Sound Off with Dan Fahrner, The Journey of Hi and Mighty, A Craft Spirits Story
During this episode of the Dailey Blend Show, we Sound Off with Dan Fahrner is the CEO and Cofounder of Hi & Mighty, an Indianapolis distillery at the Indiana State Fairgrounds crafting spirits & cocktails dedicated to celebrating the big (and small) gifts in life.
In this conversation, Dan Fahrner, co-founder of Hi and Mighty, shares the journey of his distillery based in Indianapolis, Indiana, which pivoted from traditional distilling to focus on canned cocktails. He discusses the challenges faced during the transition, the development of their flagship product, the Lemon Shake Up canned cocktail, and the strategic decisions made to expand their product line. Dan also highlights the importance of branding, marketing strategies, and the company's lean operational model as they navigate the evolving alcohol industry landscape.
Chapters
00:00 Introduction to Hi & Mighty Distillery
03:04 The Pivot to Canned Cocktails
05:50 Product Development and Market Response
09:08 Expanding Product Line and Seasonal Flavors
12:12 The Brandy Old Fashioned and Regional Drinks
15:07 Branding and Packaging Decisions 17:53 Company Structure and Staffing
20:49 Marketing Strategies and Future Expansion
24:04 Trends in the Alcohol Industry
27:13 Conclusion and Where to Find Hi & Mighty
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Connect Online
Website - drinkhiandmighty.com
Instagram - @drinkhiandmighty
LinkedIn - @danielfahrner
Transcription - Sound Off
Host Reed Dailey (@ReedDailey): This is a transcription of the Sound Off Interview a segment of the Dailey Blend Show.
Hey everyone, welcome back to The Dailey Blend Show with me, Reed Dailey. This episode we are sounding off with Dan from Hi and Mighty, an innovative spirit-based ready to drink beverage brand capitalizing on the rapidly growing market for premium flavored Ford alcohol beverages. As hard seltzer and craft beer sales decline, spirit-based RTD drinks are experiencing substantial growth.
with an anticipated compounding annual growth rate of 18 % reaching 21 billion estimated market cap by 2027. Hi and Mighty is strategically positioned to cater to millennials and younger consumers who prioritize natural products, minority and women-owned brands and social drinking experiences. With strong brand identity rooted in Midwest nostalgia,
award-winning flavors and a focus on premium natural products. Hi and Mighty is poised for significant growth in the fastest evolving alcoholic beverage market. But before we jump into my conversation with Dan, I want to remind you to check them out at drinkhighandmighty. That's like hi and follow them on Instagram at drinkhighandmighty.
And don't forget to like, follow, subscribe to Daily Blend and the Daily Blend show at Daily Blend on IGX and threads. You can also check us out on Spotify, YouTube, Apple Podcast, and of course, DailyBlend.com. With all that said, let's jump into it.
Reed Dailey (02:02)
everyone. Here with Dan from Hi and Mighty. We're going to talk about his company, kind of what they're doing in terms of launching their company, a little more about their sort of funding journey. And of course talk about the product. Dan, where in this wonderful world of ours are you calling in from?
Dan Fahrner (02:20)
Yeah, I'm calling from Indianapolis, Indiana. So the heart of the heartland here in the Midwest.
Reed Dailey (02:25)
Excellent. Nice. Tell us a little bit about your company, HiMighty.
Dan Fahrner (02:30)
Yeah, sure. So Hi and Mighty is technically it's a distillery, craft spirits distillery based here in Indy located at the Indiana State Fairgrounds, which is a little unique. And I can tell a story about that. But, kind of the future of Hi and Mighty is a little unique in that, we're actually pivoting away from the distillery towards a product line of ours that we created that's taken off on us. And, it's called shake up canned cocktails. So we made a, a ready to drink.
Canned Cocktail that we launched in 2022 that really took us on a wild ride the last two years. And so we decided to go all in on it.
Reed Dailey (03:07)
Nice. so, you know, going from a distillery to, know, deciding to go all in on a product other than you probably like the way it tastes. If you're making it, you know, what are some of the things that you guys did to decide, Hey, we want to make a pivot and start putting our own product out in the marketplace or really backing this as our, sort of flagship.
