Des Moines, Iowa-based Exile Brewing Company is expanding its distribution reach even further in the state of Illinois after launching in the Chicago suburbs of Aurora, Naperville, Wheaton, and Elgin last week.
Exile made its first move outside of its home state last November with a reach across the state line into the Quad Cities (Rock Island, Moline, and East Moline) with Molson Coors house Euclid Beverage. Exile is in the Anheuser-Busch network in Iowa, including with Doll Distributing in Des Moines.
Those moves have more than doubled Exile’s potential customer base, and sales manager Nick Cervine projects sales outside of the company’s home state of Iowa could reach as much as 60,000 case equivalents by the end of Year Two.
Exile is taking its leading brands into the market, starting with 6-pack bottles and draft of its top brands Ruthie lager, Zoltan IPA, Beatnik sour, Hannah wheat and G.G. dunkel.
“The product mix right now is extremely skewed to package, but now that the on-premise is open, our draft is out of stock,” Cervine told Brewbound in mid-February. “It went overnight, so it’s just gonna be hard to know what the actual splits are going to look like until we have a few more months of historical data and also product on both sides.”
Although Exile has a can inventory available for its top two brands Ruthie and Zoltan, Cervine said there isn’t enough to supply a new territory.
“We’re gonna keep those at home,” he said. “And the beautiful thing is that we have both those options [cans and bottles], so 6-pack bottles it is.”
Asked if Exile will be taking on Chicago next, he said the city isn’t yet on the company’s radar and doesn’t expect it to be for maybe three years.
“We want to fill out everything, all the way up to Chicago, build our presence, build our brand and then, once we’re relatively known, or once people know more about us, then that’s the time to move, if and when the time comes,” he said. “We really want to be able to plant the seed and see it grow.”
For Exile, the move is about “slow and steady growth,” which will mean hitting the ground in the state and selling like the company did when it first launched distribution, Cervine said.
“Because it’s our first step outside of the state, we didn’t want to take on too big of a chunk all at once,” he said. “We’re still a very small company.”
Exile’s on-premise versus off-premise mix was split 50-50 prior to the pandemic shutting down the on-premise. In the company’s home state of Iowa, that lasted for about eight weeks. Now, the on-premise has returned with no restrictions — including Gov. Kim Reynolds lifting the state’s mask mandate — although Cervine said “consumer confidence and traffic” haven’t bounced back.
Exile posted low-single digit losses as off-premise packaged product sales failed to offset the loss of on-premise sales, Cervine said. Exile finished the year at around 13,700 barrels of beer. Ruthie accounted for about 60% of that volume, followed by Zoltan at 15%.
While Iowa is a c-store and chain driven state with Hyvee, Fareway, Casey’s, Kum & Go, and QuikTrip, Illinois is a more independent liquor store market. Exile’s initial slate of retailers include Binny’s, Jewel Osco and Sullivan’s.
“It’s nice to see that our brand is going to travel just fine,” Cervine said.
Exile will support the market with an eastern territory manager and field sales reps on the ground, with Cervine doing quarterly reviews and ABPs.
Illinois won’t be the last out-of-state expansion for Exile. The company is eyeing a possible Nebraska rollout for the back half of 2021.