Devils Backbone to Add 5 New States in Next 12 Months

On the heels of a $7 million brewery expansion, fast-growing Virginia craft brewery Devils Backbone today announced it would expand distribution to neighboring North Carolina, beginning in August. It’s the first time in more than two years that the beer company has broadened its footprint, signing agreements with six new wholesalers in the state:

  • RH Barringer Distributing Company (Greensboro);
  • Craft Central (division of Charlotte-based Premium Beverage);
  • Long Beverage (Raleigh);
  • Coastal Beverage Company (Wilmington);
  • Best of Beers (Hickory);
  • Healy Wholesale (Fayetteville).

Market launches in Greensboro and Raleigh-Durham are slated for August while rollouts in Charlotte, Asheville and Wilmington are planned throughout September and October, the company said in a statement.

Devils Backbone also plans to launch in Tennessee and West Virginia later this year, as part an effort to enter five new states over the next 12 months, according to Hayes Humphreys, the company’s chief operating officer.

“A lot of these expansions will be driven by some of our existing relationships with national retail accounts,” he said.

Helping to fuel the new market entries was an aggressive facility expansion that included the installation of a 120-barrel brewhouse as well as three 960-barrel fermentation tanks and a 960-barrel bright beer tank, Humphreys said. As a result, production capacity immediately grew from 60,000 barrels to 90,000 barrels and, long-term, the brewery will eventually be capable of producing upwards of 300,000 barrels annually.

“We’ve got some shiny new toys and we are excited to put them to work,” Humphreys said.

Driven by the success of its sessionable Vienna Lager — the no. 1 selling craft six-pack in Virginia, according to market research firm IRI — Devils Backbone, which opened its “Outpost” commercial brewing facility in January 2012, has scaled production to more than 43,000 barrels in just three years. That growth has primarily occurred within its home state and the company doesn’t currently distribute its products outside of Virginia, Maryland and Washington D.C.

“Our beers lend themselves to repeat consumption, but we don’t have much experience outside of our home state,” Humphreys said. “This will be a real learning experience and we will see if our brand is relevant elsewhere.”

North Carolina has become somewhat of an east coast mecca for both in-state and out-of-state craft brewers. Large national players like Sierra Nevada, New Belgium and Oskar Blues, all recently established secondary breweries in the state but Humphreys believes there’s still plenty of run room left for craft growth.

“I was surprised to see craft is only 7.2 percent of all beer sales,” he said, referring to off-premise IRI data through mid June.

And one area where Humphreys believes Devils Backbone has an opportunity to gain a foothold and boost craft’s overall market share are with grocery and convenience store accounts.

“Local craft’s performance in chain grocery didn’t match my perception of its strength elsewhere in the state,” he said. “The market, as viewed through the IRI lens, doesn’t look so different from what we see in Virginia.”

To help support the launch, Devils Backbone will hire five new sales representatives who will focus exclusively on North Carolina.

“There is a big opportunity for someone with a strong wholesaler network and someone with a national account presence,” he said. “We are going to enter in a big way and be very present with some local faces to go along with the beer.”