1. 622 Main Street - Genoa, Ohio – 43430 – p 419.855.6080 – f 419.855.6082
www.pearsonandpearson.org
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2. “we shall be COLLECTORS of treasures, ROAMERS of free
markets, SEEKERS of worldly goods LOVEING the thrill of
the hunt, the HARD to find PIECES that are wholly unique,
our moment together in DISCOVERY”
3. Table of Contents
Company History
At A Glance
Company Summary
Call Us About Your Idea!
Concept to Market
Bottle Your Idea
The Right Partner
Everything Under One Roof
Industry FIRST Call Center
Overview
Brian Pearson
Growth
Product Development
Turnkey Brokerage Solution
Product Marketing
International
The Show ( )Wine & Spirits Wholesalers of America
Industry Resilience
Revenue Stats
The Market
Why Build Your Own Brand?
Market Size
Spirit Segments
Value Segments
4. Brian Pearson started in the alcohol beverage industry over 16 years ago at the age of 23 and while still
active in the United States Marine Corps. While in the Marines, Pearson was stationed at Marine Barracks 8th
& I, Washington D.C. and participated in the Presidential Support Unit. In 1998 Pearson received an
Honorable Discharge from Marines and pursued a career in the alcohol beverage industry.
Pearson’s first idea and niche product, the common jello shot. This concept was simple, commercialize the
well-known homemade shooter. Bringing that simple product to market proved to be the most challenging
project to date as Pearson encountered major issues with liquor compliance on both federal government
and state levels. In addition to the compliance hurdles, actually formulating a shelf stable version of this
timeless staple was a difficult challenge in of itself.
As soon as his jello shot came to market it took off as cases turned to pallets and pallets to trucks. As sales
skyrocketed, the contract distilling company producing the product quit. This forced Pearson to open his
own distillery. In 2005 Pearson received both Federal and State Permits to begin producing alcoholic
beverages. As soon as the distillery opened, Pearson started receiving inquiry calls from potential clients
looking to contract package their own ideas. He assisted in the formulation, development, and production
of over 100 alcohol beverages ranging from high proof sophisticated and complex spirits to niche novelty
type products. When Pearson left the distillery he built, it was a 100,000 sq ft multiple production distillery.
In 2009 Pearson stepped away from the distillery and opened Pearson & Pearson, LLC. Pearson’s goal was
to connect brand owners, micro brewers, micro distilleries, and wineries to wholesalers, retailers, and
consumers. Pearson uses his vast experience to guide his team through the day to day goals, objectives,
and challenges of the alcohol beverage industry.
“WE SPECIALIZE IN CONNECTING BRAND OWNERS, CRAFT
BREWERS, AND MICRO DISTILLERS TO A NATIONAL DISTRIBUTION
PLATFORM OF OVER 1800 WHOLESALERS INSTANTLY”
Sales & Marketing
We help our clients construct and develop comprehensive marketing strategies. Then we
execute those strategies through the alcohol beverage industry’s suppliers, wholesalers, retailers,
and consumers across the United States.
Social Media
Direct marketing and advertising campaigns through social and web based media is requirement
for any emerging brand. Our firm creates and executes our client’s social media goals and
objectives.
Billing & Compliance
Pearson & Pearson is licensed across the United States so that our clients don’t have to be. We
offer our clients the ability to focus on their brands avoiding the timely and sometimes costly
regulatory and tax compliance maters for each individual state.
Consolidation Warehouse
Our licensed consolidation warehouse offers clients solutions for both long and short term storage
needs for all alcohol beverages. In addition, wholesalers are able to try new brands without a
large up-front commitment and this provides micro and craft manufactures access to over 1800
wholesalers nationwide.
Logistics & Shipping
Over the years our shipping rates have continually improved as our shipments increased. Our
cultivated long term shipping relationships now benefit our clients by allowing us to offer
inexpensive and reliable logistics.
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11. Overview
Pearson & Pearson is a full service beverage company providing a turnkey solution to
alcohol beverage manufacturing, federal and state compliance, beverage
development and formulation, brand development, complete with concepts, raw goods
identification and procurement, sales and wholesale distribution, chain distribution,
importing and exporting along with marketing.
Product Concept & Feasibility
Housekeeping
Formulation Development
Graphic Design And Development
Product Samples
Federal & State Compliance
Alcohol Beverage Manufacturing
Logistics and Transportation
Importing & Exporting
Consolidation & Warehousing
Brokerage Sales & Distribution
Marketing
General Rules & Guidance
After Prohibition, the United States adopted the Three Tier System and created what is still
one of the most regulated industries in the United States. This is the system in which all
product and capital must flow from once licensed entity to the next. Pearson & Pearson
holds Federal and individual States Licenses across the United States.
