Host Tony Castellano, VP of Sales, along with our Co-Host Jackie O'Brien, welcomes Jeff Carroll with Avalara for Beverage and Alcohol for episode 5 of 365WineTrade Technology Talks. They will introduce our new segment, Through the Grapevine, and discussing current trends in e-commerce as well as how supply chain issues are affecting many companies in the wine & spirits industry.
To learn more about 365WineTrade, visit us at www.365winetrade.com/podcast
Full transcript:
Tony Castellano (00:07):
Hello everyone. And welcome to the 365WineTrade Technology Talks Podcast powered by Western Computer. I'm Tony Castellano, your host. And in a few minutes, I'll be introducing our guest for today, Jeff Carroll with Avalara for Beverage and Alcohol.
Tony Castellano (00:25):
But first, I wanted to introduce our new co-host for the 365WineTrade Technology Talks, Jackie O'Brien. Jackie, how are you today?
Jacklyn O'Brien (00:34):
Doing great. Thanks so much for having me.
Tony Castellano (00:36):
Thanks so much. We enjoyed having you last time. Thought it'd be great to have you along for the ride. There's just so much going on in the wine and spirits industry these days. I think we need two, three, and four people to cover it, so glad to have you on board. So, Jackie, I know we talked about doing a new segment, Through The Grapevine, where we highlight some of the relevant wine and spirits industry news from local and national writers, so take the floor. I'd love to see some of the topics that are hot out there in the industry.
Jacklyn O'Brien (01:07):
Yeah, absolutely. Love the idea Through The Grapevine. As I was going through some of the articles this morning, I wanted to pick out one that really stuck out to me and it was how expensive glass bottles are getting and how much more expensive that's making everything else. I think the statistic was the cost of glass bottles in the U.S. has risen as much as 20%. So that's a significant increase on top of just inflation in general and everything that's going on around supply chains. So that was one that really stuck out to me in how are they going to overcome this? I know there were a couple of articles highlighting the cost around the glass and what companies are doing. And I was even reading, going back to box wine, which I haven't had in years but it's a good alternative.
Tony Castellano (01:59):
Yeah, absolutely. And I know consumers are looking for alternate choices. I was at the local store and I saw a lot of ready to drink items there, taking up half the shelves that are normally there for spirits. So seeing those trends that we've been talking about on the show actually hitting the retailer floors and such, so very interesting to see. Well, I know that bottle is a hot topic and I bet Jeff has some insight for us there. So Jeff Carroll, with Avalara Beverage and Alcohol, I wanted to welcome you to the 365WineTrade Technology Talks. How are you today?
Jeff Carroll (02:32):
Hey Tony. Hey Jackie. Thanks for having me. We really appreciate you bringing us on here.
Tony Castellano (02:37):
Well, absolutely. Jeff, well, tell us a little bit about you and about your company. And I would like to get your insight on some of the trends that you're seen in the marketplace too.
Jeff Carroll (02:46):
Yeah, absolutely. And I agree with Jackie, I think that's an interesting trend around the packaging. I mean, I do think that boxes are going to become more and more prevalent, especially with supply chain issues and you're seeing the environmental impacts and that kind of thing. So Tablas Creek was one of the first higher end wines to announce their box format and I think others will follow suit. And that's a very interesting trend to watch.
Tony Castellano (03:11):
Yeah. And the other thing Jeff, I saw some requirements for is kegs. Now that's also becoming popular on the wine side. So you have various types of bottles and sizes and different things you need to keep track of, now with kegs and we need keg deposits. So interesting to see what's going on in the marketplace. And I'm sure you see quite a bit with your beverage alcohol division.
Jeff Carroll (03:33):
Lots of innovation, very exciting times. The pandemic has accelerated a bunch of different trends and is spurring innovation. And that's exciting to see without question.
Tony Castellano (03:43):
Yeah, no doubt. And obviously a lot of compliance out there. And of course your Avalara solution helps with that, the taxation of wines. Tell us a little bit about your solution and what it does for the wine and spirits industry.
