Cigar City Poised to Eclipse 100,000 Barrels in 2017

After selling 65,000 barrels of beer in 2016, Cigar City Brewing is on pace for a major bump in sales as the Florida craft brewery plans to cross the 100,000-barrel threshold by the end of the year.

In an interview with Brewbound, Cigar City brand ambassador Neil Callaghan attributed the growth to expanded production of its flagship brand, Jai Alai IPA, at the start of the year. Jai Alai now accounts for 60 percent of Cigar City’s sales in Florida and about 70 percent of sales across an 11-state footprint outside of its home state, Callaghan said.

“We’re still not meeting demand on Jai Alai, which is a good problem, but now that we have a little bit more production room to work with,” he said.

That sales boost was made possible after Cigar City transferred its supplemental brewing operations from Brew Hub, a Lakeland-based contract outfit, to Oskar Blues’ production facility in Brevard, North Carolina.

“Partnering with Oskar Blues has allowed us to produce a lot more beer,” said Callaghan.

The partnership with Oskar Blues started in March 2016, when Fireman Capital Partners’ holding company, United Craft Brewers LLC, acquired a controlling interest in Cigar City. Fireman Capital owns majority stakes in Oskar Blues, Perrin Brewing and the Utah Brewers Cooperative (Wasatch and Squatters).

Last week, the holding company announced that it would change its name to “Canarchy.” Oskar Blues marketing director Chad Melis Melis told Brewbound that the new name better reflects the group’s values of “challenging corporate convention,” “preserving beer culture” and providing craft brewers an “opportunity to join a team of craft collaborators.”

“We’re just now part of a collaborative group that will help us get our beer into the hands of more craft beer drinkers,” he wrote.

According to Melis, who cited off-premise retail sales data from market research firm IRI Worldwide, sales of those five breweries’ beer are up a combined 15.2 percent year-to-date. A pair of Canarchy offerings — Cigar City’s Jai Alai IPA and Oskar Blues’ Dale’s Pale Ale — are the top two selling craft canned 6-packs, according to IRI. Sales of Dale’s Pale Ale have increased 9.6 percent year-to-date, he added.

To help illustrate how the Canarchy breweries are working together, Callaghan explained that the group has discussed ways in which breweries might work together to solve capacity constraints. That’s important for Cigar City, whose Tampa-based brewery has been maxed out at about 55,000 barrels of beer for the last couple of years, Callaghan said.

“We’re no longer making decisions just necessarily with our staff in mind,” he said. “Now we have to think bigger picture as a group, which is awesome. There’s strength in numbers.”

Canarchy’s breweries are collectively creating economies of scale by leveraging common distributor networks and key retail relationships. And the holding company is open to adding more breweries into the fold.

“There’s opportunity there,” Melis told Brewbound. “For us, it needs to be a true cultural fit. Something that contributes to the overall platform.”

For Cigar City, the extra production space will enable the company to increase supply to its existing markets while also expanding its footprint next year into California, Texas, Arizona, Louisiana, Illinois, Michigan and Delaware.

“We want to make sure that we’re supplying the markets where we currently distribute well, but at the same time, we’re lucky enough to have a demand for a lot of our beer,” he said. “We do want to get as much beer into as many people’s hands as possible, but we want to do it in a strategic way.”

Those markets will be seeing a new look from Cigar City. In mid-November, the company unveiled a cleaner logo that maintains the familiar cigar imagery and oval shape while simplifying other elements.

“When you’re looking at it from across the room, you can still tell it’s the Cigar City logo,” Callaghan said. “Even the full-color logo is three-color as opposed to, literally, 56 different colors.”

Callaghan declined to put a specific dollar figure on the rebrand. However, he said the company made “a heavy monetary investment” into the project, which is expected to be completed in March 2018.

The new logo, developed in partnership with North Carolina branding and marketing agency The Brandit, also incorporates two sayings: “Hecho a mano” (Spanish for handmade) and “Born in Tampa, FL.”

“We want people to associate our brand with Tampa, Florida,” Callaghan said. “It’s informed really everything we’ve done.”

The company’s brand image, which dated back to the brewery’s founding in 2009, was overdue for a facelift to better reflect the company’s evolution, Callaghan said.

“It was designed really without scalability in mind,” he said. “It has 56 different colors in it. Recreating that in print and on T-shirts and that sort of thing is such a nightmare.”

The new logo has already started to appear on 22 oz. bottles of Café con Leche stout and merchandise in Cigar City’s Tampa tasting room, Callaghan said. He added that new can packaging will begin showing up in stores in the coming months.

As part of the rebrand, Cigar City is also renovating its tasting room to improve service in the bar area, expand its retail store and incorporate more of Tampa’s history and culture in the aesthetic, according to Callaghan.

“We want to be able to tell that story,” he said. “The way that our tasting room is laid out and the way that it’s decorated right now, we’re not telling that story as well as we could be.”

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