Tier #1Supplier (bottler or distillery)
Tier #2Wholesaler
Tier #3Retailer
These Tiers are controlled both at federal and state levels.
With over 16 years of experience in both the manufacturing and sales sectors of the
industry, P&P holds a unique knowledge base that enables us to provide support and
direction across all three tiers.
12. Brian Pearson
Brian Pearson has made good inroads in the liquor market with new and exciting
products targeted for growing audiences with a disposable income. He started in 1998
out of his garage with a commercially packaged gelatin shot, which he called Zipper
Shots or Zippers. He thought of the idea while on leave from the Marine Corps. His mother
had asked him to pick up some of the shots but at that time they were unavailable in a
commercially viable form. At last count, over 100 million zipper shots have been
manufactured and sold all over the world. Through his gained experience, he has to date
created and launched more than 30 brands and has sold over 1,000,000 cases in both
the national and world arena.
Quickly evolving from a bootstrapped operation, Pearson continues to be a market
innovator. He started in the alcohol beverage industry in 1998 and began his venture into
the liquor industry through his first niche product, Zippers The Original Gelatin Shot™,
referred to as a “Jell-O” shot, and sometimes just called Zippers. Brian started selling
cases, then pallets, then trucks at an early stage. The success of the product traveled
through the distributing network opening door after door. Soon after, the distillery that
was contracted to manufacture the shooters, quit and Brian was forced to start his own
distillery and bottling plant. The small company that he had started out of his house soon
transformed into the Temperance Distilling Company. www.usatdc.com
That first niche product created the network that would be the platform and knowledge
base for the future growth. Since he entered the market, Brian has been exploring every
facet of the industry, from product formulation and manufacturing to brand building and
marketing strategies. Over the last decade and a half, he has formed strategic
relationships with distributors (wholesalers) across the US and Canada. As a result of these
efforts, Brian has the ability to launch products in a national foot print allowing for
immediate brand recognition. This combined with a strategic sales and marketing force
creates instant market penetration.
13. On October 1st
2009, 12 years after he started out of his garage, Brian resigned as the
President of Temperance Distilling Company. He is now the Sole Owner of Pearson and
Pearson. While Brian spent most of his time running Temperance Distilling Company’s day
to day bottling activities, he also helped clients connect with wholesalers. Brian began
utilizing his wholesaler relationships and knowledge base to broker and represent multiple
brands.
Poised for Growth
The 16 year investment into Pearson’s education in the alcohol beverage industry has put
him in a great position to capitalize on opportunities in contract distilling, brand
development, brokering, sales, tax collection and the storage of spirits. Below are a few
achievements during the last several years, which have positioned him for rapid growth.
Hand built a facility with the capacity to produce 500K Cases on an annual basis
Established a strong national footprint of wholesalers, chains, and retailers
Developed and effectively introduced several proprietary products to market
Systemized the regulatory compliance and tax collection process
Demonstrated proof of concept in all micro-distilling processes
Broke industry barriers in the market place by producing the first commercialize jello
shot in 1998
Positioned Multiple Brands for mergers and acquisitions
Experience in the global spirits sales, marketing, and distribution
Product Development
Pearson & Pearson develops ideas from conception to market. His team develops
Federal and State approved product formulas and packaging within the compliance
standards and laws of the United States. From sourcing glass in France to custom and
complex labeling and decorating to the procurement of the development needs and
the proprietary raw goods requirements for the production capability to bring clients
ideas to life.
14. Turnkey Brokerage Solution
P&P has an extensive network of contacts within the alcohol wholesaling industry,
enabling the company to successfully prepare client’s products for widespread
distribution. This task is very difficult to accomplish without the expertise and guidance of
an experienced broker. In addition, he has strong relationships with Southern/Glazer’s
Distributors of America, Republic National Distributing Company and Young’s Market
Company; the first, second and fourth largest wholesalers in the United States,
respectively. Wholesalers generally do not purchase and distribute low-volume
beverages such as those developed by typical clients or start up brands. This is largely
due to wholesalers’ desire to work with a limited number of beverage producers and
suppliers that are seasoned and this makes the task of approaching a wholesaler
extremely difficult without an experienced broker. P&P has strong relationships with
wholesalers across the United States and this enables P&P to arrange widespread
distribution of client products. P&P works regularly with Southern/Glazer’s Distributors of
America, Republic National Distributing Company and Young’s Market Company; the
first, second and fourth largest wholesalers in the United States, respectively.
