184: {Interview} Growing and Scaling a Niche Business with Jess Loske

Today I'm sitting down with the co-Founder of Midwest Barrel Co. Jess Loseke.  She shares her entrepreneurial journey in the whiskey barrel industry, highlighting the challenges of scaling a niche business, the importance of mindset, and leadership insights. Listen to exactly how how her team navigates international logistics, tech innovations, and why building a strong company culture is crucial.

Connect further with Jess HERE and more on Midwest Barrel Co. HERE

Transcript

Caroline Pennington (00:00.983)
Welcome, Jess.

Jess Loseke (00:03.33)
Hi, Caroline.

Caroline Pennington (00:05.357)
So you and I were connected by through a mutual entrepreneur friend, and I have been following your journey for a little while now, and I've been very fascinated with everything that you've done. You're a founder, you're an entrepreneur, you're a speaker, you're an industry disruptor. Tell me your story. How did you do it?

Jess Loseke (00:24.8)
That's a big question. Where in the story do you want to start? Do you want to start at the very beginning or how far back are we going?

Caroline Pennington (00:32.525)
Part wherever you want to.

Jess Loseke (00:34.744)
Okay, well, the number one question that people always ask me is how on earth did you get into what you do? So I sell barrels, which is very niche. And by barrels I mean used bourbon, whiskey, wine, tequila, all kinds of specialty barrels. We buy them after they're emptied at the distillery or winery, and then we get them to their next stopping point.

And we've been in business since 2015. I did not start the business, so my husband actually is the the interesting one of this story. So dating back to 2013, I was working in HR consulting and I traveled a lot. I was gone about half the month. And so he started going to auctions and estate sales, and he would buy, I call it other people's junk.

And he would resell it. And he got really good at it. He spent a couple of years doing that. And then we started having a family. And suddenly him being at these estate sales and auctions all weekend, I was like, maybe we don't do that as much. And so he decided to start buying wine barrels. So he has his PhD. It's in it's called viticulture, which is the science of growing grapes. And he saw an opportunity to

To buy these barrels and to sell them to wineries. Well, it turns out wineries don't buy used barrels. And so he found a different market. So furniture and then breweries. And fast forward, you know, he did this by himself for a couple of years. And then a series of life events happened. And it made sense for me to leave what I was doing and to go join him full time. And so we've been doing it together ever since 2019. So really that was the year that we took this from it's a hobby to it's a business.

And we started putting systems and scale and people because before that he was just an N of one doing everything all by himself. And through that process, I've really learned that there's two different types of founders. So there's the scrappy, the startup ones that they're gonna wear all the hats and learn every system and know every customer. And then there's scaling founders, and they're not necessarily the same person. They can be, but it it's often not. And so we were really good match because I was able to come take.

Jess Loseke (02:52.332)
his proof of concept. And he went out into the market and he tested everything. And then I was able to put marketing and vision behind it and people and really scale it. So we started our business in Nebraska. And then in 2020, January of 2023, we moved to Louisville, Kentucky, because as we started doing business models, we realized it did not make sense to bring barrels from Kentucky, Tennessee, Indiana to Lincoln, Nebraska.

and then ship them back out to ports to go internationally to Scotland, Ireland, China, India. we shipped over thirty countries today, but that's kind of like the condensed version of the story, but everybody wants to know how did how did you get into barrels?

Caroline Pennington (03:36.491)
Yeah, and I want to know more nitty-gritty than that too, because I've invented a wine product and done the e-com thing and not at the level or scale that you guys are operating at, but I mean, how did that look on the back end like when you

Jess Loseke (03:47.182)
Mm-hmm.

Caroline Pennington (03:52.387)
I'm sure there's a time period you have from when you source the barrels to when you need to get from the customers and there's logistics involved in that and timelines and when you get international like you guys are doing, like you've got shipping, turnaround times, and all of those things. I mean, how did you guys work through those things?