Jeff Carroll (03:56):
Yeah, yeah, absolutely. So at a high level, Avalara is all about tax compliance software. And so we help folks deal with tax compliance in the sales and use tax and VAT and cross border and then a lot of industry verticals, and beverage alcohol is one of those industries in which we have a very strong presence. As you know, beverage alcohol is a highly regulated industry. And so we help licensees and marketplaces and other types of businesses that are dealing with beverage alcohol products with compliance. We help calculate the right amount of tax. We file and remit taxes to all of the applicable jurisdictions. We acquire, renew and revise all the different types of licenses that they need to hold and maintain. We have real time capabilities to ensure that shipments are compliant before they ship. And then we do a lot around product registrations, making sure that all products are approved at both the federal and state levels prior to those products being sold.
Tony Castellano (05:03):
Yeah, it's really a fantastic solution. And we have several customers running the Avalara solution already. And it has that native integration to the 365WineTrade Technology, so we're able to deliver that together as a whole solution. And of course, with the wine and spirits industry, Jeff, you know it's concierge service because they're very brand intensive, that's their market. Would you agree?
Jeff Carroll (05:27):
Absolutely, absolutely. Yeah. Having a really seamless experience is critical. And that definitely is one of our focus areas is to make sure that everything is tightly integrated and flows well and the customers are well supported. And we're very proud of this integration and the relationship with 365WineTrade, our integration with Dynamics 365. And that's absolutely our focus is to make a seamless customer experience.
Tony Castellano (05:53):
Absolutely. So as we've been talking to folks, Jeff, everybody has a great story on how they got into the wine of spirits industry. So do you have one you can share with us today?
Jeff Carroll (06:04):
I'm not sure if it's that great, but there are a few interesting aspects I would say. A long, long time ago in a former life, I was an engineer with a technology focused. I realized that really wasn't my jam, if you will. So I went back to business school and studied entrepreneurship. I happened to graduate in May of 2005 from business school and that happened to be the same exact month that the Granholm verses Heald Supreme court case happened. I met Jason [inaudible 00:06:32] who is an entrepreneur and was the founder and CEO of a company that was called 688 Solutions at the time. We eventually created a DBA and changed the name to Ship Compliant. That was really interesting timing. Back in May 2005, when I joined up with 688 and Jason, and we really did have fortunate timing because so much changed following that big landmark Supreme court were ruling in 2005.
Jeff Carroll (07:00):
So that's how I got started. Eventually I left Ship Compliant 11 years later and joined up with a good friend of mine in the industry, Rachel Ray based in Paso Robles. And we eventually sold that business to Avalara, that was just over three years ago. And so that business became the beverage alcohol industry within Avalara and I've been here at Avalara ever since.
Tony Castellano (07:25):
Wow. That is an amazing story, Jeff. And who would've known? There's a lot of details there because this industry it's so small in nature, you grew organically and made this amazing product and now you're representing Avalara. And I've just read some of the articles you put out, just outstanding stuff. So we're really excited to have you on board today.
Jeff Carroll (07:44):
Thanks a lot, Tony.
Tony Castellano (07:46):
Yeah, my pleasure. Tony Castellano, 365WineTrade Technology Talks. I'm here with Jackie O'Brien and our guest today, Jeff Carroll, with Avalara for the beverage and alcohol industry. Jeff, I'm curious. I know Jackie wants to get in here for a couple questions too, but I just wanted to ask you what is that one top feature that you're seeing out there? And then I'll let Jackie ask a couple questions of you.
Jeff Carroll (08:12):
Sure. So I think given the highly regulated nature of the industry, one of the big problems that people really struggle with is just filing returns, help filing the myriad returns that are due every month, every year, every quarter. It really is a burden and really, almost impossible to do yourself. So it's kind of a no brainer to automate, work with a company like ours where you can automate the filing and remitting of your taxes and other returns that are due for beverage alcohol. But then it's also extremely complex when it comes to the rules around shipping and distribution of alcohol. And so we always get asked about whether or not there's a real time capability to ensure that shipments are compliant before they go out, before they're sold, regardless of the distribution channel. So that tends to be a critical feature for our prospects and customers as well.