Product Marketing
P&P is combining a strategic sales approach with an exciting pitch. While a great pitch is
important, sometimes it can even be more important to a distributor than the product
itself and is critical for effectively penetrating the market. At the base of this approach is a
sales and marketing platform that includes sales representatives, market-focused regional
sales oversight, distributor oversight, retail and consumer strategies, advertising and sales
tactics including samples, performance measurements and sales kits along with
wholesaler incentives and goals.
Though P&P has a novel product mix, there are many product options for the distributors
to choose from, especially the spirits distributors. The entire P&P team, from the
receptionist to customer service, is focused on presenting a professional image and
helping the distributors and retailers realize that selling P&P’s products can make them
more profitable. Consumers are reached by increasing the number of distributors,
targeting key markets, increasing account penetration within the distributors, and
expanding the winning product mix once a critical mass has been reached in the
channels.
There are several key advantages for P&P:
All alcohol segments have seen an increase for over five years
Alcohol sales are growing and is not adversely affected by the economy (many say
the industry is even better during economic downturns)
Specialty alcohol sales (where most of P&P’s products fall) have been the fastest
growing segment of alcohol the last several years
The young legal drinkers are a rapidly growing population segment
The products are very unique in the marketplace, allowing a first-to-market advantage
15. Target markets are the foundation to the sales and marketing strategy, P&P focuses their
sales effort and resources on:
The largest Distributors
The largest Retail Chains, and
The largest Population Centers.
Both Push and Pull strategies are implemented by P&P to sell to the distributors and their
accounts. The sales team goes directly to the distributor to push the products through the
sales channels, as well as the large retail chains. Occasionally, the team will target the
retail chains and mass audiences to pull the product lines through the distribution
channels. The marketing to retailers and consumers augments the distributors’ work, as
well as encourages distributors to carry P&P’s products and assists in the movement of
product through their accounts.
Much of sales effort is focused on distributors who have a stronghold in the large
population centers. This effort may have a geographic basis, but will be focused on the
market potential or population base. Other factors of market attractiveness will also be
considered when qualifying market bases for targeting. For instance, although New York
has a large population base; the price sensitivity of that market, coupled with the
strength within the established distribution system, will move New York to a secondary
target. [As in other non-primary target markets, should profitable opportunities present
themselves, they will be taken advantage of.]
The top 10 states account for 53% of U.S. Spirits volume and they grew slightly faster
than the total U.S. in 2012.
16. As elaborated upon above, distributors are being solicited in a targeted and qualified
fashion. Sources of information from associations such as Wine and Spirits Wholesalers of
America, National Beer Wholesaler Association, National Association of Convenience
Stores and the Chain Store Guide are helpful in qualifying distributors and selecting
targets for a specific region. Some of these listings and associations provide a significant
amount of information concerning the business operations of the listed companies,
example; sales, employees, geographic coverage and more. The Company is actively
engaged in finding the top distributors for its product lines furthering penetration into their
territories and accounts. Southern Wines & Spirits is the number one distributor in the US
with over $10.5 billion in sales for 2012 and services 31 states. Glazer’s Spirits is a family
owned distributor ranked second nationally with $3.2 billion in annual sales for 2011
according to Forbes. They serve 15 states and Canada. The size of these distributors is a
great strength from which P&P can expand markets and grow name brands.
One of the keys to continuing the increase in sales is further penetration with established
distributors. The potential here is enormous. Penetration of just Southern Wines & Spirits and
Glazer’s; or a couple of other large distributors alone, would result in huge sales increases.
To put some perspective on the growth opportunity, in Indiana alone, Glazer’s has over
6,400 accounts in Indiana. This type of scalability will account for the new generation of
P&P. As stated earlier, alcohol sales in the United States work on a three-tier system. In the
first tier, alcohol is sold from the manufacturers to the distributors. Then, alcohol is sold from
the distributors to the retailers. The retail accounts distributors sell to include:
Off-Premise Channels
On-Premise Channels
Special Events Channels
Finally, in tier three, alcohol is sold from the retailer to the consumers. Getting distributors
to sign on and selling to their accounts is the key to increasing sales in the industry. The
distributor is not the only firm or channel segment which P&P can or should market, but
having distributors as key partners will ensure good sales.