Jess Loseke (04:07.986)
Yeah, so it was not all at once. that's kind of the first thing. So I will give Ben, my husband and business partner, a ton of credit because when he first started buying barrels, he was doing it very local in our our community to test the market. And his his first marketing campaign besides like Craigslist and was when Facebook, I don't even think Facebook Marketplace existed, but you could post in Facebook groups. But he

bought a bunch of signs that said wine barrels for sale and had a cell phone number and he did the old school like sticking yard signs all around. And you know, still even today, there's actually one of those yard signs in the Nebraska State Capitol as like an artifact, which is really funny to me. But he he did that hard work before he spent a lot of money investing in how to scale and how to figure it out. But the genius thing that he did is he he saw

a market to go beyond our little local community. And he put a barrel on the internet. And that changed everything because before that, no one sold barrels on the internet. Still to this day, they're really, we really are the online marketplace. No one's quite doing it in the same way. But we ran through many different issues as we got into that. So like the first big barrier that we hit is shipping. And so we could put

A barrel on the internet, and you could get online and you could order one barrel and we would know how to charge for one barrel. But the second that you added two barrels, the tech at the time was not sophisticated enough to calculate what the shipping realistically should be for two barrels. So it would take way, it cost $180 at the time to ship one barrel, and it would take 180 times two. And if you added six barrels to your cart, it would take six times 180. And

I knew that that was not sustainable if we were going to get to higher volumes because you would lose people at checkout because of the shipping. And so that really set me on a multi-year journey of many different website iterations. We started with Wix, then we went to Squarespace, then we went to WordPress, then we went to Shopify Plus, and then we did an upgrade of Shopify Plus. And so that was all really between 2018 and let's say 2023.

Jess Loseke (06:28.2)
All of those versions of the website were done and iterated differently. And then by 2021 was when I found an app that we could plug our carriers into that would calculate real-time shipping. So if you're in California, it's going to calculate to your doorstep what it would cost. And if you're a business, then that's one price. And if you're a consumer, a different price.

That changed the game for us and really allowed us to do this at scale in a way that had never been done before domestically here in the US. And so for us, it's been a lot of iterations and a lot of failures and testing things that didn't work. And I have tested so many tech platforms, and that's really been the game changer for me is being very committed to staying best in class with the tech and

My team probably doesn't love it all the time because they get comfortable with something and I'm like something new and better is out, we're switching. But that's just kind of been the motto of of how I lead.

Caroline Pennington (07:27.603)
customer acquisition? I mean your husband did started with the sign and the Facebook picture, Facebook before there was even Facebook Marketplace. Like, did you go on a journey to ship directly to a customer or was it more profitable for you to go to the company?

Jess Loseke (07:46.51)
That's an interesting question and quite frankly, something that we've struggled a little bit on because in general we are. How do I how do I word this? I never quite get it right, but we're essentially a B2B company that masquerades as a direct-to-consumer company, and then sometimes a D to C company that masquerades as a B2B company. And so we've had an identity crisis going on our entire

Existence because the platforms are built for direct to consumer. So Shopify, for example, on the back end, they have what are called person accounts, not business accounts on a typical if you don't build out a wholesale platform. And they now have wholesale B2B features, which is great. But the problem is our customers now expect a direct to consumer shopping experience. And so it's been a little bit of

Both where the platforms are designed, we use Clavio for email marketing. That is designed at the person level, not at the business level. But we've found that no matter what, it's a you're speaking to one person at the end of the day. And that's a human buyer that is not the identity of the business. And sometimes they look confusing, but you have to reach to that person. And so we've always marketed more with a person focus.

rather than a business focus because that person, that brewer might leave and go to a different brewery. They might expand and want some of our D to C products, but really you have to speak to one end person.

Caroline Pennington (09:22.489)
So what was it like when you started having demand in other countries? Because that just is a whole nother ball game. A lot more red tape. You wanna talk about currencies, taxes, like all of the things. Like what did that look like?

