2022 marked a record year for New Belgium Brewing Company, as the Fort Collins, Colorado-headquartered craft brewery’s volume topped 1.2 million barrels (+15% year-over-year), driven by the continued success of the Voodoo Ranger IPA portfolio, New Belgium CEO Steve Fechheimer shared.
Meanwhile, Bell’s Brewery declined around -8%, to just shy of 450,000 barrels, he added. The decline was mostly attributed to an integration and wholesaler alignment effort outside of the brewery’s home state of Michigan, following the November 2021 sale of the company to New Belgium’s parent company, Lion Little World Beverages, Bell’s EVP Carrie Yunker said.
“If you look at Michigan, where we didn’t have any distributor disruption, we grew our share,” she added. “We grew in Michigan, which is where we sell 46% of the beer that we make.”
In fact, in Michigan, Bell’s reclaimed the title of largest brewery in the state, Yunker said.
Heading into 2023, both New Belgium and Bell’s are riding a wave of momentum. Fechheimer described Q4 as the best growth quarter of 2022 for both brands. The hot end to 2022 has carried over to January, although Fechheimer noted that moving the release date of popular Bell’s seasonal Hopslam IPA from Q1 to Q4 has caused some uneven comps.
“If you take that out of there, Bell’s is flying as we start this year behind some innovations,” he said. “And we’re continuing to see that growth on the New Belgium brands as well.”
The playbook for 2023 will focus on a core four philosophy led by New Belgium’s Voodoo Ranger portfolio and remastered Fat Tire brand and Bell’s Hearted and Oberon families.
Voodoo Ranger Top Distributor Ask for 5th Consecutive Year
For the fifth consecutive year, New Belgium is asking its wholesalers to make the Voodoo Ranger portfolio their top priority, Fechheimer said. The strategy is about “consistency of messaging and execution” with wholesalers and retailers and in marketing to consumers, which “is all really lined up to build on each other,” he added.
Voodoo Ranger Juice Force imperial hazy IPA, which launched in early 2022, became the largest craft innovation of all time, with nearly $73.3 million in off-premise sales year-to-date through January 1, 2023, according to the market research firm IRI. In Juice Force’s sophomore year, the brand will add a new packaging format, 12-pack cans in March, as well as a sister brand, Fruit Force fruit punch imperial IPA (9.5% ABV). Building out the Juice Force brand family and capturing “incremental shelf space” is the goal in 2023, Fechheimer said.
Beyond Juice Force, the Voodoo Ranger portfolio grew on its own, Fechheimer said. In a flat to slightly down craft beer market, the Voodoo Ranger brand grew around 6% in 2022, signaling “a really healthy brand in the context of an evolved craft market,” he added. Five Voodoo Ranger offerings made IRI’s top 30 craft beer list in 2022, with Voodoo Ranger Imperial IPA ranking No. 2, behind Molson Coors’ Blue Moon Belgian Wheat.
For 2023, New Belgium is zeroing in on the convenience channel for growth, with ACVs [all commodity volume] increasing by the month but “still a ways to go in terms of opportunity,” Fechheimer said.
“Even our most distributed Voodoo brand is something like 60% ACV and just over that, and craft doesn’t typically get to 100% ACV,” he said. “Blue Moon is just over 80% ACV, so just think about that as we maintain velocity, what that growth can be for growing the brands from 60% to be 80% is a huge opportunity.”
Voodoo Ranger Imperial IPA and Juice Force are the top two selling craft single-serve offerings in convenience, but there remains a “30 to 40 point” ACV gap between Juice Force and Imperial, signaling a lot of opportunity ahead for both brands.
Tack on single-serves of Juicy Haze IPA, Voodoo Ranger IPA, Two Hearted IPA, and Fat Tire, and there is “a significant opportunity to gain distribution that the velocities justify,” Fechheimer said.
Fechheimer sees an opportunity to create a “billboard effect” with multiple brands on shelf. He added that with velocity of the Voodoo Ranger brands tracking similar to domestic beers, the space is justified.
In many c-stores, New Belgium already has multiple facings of Voodoo Ranger Imperial IPA and Juice Force, as well as a facing for Juicy Haze IPA or Two Hearted IPA.
