Stewart Skloss, founder and CEO of Pura Vida, talks tequila and the spirits business.
Please excuse any typos in this hasty transcript.
Matt Register: Welcome back to the show. Texas Business Radio. We have a exciting segment for you. We’re talking about booze, and some very interesting things about it. We have the owner of Pura Vida Spirits Company, makes some very, very good tequila if you hadn’t tried it you need to do yourself a favor and go try it.
Stewart Skloss: Tonight.
Matt Register: Today. That’s right. That’s exactly right. Couple of ways to get in touch with us guys. #TBR on Twitter. Send your questions in, go to the website send your questions in. Or, give us a call 844-814-8144 is our 24-hour call in line. Get your calls in anytime of the day. We’re going to get the experts on here to answer them.
I’m your host Matt Register. Jay Curry is the one sitting over there in the co-host chair. What do you think Jay?
Jay Curry: Well, as you know I’m a wine guy. But my head’s just spinning after spending a little bit of time with Steward. This is a complex business, this is a tough business. It’s amazing, it really is. Going to be a fun story to hear.
Matt Register: Yep. Stewart Skloss, Chairman Pura Vida Spirits company. Stewart, welcome to the show.
Stewart Skloss: Thank you very much. Thanks you guys for having us.
Matt Register: So, tell me about Pura Vida. What is it and where do you … Who drinks it and what is it?
Stewart Skloss: Well, hopefully after the show everybody listening will be drinking it.
Matt Register: That’s exactly right.
Stewart Skloss: I’ve got to get enough money to get home. That was a long ride out here.
Anyway, Pura Vida is a … It’s Pura Vida Tequila. Pura Vida means pure life. A lot of people say that’s a Costa Rica saying. It’s actually the name of a movie that was made in Guadalajara Mexico, which is where the tequila regulatory commission .. Backwards in Spanish, is located. It was played in the theater, the first big theater there in Costa Rica. So, everybody loved Pura Vida, Pura Vida. I was trying to come up with a name when we started this that was different and the one thing we only have here in the United States as far a a toast is the word Cheers.
Matt Register: Right.
Jay Curry: Mm-hmm (affirmative).
Stewart Skloss: And so, translated Pura Vida, pure life, when you’re toasting, you’re toasting to life. Every thing you’re supposed to be enjoying. Or, you’re attributing, or whatever it may be was Pura Vida. So, we came up with the name Pura Vida.
Matt Register: Nice. We were talking during the break, and I want you to walk me through because I’m not sure I understood exactly how the spirits business worked. There is a lot of regulation, there’s a lot of tax, there’s a lot of things you need to know before you get into the business. Walk me through a little bit what happens from the moment that this is distilled in Mexico until it hits somebody’s lips. Who all touches this product?
Stewart Skloss: Well, it depends. Each state, we have three different regulatory state different types here in the United States. One is a control state.
Matt Register: Mm-hmm (affirmative).
Stewart Skloss: Which is controlled by the State government and that means they run the liquor stores. Places like Pennsylvania-
Jay Curry: Virginia.
Stewart Skloss: Virginia, and so those are State owned liquor stores. Then you have what are called three tier States, and there’s only two of them. Texas being one. They call it a three tier it’s really five. But that means when it leaves the distillery we then sell to an importer. The importer then sells to a distributor, then the distributor sells to a Class B wholesaler. Like here in Texas SPECS, SPECS is the largest. Then they turn around and they sell it to a customer. So it’s really a five tier way down there.
Matt Register: And that customer could be a restaurant, it could be a consumer, correct?
Stewart Skloss: Correct. So, on premise means selling to a place where you can drink it on site. Bars, clubs, restaurants. Off premise means you buy it, you take it off premise. Those are liquor stores. Then you have other States that sell directly to the consumer. Actually to the customer that sells to the consumers. Which, for instance, in California Young’s Market Company, which is the largest distributor out there that’s based there. Southern Glaciers being the largest in the country. They would sell to a liquor store, or they even have stores for themselves that people can come in and buy.
So, it’s a mess.
Jay Curry: What … Yeah. And every level there’s a little more cost. Right?
Stewart Skloss: Right. There’s a lot of cookie jars and everybody’s got their hands in it.
Jay Curry: Lot of people eating on that. Oh, my.
Stewart Skloss: It’s incredible.
Matt Register: No. And one of the things I didn’t realize either is that tequila is along the same vein as champaign is with sparkling wine, right? It can only be called tequila if it’s produced-
Stewart Skloss: Absolutely. It’s got to be produced in one of five States there in Mexico. Except for what is called a mixtos. If you’re going to be a … We’re 100% Blue Weber Agave. Pura Vida is, Patron is, Don Julio, Casa Amigos, Herradura, et cetera. Those are 100% Blue Weber Agave tequilas. They are mixtos tequilas, which many people are familiar with. Jose Cuervo, which is 51% Blue Weber Agave and the other 49% it’s a luck of the draw. Whatever’s least expensive spirit that they can put in there that month. Those can be made outside of Mexico.
Matt Register: Okay. Interesting. That’s very … So, talk to me about how you got into this business. Because … You just wake up one day and said, “I want to be in the Tequila business”?
