With New Markets and New Look, New Belgium Grows at Double-Digit Pace

Around this time last year, New Belgium co-founder Kim Jordan was laying out her company’s expansion timeline.

“Over the years, we have been really methodical about opening new territories at a reasonable rate,” she told Brewbound last July. “I think you will see us pick up the pace of opening new markets because there is really is no reason to wait.”

The plan, Jordan said, was to sell beer in all 50 U.S. states by 2018. At the time, New Belgium, the country’s fourth largest craft brewer, was distributed in just 31 states and Washington D.C.

Fast-forward 12 months and the company is already announcing plans to expand into its 38th state, Kentucky, with a mix of ten different Anheuser-Busch InBev and MillerCoors wholesalers.

A press release from New Belgium today said it will enter the Bluegrass state in the latter half of 2015, coinciding with the opening of New Belgium’s second brewery in Asheville, N.C.

The move was actually supposed to occur this year, said sales executive Brian Krueger, who focuses on New Belgium’s distributor selections.

“We’ve done our due diligence in Kentucky and Hawaii and we’ll be announcing our distributor networks in both of those states this year,” he said. “We had plans to launch in both states this year, but we just don’t have the capacity to get to them.”

Supplies are constricted because the brand has grown so much this year. Through July 13, sales of the brewery’s flagship offering, Fat Tire Amber Ale, are up more than 30 percent in IRI’s multi-outlet and convenience retail channel universe (MULC), which comprises grocery, drug, Wal-Mart, Club, Dollar, Mass-Merchandiser and Military stores.

Fat Tire isn’t the only SKU flying off the shelves, either. Dollar sales for New Belgium’s variety packs and seasonal beers are up 75 percent and 38 percent, respectively, in MULC during the same period.

“Our chain team is out there absolutely killing it,” said Krueger. “We are up in ads and displays. It’s basic blocking and tackling but we are definitely seeing success. It has been a concentrated effort on our part and a very focused channel strategy.”

But that kind of fast-paced growth wasn’t exactly the case just nine months ago. While many other large regional craft brewers were experiencing double-digit volume gains, New Belgium was growing in the low single-digits.

So what changed? Look no further than the company’s new markets and new look. In the last 12 months, New Belgium has entered six new states with its more modern looking and redesigned brand.

“Making a change is gut wrenching when you first approach it,” said company spokesman Bryan Simpson. “Just like you need to innovate with your beer, you need to innovate with your brand and your look.”

New Belgium believes the refreshed packaging has contributed to a “conservative” five percent bump in sales, said Simpson.

“You only get to pull that rabbit out of the hat once,” he said. “When you activate new packaging and work with your distributor partners to roll it out, they get excited and go to work on case displays.”

Even in its most established markets, New Belgium said its growing steadily, said Simpson. In Arizona, the company’s off-premise sales are up more than 12 percent.

Nonetheless, if the new look and the new markets have helped New Belgium increase its sales, why wouldn’t the company want to keep the momentum and open its Asheville facility sooner?

“The sequence is like a ballet that has been coordinated down to the last detail,” said Simpson. “There is temptation. It would be really sweet to keep this momentum up. But at the same time, there are so many other mitigating factors that you really have to take a big picture approach. We don’t want to increase the hours on the site so we are sticking to the plan.”

That plan is one where New Belgium, like its closest craft competitors — Boston Beer, Sierra Nevada and Craft Brew Alliance – is a truly national brand.

New Belgium still has 12 states left to check off the list and, if everything goes according to plan, that could happen sooner than 2018.

“2017 could be the year that we launch our last states in the U.S.,” said Krueger.

It’s anybody’s guess where the brewer will head next, but West Virginia, Pennsylvania and New York are on the short list. New Belgium is beginning the research process, is conducting market visits and requesting information from every distributor in those states.

“With all of the new craft breweries opening up, they would be one that is highly sought after here, just because of the reputation that it has with Fat Tire,” said John Peters, the on-premise manager for Atomic Distributing in Huntington, West Virginia.

New Belgium said it would consider its wholesaler selections in West Virginia at the end of this year. By that time, the company will have likely brewed more than 900,000 barrels, up from the 792,000 it made in 2013.

Brewery: New Belgium Brewing Co Website: http://www.newbelgium.com
Address: 500 Linden St
Fort Collins, CO 80524
United States
  • Bob Coups

    need Fat Tire in PA