Beverage Marketing Leader Shares What It Takes To Make A Product And Brand Stand Out In A Crowded Market
Sean Dollinger, CEO of LQR House, was recently a guest on Benzinga’s All-Access.
LQR House is a leading marketing agency specializing in the spirits and beverage industry. The company has also partnered with CWSpirits.com, one of the leading e-commerce sites for alcohol. This allows LQR House to be the only alcohol marketing agency with the ability to track and report revenue generated from its own e-commerce platform.
LQR House is a leading marketing agency specializing in the spirits and beverage industry. The company has also partnered with CWSpirits.com, one of the leading e-commerce sites for alcohol. This allows LQR House to be the only alcohol marketing agency with the ability to track and report revenue generated from its own e-commerce platform.
Transcript
00:00 (upbeat music)
00:02 Let's go ahead and bring my man, Sean on the stream.
00:08 Sean, how are you doing today?
00:11 - Thanks for having me on, everything's great.
00:14 - Yeah, well, I'm glad to hear it.
00:16 Happy Wednesday, good morning, where are you joining us from?
00:18 - Vancouver, BC today.
00:20 - Vancouver, BC, cool.
00:22 We're in Detroit, Michigan.
00:23 So we're actually right on the border of Canada ourselves.
00:26 I think a vastly different part of Canada,
00:28 but you know.
00:30 - Definitely, not too far.
00:34 - Vancouver's on the West side, right?
00:35 You're all the way over there.
00:36 - Yeah, probably a few hour flight from you.
00:39 - Yeah, there you go.
00:40 Well, then it's probably a couple hours earlier for you.
00:42 So thanks for joining us early.
00:45 It's about 11 a.m. here.
00:46 So before we get started, Sean,
00:47 why don't you just give us a brief overview of LQR?
00:52 - So a lot of people don't know,
00:53 we're one of the leading alcohol marketplaces online.
00:57 So behind a company like Drizzly
00:59 that was bought by Uber for $1.2 billion
01:02 and then Reserve Bar,
01:05 cwspirits.com kind of sits as the third largest
01:10 e-commerce platform out there.
01:12 So people could go and buy a $10 bottle of alcohol
01:17 all the way up to a $5,000 bottle of alcohol
01:20 and get it delivered to their doorstep.
01:22 And we also have a full influencer marketing network
01:27 that we developed from the ground up to 550 plus influencers
01:32 and I'm sure as you know,
01:33 are in the power of influencers in 2023, 2024,
01:38 is absolutely huge.
01:40 So we take no name brands and get them to go viral.
01:44 - What makes marketing in the alcohol and spirit space unique
01:50 compared to other industries or sectors out there?
01:55 - I think the biggest thing is the saturation in the market.
01:58 Everybody, every week thinks they're coming out
02:01 with the next greatest product,
02:03 but how do they penetrate the market?
02:05 We saw this in the tequila space.
02:09 People bring out different types of tequila
02:12 with different twists, et cetera.
02:14 But if you have one that you love,
02:16 how do you get somebody to try the other one?
02:18 So what we're really great at at LQR House
02:22 is creating the brands that have uniqueness to them.
02:27 So last year, one of the top ones was a cookie liqueur
02:30 that looked like a cookie,
02:33 the packaging and it's called the bake sale.
02:35 It went from decent sales
02:38 to absolutely going crazy last summer.
02:41 - Yeah, I'm always fascinated.
02:44 I mean, you see the different marketing campaigns
02:46 and alcohol and in the spirits industry
02:48 and some that seem to just take off and do really well
02:51 and some kind of don't do as well.
02:54 One way we've seen a lot of companies
02:57 try to get their name out there is through influencers.
03:00 How do influencers help a brand get its message out?
03:03 - So essentially being able to capture
03:06 what their experience.
03:07 So we have like a jalapeno vodka, for example,
03:10 being able to go ahead and record that
03:13 and capture the experience
03:16 and then being able to share that.
03:18 So for example, if you go into a Total Wine,
03:21 which is one of the biggest B2C retail stores in the US,
03:26 you see all these products on the shelf,
03:28 but unless you've seen some type of marketing for it,
03:31 what makes you reach for it?
03:33 Well, for us, a product called cocktail caviar,
03:37 for example, it's actually caviar filled with vodka.
03:41 That was sitting on Total Wine shelf for eight years
03:46 collecting dust.
03:47 And then all of a sudden we go ahead,
03:49 Lani, who's absolutely incredible
03:51 on our whole marketing team.
03:53 She works over at Disney, the bars, et cetera.