Jess Loseke (09:36.534)
Yeah, it's been hard. and and the last eighteen months have by far been the hardest. Every single country has different customs rules. They have different shipping and inspection requirements. So for example, shipping to Australia, there is a you can call it like a curing period. I'm probably not using the rect correct terminology on this, but your container arrives and it has to sit at the port for a spirit period of time because they don't allow for

bugs to come into their country that were from other countries. And so they have to make sure that products aren't brought in with certain insects. And that's very specific to Australia. And then there's other countries like Scotland and Ireland, super easy to ship to because they've been buying barrels for centuries. And so they and probably not centuries, decades, called decades, they've been buying from the US, but Scotland and Ireland, they they know the drill, they know the deal, the

Systems are set up really easily there. India and China, those are the two big markets that have been coming online in the last couple of years. They don't know how to buy barrels. And so that has been not only are you f figuring out logistics, customs, all of those pieces, but you are educating them on how to barrel age. And so they don't understand the product. They don't understand what buying a used product looks like. And so it has been really, really hard that education curve. And so

We try to stay in front of it as much as possible, but it is definitely a work in progress.

Caroline Pennington (11:04.729)
I love you and your husband work together as a team in this too, because my husband and I I do more the marketing stuff and he is a lawyer, he does more of the legal stuff. And it's nice 'cause you can help each other out, you have different skill sets and you stay in each other's lane. Has that been the similar experience for you and your husband?

Jess Loseke (11:16.803)
Yes.

Jess Loseke (11:20.558)
Yeah. So he will say that he didn't ever have a vision that I was going to actually like I was doing stuff behind the scenes, like, you know, advising behind the scenes, but he didn't ever have this vision that like I was going to show up to work one day. But that's literally what happened. We had in 2018 we'd hired one employee and he started in January and in December he put his notice in because he was moving to Denver and

I said, Well, you have no one to answer the phone. And he worked full time at the time for the University of Nebraska. And so I'm like, you have a full-time job and we've now grown this enough where like it's the actual business. Like this is not a hobby anymore. Like this is a business. And I was like, I guess I'm coming to work on Monday. And so I just showed up and I didn't know anything about barrels. I I remember the first the first conference that they that him and that employee went to.

I was covering the phones while they were gone. And the the first day they were gone, the phone rang and I got really nervous. which this is just so funny to even admit out loud, but I because I didn't know anything about barrels and I was so scared they were gonna ask me something I didn't know. And I had a can of Coke sitting next to me and I spilled the Coke all over my c computer keyboard and I completely fried my computer and it wouldn't work.

And you know, back like I didn't have money to go buy a new computer. Like we were bare bones. Like we were like, you know, every single dollar got reinvested. We were not taking salaries, nothing like that. And I remember the phone call where I had to call my husband and tell him, well, I answered the phone, but I ruined my computer. And so thankfully that one instance didn't ruin his trust in me. But I it turns out I'm pretty good at marketing. that's my lane. I do all the legal

I do all the human resources pieces and then he does all procurement, he does sales, and he he he's better at on the finance side than I am. I mean, I the you know, it if you're gonna be an executive and certainly if you're gonna be a CEO, you have to know the finances. So I, you know, have had to work harder at that. So we both handle that. but he is better at that side than I am.

Caroline Pennington (13:33.943)
So switching gears, I still want to talk about your journey and working together in the barrel company and how you scaled. Talk talk to me about mindset. I mean, what's it been like to grow and scale a company like that?

Jess Loseke (13:45.312)
Mindset's everything. that's such a good question. And it's such an underrated. I feel like it's kind of one of those, it's really cheesy and you know, kind of a woo-woo sort of thing. But I really f do feel like your mindset determines all of your success because you either get up choosing to go tackle the day or letting the day tackle you. And as a business owner, my my whole role is

Solving problems all day long. That's what I do. I'm a chief problem solver. And I the hardest problems come to my desk. And that's what I'm really, really good at. And if you have the attitude or the mindset that you're defeated before you ever even start, you're not gonna get anywhere. And if you've been following the alcohol industry in any way, shape, or form across the world, this is not specific to the US, but it is not good right now.