Dan Fahrner (03:28)
Yeah, sure. Well, so maybe I can just share the beginning of the story and kind of how we got to that decision point. we, let's see, my background is in brand and marketing. spent my whole career building brands for other people have had the itch to start my own business and brand for many years. so my wife and I decided to take the plunge in 2019 took a couple of years to kind of build out the
the back end of the business, get a little bit of financing. There's a lot of red tape in the alcohol industry. Also, there's not really like a school that you can go to to like learn how to start up a distillery or like anything related to that. Like literally all distillers are self-taught or they've worked for a distiller and then, you know, jumped out on their own. And I think breweries are similar, right? So anyway, it took a couple of years to get going.
finally, you know, had everything lined up, had a building that we had chosen here in Indianapolis. And the location is a little unique in that we partnered up with the State Fair here in Indiana, which is a very big organization, but also it's a huge event. But it's also right in the middle of the city in Indianapolis, which is in the middle of the state. So you think about like, for instance,
Reed, you're in Chicagoland. I actually grew up in Chicagoland in the Northwest suburbs, Palatine. But the state fair in Illinois is not something that people in Chicago are necessarily thinking about or even visiting perhaps because it's down south or central Illinois rather. But in Indiana, it's the largest event in the state attracting about a million people.
We thought, well, hey, partnering with a fair, which happens to be about four blocks from our house could be interesting in that, you know, if we build our distillery there, we've got the state fair. They have events every day of every week. Like we really only need to slice off a small portion of that, as foot traffic to kind of become profitable. And, we were right about that. However, one of the challenges that we found early is that in 2021, when we were fundraising to build out the bar restaurant portion of the distillery.
That was when interest rates started skyrocketing and banks, you know, risk tolerance for lending just dropped kind of in correlation. So I had two deals that were going to fully fund this project. would have been about $1.5 million and they both died at the very last decision point, which is, was just heartbreaking. Right? So we decided to pivot at that point because we had to into
Reed Dailey (05:38)
Hmm.
Dan Fahrner (06:02)
building out a wholesale business. So that would mean for us continuing to make our products, but instead of selling them direct to consumers via our own bar, we were selling them through our distributor to bars and restaurants, liquor stores, grocery, et cetera. And that was the plan the whole time, but we were kind of deciding at that point to instead of focus a lot of our energy on
building a of a direct to consumer relationship, we were going to have to focus on that wholesale relationship and figuring out what it means to sell through a distributor, which is definitely a unique process itself. that was like, of like, I think the initial question was like, how did you decide to pivot? Well, I think that was like the first portion of the pivot, which is that we were no longer, you know,
having that direct to consumer relationship, at least physically. We still do online, but it was selling through this distribution channel. So when that happened, we had really three products that we launched with. The first product was this canned cocktail, Lemon Shake Up. And if you're not familiar, Lemon Shake Up is a classic, fair flavor.
You can go to state or county fairs in Indiana and actually across the Midwest as well. And you will see stands that sell lemon shakeups. What they, what it is, is, it's really just a fresh lemonade. They use fresh squeezed lemon and then real sugar, water and ice. And they literally shake it like a cocktail would be shaken, but there's no booze in it, no alcohol. So lemon shakeup is kind of like a.