Jacklyn O'Brien (09:07):
Yeah. Jeff, curious, I know we talked a little bit about it when we first jumped on what's going on, but what are some other are trends you're seeing in the marketplace now?
Jeff Carroll (09:18):
Sure. Yeah. So I tend to have a lens when I look at the industry. And because we're in the tax and compliance space, I'm always focused on regulatory developments.
Jacklyn O'Brien (09:27):
Right.
Jeff Carroll (09:27):
And a couple things I would point to on that. Number one is this treasury report that came out couple months ago. So this was in response to Biden's order on competition in the beverage alcohol industry. They released kind of a landmark report and then really interestingly a few weeks later, a company called Provi came forward with a big antitrust lawsuit against the two biggest wine and spirits wholesalers in the country. And I think that is very much worth watching and paying attention to. I think what you saw during COVID, and obviously this is another trend, is just the rise of e-commerce.
Jeff Carroll (10:10):
And when I say e-commerce, I don't just mean direct to consumer sales, right? We tend to get into some definition problems. Because to me, direct to consumer had really strong growth during COVID, but potentially that growth is slowing down, but also e-commerce through the three tier system. And so I think you're seeing a big push from multiple fronts for, some states in particular, to modernize some of their laws and allow for delivery and cocktails to go and direct to consumer shipments and other things. And so I think the timing of everything right now with all of these legislative changes, plus the treasury report, plus this Provi antitrust lawsuit, feels to me like it's fairly dynamic right now. So those are, I think Jackie, the biggest things I'm looking at right now.
Jacklyn O'Brien (11:02):
Yeah, no, I completely agree. And I think you're spot on with the e-commerce. And I even think we're going to see it continue to go from ordering online to having the app on your phone, where it is instant, especially as the younger generation is taking over more buying power. We go to a app for everything. So I think you're completely right there. One last closing question on my end is what do you think the trends will be a year or two from now?
Jeff Carroll (11:31):
That's always fun to think about. I agree with you. I think that if you look at how people are buying more and more, and the other thing to think about is we're not just talking about consumers, but I think we're also talking about how are business is going to buy in the future. And that was interesting when I was reading the Provi lawsuit to see how they're really trying to automate the purchase between retailers and wholesalers as well. I think that will also move online. So as we see these shifts and we look at other marketplaces, I think that's going to be a trend, marketplaces in general. Like Drizly and Provi and Instacart and the Veno, those will continue to grow in my opinion and continue to become prevalent. And with that, you're going to see some laws and some regulations that are going to need to continue to evolve in order to support some of those business models.
Tony Castellano (12:23):
Agree with you there, Jeff. And Jeff, I was curious there's the WSWA and our local legislators are trying to make change. What area are you seeing the most rapid change? Is it that delivery from restaurants or what area of the industry do you see rapid change around taxation?
Jeff Carroll (12:41):
Around taxation, yeah, lots of change around delivery, both on premise and off premise delivery. So cocktails to go just really took off during the pandemic. But then you've also seen allowances for delivery by retailers to support a business model like a Drizly, where you can get stuff delivered from local retailers. I think that you're seeing certain groups like the Distilled Spirits Council push for tax reform and tax equivalency around spirits products. And so that's something to keep an eye on.
Jeff Carroll (13:12):
And then there's also a lot of legislative activity around direct to consumer sales. Spirits, producers and beer associations are pushing to get access to direct to consumer laws. Right now wineries as we know it have access to like 47 states, but for breweries and distilleries, it's less than 10. So that's a big push and retailers are pushing for direct to consumer access. Those are real tough battles, but there's a lot of bills that are being considered as we speak on that front.
Tony Castellano (13:44):
That's really good info because I was just reading a great article by Abbey Carnivale out in Sullivan County about some of the decrease in the requirements for the distillers to get ready for markets. Let's talk about that a little bit more. Jeff, we're going to take a quick break. We'll be right back. 365WineTrade Technology Talks.
