As beer companies look to non-beer products such as hard seltzer to buoy their businesses, many are beginning to reimagine themselves as craft beverage companies.
“If you can think as a beverage company, there’s so much more whitespace that you can play in,” CANarchy Craft Brewing Collective president Matt Fraser shared during Brewbound’s final Brew Talks meetup of 2019.
Fraser was joined on stage last Friday at Herman’s Hideaway in Denver by Odell Brewing co-CEO and chief sales and marketing officer Eric “Smitty’ Smith and Maui Brewing founder and CEO Garrett Marrero. Each discussed their companies’ forays into “beyond beer” products, including hard seltzer, canned cocktails and wine.
In the last couple of years, many craft breweries have launched hard seltzer brands. Hard seltzer reached $1 billion in off premise sales for the year at the end of August, according to market research firm Nielsen. And Brewers Association chief economist Bart Watson projects that nearly 4 million barrels of hard seltzer will be produced this year.
CANarchy, Maui and Odell have each dabbled in hard seltzer, to varying degrees.
CANarchy released Wild Basin Boozy Sparkling Water nationwide in December 2018 as an offshoot of the Oskar Blues brand, and the craft brewery rollup has since launched spiked seltzers at the majority of its breweries.
“We developed a lifestyle brand around Wild Basin, and when we make big bets, we want to do it with Oskar Blues or with Cigar City because we can go national, and we can go national quickly,” Fraser said.
Marrero admitted that it was difficult at first to get behind the hard seltzer trend. However, Hawaii’s remote location allows Maui to adapt its innovation strategy to offer local alternatives to mainland trends. Maui has since launched a hard seltzer brand, as well as a line of canned cocktails under its Kupu Spirits label.
“If there’s something we can get behind, we might as well offer a local alternative to what’s being sold in the market,” he said.
Marrero said he knew the hard seltzer trend wasn’t going away after his staff finished off a cooler full of hard seltzer during an outing earlier this year. He added that he believes embracing the notion of being a beverage company is a key to future success.
“We’re a craft brewery at our heart, at our core and we’ll always be that, but we are morphing into a craft beverage company,” he said. “It’s hard for me to even call hard seltzer beer, even though it’s defined as that. I still just think of it as seltzer.”
According to Marrero, a shift in perception isn’t something businesses should shy away from in an increasingly competitive marketplace and as consumers’ demand for alcoholic beverage products other than beer increases.
“I’m not embarrassed to look at craft beer as a business,” he said. “Anybody who’s not looking at it as a business is certainly having some difficulties in this market. That doesn’t mean that it’s not 110% passion from everyone of us everyday.”
Meanwhile, Odell Brewing is taking a different tack, with plans to add a wine cellar and sell draft and canned wine next year. Although the company has offered hard seltzer in its taproom, it has no plans to package it, Smith said.
Smith, who was recently announced as co-founder Wynne Odell’s successor as CEO, said a member of the 30-year-old craft brewery’s maintenance team suggested offering wine. Since many of Odell’s hop suppliers also grow grapes, the addition of wine to Odell’s portfolio seemed like a logical move, he added.
“We’re going to do wine with a craft beer lens,” he said. “We’re a brewery first and foremost. We’ll be able to innovate and tell the story of wine, just how the Odells built the company with beer.”
Watch the entire discussion in the video below.