It's a cult classic drink here in Indiana. It's very popular. We've learned that it's popular across the Midwest as well at state and county fairs. So we decided, hey, we're partnering with the fair. Let's make a lemon shakeup. It'll be, you know, a fun tie in maybe to help us promote it. Well, they did. And I'll get back to that in a second. But we also had two gin, bottled gin products as well. We called our twin gins. And there's a fun story there, which is that
My wife and I have twins who are now eight years old and our distiller Nick thought it would be funny to name the products after them. You know, and so we went along with it, but the name of the gins are, we have big heart gin, which is a floral gin, and then have big fuss gin, which is a dry savory gin. They're both pretty unique. They're not like a middle of the road, like classic, you know, gin. People don't, they don't taste like pine trees, which is our
the thing that people commonly say about gin, like, I don't like gin, tastes like pine trees. They're very unique, bartenders love them. So we had these two gins and we had the Lemon Shake Up Can cocktail. What we found pretty early on in promoting these products is that the gin products were a hit with a very specific niche audience, which is craft bartenders. So like the craft cocktail boom on the
in New York and LA and Chicago. Well, I mean, every major city has like at least one craft cocktail bar in Indy. They're a handful. These are the folks that were really into our gins. They're pretty unique, very different. And so these folks loved it. However, you know, we were having trouble getting, you know, kind of like your standard bar restaurant to pick it up. It was maybe a little too unique for them. So
Our challenge then was like, all right, our pool of customers is somewhat limited. We can go into new states, which we did, and I'll talk about that later. Or, you know, we can kind of change how we sell the product, which we tried that. We still just were having a hard time getting pick up with it. Meanwhile, the can cocktails, the primary audience was consumers and we were selling that through liquor stores, right? So.
For every craft cocktail bar, there's like 20 liquor, 30 liquor stores in a city. So, you know, the audience was much larger and for every case of gin that we could sell into a bar, you know, there are like basically six bottles to a case. Usually it would take them, you know, a few months to burn off that case. Whereas a liquor store, we could sell five to 15 or even more cases of canned cocktails into the liquor store.
And then we actually could control the pacing of sales and marketing. And the way that we would do that is to book tastings or events at these stores. So like for instance, up in Chicago area, Binny's is very popular. If you go into Binny's on any weekend, you're going to see people at these like little tasting tables. You can try free samples. It's very fun. People love it and it works. And so when people try a product and it's good.
you know, they tend to buy it more frequently. so, you know, again, like there were just like two totally different revenue streams here or audiences. You could say the one was like these craft cocktail bartenders who, you know, you had to build a relationship with the sales cycle was like a few months. And even when they did buy, they're buying a case at a time, unless you got onto a menu versus the, liquor store audience, which has.
you know, the ability to buy 10 to 15 cases at a time. And then it also has the ability, we have the ability then to influence sales through marketing, you know, direct marketing. So we very quickly realized over the course of months that like, you know, the volume that we could do with these liquor store channels was so much higher than what we could do with the, with the gin and the craft cocktail bars. And so
That's where the traction went and that's where our energy went. And eventually we kind of realized like, hey, let's not kid ourselves anymore. Let's just lean into the area of the business that's working and focus, you know, because as you and your listeners know, I'm sure like focus in a business is maybe one of the most critical things. And so that was a long winded answer to your story, but it was really happenstance and just, you know, market, the market kind of dictated which direction we.
Reed Dailey (12:09)
It's a really cool story in terms of just kind of doing a little bit of a, you know, using sort of insights, a little bit of data. I think, you know, your 30 to one, you know, analogy makes a ton of sense to me. and the sampling at Benny's is someone who lives in Chicago. Benny's is my go-to spot. So yeah, it's great. So, you know, I'm before this, I went through, you know, kind of the website and was looking at, you know, your product skews. So how did you go from
Dan Fahrner (12:28)
yeah.
Reed Dailey (12:38)
the lemon shakeup and sort of the two gins to a broader portfolio of products. Like what was that process like for you guys?
Dan Fahrner (12:45)
yeah, great question. So we launched that Lemon Shake Up Canned Cocktail in the summer of 2022. And let's say we launched it in June of 2022. summer is kicking in, kids are out of school, people were hitting the pool, hitting the lake. And the Lemon Shake Up is very much like a summer flavor. It's a very refreshing drink. One of the things you'll find if you're ever to try it, and I'll send you some samples for you.
