Beer industry executives gathered last week in Chicago for Beer Marketer’s Insights Spring Conference, which returned after a two-year absence due to the pandemic.
Below is a recap of discussions that took place during the daylong event.
Sierra Nevada Boosted by Little Thing Family
Sierra Nevada VP of sales Ellie Preslar and chief commercial officer Joe Whitney discussed the company’s growth via its Little Things family, media budget increases for Pale Ale, entering the non-alc segment with Hop Splash sparkling water and other innovations.
“We’ve been holding our own, but it’s a tough, tough time,” Whitney said, adding that the company has been “growing a percent so far this year.”
This year, