Growing at 30 Percent, Founders Expands Distribution to Colorado

The continued growth of All Day IPA has Founders Brewing Company staring down nearly 600,000 barrels of beer in 2018, according to the brewery’s co-founder and CEO Mike Stevens.

“We’re clipping along at around 30 percent growth,” Stevens told Brewbound. “I see next year about the same.”

The Grand Rapids, Michigan-based brewery, which sold a 30 percent stake to Spain’s Mahou San Miguel in 2014, grew beer production 34 percent last year, to 466,618 barrels, according to data compiled by the Brewers Association. The company is on pace to produce 580,000 barrels in 2018, Stevens told Brewbound.

Overall dollar sales of Founders products at off-premise retailers are up 39.5 percent, to more than $63.4 million year-to-date, according to market research firm IRI Worldwide. Much of the company’s continued growth can be attributed to flagship offering All Day IPA, a 4.7 percent session beer that is now the second best selling IPA in IRI-tracked multi-outlet and convenience stores. Through August 12, All Day IPA dollar sales were up 38.2 percent, to more than $38.6 million.

And according to Stevens, All Day IPA still has plenty of room to grow as the company works to triple the brand’s points of distribution in order to be sold in as many places as IPAs from larger competitors, including Sierra Nevada and Lagunitas.

Beyond All Day, Founders is positioning Solid Gold premium lager, launched in March, as the company’s No. 2 brand in an effort to reach a more mainstream consumer that ordinarily buys core products from global brewing giants Anheuser-Busch InBev and MillerCoors, Stevens said.

“If we start to broaden our horizon to a place where we can bring more beer out to the public, we can start picking up the pieces that the big guys are leaving behind,” he said. “If you’re going to lose 5 million barrels a year, which they are, I’m going to go … pick it up, and then help build and bring back the beer industry to a higher volume level than it is today.”

In an effort to appeal to that audience, Founders recently announced plans to release Solid Gold — which was previously only available in 12 oz. cans — in 12-pack bottles and single-serve 19.2 oz. cans; 24-pack “suitcases” are also on the way.

Stevens said offering a 4.4 percent lager is his company’s attempt to reach the 85 percent of consumers who don’t drink big craft beers such as KBS, Breakfast Stout and Backwoods Bastard barrel-aged scotch ale.

“Solid Gold is our first move towards taking our craft circle and going outside of it,” he said.

Stevens, who said that craft beer is no longer a “cottage industry,” believes that smaller producers need to look outside the “tiny bubble” for opportunities.

“That’s the thing that we have to get over,” he said. “When I start hearing about definitions and things that put ceilings on things or walls on things. I sit there and go why on god’s earth would you care if Dogfish sold 10 million barrels of beer? It’s a brilliant thing. Praise, Sam. It’s great.

“Once we start looking at the bigger picture, we can take this whole thing to another level,” he added.

Founders’ rapid growth hasn’t come without its complications, however. Stevens said the company is looking to either build or purchase an East Coast manufacturing facility in order to supplement demand during peak months. He added that the company previously explored acquiring distressed properties, including the former Green Flash brewery in Virginia Beach, which was acquired by Atlanta’s New Realm Brewing, and New Hampshire’s Smuttynose Brewing, which was acquired by Runnymede Investments, a venture capital firm.

Despite possessing about 1 million barrels of capacity at its Michigan production facility, Founders’ peak months max out its capacity, Stevens said. Adding about 20,000 to 50,000 barrels of capacity in the east would alleviate those pinch points while saving the company about $6 per barrel in freight costs.

However, due to the “volatility” in the marketplace, Stevens said he’d rather make sure Founders’ capacity is “guaranteed” before making a decision.

Nevertheless, Founders announced plans to begin shipping beer to Colorado, it’s 47th state, starting in October. In Colorado, the company will partner with Rocky Mountain Coors, Coors Distributing, High Country Beverage, Mountain Beverage, B&K, High Country Western Slope and A&L Coors for statewide coverage.

“Colorado is a competitive market, and it costs a lot of money to get beer there,” Stevens said. “We kind of stayed away for awhile, and our retail customers and the people we were dealing with weren’t demanding it, so we just didn’t go there.”

Only three states — Utah, Wyoming and Hawaii — remain before Founders rounds out its national footprint. Stevens said the company would eventually fill out the map, but it is in no rush.

“Hawaii is more of when we all want to put a flag in the ground and say, ‘This is our last state. Let’s all go on vacation,’” he said.

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