It's a very balanced drink. We use real lemon. It's all natural. It's gluten free. It's really tasty in a natural way versus I think other canned cocktails that are super popular are more on the seltzer side, which are also refreshing but not a ton of flavor typically. More like a La Croix with vodka type situation. Anyway, so in the summer of 22, we had this super refreshing drink and our distributor said, hey,
Why don't you make like a pallet of it, which is about a hundred cases. And they said that'll last us a summer. Like we'll see how fast we can sell it and then kind of revisit. And so we're like, all right, we made the pallet. We gave it to them. They said it would probably last about three months and magically it was gone in two weeks. And so we're like, whoa, we've got something in our hands. You know, this is the sales team, like really love the product. But then when they took it to these liquor store owners across the state,
the owners just saw like, Hey, there's real potential with this. And so they bought it up quickly. And that was an awesome problem to have, but it also left us in a real pickle, which is that we didn't have like this kind of backup plan. Like we didn't expect that we were going to have to make another batch so quickly. And so we didn't have the raw ingredients on hand. So, yeah, I think your original question was like, how did you move into new skews? And, know, we, we really got caught.
playing catch up that whole summer. so seeing that there was some potential in this canned cocktail market, and then we get to the fair in 2022, which takes place in August. And the state fair decided they wanted to sell it at their bars, which for us was a big win, because that was ended up being about 300 cases. So that was like three pallets just at the state fair over a course of two weeks.
So that gave us this huge like marketing platform that was statewide. So, you know, we had bars buying it up quickly, and then all of a sudden we had some real consumer demand due to the state fair and some of our own marketing efforts. come September, you know, weather starts to cool down a little bit, I guess in September and October, and we realized, man, what our revenue is going to change pretty quickly here as the summer winds down. And so the idea was, well,
let's just make a new flavor. And so literally like in September, we were like, let's make a fall flavor that we can launch really quickly and see if we can get it out. we did that flavor exists today. It's called spiced apple sidekick. So it's like a, it's made with real apple. It's kind of like a, it's fall in a can. It tastes like, it tastes like a, like cinnamon apple sauce, like a Mott cinnamon apple sauce cocktail. Like
in a really good way, not like with the texture, maybe I'm not doing it justice here, but Apple pie is maybe the best example. It tastes like apple pie, but not super sweet, know, like, pie is usually like a little more savory and balanced to. So I mean, really, it kind of happened organically, right? So we went from the single product that we had no idea if it was even going to be anything people wanted to my goodness, it's so like crazy for us, at least. And then
realizing, man, we need to follow this up with something to keep up this momentum. And so that's kind of how it started. And then, you know, as we got into last year in 2023 in the spring, we realized, okay, we should probably launch another flavor to keep like kind of our core base audience interested. And so we did that as well. And that was our cherry flavor. So cherry shakeup. And so we kind of realized like, all right, let's go in on this.
on this shake up flavor that we know could be a hit for us. And so that's kind of what we did.
Reed Dailey (17:00)
Nice. So, being, you know, we're in full fall here now, tell me a little more about the, Brandy old fashioned, because I live in Chicago. I didn't grow up here. and I'm learning Brandy is I think if I've got this right, it came over through either the Germans or one of the Nordic countries into Wisconsin. And Brandy is like a, a big component of drinks. I know in Wisconsin, but
Maybe it's the same in Indy in Indiana. So what give me the background that one
Dan Fahrner (17:31)
Yeah, this is a fun story too. So,
I grew up spending summers up in Wisconsin. It's where I had my first beer. As a matter of fact, I have a fond has a fond place in my heart. So we decided that, you know, if we're going to expand into some new territories, you know, this whole regional drink thing, maybe there's some legs to it, right? Like as a kind of like a market penetration strategy. And so we were kind of targeting Wisconsin. And part of the reason would be that
Maybe you've heard this, but Wisconsin over indexes and alcohol consumption per person, in the state, meaning people in Wisconsin drink more than people in other States, you know, per person. I've learned that that's very true, in the best way. So, we thought, well, all right, what's the, like the regional drink of the Midwest outside of lemon shakeup. then, you know, there is in Wisconsin, this Wisconsin style brandy old fashioned.
cocktail. if you go to a supper club in Wisconsin, you're going to see an old fashioned on the menu, but it's not going to be made with whiskey. It'll be made with brandy, which is similar. it's made with brandy is a fruit based product, whereas whiskey is a grain based. they taste somewhat similar. They're usually barrel aged in the same way. brandy is a little bit more of like a round profile, whereas whiskey can be, especially like weeded whiskey or rye can be kind of like sharp or spicy.
