The Canarchy Craft Brewery Collective – whose brands include Oskar Blues, Cigar City, Deep Ellum, Perrin Brewing, Three Weavers, and Utah Brewers Cooperative (Wasatch and Squatters) – continued its growth through the midway point of 2019.
Speaking to Brewbound, Canarchy president Matt Fraser said portfolio-wide depletions were up 13 percent, while IRI-tracked off-premise dollar sales were up 28 percent through the first six months of the year.
“We are on pace for some great growth this year,” he said, noting that he expected sales to accelerate during the back half of 2019.
Part of the company’s hot start in 2019 can be attributed to continued growth in home markets, Fraser said.
Despite an expansion into 13 new states this year, Cigar City is still up 20 percent in its home market of Florida.
Oskar Blues, meanwhile, is up 12 percent collectively in Colorado, North Carolina and Texas – markets where the brand has brewing facilities.
Elsewhere, Three Weavers is up 32 percent in California and Deep Ellum is up 7 percent in Texas.
“We are heading in the right direction, and we don’t have a ton of growth from new distribution right now,” Fraser said.
Nevertheless, Canarchy will continue to expand the footprint for Cigar City. It plans to launch in the Pacific Northwest during the third quarter.
“We will be in close to 40 states at the end of the year,” he said, adding that the Cigar City brand has a unique ability to resonate with consumers outside of its home state.
“There aren’t a lot of brands you can take that far away from your home market,” Fraser said. “But when you have boots on the ground and you are generating excitement and buzz, and leading with certain chain partners, that can have a long-lasting effect on the success in that market.”
Beyond expanded distribution for Cigar City, Canarchy also plans to roll out refreshed or rebranded packages for Oskar Blues, Three Weavers and Wasatch, and introduce new innovations across the portfolio.
The company, which already makes three different lines of hard seltzer (Wild Basin, Clear Coast and Grandeur Peak), will continue its shift toward appealing to health-conscious consumers via the introduction of a new 100-calorie hazy IPA called “One-Y.”
The Oskar Blues product checks in at 4 percent ABV and will be available in 6-packs, 12-packs and on draft in time for fall resets.
Additionally, the company will launch “large-scale” distribution of a new Cigar City offering, Margarita Gose, that is also lower in calories.
“The consumer is always changing, and their taste buds are always changing,” Fraser said. “Ultimately, we want to have an offering for the full spectrum of craft beer drinkers.”
Looking ahead, the consortium, which is backed by Fireman Capital Partners, said it still has its eye on additional mergers and acquisitions.
“The market is changing monthly now, but the appetite is still there,” Fraser said. “It’s got to be the right people, the right brand, the right liquid, and the right geographic opportunity. There is nothing on the horizon, but it is something we are still actively pursuing.”
Additional details about the company’s performance halfway through the year are included in the press release below.
CANarchy Craft Brewery Collective Experiences Strong Growth in First Half of 2019
The CANarchy Craft Brewery Collective, comprised of Oskar Blues Brewery, Perrin Brewing Company, Cigar City Brewing, Wasatch Brewery, Squatters Craft Beers, Deep Ellum Brewing Company and Three Weavers Brewing Company, experienced a strong first half of 2019. Strong brand innovation, flourishing flagship brands, successes in the hard seltzer space and new market openings all represent areas of health for the Collective; while also positioning CANarchy for further acceleration moving into the second half of the year.
Despite total craft beer being up only 3% YTD in IRI market research data, CANarchy is +28%. The individual breweries have experienced growth as follows: Oskar Blues is +18%, Cigar City Brewing is +48%, Perrin is +4%, Wasatch is +7%, Squatters is +16%, Deep Ellum is +7% and Three Weavers is +122% compared to last year’s data.
Winning Innovation
New brand and package innovation across CANarchy are driving increased sales and securing new points of distribution. 2019 innovations include Cigar City Brewing’s first ever Mix Pack; and the switch to a 15-pack format for CANundrum Mix Pack by Oskar Blues, which resulted in an 80% YOY growth in sales for CANundrum. Successful new liquids include Squatters Juicy IPA; and the Oskar Blues Can-O-Bliss IPA Series, which quickly became the #1 selling new IPA in the Colorado grocery channel according to IRI.
