Want to know why the “long tail” of craft is growing faster than 350 percent, according to research firm IRI Worldwide? Look no further than Cincinnati’s Rhinegeist brewery, which tripled production to more than 31,000 barrels in just its second full year of business.
Rhinegeist, which only sells its beer in Ohio and Kentucky, is one of a growing number of well-capitalized and entrepreneurial-minded craft startups outpacing category growth by brewing dozens of different styles and overinvesting in sales personnel.
In a conversation with Brewbound, co-founder Bryant Goulding, who served in sales management roles for Golden Road Brewing and Dogfish Head before leaving to start Rhinegeist with business partner Bob Bonder in 2012, described his company’s growth in 2015 as “heroic.”
“We were loosely pushing for 30,000 barrels,” he said. “We learned a lot about how quickly we can grow.”
The company, now 120 employees strong, also self-distributed about 25,000 barrels in the Cincinnati, Dayton and Columbus markets, Goulding said — Rhinegeist now maintains a fleet of 12 sprinter vans, a box truck and a 54-foot-long trailer.
“Self-distribution has continued to be a foundational element in our growth,” Goulding wrote in an email. “We love the symbiosis and communication between sales and distribution teams.”
The remainder of Rhinegeist’s sales — which now includes the Cidergeist line of hard apple ciders, launched in October — were concentrated across the Ohio River, in Kentucky. Rhinegeist had been self-distributing in that market through its Riverghost Distributing subsidiary for about eight months until a change in Kentucky law forced the company to sell its brand rights to Heidelberg Distributing last June.
Heidelberg, which also competes against Rhinegeist via its wholesale operations in Ohio, helped more than double sales to 100,000 case-equivalents. Rhinegeist had only sold about 30,000 CE’s in the market when Heidelberg took over distribution in July.
“They doubled down, built an impressive craft team and hit the ground running with the brand,” Goulding told Brewbound.
In April, the company upgraded its facility and installed a new 60-barrel BrauKon brewhouse. It also added a number of 240 barrel fermentation tanks throughout the year, which theoretically gives Rhinegeist the ability to scale production to 80,000 barrels overnight, though Goulding doesn’t expect expansion to move that quickly in 2016.
“We aren’t in a hurry to get there,” he said. “Having some additional space means we can experiment with lagers right now, but come May all 13 tanks will be full.”
Goulding is “modestly” forecasting 50 percent growth in 2016, he said.
As the company works toward 80,000 barrels, it’s also expanding the availability of the Cidergeist brand to Boston and New York City. Rhinegeist tapped Massachusetts Beverage Alliance for distribution throughout the state and is still in the process of interviewing wholesalers in New York, Goulding said.
And the decision to lead with cider, instead of beer, in those two markets was a deliberate one, added Goulding.
As Rhinegeist expands throughout Ohio, he doesn’t want to risk shorting wholesalers of product because the company has already committed to deliveries on the East Coast. He’s also using the cider brand, which is easier to scale up should things take off, as somewhat of a loss leader — investing in four new sales managers and a sales director to “test” the company’s sales techniques.
“In going to some of the toughest markets, I think we will learn a lot about how hard it can be to sell,” he said. “It takes a considerable effort to build relationships with key tastemakers and retailers. We can put a sales team out there, build awareness with cider and then when we come with beer, we are poised to build a much better story and win people over.”
Rhinegeist By The Numbers:
- 80,000 barrels — Production capacity
- 31, 470 barrels (incl. cider) — 2015 Production Volume
- 25,000 barrels — Self-distributed barrels
- 40 percent — Truth IPA’s percentage of total business
- 76 — Number of beers made in 2015
- 1 — GABF silver medal for Ink Imperial Stout aged in sherry barrels.