Anyway, so the brandy old fashioned really came from that kind of like the lore and to kind of give some background on it because it is a fun story and you're totally correct. Read. I believe the brandy came from Germany primarily and as far as I can remember it was a drink that was served to people in Wisconsin who are visiting. It was either the Chicago
World's Fair in 1892, it was a major event that maybe occurred in Milwaukee around that same time. And so the German population was serving brandy and people in Wisconsin kind of took it and ran with it. So brandy became like a common drink in Wisconsin and that's how it found its way into old fashions. The other funny thing about the brandy old fashioned is that
Typically it's muddled with cherry and orange and then it's topped with sprite or squirt which is like totally blasphemous to most cocktail aficionados so it's just like you know like putting soda in your You know like in your old-fashioned Sounds kind of crazy, but that's how they like it and So we literally made that in a can and it turned out dynamite for a few reasons
You know, it's very well balanced. But the lemon soda adds like a little bit of a bubbly texture that just works really well in a can and old fashions in a can. I don't know. mean, they can, that can be a little tricky, right? And old fashioned is meant to be kind of like the strong, would you call it like a nightcap almost kind of drink. And that just doesn't work well for a can. But so, you know, we thought this could work and turns out it's delicious.
Reed Dailey (20:38)
Nice. you know, two more kinds of questions on, the, the product side, and then I want to move into the kind of the company side. So when you thought about the, the can size, you know, I've, I've, you know, gone to liquor stores and seen RTD drinks, in sort of a smaller format. What was the decision of, of sticking with what I, you know, is the eight ounce or 12 ounce can, versus, you know, the smaller ones, how did you guys think about, you know, that direction?
Dan Fahrner (21:04)
Yeah, good question. Well, I had before we had launched the product and we were kind of an R and D stage. I started talking to other distillers and R T D brands and just learn through the grapevine that, a lot of those decisions are dictated by the retailers themselves and by the shelf space available to them. So, 12 ounce can is a standard, like your kind of common beer can.
That's the standard. so the shelf sizes are in most stores are actually based on the number of 12 ounce cans that can be, that can fit on a shelf. So there are now the like sleek cans, which are like the skinny ones, like high noon or you know, white claw or truly usually has those. That's a newer thing. Like within the last like five years has become popular, but
Honestly, it's like, that's really what it is, is the retailers are a little old school and not all of them, but you know, just a lot of mom and pop shops out there that are doing things the way they've done for 30 years. And we didn't want to rock the boat. We wanted to be as seamless as possible for them.
Reed Dailey (22:08)
makes total sense. then, know, earlier in the conversation, you met mentioned you are a branding person and. You know, you had done a lot of branding and want to start your brands. Can I make the assumption that you did the branding on all of the cans? Because it's fantastic. The, look in the field. mean, it's a very signature look and a very fun look. must, must add.
Dan Fahrner (22:28)
Thank you, I appreciate that. Well, I didn't design it myself, but I was the strategist, I guess you could say behind the brand. So it's very much is my baby and, and, know, I treat it that way. I'm not a super capable designer personally, but I mean, I, whatever I can use Canva, but I did want to hire a brand agency. And we also hired an illustration company here.
in Indiana to design the characters on the can. then, so, you know, we worked with a couple of really talented groups to pull off the branding design.
Reed Dailey (23:03)
Well, they're great. I love them. they're super fun. let's talk about kind of the, company in terms of Oregon operating model. So, you know, you initially went out and you were kind of running it, you know, one business and sort of pivoted towards, you know, an RTG, can business. Like, how are you guys, how did you guys make a, you know, staffing changes and like, what does your team look like today as you're kind of, you know, still in what I'll call early days of the business, you know, and what.
Dan Fahrner (23:05)
Thank you.
Sure.
