A pair of Iowa breweries have started a collective, while maintaining independent ownership.
Backpocket Brewing in Coralville and SingleSpeed Brewing in Waterloo have linked up under the Parallel Brewery Collective umbrella. As of mid-February, the breweries are working under a shared-service agreement, with a shared sales team now offering both breweries’ portfolios, and are working together on supply chain procurement.
Several craft brewers have formed partnerships over the years, including the CANarchy Craft Brewery Collective, Artisanal Brewing Ventures, Great Frontier Holdings and IndieBrew, among several others. In the instance of Parallel, equity is not changing hands, and the platform is similar to that of a co-op like the Independent Brewers Alliance. Both breweries remain independently owned and operated.
Conversations between the breweries started in October, when Backpocket managing partner Aaron Vargas and SingleSpeed founder David Morgan began comparing notes on procurement.
Those talks expanded when both companies were in the market for a rep to cover the Des Moines market, Vargas said. The idea of hiring one person to sell both breweries’ portfolios was broached.
Although there was doubt a partnership would work at first, the more they talked, the more they believed it could, as the breweries offer complementary portfolios and share the same distributor networks in the state of Iowa.
With regard to product offerings, Backpocket offers a stronger seasonal program, led by Lemonade Shandy, as well as Clonefest festbier and Hawktoberfest Oktoberfest, which both lean into Iowa’s largest universities. Backpocket is also the official craft beer of Iowa State University.
SingleSpeed is more focused on its core, including Gable, a Munich helles.
Between the breweries, they operate six taprooms with four production facilities. They’ve begun offering each other’s beer in their taprooms.
When SingleSpeed and Backpocket examined their account bases, they found around 500 accounts, 80% of which overlapped. This was the impetus for forming a “tighter” business relationship.
The companies had reps overlapping in Eastern and Central Iowa. The more they examined it, the more they realized they could “make an effective sales call with one person.” The company lost one person to attrition and one person was laid off. Now Parallel operates with a sales manager in each of those markets handling wholesaler and retail management, with support from sales reps in each brewery’s home market.
“When they’re out there, they’re working on both brands actively,” said Singlspeed director of business development Nick Bandy, who is being tasked with leading Parallel. “From a salesperson standpoint, they have a bigger portfolio. So the members of our sales team are chalking up more wins.”
The feedback from both wholesalers and retailers has been positive thus far, with distributors appreciating the streamlined communications and greater level of organization.
As small brewers, Vargas said innovating on a ubiquitous craft style such as IPA wouldn’t move the needle for the business as much as looking at ways to streamline operations in innovative ways. He conceded that Backpocket and SingleSpeed aren’t going to “take over the market” with a new offering, even if theirs is better than a market leader, as they don’t have the same resources or mindshare as larger brewers. However, SingleSpeed and Backpocket combined will produce around 12,000 barrels this year, and linking up and sharing sales teams allow them to operate more efficiently and gain more mindshare with their local distributors and shared buying power.
“We’re not small potatoes,” Vargas said. “We’re up there. We’re middle of the pack, top 10, in the state. But combined, we grow to a bigger footprint.”
Parallel is already receiving inbound interest from other breweries about potentially joining the collective, Vargas said. For now, Backpocket and SingleSpeed are focused on proving the concept before adding new members. When they are ready, Parallel will likely add brands that are aligned with their wholesaler networks and offer complementary portfolios, adding value with products that neither brewery already offers, such as cider.
Another key for new partners is cultural fit.
“That’s where it starts,” Vargas said. “We’re not in the mode to grow and just have whoever. We got to like them.
“They gotta have the same kind of culture because our ultimate goal is to collaborate on a bunch of things,” he continued.