Speaker 4 (14:10):
This addition of 365WineTrade Technology Talks is brought to you by 365WineTrade by Western Computer. 365WineTrade is the ultimate cloud solution for wine and spirits distributors. Built specifically for your industry, its supports embedded multi-state compliance, inventory and three PL management, three tier compliant pricing engine, purchase consolidation and direct imports and more to help you run as smoothly as the wine you enjoy. 365WineTrade takes advantage of the Microsoft Cloud Azure environment so you can be assured your company's data is safe. To learn more about 365WineTrade, please visit us at www.365winetrade.com/techtalks. That's T-E-C-H talks, or click the link in the description below. And now back to you, Tony.
Tony Castellano (15:17):
And we're back. 365WineTrade Technology Talks. This is Tony Castellano, your host. I'm here with Jackie O'Brien, my co-host. And I have Jeff Carroll with Avalara for beverage and alcohol on the line with us. We've been having some great conversations, talking about our new feature on the podcast, Through The Grapevines. Jeff, when we went on the break there, we started to talk a little bit about some of the compliance around the distillers. I did read a great article where New York state adding a quicker path to market for these smaller distillers. I'm not sure if you saw the article by Abbey Carnivale, but seeing some of the things they've been talking about move into action. As you said, there's a lot of compliance that's pending out there, but now we're starting to actually see things get approved. Can you tell us what you're seeing from your position at Avalara on the beverage alcohol team?
Jeff Carroll (16:10):
Yeah. With distilleries and I think just with smaller businesses in general, I think there's a recognition that a lot of businesses struggled during the pandemic and were put in a tough position and had a hard time selling their products depending on what the regulations were in their state and what they could do out of state. And so I think that was a bit of a wake up call and that the industry associations, be it the local or national associations, are trying to make a push to diversify some of those sales channels and gain access to additional routes to market, be it direct to consumer or self-distribution or pick up from the tasting room, that kind of thing. So I think that is definitely a focus of these associations and we'll continue to see legislation and other actions by governors, for example, to extend allowances that have been created.
Jacklyn O'Brien (17:04):
So Jeff, what area of the country do you live in?
Jeff Carroll (17:08):
I'm in Boulder, Colorado.
Jacklyn O'Brien (17:10):
Okay. Definitely on my list to get up there.
Jeff Carroll (17:13):
It's a lovely place. I think you would enjoy it and we'd be happy to host you if you ever came through.
Jacklyn O'Brien (17:19):
Absolutely. What's one of your favorite drinks, Jeff.
Jeff Carroll (17:23):
Ooh, that's a good question. I probably drink more wine than spirits and beer, but I also love a good cocktail and a good beer. When it comes to beer, I tend to drink locally. I love Upslope here in Boulder, Avery. There's a lot of great beers here in Colorado, so I tend to stay local. When it comes to wine, I like a lot of things. I love a Pinot noir. I love a Cabernet, more red than white. My cocktail these days that I order more than anything else is probably a Manhattan, would be my guess. And then I guess one thing that I've been drinking a little bit more of recently is that I recently discovered is a product called JuneShine, which is actually a hard kombucha and I've been enjoying that. So I try everything.
Jacklyn O'Brien (18:13):
I love it. I love it. And I'm sure the season and how you're feeling all plays a big part into what your go-to drink is, right? If it's 90 degrees or if it's 32 and snowing?
Jeff Carroll (18:26):
No question, no question. That has a big impact on the choice.
Jacklyn O'Brien (18:30):
Very cool. Well, I love to hear all the beers and stuff like that you like to stay local for.
Jeff Carroll (18:35):
Definitely. Yeah. Boulder is where the Brewers Association is located and there's just a great beer scene here. But that doesn't mean that I'm also not drinking beers from California and Boston and you name it.
Jacklyn O'Brien (18:49):
Oh yeah, absolutely. Jeff, I'm sure our listeners would love to know how do we learn more about Avalara for beverage alcohol?
