Oregon’s Rogue Ales & Spirits launched a line of ready-to-drink (RTD) canned cocktails in key markets, including the Pacific Northwest, last week.
Speaking to Brewbound, Rouge’s president, Dharma Tamm, said adding canned mixed drinks to the Newport, Oregon-headquartered craft brewery’s portfolio was a “natural” extension of its business.
The cocktails, which come in three flavors — Cucumber Lime Gin Fizz, Cranberry Elderflower Vodka Soda and Ginger Lime Vodka Mule — source vodka and gin from Rogue’s 16-year-old distillery. The drinks, sold in 4-packs of 12 oz. slim cans, check in at 7.5 percent ABV.
“We use all natural ingredients, and it’s gluten free,” Tamm explained. “We also did it in the Rogue way in regards to the actual product quality as well, as opposed to artificial ingredients or a malt base. That’s not Rogue. That doesn’t feel Rogue from an authenticity standpoint.”
Rogue is entering a fast-growing canned cocktail market. According to market research firm Nielsen, off-premise retail sales of prepared cocktails in cans increased 70.3 percent, to $55.3 million, during the 52-week period ending July 13. Additionally, canned RTD cocktails account for about 20 percent of all prepared cocktails, and the segment is growing nearly seven times faster than the broader category, the firm added.
The canned cocktail segment is also one other beer companies are turning to as growth becomes more scarce in a crowded and competitive field of more than 7,500 breweries. Earlier this year, Anheuser-Busch InBev acquired San Diego-based Cutwater Spirits — the craft distilling venture founded in mid-2016 by former executives of Ballast Point Brewing. In late March, Kansas City’s Boulevard Brewing Company launched its own RTD canned cocktail line called Fling.
Rogue, like many other three-decade-old regional craft breweries, has seen its volume decline in recent years. After reaching 117,000 barrels in 2014, Rogue produced 89,000 barrels of beer in 2018, according to the Brewers Association. That’s led the company to look outside of the beer for growth, and Tamm believes there’s “a huge opportunity” in the canned cocktail segment.
“People are looking for alternatives to beer, and obviously the explosion of the spiked or hard seltzer category has shown that,” he said. “But I think people still want a little bit more flavor. They want to know what ingredients that people are using, they want to know that it’s coming from a brand that they can trust, that they believe makes high quality products.”
Rogue plans to test market the canned cocktail line first in its strongest markets — Oregon, Washington, Idaho, Florida, Michigan and Colorado — before going national in 2020.
“We want to make sure that we’re doing this right, not just blanket carpet bombing everything,” he said.
According to Tamm, Rogue is also working on other innovations for 2020 and beyond. The company is exploring the potential of CBD-infused drinks and other segments, as long as they fit within the Rogue brand.
“We’re going to keep pushing the boundaries of what we can do as a brewery and as a company,” he said.
As for Rogue’s core beer business, Tamm, who assumed the president role from owner Brett Joyce in January, called 2019 “a mixed bag” so far. He said the company’s sales are up double digits in its home market, but down in international markets.
“Not many 31-year-old breweries that are up double digits in their home markets,” he said. “So that’s awesome. The rest of the U.S., we’ve got some places that are up and some places that are down.”
Tamm credited new product launches this year — Batsquatch hazy IPA and Outta Line West Coast IPA — with helping drive growth in the Pacific Northwest.
“Those have done really well for us,” he said. “They’ve become our second and fourth biggest products, actually.”
According to Tamm, sales of Rogue’s other core offerings — Dead Guy Ale, Hazelnut Brown Nectar and Honey Kolsch — have also performed well within its home market. For the Dead Guy brand, the important Halloween selling season is still to come, and Tamm said Rogue will work to “own” the holiday occasion.
“That’s where Dead Guy does really, really well,” he said. “That’s a perfect beer for that time of year too.”
In other Rogue news, assistant brewmaster Joel Shields was officially named the company’s new brewmaster last Friday. Shields supplants longtime brewmaster John Maier, who retired at the end of July after a 30-year career.