Interview with Robert "Bob" Trostel, 2016 January 14

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  • Introduction and background on the alcohol wholesale industry and Delaware state regulations
    Partial Transcript: "I grew up in Philadelphia and then I came to Delaware in the late 70's and I have a background in... restaurants..." "I'm an orphan, so I grew up in an orphanage..."
    Synopsis: Trostel talks about his background growing up as an orphan in Philadelphia and working in area French cuisines. He states that from there he moved down to Delaware and became a wholesaler in part due to a childhood friend. He talks about how different states were allowed to develop their own alcohol regulations following Prohibition's repeal.
    Keywords: 21st Amendment; Break Thru Beverage Group; Dilworthtown Inn; French cuisine; licenses; New Castle, Delaware; orphans; Philadelphia, Pennsylvania; Prohibition; regulations; restaurants; West Chester, Pennsylvania; wholesalers
  • Innovation fueling growth in the alcohol industry
    Partial Transcript: "...If you take a look at the human, we all want to discover something, right?"
    Synopsis: Trostel talks about innovation in society and the alcohol industry. He says that current young adults care more about what is in the products they purchase than their baby boomer parents. As he sees it craft beer and these new desires go hand in hand.
    Keywords: beer; craft beer industry; generations; innovation; luxury
  • The evolution of beer
    Partial Transcript: "So Gallons of Glory, the light beers of the world, the regular premium beers of the world- they're all great products..." "...price influences consumption"
    Synopsis: Trostel talks about changes in beer and beer pricing. He talks about how craft beer has revived historical beer recipes while creating new ones. He describes craft brewers as artists and chemists and says that baby boomers drove the early days of the industry because they wanted to try new flavors and fresh ingredients.
    Keywords: AB InBev; baseball; Boston Beer Company; Coors; craft beers; flavor; George Will; imports; Jim Cook; Miller; pricing; Sam Adams
  • Sam Calagione as an outlier and the nature of the craft beer movement
    Partial Transcript: "You can see in Sam Calagione an outlier... he thinks differently..." "...I would pay for the beer before he would brew the beer..."
    Synopsis: Trostel talks about Sam Calagione and the early days of Dogfish Head beer. He recalls helping Calagione by giving him gas money in the early days of Dogfish Head when he self distributed. He characterizes Calagione and his company and describes them as being outliers far from conventional thought. He talks about the importance of fresh and local beer and craft beer's local roots. He also talks about the importance of technology and an ever present desire to try something new as the craft movement continues to grow
    Keywords: craft beer; Delaware; Dogfish Head; food; innovation; Sam Calagione; Stone
  • Delaware's three tiered distribution system
    Partial Transcript: "Producers create products... sell to wholesalers... who bring it to market..." "We are the focal point on trying to create access to the consumer..."
    Synopsis: Trostel talks about marketing and the three tiered distribution system in the state of Delaware, with a focus on wholesale selling. He discusees the importance of social media in getting new beers to market and how he, as a wholesaler, interacts with brewers, consumers, and restaurant owners to bring quality products to market and how tastes change over time.
    Keywords: accounting; big brewers; consumers; craft brewers; distribution; Dogfish Head; infrastructure; internet; sales; social media; Victory Brewing
  • The beer market in Delaware
    Partial Transcript: "It's about a ten million case market..." "Your barrels is how they measure beer, wine and cider is measured in gallonage..." "...we want quality... we're into cool, craft beer..."
    Synopsis: Trostel talks about the beer market in Delaware and his company's share of it. He says they control about 4% of the market and they focus on quality, Trostel specifically says that everything they sell is focused on quality.
    Keywords: barrels; beer market; cider; craft beer; spirits; wine
  • The role of technology in distributing craft beer
    Partial Transcript: "There's a capacity issue... the consumers are only gonna buy for whatever they can afford..." "There's a third of the beers on the shelf that are maybe questionable..."
    Synopsis: Trostel talks about the challenges facing craft brewers as they grow and expand into new markets. He discusses the importance of quality control as craft brewers grow. He says that he believes a shakeout is about to happen as some brewers cannot or do not manage their quality control compared to other brewers. He also talks about the growth in the number of tap handles in Delaware. He also talks about the importance of production chains in craft brewing from hops to packaging materials
    Keywords: brand loyalty; consumers; craft beer; distribution; economic bubbles; luxury; package stores; quality controls; tap handles; technology; the Internet; trends
  • Thoughts on the craft beer bubble
    Partial Transcript: "Well, we've had the craft beer bubble before..."
