This summer is shaping up to be one of the most unpredictable seasons that Columbia Distributing CEO Chris Steffanci has ever experienced.
“I’ve been doing this a long time, this summer is so different because we’re just not sure,” Steffanci told Brewbound. “We’re not sure how the consumer is going to react. And because we had a soft May, and now we’re having a really good June, the predictability, forecasting has never been worse.”
The tumult is due in part to national trends as Hispanic consumers are under pressure from the Trump administration’s immigration policies, consumer sentiment being on a roller coaster of tariffs and inflation and a Memorial Day weekend that proved to be a bust for bev-alc sales.
“Memorial Day, we had great execution, we had tons of beer on the floor, but the pull was less than stellar,” Steffanci said. “If you looked a couple weeks after, [we] still had big displays on the floor. So pull was a lot slower than we have typically seen in the past.”
However, the “good news is June’s starting to look a lot better,” with an assist from nice weather in the Pacific Northwest, an anomaly this early in the year, he continued. Helping build that confidence is a bounceback for the on-premise in Washington and Oregon, including new accounts coming online in Seattle and Portland.
“If I look at our traditional bar and tavern business, our business is actually flat, which is a new trend for us,” he said. “So that’s something we’re excited about, and we’re hoping that’s going to be a trend that we’ll see continue for the rest of the year.”
Steffanci shared which trends he’s watching as summer begins. This Q&A has been edited for length and clarity.
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Which new brands have motion this summer, and how can they keep it going?
Steffanci: I scoured our numbers and data to really look and see if there’s any new, and I would say, completely brand new, big winners, especially in traditional beer.
We still are seeing a lot of excitement around flavored malt beverages (FMBs). Our spirit-based RTDs, we’re seeing a lot of success there. Boston Beer’s Sun Cruiser, which is the iced tea lemonade brand, that brand, for us, is doing exceptionally well.
As our traditional beer business is struggling a bit, we’re starting to see a lot of growth in alternatives. We’re also seeing anybody innovating around non-alc right now. You see this resurgence in Deschutes, which has been really interesting. A lot of our craft guys are starting to innovate around NA, and that’s been a really good trend. And honestly, it’s really starting to help our overall craft trend turnaround.
As far as established brands, anything surprising you so far?
Steffanci: We’ve always been a really big White Claw business, and if you look at the trends of seltzers over the last couple of years, they’ve been really challenged, especially with the new entrants, with High Noon, a lot of the RTDs.
But our White Claw business actually is gaining momentum and coming back. We’re actually up 4% on White Claw, which is a really big business for us. So we’re excited about the momentum starting to come back to the seltzer side, and White Claw being No. 1 in the category is helpful. Their flavor innovation is still really good.
Guinness draft is still strong. We’re growing Guinness aggressively.
While Constellation’s overall portfolio is a bit of a mixed bag – Modelo slowed down a fair amount – but if you look inside that portfolio, Pacifico is still growing double digits for us. Victoria is still growing double digits for us. So Constellation still has a lot of winning brands in that portfolio, and there’s still a lot of growth to be had. Ultimately, Modelo is going to come back strong as well, but watching Pacifico continue to grow on a really big base has been very encouraging.
Are you seeing a lot of pressure on the Hispanic consumer in your markets?
Steffanci: We’re starting to see it. And especially as the agricultural part of our business in Eastern Oregon and Eastern Washington start to come back, we are starting to see that. So we definitely think there’s absolutely a challenge right now with all of the immigration policies and ICE and all the buzz that you’re hearing about that in the media.
It’s definitely having an impact. It’s hard to really say how big of an impact it’s actually having. Again, I think we’ll learn a lot more as we go through summer.
What’s a trend (style/flavor/segment) that’s really working?
Steffanci: Our Japanese beer portfolio is something that over the last several years people haven’t really noticed. We’re super excited about [it]. We have Sapporo, we have Asahi, we now have Kirin. That portfolio for us is doing amazingly well, growing double digits.
That portfolio, for us, is far extending outside of Asian restaurants. We’re actually starting to see this crossover to the mainstream. So our Japanese beer portfolio has got a lot of runway. It’s still a very small base, but we’re putting a lot of time and energy behind it right now. If you watch that portfolio over the next couple of years, I think it’s going to start gaining meaningful scale.
How do you feel about how craft is trending in your markets?
Steffanci: We’re not positive yet, but the trend turnaround has been really good. Especially local. Deschutes is a great example of really getting outside of their comfort zone and innovating around current trends, and building on the back of what Athletic has really built, and brought so many new consumers into thinking about non-alcoholic beer differently.
But our locals are doing really well. Georgetown is still growing. PFriem has been just an awesome Pac Northwest brand for us. Their liquids are great, their trends are double digits and the base is actually starting to get really big. So I do believe we’re starting to see momentum gain back.