“As we add Fruit Force to that, you’re starting to get to that point where you can really think about this combined portfolio justifying a convenience store shelf, which is a really exciting place for us to be,” Fechheimer said. “You think about the summer, you put an Oberon 19.2 [oz. single-serve can] in there in certain markets, maybe you put a Fat Tire 19.2 in there, you just start to get to this spot where there’s a really compelling convenience story to tell.”
Variety Packs a Key to Growth for Bell’s
The end-of-year momentum carrying Bell’s into 2023 was kickstarted by Hopslam IPA’s move to Q4 and “finally answering the call for a year-round variety pack in cans,” Yunker said, referring to the Hearted IPA variety pack, featuring flagship Two Hearted (7% ABV), Hazy Hearted (7.5% ABV), Big Hearted imperial IPA (9.5% ABV) and Change of Heart experimental IPA (6.8% ABV).
The move of Hopslam IPA (10% ABV) into the winter months and away from “Dry January” was a logical move.
“Hopslam is an indulgent, delicious beer and that’s the season of indulgence,” Yunker said. “So we were really happy with how it performed in the fall.”
Meanwhile, the first Hearted variety pack has pushed Bell’s up around +160% of its forecast over the last two months, Yunker said. A second iteration of the variety pack will follow in March.
Hazy Hearted IPA – the most prominent line extension to flagship Two Hearted IPA – replaced Official IPA this year and increased sales +60% compared to January 2022, Yunker added.
Also getting the variety pack treatment in summer 2023 will be Bell’s most popular seasonal, Oberon wheat ale. Filling out that pack will be Cherry Oberon and two other nearly finalized variants, Yunker said.
Oberon Day, an official holiday in Michigan, is set for March 20, which Yunker promised will be “bigger than it ever was.”
Finally, Yunker teased news about a new Bell’s lager, which she described as a “pet project,” coming in the next month.
Fat Tire Rebrand a ‘Recruitment Tool’ For Craft
The redesign and restyling of the iconic Fat Tire brand has been met with mixed emotions from some, but Fechheimer sees the brand as an important “recruitment tool” for new legal-drinking-age consumers to craft beer.
Whenever a long-standing brand is reformulated, there’s rarely consensus on the new liquid. The new packaging for Fat Tire, though, has been well received among distributors and retailers. Fechheimer said it’s all about trying to get drinkers to “reappraise and try the brand again.”
“The beer is either going to get them to stay or not,” he said. “And we’re hearing in Fort Collins that there’s been a lot of good feedback. It’s not universally great, right? We know that you’re taking a risk when you do this. I’m not trying to say it’s all perfect. There are some people who will miss the prior version of a Fat Tire, but we’re hearing a lot of good feedback.”
Marketing Spend Going Up
New Belgium will unsurprisingly continue to invest more behind the Voodoo Ranger brands in 2023, as the company works to maximize the brand’s potential, Fechheimer said.
Two Hearted and Oberon will also receive more investment, which Yunker described as “five times more than” what was spent behind those brands prior to the sale of Bell’s to Lion.
“Those have always been brands that we’ve built over the bar and by word of mouth,” she said. “Again, enjoying some of the benefits of joining a larger family and thinking about how do we tell the Two Hearted story. I’m really excited for some of the campaign work that’s happening right now to finally hit market.”
Look for it in the next month.
Distributors Asked to Manage Inventory in Q1
The faster Q4 growth pushed volumes ahead of projections, leading the company to bump up against some of its capacity constraints, Fechheimer shared. Thus, the company has asked its “distributors to manage really tight inventory levels in Q1,” he added.
To alleviate those constraints, the company is adding a new canning line in Fort Collins, which should be operational by summer. Bell’s production facilities have picked up production of some Voodoo Ranger variants. The company is working on some efficiency projects at its Asheville, North Carolina, facility, while also adding co-packing.
66 Transitions in 2022
New Belgium and Bell’s did around 66 distributor transitions in 2022, with 120 new distributors appointed, as the company worked to align the networks of the two craft breweries, Fechheimer said.
“We’re obviously not all the way there, but I think the majority of the transitions that are going to happen have happened,” he added.
“We’re about 90% of the way there, consolidated,” Yunker said.
Notably, in Bell’s home state, the company remained with its existing network. Neighboring Bell’s markets such as Wisconsin, Indiana, and Ohio are completed, with Illinois “close to complete,” Fechheimer said.
After building out its footprint in Northern California and Montana in 2022, Bell’s is closing in on 50-state distribution with Hawaii one of the last remaining states.
“We’ll get there,” Yunker said.