    Synopsis: Trostel talks about the craft beer bubble of the late 1990s. He says that the current economy cannot sustain the activities of the industry as it stands right now. He thinks there will be a few large craft brewers that will survive and cites Dogfish Head, Sam Adams and Yuengling as current examples. He thinks that craft brewers getting purchased by large brewers is a sign of the times- a move done for economic safety. He stresses again that the focus of the craft beer industry is quality.
    Keywords: brewpub; consumer education; craft beer; economic bubbles; economics; production; sustainability
  • Career and personal life
    Partial Transcript: "Well, let's see... so I grew up in Philadelphia at an orphanage called Girard College... I went to Temple University, I studied communications... I had been trained on waiting tables, but also I understood French, so I went into the restaurant business..."
    Synopsis: Trostel discusses what got him into the restaurant industry. He says that he knew how to wait tables and understood French, so he was able to get jobs at high end French restaurants in Philadelphia. He says that this helped him make contacts and gain experience. He says that his understanding of food, restaurants, and distribution led him into the wholesale world. He says that he worked his way into ownership of various companies and that the worked his way up in the wholesale industry. He details the events that led to the creation of Break Thru Beverage.
    Keywords: Anheuser-Busch; beer; Break Thru Beverage; business; Delaware Beverage; French; French Cuisine; Girard College; mergers; Philadelphia, Pennsylvania; restaurants; spirits; Temple University; United Distributing; wholesale; wine
  • Running a wholesale business
    Partial Transcript: "We're a middle tier, so we have to do something better for them... as a middle man than they could for themselves..."
    Synopsis: Trostel talks about the challenges of being a middle man in the alcohol industry and how that means his business must do whatever is necessary to remain attractive business partners to brewers and restaurant owners. He says that they need to do a better job than they could. He says that his operating margins are very tight. He says that they ensure quality, report their taxes, and only do business with licensed sellers and producers.
    Keywords: brewers; code dates; margins; markets; middlemen; percentages; profits; quality control; regulations; restaurants; SKUs; wholesales
  • Meeting modern demands
    Partial Transcript: "We have to be cutting edge in our technology..." "We're only human, but we're getting pretty good at it."
    Synopsis: Trostel talks about the role of technology and automation in meeting modern demands for alcohol. He talks about the importance of specificity and quality control, he says that buyers purchase many different kinds of beer at a time and details the challenges of fulfilling those orders. He also talks about the importance of his staff and having what he refers to as associates to help further business growth rather than employees who just work for them. He details some of the roles of his 200 member staff.
    Keywords: automation; computers; consumers; distribution; energy management; green technologies; jobs; staffing; technology; three tiered system
  • Efforts to promote drinking responsibly
    Partial Transcript: "We sell alcohol, but we advocate heavily that people drink responsibly."
    Synopsis: Trostel talks about his efforts to advocate drinking responsibly. He says that is an important part of his business and remarks that everyone likes a beer, but no one likes drunk driving or underage drinking.
    Keywords: alcohol abuse; anti-alcoholism; drinking and driving; drunk driving
  • Deciding what beers to sell
    Partial Transcript: "Is it viable long term?" "I say O.K., you like this beer let's see if this vendor is gonna be there... long term?"
    Synopsis: Trostel talks about how he determines what beers to try and sell. He asks his crew if they like a product, assesses whether or not he thinks the vendor will be around long term, and if there is a broad demand for the product. He says that to do well in his job he has to pre-anticipate where the market will be in the future.
    Keywords: beer; decisions; Dogfish Head; economics; marketing; resources; sales; time; Tito's Vodka
  • Thoughts on what makes a brewer good to work with
    Partial Transcript: "We like the little guy, 'cause all of us were little guys once..." "We sell craft beer..." "Follow your bliss"
    Synopsis: Trostel talks about what makes a vendor good to work to. He says that he looks for a good feel from the producer, someone who he wants to help grow.
    Keywords: ciders; craft beer; distribution; growth; spirits; wineries
  • Why brewers say their distributor is their favorite customer
    Partial Transcript: "The system is designed to go to market that way..."