Yeah, great question. So we are lean and mean, like on terms of the full-time employee headcount, there's three of us. It's myself and I run sales marketing finance, my wife who started the business with me and she runs our events team and a lot of sales. And then she does all of our compliance. And then our business partner, Nick, who we've known for many years as a friend who,
does all the flavor development and then manages all the production for us as well. So he actually designed the flavors and then he also built out our distillery. So he's a bit of a unicorn in that he's super talented. A bit of our secret weapon, you could say. Beyond that, we have a huge group of, well, not huge, but we have about a 20 person events team that runs.
liquor store tastings and a beer fest and all kinds of different events for us. Those folks are part-time, know, they're hourly. Essentially, this is kind of like a fun hobby for them. And those folks are based primarily in Indiana, but then we do have some folks in the Chicagoland area and then also in Milwaukee. And then...
We also have four part-time salespeople as well. So I think the thing like maybe to consider or like kind of the strategy for us is because our business is somewhat seasonal still today in that, you know, we're naturally going to see a boom in the summer and then things are going to slow down, especially in January through March. You know, you've got dry January, people aren't out. They're not.
out on the boat or on the lake here in the Midwest as much. And so we want to be able to scale up and scale down as far as infrastructure goes to kind of accommodate that seasonality. We kind of resisted the seasonality the first year and just realize that, you know, maybe we need to lean into it a little bit with, you know, the scaling up and scaling down. So, you know, we are planning to make some hires some full-time hires in the sales area. I think, you know, like
coming into this business, planning to launch a distillery bar tasting room, like restaurant, you we were expecting to staff a bar essentially, and the production team would be supporting that. However, now, you know, having pivoted into this RTD brand, it's really more about sales and marketing staffing. And you know, that's where like the firepower and the budget for our business is going. So.
You know, we deploy that with these part-time folks and, you know, all kinds of advertising as well to kind of accompany it. But that's really kind of like the strategy and, know, eventually within the next few years, as we bring funding on, we will be hiring full time. But for now, like it's been really a blessing to be able to, you know, scale up and scale down as we need to.
Reed Dailey (26:26)
As you guys are starting to think about your funding and kind of how you deploy it. I know you mentioned obviously the sales and marketing team. How much do you guys think, you know, is it going to be a balance of having what's called boots on, on the ground, know, liquid lips campaign, if you will, versus digital marketing, through like banner ads, social ads versus like, or call it organic or influencer based marketing. Like how are you guys starting to think about that and that.
that delineation.
Dan Fahrner (26:57)
Yeah, that's a great question. And those are kind of like that combination of digital and the like the more grassroots approach with the liquor store tastings and events and things like that. That's like a total yin and yang for us. We've learned that when we can create awareness through digital and through social, and then follow that up with tastings like that's when we get the conversions when people aren't coming into the liquor store cold, but when they have seen the product.
in an ad of some kind, there's at least a little bit of familiarity. So it's like kind of like classic, you know, marketing funnel, one-on-one, but it really does work. so, you know, thinking about capital and how we plan to deploy that, you know, let's say a third to maybe 40 % of our budget, probably more, it's probably more like 50 % of our budget is really dedicated to those two motions.
moving forward, which would be aggressive social media and advertising, especially. I mentioned my background being in branded marketing, but like my, my deepest area of expertise personally is in, digital advertising. So, you know, Google and social. So, you know, that's an area that I feel we can be really successful and have been thus far. But you know, it's, it's really that combo that's super important.
be able to utilize both digital and grassroots in combination.
Reed Dailey (28:22)
And then, you know, let's say you had a crystal ball and you had unlimited budget. mean, let's call this, you a lot of money coming in. Let's just say, you know, how, when you guys are looking at what's going on, you know, in the States, obviously you're, you're kind of like me in the middle of this country. Like, where do you guys find that is the most likely best next place to start expanding the business from a geography standpoint and why, like, and what's the reasoning behind that?
Dan Fahrner (28:32)
Sure.
Yeah.