The Off-Premise channel is defined as Supermarkets, Drug Stores, Beverage Suppliers,
Convenience Stores, and Liquor Stores. This category is further broken down into
Categories A and B. Category A, P&P’s primary focus, includes Large Supermarkets, Drug
Stores, and Beverage Suppliers. There are over 31,000 Category A locations across the
United States. Category B includes small supermarkets, convenience stores, and liquor
stores. There are more than 73,000 Category B locations in the US. The On-Premise
channel has a potential customer base of 142,834 bars, nightclubs, and casinos
throughout the 50 states. This segment is broken up into three categories:
17.
18. The Show
Wine & Spirits Wholesalers Association – The WSWA Show is an annual show that
attracts all the major alcohol wholesalers in the United States. The show is held
between Las Vegas and Orlando, rotating each year. This will be the 9th
year Brian has
attended the show. Booths are sold in 10ft x 10ft increments and in fact are the exact
size Brian started in. Pictured below are the clients from past WSWA shows.
19.
20. Industry Resilience
Despite the recent tumultuous conditions in the domestic and global economy in the
past years, the alcohol market and spirits segment in particular, have continued to
grow. The largest quarterly sales decline in the last 48 years was 3.7% in the fourth quarter
of 1991. In 2012, spirits sales volume increased by 3% to reach a record level of 205.8
million 9-Liter cases marking 10 consecutive years of growth. These statistics demonstrate
alcohol is a consumer staple and does not experience negative outcomes in economic
down cycles.
Product innovation represents a major growth driver in the Alcohol Beverage Industry.
According to a new report by Global Industry Analysts, Inc. new product launches such
as flavored alcoholic beverages, ready-to-drink options and low calorie alcoholic
beverages are increasingly being accepted by consumers and are anticipated to serve
as an impetus for the long term growth in the alcohol beverage market. San Jose,
California (PRWEB) January 11, 2012 Trends are showing that the new age drinkers are
not drinking the hard spirits and stout beers that their grandfathers started with, they
want spirit, beers, and novel products that excite their taste buds and catch their eye.
Today the market is reflecting these trends, providing more flavors and types of drinks to
accommodate the growing market demand. US Spirits Supplier revenues rose 4.5% to
$21.3 Billion dollars.
140
150
160
170
180
190
200
U.S. Volume Up 3.0% in 2012
%3.0
3.0%
2.9%
2.0%
1.4%
1.7%
2.2%
4.1%
2.7%
%4.1
%3.8
%2.0
1.0%
Source: Discus MSDB
23. August 2006: Brown Forman acquires Herradura & El Jimador Tequilas from Romo de la
Pena family
o Case Volume: 65K Sales: $200M* Purchase Price: $776M
o Multiple of Sales: 3.88x
o Sources: Brown Forman
*Majority of case sales volume in Mexico at lower prices. Sale included Agave
Acreage Distilleries and Mexican Distribution Company
September 2006: Bacardi acquires 42 Below Vodka (founded 1999)
o Case Volume: 60K Sales: $10M Purchase Price: $91M
o Multiple of Sales: 9x
o Sources: Drinks Business Review, ValueCruncher.com, NZ Herald
September 2005: V&S acquires Cruzan Rum
o Case Volume: 700K Sales: $32M Purchase Price: $160M (est. allocation of
purchase price of entire company)
o Multiple of Sales: 5x
o Sources: Adams Beverage Group, SEC Filings of Cruzan International, Inc.
June 2005: Bacardi acquires Grey Goose Vodka (founded 1998)
o Case Volume: 1.4M Sales: $252M Purchase Price: $2.3B
o Multiple of Sales: 9.4x
o Sources: Forbes, Adams Beverage Group, Beverage Dynamics, Tennessean
More recently Bethenny Frankel’s Skinnygirl cocktails fetched approximately $64 million
from Fortune Brands Beam Global Spirits only 18 short months after its launch. In
addition, RumChata has an impressive story.
24. Brian Pearson, and Pearson & Pearson already have a great track record:
Apple Pie - www.drinkpie.com
Pearson played a great roll in the development and launch of Apple Pie and
even physically bottled the first product for market. Within a short time, Apple Pie
merged with Castle Brands. www.castlebrandsinc.com
Adult Chocolate Milk - www.adultchocolatemilk.com
Pearson developed Adult Chocolate Milk along with the other owners. Just over a
year after introducing the brand to the market, Adult Chocolate Milk merged
with W. J. Deutsch & Sons www.wjdeutsch.com Pearson accepted a buyout of
ownership.