    Synopsis: Trostel talks about why he thinks many brewers refer to their distributors as their favorite customers. He says that it is in part because a wholesaler deals with logistics of buying and transporting beer so that the brewer does not have to do all the work. He says that whenever he starts with a new brewer he tries to do right by them, and that he views those arrangements as partnerships.
    Keywords: beer; distribution; logistics; markets; quality control; resources; three tiered system; time
  • The growler trend and growler legislation in Delaware
    Partial Transcript: "The growler phenomenon... what a wonderful thing..."
    Synopsis: Trostel talks about the growler trend in Delaware. He says that it is great for providing the consumer with high quality fresh beer. He briefly talks about how growlers became legal in the state of Delaware.
    Keywords: beer; distribution; growler; legislation
  • The relationship between vendors and distirbutors
    Partial Transcript: "I wouldn't call it conflict, I would call it expectation that gets resolved and settled in an agreement."
    Synopsis: Trostel talks about the relationship between distributor and vendor. He says that if there is conflict, they are generally not doing business together. He says that many disagreements can be compromised on with enough work from either party. He says that while doing that, the brewer and the vendor need to have big goals for what they can achieve, but maintain a dose of reality.
    Keywords: craft brewers; distribution; production; spirits; wholesale; wine
  • Marketing Break Thru Beverage
    Partial Transcript: "I have a marketing person..." "Some of them are pre-logoed by our vendors..." "We market on the internet.."
    Synopsis: Trostel talks about selling his business and his products. He talks about marketing things on the internet and with social media. He also discusses trademarks, and how it is necessary for him to make sure that he does not violate his partner's trademarks. He says that he favors forms of advertisement with logos on them, like pint glasses, clothing, and key chains. He says that his marketing efforts are more focused on boosting the brands sold by Break Thru Beverage rather than promoting Break thru Beverage.
    Keywords: advertisement; Break Thru Beverage; clothing; Facebook; glassware; Instagram; marketing; social media; the Internet; trademarks; trinkets; Twitter; wholesale
  • Industry and trade organizations
    Partial Transcript: There's various trade associations... there's the Delaware Restaurant Association, there's a group called DAABA which is an Indian retail association..." "We're all about quality... and care of the industry..."
    Synopsis: Trostel talks about trade association in Delaware. He discuses the Delaware Restaurant Association and, of which he is a board member, and the DAABA (Delaware Asian American Business Association.) He mentions the Wine and Spirit Wholesalers Association, which operates on the national level. He talks about how easy it is to communicate with the Delaware Alcohol Control Commission if he needs to. He talks about how these associations self-regulate and how they, along with consumer trends, can help change laws.
    Keywords: Delaware; Delaware Alcohol Control Comission; Delaware Asian American Business Association; Delaware Restaurant Association; government; regualtion; rules; trade organizations; Wine and Spirit Wholesalers Association
  • The zen of golf and wholesale alcohol
    Partial Transcript: "I think we've- we're the wholesale tier, the middle tier, but we have to think from our... supplier perspective and the consumer perspective..." "What's the trend going to be and are you resourced to do it?"
    Synopsis: Trostel talks about the zen side of wholesaling beer and alcohol. He talks about the importance of thinking outside of the box and creativity in order to keep ahead of and create new trends. As he describes it, he believes it pays for business owners to be creative.
    Keywords: beer; craft beer; creativity; golf; innovation; spirits; trends; wholesale; wine
  • The future of craft brewing
    Partial Transcript: "I think it's here to say..." "I'm a reader... you have to see tremendous potential for what I'll call the quality movement."
    Synopsis: Trostel talks about the future and says craft beer is here to stay. He argues that it is part of something he calls the "quality movement" which he says has been around as long as people have been making things. He describes craft brewing as part of an endless quest for quality.
    Keywords: Amazon.com; craft beer; Elon Musk; innovation; Jeff Bezos; quality
  • Corporate Structure and Break Thru Beverage
    Partial Transcript: "If you go back in the past, the three tiered system had to be set up..."
    Synopsis: Trostel talks about the corporate and governmental structures in the three tiered system. He describes how the government created it with the intent that no one tier of the system would become too powerful.
    Keywords: Anheuser- Busch; Break Thru Beverage; Charmer Sunbelt Group; government; INBev AB; regulation; retail; wholesale