03:57 She found a way to get the influencers
04:00 to capture the experience.
04:01 And then we couldn't even keep that product on the shelf.
04:04 That's how viral it went.
04:05 - Yeah, I mean, that's insane.
04:08 We've seen not really in the alcohol and spirit space,
04:10 but just the growth of Prime and the drink markets
04:14 through Logan Paul and some of those guys.
04:16 And it's just been insane story the past couple of years.
04:19 I mean, I know in the alcohol market,
04:21 you see guys like The Rock or Ryan Reynolds
04:25 release their own alcohols
04:26 and those tend to do really well.
04:29 Sean, you just announced a partnership with Kylix Antique.
04:32 Can you tell us about the deal
04:35 and a little bit more about the hangover cure market?
04:38 This might be a market I need to learn about.
04:40 - So one of the big, big moves
04:42 that I'm sure that you've seen
04:44 is a company called Shot out of Jupiter, Florida.
04:49 And basically it's a proven drink
04:52 to make you feel better 30 minutes after drinking.
04:56 Brings your alcohol, blood level down
04:59 and everything across the board.
05:01 They're having a launch party in LA.
05:02 Their stock has gone from about,
05:04 I believe 35 cents up to $7.50 last week.
05:10 Again, the ticker symbol SHOT, S-H-O-T.
05:13 So this company that we've brought on
05:15 is a competitor to them.
05:18 There's a lot of different companies in the space.
05:21 So for us, it's huge because obviously
05:24 if you're coming to buy alcohol,
05:26 why wouldn't you give some of these products a chance?
05:28 So we're looking forward to perhaps bringing on more
05:32 of these products just because you know how it is, Aaron.
05:36 People like different things.
05:39 So we like to give variety.
05:40 That's the idea behind the platform that we've developed.
05:43 - Yeah, well, I mean, again,
05:46 that sounds like a really good partnership.
05:48 I might need to try some of those products out
05:50 next time we go out drinking.
05:52 How about your deal with the Cabal Tequila?
05:55 How does a company get into Costco?
05:58 - So what we've done is through a distribution partnership
06:03 out of California in San Diego,
06:06 the distributor's called Alpha.
06:08 They've teamed up with companies like Garvey
06:11 who have the relationships with Costco directly
06:14 to be able to deliver to their doorstep.
06:16 So when we bring on a brand, for example, like Von Payne,
06:20 which was an incredible product for Halloween,
06:24 it's gothic, et cetera, so they play off that.
06:28 We are able to then bring it into California
06:33 and then distribute to different Costco outlets
06:37 throughout California.
06:39 - Well, yeah, I mean, again, congratulations on that,
06:44 that partnership.
06:45 Getting into Costco, that's gotta be one of the biggest
06:47 steps you could make as a brand kind of,
06:49 'cause I mean, a lot of stuff they have in there
06:51 is their own brand.
06:52 So if they're selling your stuff,
06:53 then you know it's pretty good.
06:55 You IPO'd in August of this year
06:57 and your stock price has had some trouble since then.
07:01 Can you talk about the buyback and reverse split
07:03 that will hopefully keep you in NASDAQ compliance?
07:06 - Yeah, so obviously been a super rough ride
07:09 that nobody could make any sense of.
07:12 Our market cap is below the cash that we even have
07:14 in the bank on our balance sheet, I believe.
07:18 We have pretty close to $10 million right now.
07:20 We have absolutely no debt whatsoever in the company.
07:24 And then with the acquisition of the e-commerce site,
07:28 our revenue is really gonna start picking up here
07:32 and I'm excited to share that with the markets
07:35 as it becomes public knowledge.
07:37 We believe that there's short attacks out there.
07:42 I can't share too much information on the info that we have,
07:45 but we validated a lot of these kind of naked shorting,
07:49 which Aaron, I know you would know it's illegal in the US.
07:54 So we teamed up with a lawyer.
07:58 He had suggested to kind of do this buyback,
08:01 which again, we've shown to the markets
08:03 that we've done each day over the last few.
08:07 We didn't just pick up a hundred thousand shares.
08:09 We've literally picked up a few million shares,
08:11 which we disclosed.
08:13 And then supposedly with the reverse splits,
08:17 you have to get new Q-SIP codes.
08:19 So what we've heard is that hopefully will change
08:24 how shorters are able to short the stock, et cetera,
08:27 because we know we have some really great long-term holders.
08:30 We probably know where about 80% of the stock is currently,
08:35 which is unheard of for a publicly traded company.
08:38 And we have great relationships with those investors.