Yeah. A few reasons. well, our next target state to expand is Kentucky. it'd be on that. would be in the Midwest. So Ohio, Missouri, Michigan, Tennessee, guess I, I don't know if Tennessee is considered the Midwest, but close enough. the reason for the Midwest primarily, even though there is more seasonality it's
primarily because the nostalgia of the lemon shake-up flavor is familiar in this part of the country that it's not necessarily familiar in Florida, for instance, or Texas, which are like natural expansion markets for an RTD cocktail brand. We may need to experiment in those areas anyway. In fact, we'll have to, but...
We have learned just through, you know, a few years now of trial and error that there is familiarity and, which called context and essentially kind of like, have the ability to tap into a audience, just through like the familiarity of the lemon shakeup flavor. So that that's like a big thing for us. And, know, that will be tested and it is continuing to be tested here, but
I mentioned Kentucky a minute ago, the reason that we're planning to head South from where we are here in Indiana down to Kentucky, Louisville is only two hours from us. The other reason that Kentucky is really appealing is that, well, there's two reasons. Number one, they have Total Wine stores in Kentucky. Total Wine is our largest account here in Indiana. We do very well on Total Wine in Milwaukee and Madison, Wisconsin as well. We have the ability to kind of like turn on.
our presence in a state with total wine, if we want to, which is a huge bonus, you know, we can go into total wine. can start our process right away and that we can book tastings. can drive digital ads to people who are following total wine. it's a really like nice way to start a process. the other reason for Kentucky is that it's really the spirits epicenter of the country here in the U S.
The laws are simpler or more friendly for brands like us. There are things like shipping that can occur in Kentucky that can occur here in Indiana for craft spirits. There's all kinds of unique laws and there's just a tourism based around the craft spirits industry that is very appealing. So I think that's kind of like an easy next step for us.
Reed Dailey (31:24)
Nice, very cool. In terms of like, in terms of your kind of growth strategy, so walk us through just, you know, where are you guys and what are you looking to do next in terms of, you know, your growth evolution?
Dan Fahrner (31:38)
Sure, yeah. to date we've sold about 18,000 cases, which to put that in context is close to a million dollars worth of canned cocktails, which for us is very exciting or we're pretty proud of that number. And especially because both my wife and I are part-time in the business still, so it's exciting to think about what it looks like going full-time. So as we think about growth,
like the areas that we can scale and need to scale our sales capacity, marketing effort. And then, you know, on the inventory side, we can, that's, that part's pretty plug and play and that, you know, we have a process for it. So the areas of growth really come down to that sales and marketing motion. In terms of like, you know, what that means for our business, you know, we're planning to be able to hit about a million dollars in revenue.
in 2026 and, that will essentially allow us to, to do some, more kind of aggressive fundraising to kind of put even more fuel on the fire. So I think we are in the middle of a fundraise right now. it's essentially a bridge to a seed round that will occur in 2026. And, all right, this bridge period right now, is really designed to kind of help us prove the ability to.
scale into these new markets in Illinois and Wisconsin and get some real traction and velocity so that we can increase that movement or that traction across other states after that.
Reed Dailey (33:06)
In terms of just looking at the macro economics here of just what's going on in the marketplace, obviously, dry January is a real thing now. How are you guys thinking about tailoring taste buds and dealing with changing market trends and building that into your product skew?
Dan Fahrner (33:28)
Yeah, great question. Well, I'm happy to say that we are on perhaps the bleeding or cutting edge of where the trends are going today. So maybe I'll take a step back and just think through like alcohol industry trends over the last like 20 years or so, starting with craft beer, like in 2010. So you saw craft beer kind of explode in 2010 and.
all these breweries just started popping up everywhere. And some, some breweries got big rather quickly. Like in Chicagoland, you had Goose Island, like the best example, right? Who they were like the original Chicago craft brewery. And I remember very well being living in Chicago at the time. And, you know, that was what my dad would buy and bring home. And I would, you know, sneak out, you know, in high school. So sorry, dad.