Stewart Skloss: Well, no. Like I said before being a stripper out on the seniors tour wasn’t working for me.
Jay Curry: This is a big guy. You got to see the video before you get that one.
Matt Register: Yeah.
Stewart Skloss: No. I had started a tequila company when I was 20. I was living in … I went to school at Universidad de Antonio in Guadalajara Mexico through the University of Texas exchange program. We were driving to Puerto Vallarta and we came across town called Tequila. I said to my buddy, I was like, “We got to stop here.” We thought it was a joke, like Wally World or something like that trying to get the Americans to pull in.
Well, my roommate had a black passport, which is a diplomatic passport. They found a diplomat was in town and everybody was inviting us to their distillery so they didn’t have to wait in line at the Embassy for a Visa. Or whatever it may be. So, our trip to Puerto Villarta got delayed. We wound up spending two days there. We traded our Volkswagen Gulf for two days for two donkeys and we stared a Tequila called Dos Hermanos. It lasted about six weeks, because I had the attention span of a Mexican jumping bean at that age.
Fast forward, I was at dinner with John Paul Dejoria, this was, I think, in 2008. We were business partners. JP owns Patron, he also owns … Well, he did own it, he sold it on Monday for 5.1 billion dollars. He also owns Paul Mitchell hair care products and numerous other businesses. Great, great guy. Not a better mentor out there. Shout out to you JP.
Anyway, he had just told me how much he had sold 28% of Patron for. I about fell back in my chair. He said, you should have stuck with … “Didn’t you have a tequila company when you were 20?” I said, “I did.” He said, “You should have stuck with it.” I said, “First of all blank off. Second of, dinner’s on you.” He said, “I can take that.” I said, “For life.” He said, “I can take that too.” He said, “Listen. You ought to do it again.” I said, “JP I can’t afford it.” He said, “If you wait till you can afford it you’ll never do it.” And from that moment on I decided that’s what I was going to do.
So, a long … I know we only have a couple minutes on air. So, I went down to Guadalajara Mexico and decided to make … You know, the United States is a blend of ethnicities. We’re all from somewhere else, so we’re middle Asian, we’re African, we’re Latin, we’re Vikings, you know, whatever it may be. But the people in the United States like flavor. People in Mexico are used to bite. So I wanted to take the bite and the spice out of tequila while keeping-
Matt Register: The flavor.
Stewart Skloss: The flavor. So, foundation of all spirits is water. You’ve got to have great water. So, I asked 100 bartenders, “What’s your favorite water? What’s your least favorite water?” Favorite water was Fiji Water. So, I went to Seamans and said, “How do I get water out of Mexico?” They said, “You don’t want to use in the areas where … Up in the Highlands of Jalisco, or Lowlands of … Down in the Lowlands. You really don’t want to use water from a plant. You want to use water from a well, or water from a stream.” So, we decided to buy a five stage water purification system and drill a well and we came up with the clean, clean water.
The partnership that we just made we are actually using water coming from the mountains of Mazamitlas.
Matt Register: Okay.
Stewart Skloss: So our water is as clean … Well, I’ll put it up against anybody. Our PPMs, parts per million, of any type of substance other than water, we’re the lowest there is. Then we use … Our Agave are 23% or higher in sugar content. The highest in the business. I test out one out of every 10. So, when you open our bottle … Here you go Jay, you give this thing … You’ll notice the aroma.
Matt Register: Here we are opening the bottle in the middle of the broadcast.
Jay Curry: Folks, you’re going to have to see it on the video. But-
Stewart Skloss: You see that aroma?
Jay Curry: Hmm.
Stewart Skloss: You don’t have that “blech” that you’re so used to getting.
Jay Curry: No, not all. Not at all.
Stewart Skloss: So, got to make sure it’s absolutely perfect. See how it’s almost sweet?
Matt Register: Mm-hmm (affirmative).
Stewart Skloss: Because we use, again our Agave … Most people use 14, 16, 17% Agave. We’re at 23% or higher. So then I triple distill it, twice in copper, once in stainless steel. There’s two other tequilas that do a triple distillation. We do ours twice in copper, once in stainless steel. We use only single generation Jack Daniels barrels for our Reposado and our Anjeco. Then also, we play Mariachi music during the fermentation process, during the distillation and in the barrel rooms. We say it puts a little bit of sip … Little bit of dance in every sip.
Matt Register: That’s the secret.
Jay Curry: Bottom line’s quality. You are a perfectionist on the quality that you want to put out.
Stewart Skloss: Absolutely. You know, people play music at their plants to make it grow. That’s what we do with our tequila.
Matt Register: That’s interesting. That’s the secret sauce right there, is the Mariachi music played while it’s being distilled. Wonderful.
Stewart Skloss is the Chairman of Pura Vida Spirits, and Pura Vida Tequilas. If you haven’t tried it, go try it. It’s available at SPECS, and fine restaurants all over Texas. Ask for it, give it a shot it’s good stuff.
Puravida.mx is the website. We’re going to have it linked right there from Texas Business Radio. We are out of time though. Thank you very much for joining us.
Stewart Skloss: Yeah. Thank you guys so much. Really do appreciate it. Thank you.
Jay Curry: Great story.
Matt Register: We’ll be back with a whole lot more Texas Business radio right after this.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.