08:40 So that's why I'm saying we know a little bit more
08:43 than kind of the average company out there,
08:46 because we know there's only 20% of the float.
08:49 And then how is it possible on a daily basis,
08:52 some days we trade four times the amount of the float.
08:56 So not to get too much into the stock,
09:00 but we believe that the future is bright over here
09:04 and we've done everything we can.
09:07 And to answer your compliance question,
09:09 as of tomorrow, we are compliant
09:12 because on the reverse split,
09:15 our share price should go up above a $1.50,
09:18 which takes us out of kind of this red zone.
09:22 - Yeah, I mean, that's some good insights there, Sean.
09:26 I'm glad we were able to touch on that.
09:29 You know, the stock market,
09:31 the capital markets can often be kind of a cruel place.
09:34 What about the influence of algorithmic shorting
09:37 for small cap companies like LQR?
09:40 Have you run into that?
09:41 How difficult is it to reach a fair valuation
09:43 with all these types of trading
09:45 and computer algorithms going on?
09:48 - It's incredible, the power, you know,
09:49 in the past I've been on the Canadian public markets.
09:53 I launched my first public company in 2016.
09:56 We were the most traded stock in 2018 company
10:00 I had literally built from my garage, you know,
10:03 and in Canada, they've done a really good job
10:06 in closing that whole short position.
10:09 You know, there was a mandate done by IROC here in Canada
10:13 that, you know, literally any broker is completely offside
10:16 and will not give any trading
10:19 unless you could show that you have like a certificate
10:21 coming later that day or the next day.
10:24 In the US, when we started entering into the market,
10:27 it was incredible to see how the bids and asks
10:31 are get pulled and puts, and it's incredible,
10:34 you know, these computers,
10:36 and now you mix in the AI into it.
10:39 You're literally going against super computers trading,
10:42 you know, so we've definitely seen,
10:43 it doesn't make sense that a stock goes from 7.25
10:47 only comes out with great news
10:49 and goes all the way down from, you know, 7.25
10:52 to 3 cents today.
10:54 It's just mind blowing, you know what I mean?
10:57 So one thing that I've learned through the years,
10:59 you know, gotta have thick skin,
11:02 gotta keep your head down.
11:03 You know, some people are blaming us.
11:05 It's like, what can we do?
11:07 Why would we want, you know, in the show before yours started
11:10 I heard them say, you know, like Elon Musk comes out there
11:13 and blows his stock up and they want it to go up.
11:16 As any CEO, it would make me so happy
11:19 to see a $100 share price in a company
11:22 that I literally am the co-founder of,
11:24 you know what I mean?
11:25 Like nothing would make me happier.
11:27 So kind of hurts when people write in,
11:29 but like you said, you know,
11:31 there's all these kind of algos out there, these shorts.
11:34 So we're really doing our best
11:36 and we're gonna keep coming out with incredible news
11:38 and one day, hopefully it snaps
11:40 and the algos take us the other way.
11:43 - Yeah, well, I mean, in Elon's case,
11:45 that stock didn't do well for a long time
11:48 and until it didn't start doing well,
11:50 and then, you know, now he's where he is.
11:52 Well, Sean, we're getting ready to wrap up here,
11:56 been about 15 minutes.
11:58 Let me ask you for a hot take before we leave.
12:01 What impact is generative AI having in marketing
12:04 and, you know, where do you see this kind of going
12:06 throughout the next few years?
12:07 - So we're using AI in a lot of our live chat,
12:10 which is a lot of fun.
12:11 People are going on there and playing around with that.
12:14 We're actually working on something really cool
12:17 in the whole influencer space.
12:19 I don't know if you heard Aaron,
12:21 there's these influencers now on Instagram
12:25 that actually don't exist in real life,
12:27 but they're influencers that people follow
12:31 that are completely made up.
12:33 And the people who are controlling
12:35 kind of the narrative around them
12:37 are the ones who are collecting money
12:39 and, you know, referral fees and commissions.
12:42 So we're looking to have some fun with that in 2024,
12:46 where we'll be creating a AI influencer network.
12:51 So, you know, stay tuned to that.
12:53 And I think that it could become really, really interesting.
12:57 - That does sound interesting.
12:58 Well, Sean, I've loved learning more about LQR House today
13:03 on the show.
13:05 I would love to have you on again in the future.
13:07 Anytime you guys have some of those exciting updates
13:09 and news to share with our audience.
13:13 And again, thanks again for hopping on Benzinga's All Access.
13:15 (upbeat music)
13:18 (upbeat music)