Dixie Beer Company Targets Domestic Premium Space in New Orleans

Dixie Beer Company will officially open its 85,000 sq. ft. production facility to the public on Saturday, marking the return of locally produced Dixie Beer to the market for the first time in about 15 years.

The 112-year-old Dixie brand was nearly wiped out during Hurricane Katrina, which destroyed the beer company’s facility in 2005. In the aftermath, the company moved production to the Minhas brewery in Wisconsin, and then Memphis, Tennessee-based City Brewing in 2017 after the late Tom Benson, and his wife Gayle, acquired a majority stake in the business from Joe and Kendra Bruno.

The Bensons, who own the NFL’s New Orleans Saints and NBA’s New Orleans Pelicans, were a lifeline for the Dixie brand and, after taking a controlling stake in the business, they vowed to return manufacturing to New Orleans.

Saturday’s opening makes good on that promise, although Tom Benson didn’t get a chance to see it come to fruition. He died at age 90 in March 2018.

Dixie Beer general manager Jim Birch told Brewbound that the company doesn’t view the Bensons’ multimillion dollar investment as a “big bet” so much as an “investment in the long-term” of a brand that has survived Prohibition, consolidation and natural disasters, Birch added.

Dixie’s new facility is located about a seven-minute drive from the French Quarter in an industrial area that hasn’t received much investment since Hurricane Katrina.

“This is the last area that needs a little help,” he said. “But there’s so much potential. This was a thriving business part 50 years ago and there’s no reason it can’t be back there. It’s just been the last priority from an investment perspective.”

Thus far, Dixie has hired 40 full-time equivalent workers, with a focus on diversity and inclusion in its hiring practices.

“We’ve pulled primarily from the pool of local talent, whether it’s locally New Orleans or locally in the Gulf Coast,” Birch said.

Nevertheless, the goals for Dixie are lofty, with the brand taking aim at a domestic premium market long dominated by Anheuser-Busch and Molson Coors.

“Our goal is to replace what would be a traditional domestic premium choice with a local option at the same price point with similar tastes and feels but we have the nostalgia of 112 years,” Birch said.

Dixie’s flagship lager and Dixie Light, which is moving to a clear bottle this year, are line priced with the major domestic brands, around $6.99 for a 6-pack, between $10.99 and $12.99 for a 12-packs and about $19.99 for a 24-pack.

Taking on the industry’s giants required a facility with scale. As such, Dixie now operates a five-vessel, 100-barrel brewhouse in eastern New Orleans capable of pumping out 100,000 barrels of beer annually.

“We have 21 200-barrel fermenters, we have five more 800s outside that we can bring online as we need, so capacity from Day One is a non-issue” Birch said. “So we’ll take the time to fully lager a beer and then package it and still get the price points that will make us competitive and profitable.”

According to Birch, zeroing in on the domestic premium segment is about staying true to Dixie’s legacy.

“The original Dixie drinker is a domestic premium light lager drinker,” he said. “It’s that customer that we are trying to go back to first and appeal to.”

In 2019, through its contract partner, Dixie produced about 10,000 barrels, with about half of that volume dedicated to Dixie lager and Dixie Light. About 80% of the company’s sales were in its home state of Louisiana, although the company’s beer is also sold in Mississippi and Alabama, as well as in Texas with Ben E. Keith in Dallas and Fort Worth, Silver Eagle Distributors in Houston and San Antonio, and L&F Distributors in Corpus Christi.

“We’re with the three largest Bud wholesalers, I think, in the country,” he said. “And we just signed a distribution agreement with the oldest Bud wholesaler in the country, Lewis Bear, for the [Florida] Panhandle, from Pensacola to Destin, and we’re going to be rolling out there this quarter.”

Additionally, Blackened Voodoo, a dark lager, was the company’s fastest growing brand in 2019, and Birch estimated Blackened Voodoo and some forthcoming spinoffs could account for about 35% of Dixie’s volume in 2020.

In addition to lagers and light lagers, Dixie sees opportunity in the sub-premium segment. Birch said the company worked with its wholesaler in New Orleans, Crescent Crown, to find opportunities in its local market. As such, in February, Dixie will launch D’Ice, a sub-premium brand that checks in at 5.9% ABV, which the company is positioning as a challenger to Busch Ice and similar offerings.

“It’s an area of beer that hasn’t had any innovation at all,” Birch said. “There’s really no local options when the customer is in a convenience store or in a grocery store and looking for an ice beer at, say, $1 per 16 oz. can. That’s exactly where we’re going to be.”

D’Ice will be sold in 16 oz. 6-packs throughout the company’s five-state footprint.

Although Dixie’s focus is on domestic drinkers, the company will also launch with several craft offerings — including three IPAs, a coffee and chicory stout and raspberry white ale — produced on a two-vessel, 15-barrel brewing system.

All of this adds up to a potentially big year for Dixie, as Birch estimated that the brand could grow as much as 100% in 2020.

“If we don’t grow 100% next year, it’s no problem,” he added. “Luckily, with the financial backing that we have, we can take a much longer time perspective than a lot of other breweries … [with traditional] bank financing,” he said.

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