So we are going from having grown and scaled our business incredibly rapidly to hitting a cliff and watching the whole industry just tank in the last, you know, really 15 months. And so you have to make a choice every day to get up and to be better than the day before, or to let the day beat you. And I I mean, this is such a life thing for me. My oldest is 11 and he's gotten really into golf and

I I know you're kind of like an 11-year-old playing golf, like, okay, congratulations. But he's actually like pretty decent. And golf is a completely a mental game. And that's all it is, is it is just going out there and it's you versus you all day long. And so it's been very interesting for me to take my mindset focus on business and try to teach my 11-year-old how to apply that in his life and to watch him struggle with that and then to remember.

I didn't learn this overnight and I really believe as the leader that you set it's my job to instill hope, not fear. And so if I wake up every day letting the problems mentally tackle me, that's gonna translate to the team and they're gonna be really disengaged. And so it's a choice that you have to make every single day.

Caroline Pennington (16:01.305)
Okay, that was so good. So anybody listening to this podcast, repeat this last three minutes, okay? We know I spoke about this earlier before we press record about both of us being Enneagram eights, which I love the Enneagram stuff. I love all the woo woo stuff. I am into all of it. but I wanna know, how does that help you as a leader?

Jess Loseke (16:14.209)
Yes.

Jess Loseke (16:22.606)
Well, I really think that the core of not just being a leader, I mean just really being an all-around solid human is self-awareness. And you really do sorry, I'm dropping my headphones here. Let me let me start over here. If anyone else out there has this problem where headphones don't fit into their ears, that is me and

Like they literally don't fit in my ears, but when you're on a podcast, you gotta have headphones. It sounds so much better. So sorry about that. Squirrel. Okay. Yes. So self-awareness is the number one best gift that you can give to yourself. And it does not matter if you are in a leadership position, if you own a business, or if you are a stay-at-home mom, because no matter what role that you play in life, the more that you know yourself.

Caroline Pennington (16:52.919)
Same problem, so you know.

Jess Loseke (17:15.68)
the better that you can be and show up for the people that are around you. And so I have been on a self-discovery journey my entire life. And there's so many tools out there. I'm you mentioned Enneagram 8. I love Enneagram. I love Culture Index, Gallop Strength Finders. I mean it like there's so many out there that you can tools that you can take to learn about yourself. Take them all. Like I'm not a proponent of just one. Learn all of the things that you can

Because what it does when you start to learn about both your strengths and your weaknesses, you can learn to double, triple, quadruple down on the places that you're strong, and you can learn to put pieces and things around you in your weak areas. I always say I wish that resources like this would have existed when my mom was parenting me because she will to this day describe that I was her hardest child to raise. And

What I have learned is because I have this talent of asking questions. So I always want to know why, why, why, why. And I'm so inquisitive. I am so curious. But to her, that came out as disrespectful. And she was telling me what to do and she wanted me to do so. So she did not know how to cultivate that talent in me. So for the longest time, I thought something was wrong with me and I thought I was a bad kid because I would constantly be pushing my mom in the wrong way and she would be frustrated with me.

And it was simply because she didn't know that that was a talent and she didn't know how to cultivate it. I'm now a parent and I'm able to see those same things come out in my kid and I can see, I did that to my mom, and I could understand why she thought it was disrespectful, but it was really just curiosity. I am very bad at finishing things. I'm really great at starting things. I'm very, I'm like I said, I'm so curious. I want to try all the tech. I want to do all the things. I want to be involved in so many different things.

So I start, I start, I start, I learn. And then the second that I get bored, I don't finish things. I have to have a team around me that comes behind that can complete things for me because I won't get it across the finish line. So I know that about myself. I could spend every day, all day trying to force myself to finish things and I would be miserable. I would not be as successful. Instead, I try to hire around. So I think that knowing yourself, self-awareness, being a female Enneagram eight is not easy.