Flourishing Flagships
Alongside new and innovative liquids, established flagship brands continue to show strong performance, with total CANarchy flagships improving 30% YTD in IRI reporting. The following flagship brands have experienced growth as follows: Dale’s Pale Ale by Oskar Blues is +4%, Jai Alai IPA by Cigar City is +52%, Black Ale by Perrin is +17%, Apricot Hefeweizen by Wasatch is +29%, Hop Rising Double IPA by Squatters is +3%, Dallas Blonde Ale by Deep Ellum is +7% and Expatriate IPA by Three Weavers is +111% compared to last year’s data.
Foray into Hard Seltzer
CANarchy has established a presence in the hard seltzer segment, a category that has seen immense growth in 2019. The collective has launched three hard seltzer brands this year – Wild Basin Boozy Sparkling Water by Oskar Blues, Squatters Grandeur Peak Spiked Seltzer and Clear Coast Fresh Hard Seltzer by Perrin. The three brands have reached nearly 13,000 points of distribution, and are currently gaining an average of 130 new POD per day. CANarchy hard seltzer brands have been placed in over 2,100 on premise locations with over 1,000 draft points of distribution in the last 90 days (as of July 10). With the rapid expansion of distribution, velocity per account has also continued to accelerate. Rate of sale saw a 30% increase over the launch numbers in March. There is significant room for growth in this segment, as the current footprint only represents 20-30% of the distribution of CANarchy flagship brands.
Expansion into New Markets
CANarchy breweries have expanded into new markets, with Cigar City launching 13 additional states of distribution so far this year, Deep Ellum reaching into Oklahoma and Three Weavers expanding into Northern California. Deep Ellum opened a new location in Fort Worth, Texas – the Funkytown Fermatorium – which offers limited release beers and beer-inspired fare. Additionally, June saw the opening of the Collaboratory in Asheville, North Carolina – a CANarchy-wide brewery and restaurant project that focuses on collaborations among the Collective’s breweries and with brewers around the country and throughout the world.
Packaging and Design Improvements
Another significant change made in 2019 was the switch from 6-pack plastic rings to cardboard cartons for Oskar Blues, Cigar City Brewing, Perrin, Wasatch and Squatters. The new packaging format is both more easily recyclable and an aesthetic improvement.
Perrin underwent a rebrand earlier this year, with updated logos, cans and secondary packaging, which has shown favorable results in terms of placement and sales of Perrin Black Ale and other core brands.
Looking Forward
Later this year, craft beer lovers can expect to see further liquid innovation from CANarchy aligning with fall chain resets. Oskar Blues will release One-y, a 100 calorie hazy IPA delivering citrusy flavors of orange peel, tangerine and lemon zest balanced with bread-like malt; and Cigar City Brewing will launch large-scale distribution of Margarita Gose, a refreshingly tart German-style sour ale with orange, lime and salt. The CANarchy IPA Mixed Pack will also debut this fall, featuring a coast-to-coast craft collection of four notable IPAs from CANarchy breweries. There is more rebranding to come, including a reimagining of Three Weavers, Oskar Blues and Wasatch brands.
As demonstrated by its successes in the first half of 2019, CANarchy is positioned for continued growth in the latter part of the year and into 2020. For more information about CANarchy, please visit https://www.canarchy.beer/ or contact mediarelations@canarchy.beer.
About CANarchy Craft Brewery Collective
Founded in 2015, CANarchy is a disruptive collective of like-minded brewers dedicated to bringing high-quality, innovative flavors to drinkers in the name of independent craft beer. The portfolio of craft breweries, partially funded by Fireman Capital Partners, includes Oskar Blues Brewery, Perrin Brewing Company, Cigar City Brewing, Squatters Craft Beers and Wasatch Brewery, Deep Ellum Brewing Company and Three Weavers Brewing Company. In 2018, CANarchy was ranked #8 on the BA’s list of the Top 50 U.S. Craft Brewers as ranked by sales volume, having produced 421,222 bbls. Voted “Craft Brewery of the Year” by Brewbound in 2018, the collective provides craft beer to 50 U.S. states, Washington, D.C., and parts of 17 countries spanning five continents.