With sales of nearly $11 million, the five year-old Eugene, Ore. based brewer was up 117 percent in dollar sales over the 52-week period ending on Oct. 30, according to Sympohony/IRI, a service that tracks transactions in supermarkets, drug stores, convenience stores and mass market retail channels. Ninkasi’s volume growth has followed a similar arc, growing from 30,000 barrels last year to an expected 57,000-plus in 2011.
While the company only recently cracked the top 30 in sales, its run-up has one significant point of comparison — its volume has grown even faster than well-established brand New Belgium managed in its first five years. The Fort Collins, Colo. based brewery (currently the third largest craft brewer in the U.S.) produced 55,000 barrels of beer in its fifth year.
While the story of Ninkasi’s growth is in many ways typical of many breweries, considering the energy that has surged through the craft category — itself up more than 13 percent this year — a look at the timing and execution of the brand provides a road map showing how quickly smaller brewing operations can accelerate, particularly when they enter chain accounts.
Impressively, all of Ninkasi’s growth came from existing markets, meaning that the brand is not simply growing its top line sales number through new sales territory expansion. Instead, it’s following the well-worn strategy of going deeper in its own territory and making a name for itself as a regional brand.
Marty Ochs, the National Sales Director for Ninkasi, cited expanded distribution, promotional pricing, the creation of economies of scale and the introduction of new packages as the key reasons why Ninkasi has catapulted itself into the top 30 U.S. craft beer brands.
“We went from a very small footprint to a very sizeable footprint in our chain accounts — and almost no distribution in C-Stores to a healthy amount of C-Stores in the state of Washington,” Ochs said.
This year, Ninkasi landed chain retail accounts like Safeway and Quality Food Centers (QFC), and also changed distributors in parts of Oregon and Washington.
Additionally, the brewery rolled out a raft of new packages to accommodate its new chain customers, including 6-packs of 12 oz. bottles in its Total Domination, Spring Reign, Radiant and Sleigh’R brands and 4-pack mixed boxes of 22 oz. “bombers.”
“Our new packages have really helped us drive success in our chain accounts,” Ochs said.
The chain accounts also allowed Ninkasi to introduce promotional pricing for the first time in its five and a half-year history. The brand dropped its case prices across the board during promotional periods, giving consumers incentives to try the product.
And while Symphony/IRI numbers measure off-premise sales, a large part of the company’s growth, Ochs said, has come on draught, where four out of seven of Ninkasi’s offerings grew more than 40 percent.
The company appears to remain interested in innovating even as it grows. Ninkasi released 13 single-batch, draught-only offerings in 2011 and plans to do the same in 2012. Additionally, the company will debut a new lager series with releases scheduled for April and September.
That Ninkasi passed New Belgium as the ‘fastest growing craft brewery’ in its first five years of business must be encouraging. Sustaining that growth will be hard, however — it’s a long way from Ninkasi’s $11 million to New Belgium’s $97 million or so. But at least now there’s precedent.
“They were the pioneers paving the road and growing at the same time, so it’s not apples to apples,” Ochs said. “We are rambling down the road Sierra Nevada, New Belgium and so many others paved.”
Editor’s Note: A previously published version of this story cited IRI data on Ninkasi’s per-case-equivalent pricing that Brewbound.com has since learned to be inaccurate.