A little over half a year after media executive John Gallegos took a majority stake in San Diego-based SouthNorte Beer, the brewery is launching its first major advertising campaign and has hired Constellation Brands veteran Breanne Heal as its first vice president of sales and marketing.
“The first place to accelerate growth is to get the right people, in the right places, in the right seats,” Gallegos said. “So, we were looking for somebody who knew the category, knew the industry, had a mix of both sales and marketing.”
Heal joined the company in March, just as the COVID-19 pandemic forced the shutdown of bars and restaurants in the U.S. Prior to that, she spent almost nine years at Constellation Brands as the company’s western region marketing manager and San Diego regional development manager. Heal’s focus was on the company’s Mexican beer portfolio, which includes Corona, Modelo and Pacifico, and her responsibilities included both sales and marketing.
SouthNorte’s brand identity and flavor profiles sit at the intersection of traditional Mexican-inspired beers and flavors brewed with techniques from the American craft beer industry. For instance, the company’s No Güey is a West Coast IPA brewed with mango, chili, lime and salt, inspired by the traditional Mexican street food offering of fruit with lime and salt.
The company’s flagship, Sea Señor, is a sessionable Mexican-style lager that appeals to both import and craft drinkers, Heal said. Its other staple is Agavemente, a 6.3% lager brewed with agave and hibiscus. Brewmaster Ryan Brooks is working on three new styles for release by the fall, Gallegos added.
“It’s so cool to be able to play in Mexican imports and craft, and really be the trade up for a Mexican import consumer venturing into the new territory, into this new frontier with craft,” Heal said. “We’re 4.5% ABV, so it’s the same alcohol content as a Corona, Modelo or Pacifico, but it’s got a little bit more flavor and a really great craft story and craft credentials backing it up. So it’s really exciting to be able to cross over into both consumers’ preferences.”
Sea Señor stars in the ad campaign, titled “A New Frontier in Beer,” which highlights the beer in 30-second commercials featuring a perhaps quarantine-weary couple on their couch. The man pulls a Sea Señor from the fridge, takes a sip and begins speaking excitedly in fluent Spanish and his previously disengaged partner sits up in rapt attention and insists that he keeps talking. In the English version, a voiceover at the end describes Sea Señor as “American craft meets Mexican lager.”
Gallegos, the founder and owner of United Collective marketing and advertising agencies, which created the ads, said the pandemic’s upending of American life meant the experiential and event marketing methods that lifestyle and consumer brands have relied on to reach Millennials and Gen Z are out of the question.
“Everything is about an experience — it’s as much how they’re experiencing things as what they’re experiencing,” he said. “When you take that out of the equation, well, you have to lean into traditional media, not just social media, but traditional television and say, ‘how can I recreate that?’”
The commercials began airing over the July 4 holiday weekend on local broadcast television networks, digital, social media and Connected TV, which places ads on viewers’ televisions when they use streaming platforms such as Roku and Apple TV.
“We can really hyper focus,” Gallegos said. “We’ve got a mix of focusing on high concentrated ZIP codes where our retailers are, so you’re getting just different feeds for different people.”
Before the pandemic, 80% of SouthNorte’s volume flowed through on-premise accounts, which “came to a very drastic halt,” Heal said.
“With SouthNorte, we’re a nimble team — we all wear a lot of hats as John mentioned — and really came together quickly to restrategize,” she said.
The team secured placements in grocery stores, particularly by focusing on regional chains with local buyers such as Sprouts, and independent liquor stores.
“Our pivot went from 80% on-premise to now 80% off-premise, and that was a really quick, big change for us,” Heal said.
SouthNorte has also added placements at national retailers including Target, Trader Joe’s, Whole Foods and regional chains such as Vons, Albertsons, Ralphs, Sprouts and BevMo. All of these add up to “a pretty big footprint across the market,” Heal said.
“On-premise is still a big focus for us, and it still will always be a big focus of our entire plan — you gotta go win in the on-premise,” she said. “It’s just now a matter of what the state will allow, what our city will allow, in terms of openings.”
San Diego County closed restaurants for on-site dining on July 7 for three weeks due to a surge in COVID-19 cases; bars, breweries, wineries and distilleries that don’t serve food closed for on-site service on July 1. These businesses are permitted to stay open for to-go sales, and wineries with outdoor seating can remain open even without food service, according to the county website.
SouthNorte does not have a taproom in California, but operates one at Telefonica Gastro Park in Tijuana, Mexico.
When Gallegos expanded his ownership stake in the business last December, he developed a strategy to deepen SouthNorte’s roots in San Diego before bringing the brand to other markets. Now, the company is targeting September or October to enter the Los Angeles market.
SouthNorte is distributed by Crest Beverage, a Reyes Beer Division subsidiary whose territory includes San Diego and Imperial counties.
“When times get tough like this, brands can either step back and let things play themselves out — we can’t control on-premise — but what we can control is how we build our brand,” Gallegos said. “That’s why we went down the path of fully integrated, ‘Let’s go television, let’s bring it in, let’s build the brand, let’s get some big-time awareness.’
“We’re in big-time retailers, we’ve got a good distribution partner, we’ve got good coverage,” he continued. “Let’s push sales. Let’s grow the brand and be ready.”