Jeff Carroll (19:01):
We've got a great website at avalara.com. And from there we have what we call an industry solution page. If you go to the industry, drop down and click on beverage alcohol, you'll get a lot of information about what we're doing. And you can also see a beverage alcohol category on our blog, where we maintain a lot of content about what's going on in the industry. But also if anybody wants to email me directly at jeff.carroll@avalara.com, I'd love to open up a conversation.
Jacklyn O'Brien (19:29):
That's good to know. I'm sure there's a ton of content on the website. Any upcoming webinars, or is that something that you guys are doing frequently?
Jeff Carroll (19:39):
We do try to do webinars frequently. Yeah. And we do have one coming up in May, in the middle of May. I'm not sure if we've put up a page yet to announce the topics, but we do like to keep our clients and the industry up to date on what's going on. So expect the webinar come in middle of May. We're also going to be attending three events this quarter. We're going to be at the Craft Brewers Conference. And we're also going to the Distilled Spirits Council Annual Conference in New Orleans. Craft Brewers Conference is in Minneapolis. And then we'll also be at the NCSLA, the National Conference of State Liquor Administrators is going to be in Kansas and that's going to be in June as well. So three upcoming events, we'll be there and we'll have a strong present. And we'd love to meet up with anybody that will also be at those events.
Tony Castellano (20:28):
Yeah. So great to see people out there again, huh, Jackie?
Jacklyn O'Brien (20:31):
Oh, absolutely. And Jeff already knew my next question. Where are you guys going to be and what are some events you're excited for?
Jeff Carroll (20:38):
Yeah. Those three are the ones that are coming up. And then Avalara puts on a big event called Crush every year. And that is coming up in May. Crush is going to be virtual once again. We are expecting to have over 10,000 folks attend and that's going to be the Global Tax Compliance Technology Conference that we're really excited about. We have great speakers. We have Chris Swonger, who's the CEO of the Distilled Spirits Council. And Joe Moak who's the Executive Vice President and General Council for the Wine and Spirit wholesalers of America as our keynote speakers. And then we have breakouts for wine and beer and spirits. And so I do think that will also be a great event coming up in May. That's Avalara Crush.
Tony Castellano (21:21):
Yeah. I have to check that one out, Jeff. That sounds really good. You have a heavy hitter lineup there.
Jeff Carroll (21:26):
Yeah. It's going to be great. It's going to be great. I'm excited about it, Tony.
Tony Castellano (21:30):
Well, Jeff, so great to have you on the show today. I know I learned a lot. And Jackie, thanks for asking great questions. Jeff, I'm sure we're going to see you at one of the events coming up here. So thanks so much for joining 365WineTrade Technology Talks. And we'll talk with you next time.
Jeff Carroll (21:46):
Thanks so much for having me too, Tony and Jackie, it's been a pleasure.
Tony Castellano (21:50):
And as Jeff talked about, there is some pretty exciting events. People returning back to on-premise. People getting back to some of the shows that have been dormant for the last couple years. So Jackie, I know you're out there checking the news, any cool events coming up that you wanted to highlight for us?
Jacklyn O'Brien (22:07):
Yeah. One that I thought was really unique and I have a good friend who's at this conference right now and I saw them post on LinkedIn and had to do a little research to see where they were at. And they're actually at the International Association of Airport Duty Free Stores. And I thought that was just such a unique event and sometimes thinking outside of the box and going to events like these could really have such an impact on who you meet and who you're able to connect with and going to different events that are outside of your normal routine.
Tony Castellano (22:45):
Yeah, no doubt. It sounds like a very interesting event. And I saw the pictures and I hope they're doing well down there. But gosh, I can share with you, I was recently in Paso Robles at a wine event and it was good to shake people's hand and enjoy some good wine at a restaurant with our team. So I'm very excited to see that part of the business come back. And of course, we'll keep you abreast of all the news through the 365WineTrade Technology Talk. So Jackie, I wanted to thank you for joining the team.
Jacklyn O'Brien (23:12):
Thank you so much for having me, Tony.
Tony Castellano (23:14):
And we'll look forward to our next session. Look for us on Spotify and YouTube. And shout out to Kaden and Liana. We'll see you on the next 365WineTrade Technology Talks powered by Western Computer.