Thatcher’s - www.thatchersorganic.com
Pearson worked hand and hand with the former CMO of Sky Campari (Sky
Vodka) to develop Thatcher’s. In 2010, Beam Global Spirits & Wine took over as
the National Marketing Agent.
NutLiquor - www.nutliquor.me
Pearson helped develop this first to market peanut butter vodka and quickly
secured 27 states while preparing for the first sales to other countries.
Viral - www.drinkviral.com
Pearson developed this line of flavored vodka and currently has penetrated the
market in 20 states and growing. Viral released its one of a kind first to market
flavors in the fall of 2014.
Pruno - www.drinkpruno.com
Pearson developed this first to market prison alcohol. Pruno just launched and is
distributed in 4 states. This product is truly out of the box and is slated to have big
results.
Nightshade Experience - www.nightshadetequila.com
Nightshade is currently launching in May of 2014, offering the first chocolate
ready to drink margarita in the US. In addition, and simultaneously, Nightshade will
be offering their signature huckleberry margarita to the US market.
Tiller Farms - www.tillerfarms.info
Tiller Farms offers the first shelf stable farm fresh cocktails made with real fruit and
vegetables and is scheduled to launch in 2014. In addition to the liquid in the
bottles, the fruit and vegetables are used to make superior cocktails; Tiller Farms
Fresh olives are soaked in vodka to make the dirtiest martini.
25. Market Size
The alcohol category is the second largest beverage category in the US at 9.4 billion
gallons consumed in 2012, only behind the Soft Drinks category and edging out bottled
water and coffee. Since 2000 the spirits market has grown approximately 6.0% annually.
Sales of distilled spirits grew 2.8%, to $18.7 billion in 2008, while volume grew 1.6% (184
million cases), despite difficult economic conditions, according to the Distilled Spirits
Council (DISCUS). From 2001 spirits have continually seized a greater proportion of the
alcohol market. In 2012 spirits sales volume increased by 3.6% to reach a record level of
205.8 million 9-Liter cases marking 10 consecutive years of growth.
The history of this $100+ billion industry, along with US demographics, lead most to
predict that this often lucrative industry will continue to be profitable for years to come.
The industry composed of brewers, distillers, distributors and companies like P&P will
create ideas for new and exciting products, then work to bring these fresh products to
consumers. Growth is a characteristic of the alcohol industry, which is experiencing a
healthy annual increase in all sectors, including specialty alcohol; the newest portion of
the market which already accounts for over 3%.
The popularity of flavorful spirits are growing 10 time faster than total spirits, with flavors
ranging from candy shop flavors like cotton candy to sophisticated flavors like hibiscus.
A few popular beverages in the ready-to-drink segment include the pre-made Jim
Beam & Cola, Bacardi Rum Runner, Jose Cuervo Golden Margarita, Kahlua White
Russian and TGI Friday’s Frozen Mudslide. These beverages are popular because little or
no mixing is required. A number of P&P’s proprietary and contract products fit into this
category of specialty drinks.
26. Spirit Segments
The spirits market is further segmented into various classes based on types of alcohol. A
few of the larger segments include:
Whiskey, experienced 21.5% growth. Irish whiskey grew at 18.1% and captured 1% of the
market, while American Whiskey grew at 3.4% and enjoyed a 10.4% share of the whiskey
market. The leading whiskey brands in this segment are Jack Daniels and Jim Beam,
which have 29% and 19% of the U.S. spirit market, respectively.
Vodka, dominates and is the most popular spirit by volume. In 2012, Vodka volume grew
5.6% in 2012. Smirnoff Vodka held a 14% market share of the U.S. spirits segment
confirming the popularity of vodka.
Rum, is a segment that experienced volume growth of 2.1%. The largest brand in this
segment is Bacardi which commanded a 35% market share in 2012.
Value Segments
The spirits industry can also be segmented based on values as the categories are listed
below:
Ultra-Premium 7.9% market share
Super-Premium 18% market share
Premium 36.1% market share
Value 38.1% market share
Premium and Super Premium, the largest combined segments, are defined as products
which sell between $12 and $23 per bottle. These including brands like Absolute Vodka,
Tanqueray Gin, Dewar’s Scotch, Jack Daniel’s Bourbon and Canadian Club Whiskey.
This is worth noting, as many of P&Ps products will fit into this segment, which accounts
for over half of the market share.