Jess Loseke (19:38.402)
It's oftentimes it, you know, it's it's not warm and fuzzy. You're not generally described as empathetic. and that has been something that learning about what that looks like and how it manifests itself has been really important. what what's your favorite thing about being an Enneagram eight? Like what do you like about it?

Caroline Pennington (20:01.259)
Agree with you on some of the things when I look back and my childhood or how I was parented or what I was told from teachers. Like I was always bossy, I was always too direct. I was always and I was raised in the South. And so I there's even more like layers on top of that. It's like how I needed to be a lady or whatever. And I I mean, yeah, even like cultivating adult friendships, you know, I'm in my 30s now, like it just looks different. Like

Jess Loseke (20:15.534)
Yes. Yeah, yeah.

Caroline Pennington (20:30.049)
Not everybody can take my directness or wants to be around my personality and that's okay too. And it's just like a whole thing you have to figure out. So

Jess Loseke (20:39.662)
I love that you brought up being direct specifically because that that right there is being a female and being direct, those things don't generally go together in friendships and business. You you put it anywhere and it doesn't work. And I had an employee who had his last day on Friday, and he did an exit interview with his manager, and one of the notes in there said that he would have preferred to have feedback in private. And

I know exactly what that comment was meant about because we have a stand up every single day. And during the standup he would be sharing things about his role and the communication was confusing. And so I would pull and pull and pull and I would be like, That doesn't make sense. Try it again. Like tell me more. Like and super direct. And so when I get a piece of feedback like that, what what do you do with it? Because nobody wants to hear negative feedback. But the reality is is that even though

Go back to self-awareness. I know I'm direct. That doesn't abdicate me from the responsibility of learning how that other person needs to receive feedback. It doesn't mean that just because I'm direct, everyone else needs to receive my directness and just accept it and that it's my way or the highway. In fact, it's quite the opposite where I have the responsibility to learn how other people like to be communicated with.

And so that's really important feedback that I need to be held accountable. That like he didn't like how I gave him that feedback. And I really need to be self-aware of even though I tell people I'm direct, you know I'm direct, it doesn't necessarily make it okay and doesn't build that strong foundation of a relationship. And so I'm really taking that feedback to heart, but that's my natural, you know, display of

Of how I how I am. Now I don't let people run over me, so th being direct is can be really an awesome thing at the same time.

Caroline Pennington (22:32.887)
That example. Thank you for sharing that. and I am guilty of that too. So I think you raise a good point. You have to know your audience, know your team members, know what how to communicate with them. Everyone's different, and just be flexible. okay, so what are you most proud of personally and professionally?

Jess Loseke (22:55.95)
of all time.

Caroline Pennington (22:59.609)
Sure.

Jess Loseke (23:01.972)
Okay, so professionally I am I I did a program in 2022 and 2023 through Pipeline. It's called Pipeline Entrepreneurs. So it's a fellowship program. They only take 13 entrepreneurs in in the Midwest, so Nebraska, Kansas, and Missouri. And I applied to that program

It's mostly for tech founders, but I wanted to think like a tech founder. And so I knew I would be a fish out of water, but I really wanted to learn how tech founders operated. And I went through the program. They have two awards that they give out. They give out an award for best pitch. I had never pitched before. So again, it's designed for people that are raising money. And I we are bootstrapped, so I'd never raised any money. And then they give out an Innovator of the Year award. And I won both awards. And I

say that not because I'm proud that I won both awards, which I am, but I am proud at how much I leaned into that program because I really truly do think that it changed my life. It changed my perspective. It changed how it it changed it broadened my horizon of how business is

Jess Loseke (24:15.342)
It's not done just one way, that there's multiple different ways to build a business. And I saw firsthand how raising money is a full time job in and of itself. And so when you are a founder that has to raise money, you spend 50 time 50% of your time building your business, 50% of your time raising money. And what a gift that I have that I'm not raising money. I and I didn't realize that before. And so

That's definitely probably my top professional success. And then on the personal side, it sounds so cliche, but I definitely have to say my children are my best personal success. But I'm gonna get specific here. I am on a mission to raise good humans. I have two boys, they're eleven and nine, and raising good humans me can mean many different things to people, but I wanna raise men that are helpful.

