to really prove the quality of the product and then to really take off from there.

36:24 CC: Yeah, for sure. And at the end of the day too, it kinda... Well not kinda, a lot of it comes down to money, and you look at what the distributor is making off of their Jack Daniels relationship versus their Old Dominick relationship, who are they gonna pay attention to when it's comes down to the wire? And they've got a focus on Jack Daniel says, "Don't help them, you need to help me," "Okay, yes sir Jack, I'll do whatever you need me to do." But that's just a challenge that the craft guys are facing but... In spite of that the craft segment continues to grow explosively... But yeah, they're pulling all kinda tricks, and I guess if I were in their shoes and was answering to shareholders, I'd probably do the same thing. When there was a barrel storage... Oh what was that? Two or three years ago, there was a barrel shortage and the craft guys couldn't get barrels to age their whiskey in. And the big guys made it even worse, they'd call all the cooperages and they'd buy up like a 3-year contract. They do, "Give me 100,000 barrels a year and I'll pay you upfront for the next five years," and they'd struck a million dollar check, and then here comes Old Dominick, "I need a 100 barrels a month, Can you help me me out?" "I'm sorry, I'm tied up." So those're the kinda games at play and that's business, so...

37:35 S2: What's neat about a lot of what we've talked about is... And a lot of things have fallen... Kinda come in line and there's just a lot of momentum, a lot of visibility, but just from the way that you've described yourself, or the way this has started, a lot of it was just kinda doing the next thing.

37:48 CC: Yeah, I wish I was more strategic in a long-term sense, and we're getting better at that, but I've been fortunate enough to be involved in very well-run, well organized, successful businesses that the CEO will tell you, nothing that I planned outside of 12 months was gonna happen. [chuckle] Not nothing. It's just gonna change that quickly. It's smart, of course, you wanna lay out a plan for five years and think through all of that, 'cause it informs what you do today, but being nimble is to me, one of the best things you can have as a business person, and I think situations like we're in right now, whether it's COVID or whether it's a housing crisis or a credit crisis. Whatever the situation is, and lots of different crises in different industries all every day. But those are when I almost like lick my chops. [chuckle] I don't know why I just do and there's just so much opportunity in times like this. And yeah, they always hurt at first, but you start grindin through 'em and it's like, "Oh my God, look what these horrible situations they have created." Like look at all these opportunities that would never have been here if it wasn't for COVID or whatever, so yeah, I never wish for them, but we wouldn't be here without these hard times.

39:03 S2: Yeah. Well and I think we all have them in all of our lives too. Obviously, it looks differently with everybody, but we can't deny that they're gonna happen. And so it's like, how can you be honest and accept things the way they are, work through it and own it. But then how can you just... You gotta move on and you can't live in the past like that, and I think there's just a resilience that you're talking about that others have talked about, where I think it's just helpful... Even to assess your own life and say, "Where am I too rigid or where am I too... Still wishing things were the way they were?" And you can't change it, so let's deal with it and then, we gotta move on. There's just a lot of lessons, whether it's about the strategic side of the business or leadership, whatever, even just personally, there's a lot of value, I think, in what you've shared and for people to learn and hear first hand. I think sometimes you see brands, you see companies, you see individuals, and a lot of times it's just always the mountain tops. Kinda talked about or interviews, etcetera, but once you kinda know the ups and the downs, but you also kinda hear the perspective and the mindsets too, it's just helpful to think through it in how to connect it and apply it to your own life.

40:13 CC: Yeah, for sure. And I think everybody's probably learning a little bit of that right now with their families as well, like you mentioned. Some days I'm not such a good father. The longer this quarantine goes on, I feel like I'm becoming a worse father, but I know that I'm feeling the same way a lot of families are feeling right now, and that this has provided an opportunity, just like I'm talking about in business, to step back. You had to step back. It's not like you've had the choice, you had to stop. 100% full stop. And you're forced to sit there and it forces you to assess everything you've been doing, and there's a tremendous amount of value and opportunity in that, and it's made my family stronger, even though we've had to spend every waking moment together and... [chuckle] I've got 4 kids and a lot of days, I could tell you... I wake up and I'm like "I really don't wanna see my kids today." [chuckle] But it's made us closer, we've done things together that we never would have done pre-COVID. We got things on the books to do that we never would've done pre-COVID.

