After crossing the 100,000-barrel threshold in 2018, Rhinegeist’s increased production 6% in 2019, to 106,000 barrels, sales director Matt Steinke shared with Brewbound.
“We grew again, which is becoming increasingly more challenging in the craft landscape, especially without opening new markets,” he said, adding that the Cincinnati craft brewery’s depletions (sales to retailers) increased 5%.
Steinke credited flagship Truth IPA’s double-digit growth for driving the business last year. Truth now accounts for 53% of Rhinegeist’s total business.
Although 2019 was a “solid” year, not everything was rosy for Rhinegeist, Steinke admitted. Bubbles, a fruited rosé ale, was a notable drag on the company’s positive trends, as competition increased from other rosé brands and hard seltzers.
Nevertheless, Steineke said the company was able to get in front of those declines and launch Wowie, a fruited ale with pineapple and passionfruit that will serve as the company’s summer seasonal fruited ale offering.
“We looked at the model across the industry and a lot of what seltzer was doing and we looked at patterns in fruit that were kind of surviving seasonality,” he said. “This year, we saw that writing on the wall and we turned that Wowie SKU into a rotating seasonal fruited ale SKU, which is currently Slangria.”
Slangria, a pomegranate, blueberry and lime fruited ale, launched in October and quickly sold through, Rhinegeist co-founder Bryant Goulding added.
In fact, fruited ales now make up 20% of Rhinegeist’s total business, with the portfolio growing 9% last year.
Bubbles remains a priority brand for the company, and the company was able to improve the brand’s trends in the fourth quarter. Goulding believes the Bubbles brand can return to growth this year.
“Last year, we sold 180,000 cases of Bubbles,” Steinke added. “It’s 13% of our business. I think now we’ve flattened it out, and we continue to look at experiments in the fruit space in fruited ales, as a brewery that’s definitely not doing a seltzer.”
As such, the company will add Zango, a mango tangerine fruited ale, to the rotation this year.
According to Goulding, Rhinegeist’s portfolio of fruited ales are meeting consumers’ desire for products with more intense flavors.
“I think we’re seeing a divergence of consumer taste profiles, where you’re seeing people turn toward seltzer, which is pretty minimal taste and caloric and the psychological benefit that you’re being healthy even while you’re being naughty,” he said. “And then the other side of spectrum of canned cocktails and more intense flavors. We’re seeing our niche in fruited ales as being intensely delivering fruit flavor, and yet we know we’re going to have to innovate into that space and play with a lot of different fruit combos.”
Beyond fruited ales, Rhinegeist will launch its first year-round IPA since launching double IPA Knowledge four years ago. That will change this year with the March release of a hazy, juicy IPA Cloud Harvest, which has been in the works for more than two years. Cloud Harvest will be released in three different iterations throughout the year, starting with Moko Nui, followed by Bondi and then Majorca. The aroma of the beer is meant to invoke a sense of tropical locales through the fruit characters derived from the hops, Goulding said.
“The low bitterness and the juicy flavor profile, we’re really excited about,” he added. “And it’s complementary to Truth, which is a pretty fruit-forward West Coast IPA, but has that nice bracing bitterness that we all love.”
Cloud Harvest, which will be released in 6-pack cans, will check in at around 6.5% to 6.7% ABV, and the beer will have a 90-day shelf life.
Meanwhile, Rhinegeist will launch a traditional witbier called Whiffle in 6-pack cans this spring. Goulding described the 5% ABV beer as “light, bright and citrusy and really refreshing” with a medium body, which he called “a big differentiator for this style.”
“We’re back to the basics with a witbier,” he said. “That’s not a beer style that nobody’s ever heard of, of course.”
Asked how difficult it is to find white space in new product innovation, Goulding admitted that “it’s very challenging.” He described the innovation in the beer space now as “proactive reactivity,” with “everybody doing everything.” However, Goulding sees the turn to innovation as “a much healthier” and competitive space for craft brands, rather than large companies resting on their laurels.
“Innovation is the output of better competition, and I think that makes us better as an industry,” he said.
As such, Rhinegeist will also play in the low-calorie IPA space with the release of summer seasonal Mathlete.
“When everyone jumps in the pool all at once, it’s kind of hard to tell what the temperature of the water is,” he said. “We’ve seen that in the past with session IPA four or so years ago. With brut IPA, it was on the tip of everyone’s tongue. It was pretty exciting because it was unique and different and yet we didn’t really see much traction in the market. I think it is increasingly challenging, but I think that’s part of what we’re in for. Customers want brands they can trust and go back to because they trust the quality and the flavor profile, and they also want new stuff to try.”
After only opening one new market — the city of Nashville and its surrounding area, via Bounty Beverage — last year, Rhinegeist is exploring a few new markets in 2020. The company will expand into southern Wisconsin, in the Madison and Milwaukee markets, in the spring via Wisconsin Distributors. And the company plans to expand in Tennessee, to Knoxville and Chattanooga, and in Pennsylvania, where it currently only sells beer in Pittsburgh, to Erie and State College.
Finally, Goulding offered an update on Rhinegeist’s employee stock ownership plan (ESOP), as implementation is slated to begin in July. The company plans to start slow with a goal of reaching 100% employee ownership after “many years.”
“We’ll take kind of bite-size pieces, buy out some investors and transfer that into employee-owned shares,” said Goulding, who co-founded the brewery in 2013 with Bob Bonder.
Part of that slow build up is instilling an ownership mentality within the company’s workforce, and building processes that will keep the brand and brewery relevant and thriving for the long term.
“Our goal at Rhinegeist is to be a brand that outlasts ourselves, and there is actually the potential to do that with the brewery if you have the restraint to grow a brand for the long run and not just the short run,” he said.