Men that are kind and men that are hardworking. And my mother-in-law, I have to give a shout-out to her. She raised three sons, and all three of her sons are all those things. And she did just such an exceptional job. And I am on this life mission of how can I raise these three helpful, kind, hardworking men? And

The things that these eleven and this eleven and nine-year-old do as far as hardworking. My oldest, he we live on five acres. He mows our entire lawn without being asked. He does his own laundry. My youngest, we left him home by himself for the, you know, very first time for an hour and he unloaded the dishwasher and he picked up in the living room. I mean, I I just those are the types of things that even in a in a day when you feel like, man, their behavior was really off today. Like, I'm like,

Man, I'm doing something right and I'm just so, so proud of them.

Caroline Pennington (26:05.663)
I love those examples and then thank you for getting specific because I think i it's fun. So I don't have any kids of my own personally. My husband has three kids. it's a second marriage for both of us. I've made the choice not to have kids, but most of my friends do have kids and I've had so many women say that exact same thing, whether or not they work in corporate or stay at home or entrepreneurs, they just wanna raise good humans and they talk about a lot openly about how hard it is these days.

Jess Loseke (26:33.164)
Mm-hmm. It's really hard not to raise kids that are attached to devices. And I I went to Chipotle the other day, and there was this teenager that was walking out in front of me, and he had, you know, soda in one hand and a his bag of food in the other. And we get to the door and I'm right behind him. And he kicks the door open with his foot and walks out and lets the door slam right in my face. And he turns around and he looks at me, and you can tell he knows.

Caroline Pennington (26:34.957)
So thank you for

Jess Loseke (27:02.392)
That wasn't kind, but he doesn't do anything to change it. And that was one of those moments where whether you're a parent or you're leading people, we need to do the extra, we need to go the extra mile. And I one of our core values at our company is it's called cheers to family. And how I describe this value is that has nothing to do with like our company being a family because I get that we're

conceptually we're not a family. and but how I describe this value is when you were a kid and your mom went to the grocery store, when she arrived home, were you the type of kid that sat on the couch and watched TV while your mom brought the groceries in? Or did you go out to the car and help her carry the groceries in and put them away? Because we hired the people that went to the car to help their mom because nobody is above doing any job. If the words it's not my job don't fit in at our culture

And that's the same way that I'm trying to raise my children and I'm trying to lead my team the same way. And so I don't ever want to ask somebody to do something that I myself wouldn't be willing to do. And in fact, when I do ask somebody to do something, you know, I'm generally modeling it or I've d I've done it before. And I just think that that's a value that's really being lost in this digital age. And COVID really did a number on these adults that are now in the workplace where they're missing that.

Core section of learning how to be an adult. And they didn't get it. And so I'm I have not lost hope on this new generation. I think that they're fantastic. I think that they're they're our future leaders. And it's our responsibility as millennials to teach them how to adult. And I'm here for it. I'm up for the challenge. It's hard some days. And then you meet some really exceptional.

young kids that are coming up and they just they get you so excited about the future and I I think that they're gonna be great and I'm really focused on the generation of my my kids as well. Like they like they are our future and I just want to pour into them. And I mean they're gonna be running my not not necessarily my kids someday, but like you think about you know my company and other companies like these are the people that are going to be running the companies. We need to make sure they know how to be grown ups.

Caroline Pennington (29:18.841)
So as we wrap up, how can our listeners find you?

Jess Loseke (29:23.212)
I am at the Barrel Girl on all the platforms on LinkedIn at Jess Lowski and Loski's L O S E K E. So I'm all over you can follow Midwest Barrel Co. It's it's Mid Midwest Barrel C O is is where we're at and on online everywhere.

Caroline Pennington (29:42.467)
Thanks, Jess.

Jess Loseke (29:44.226)
Thank you so much for having me. This is great.