41:16 S2: What do y'all have on the books to do?

41:17 CC: We got a RV rented.

41:19 S2: Oh, nice.

41:20 CC: Rvshare.com. We're gonna do a back-packing trip. I bought a... Something that I hadn't made the time for before, to teach my kids how to fish. Just never made time for it. I've said I was gonna do it for the last five years. And my oldest is gonna be 13, and I mean he can push the button and throw it. But, that's about it. So, we've been fishing a couple weekends now, and I've got every weekend, of course, I wanna get out of the house too, teaching my kids how to fish. I'm like, "Yeah, I can kill three birds with one stone here." Yeah. We bought a Jon boat and we're gonna take it all over and Airbnb it. And on the Tennessee River in Alabama, and we're gonna go to Kentucky lake and try that, and just for the heck of it.

42:00 S2: So with the Jon boat and the RV, that's all the same.

42:03 CC: No, the RV trip is gonna be on weekends when we can get away, this is a... The RV thing is for summer vacation, we're gonna take it and do a backpacking trip out west for one week, so.

42:14 S2: That's great. That's so much fun.

42:15 CC: None of that would've happened, you know?

42:17 S2: Right.

42:18 CC: Talked about it. And none of that would have happened.

42:20 S2: Depending on either the male or the female, airlines and how things have affected flying. That's the only way that in an argument that an RV can win with some people, because otherwise they wouldn't wanna do an RV, but I think because of just how the airline industry has been so affected, maybe a lot more people are gonna be using RVs.

42:39 CC: Yeah, for sure.

42:41 S2: Man, the last question I got unless anything you wanna share, but I don't mean like a revenue standpoint, but I just mean like a coverage. Where would you love Old Dominick to be in 15 years? With where it's at now.

42:54 CC: Oh, geez. I want us to be in a very stable and sustainable place. I don't mean from an energy perspective, that would be nice too, but, sustainable in that we're to a point that our business has been around long enough and we've got it upscaled to where there's processes [43:14] ____ in place where people can come to work and know what they're supposed to do every single day. [chuckle] Because starting up a new business, everybody has to wear a different hat on a daily basis, and that's fine. But, just for a scale, I think I would like to see us as a strong, regional brand, but... Strong, regionally, but on the cusp of being nationally recognized.

43:35 CC: So that if somebody found a bottle of Old Dominick in Colorado or some state that we don't have plans to be in 15 years, they would recognize it. They may not know much about it, but they would recognize it. But, if we're at that scale and we have the pull in the markets that we're in, then, we should have the infrastructure at that point as well to where there's just business as usual on a daily basis here. And that's not something we've really known at this point. [chuckle] Not just because of things like COVID, but because we're new and we're having to pivot every day anyway, so COVID's just sort of another turn in the road at this point, but that's where I'd like us to be. A strong, regional brand with solid infrastructure, of course, I wanna be making money. And I hope everybody that we have on board today is still with us. I think they will be, I hope they will be. I might try to run Clark off.

[laughter]

44:29 CC: But that's the dream.

44:30 S2: Man, this has been great, just some last thoughts that I have, I guess it was 1859. It was Dominick right? Dominico.

44:39 CC: That's right.

44:39 S2: Pronouncing right? Just close to... Approaching 200 years, but A, the pride that your family has for businesses in its family of companies. B, the pride that you have as a result from being in that family. Third, just wanting to plant the flag in Memphis. Be as much of the community as you can possibly be and then fourth, just the way you talk about your people and just the people that y'all have now, and y'all's commitment to your culture. So, man, this has been a great interview. I think it's just been a great story about how to... To just be very honest and candid about what it's like to own and invest and run a startup right now that's much bigger than a normal startup and still how to kinda just deal with that for as it is, but then also kinda keep things in perspective and keep charging forward. It's a really great story.

45:31 CC: Thanks, we're just lucky. I tell people that all the time, we're just blessed, to have the people we have and to be here, to be in Memphis, we love Memphis.

45:39 S2: Hey everybody, thanks for listening. I hope you learned at least one thing today that you can apply to your own life. If you like the show, please make sure to leave a review. And be sure to tune in each week 'cause I'll be releasing a new episode. Hope you have a great day.

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John Carter
Tech Vlogger & YouTuber