Anyway, craft beer is a great example. you know, growth started in let's say 2010. And by 2017, that's when you were seeing larger beer brands buy up the craft brands. So they were putting fuel on the fire then even like increasing their distribution was just like, you know, built the market up even more. And then what you saw in about 2020, or maybe let's say 2019,
maybe even a little earlier, you started to see the seltzer wave coming. And the seltzer wave was a bit of a reaction to kind of like the maximalist flavors in craft beer. And the idea was that like, you know, drinking whatever, a 30 case of Keystone light had more calories than white cloth, we can give you something easier to drink. It also is more appealing to women. So that was part of the
the idea was to kind of bring the female consumer into the picture a little bit more, whereas like beer has been, you know, primarily male predominantly. So the hard seltzer craze really started to pick up major steam to the point where it really peaked in about 2021, kind of like mid pandemic or like right after kind of the core of the of pandemic for COVID. And then
What you started to see since then now is even further changing in the trends towards even more health conscious and the primary like factor there has that I've seen has been gluten-free, which is really interesting. So you go to restaurants, you see it on the restaurant menus all the time. You know, can get gluten-free buns on your burger and you know, you have entire restaurants dedicated to being gluten-free and
This that trend, it's so it's beyond just beverages, right? It's food in general. So there's like kind of something driving that trend. And so now what's fascinating is you're starting to see the seltzer wave start to kind of come down on the other side. Hard seltzers are still doing really well. White Claw and truly they're still like major players in the market. However, they are losing market share at a rate of about 16 % from 23 to 24. So it'll be interesting. Now craft beer
You're starting to see lose market share as well, but this year it may be as high as 30%, which is wild. So the trend, you know, you see these huge peaks and then now they're starting to come down and now something else comes along, which was the seltzer boom. And now it's starting to come down. So the question is, what's the next wave? And we are absolutely on the front lines of that next wave, which is, you know, like spirit based RTDs is what they're called. So,
ready to drink cocktails made with real spirits. So that would be in our case, gin, in most cases it's vodka. So a good example, this would be Hi Noon. Hi Noon is a very well-established brand, primarily vodka based. But you know, those are still made kind of more like a La Croix. It's like a La Croix with vodka, right? So not a ton of flavor. Well, the wave that's coming here,
that we're starting to see pick up significant steam is the full flavored or flavor forward cocktails. And that's really where our product comes in. So it's not a seltzer. It's a full flavor cocktail. It's balanced. You know, our, our product is made on the lemon shakeup as an example, made with real lemon. We use real sugar. So there is sugar in it, but you know, it's not significant. It's not too sweet. It's very balanced.
Reed Dailey (37:32)
Okay.
Dan Fahrner (37:50)
it's all natural, it's gluten free. And so that's part of the reason I think people have really taken to it is that we're hitting on all these like trend notes at the right time. And a good example of that too, maybe to kind of close this out would be, Gen Z. So like the youngest generation that is now able to drink legally. You start to hear these stories like, Gen Z doesn't drink as much alcohol. And that is true. but what they are drinking is higher quality. They're not the ones buying.
you know, the 30 pack of Keystone light or whatever. And of course that does happen, but you know, predominantly, especially in urban areas or like in Chicago and the burbs, like what they're buying is generally a little more of a high quality product and they're looking for, you know, cleaner and more interesting brands. So, you know, here we are.
Reed Dailey (38:38)
Nice. I appreciate it. And Dan, you know, I've peppered you with questions and I know we're kind of coming up on our time. So I want to thank you for, you know, spending some time talking about your brand. Can you leave us with where we can find you and your company online for people to check out?
Dan Fahrner (38:58)
Absolutely, thanks Reed. Yeah, happy to be here. This is delightful. I love sharing our story and helping people kind of see what's going on. Peel back the curtain if you will in the industry. You can find Hi & Mighty in our shakeup products online. Our website is drinkhiandmighty.com. It's drink-H-I, like hi, and mighty.com.
our Instagram handles at drink high and mighty. that's probably the easiest way to check us out and get in touch. and, you know, any store in Indiana, you'll be able to find us. However, in Illinois, you know, I would definitely look at Binny's and some of larger independents and Wisconsin total wine. but we're coming to a store near you.
Reed Dailey (39:37)
Thanks Dan. See you soon.
Dan Fahrner (39:40)
You're welcome. Thanks Reed.
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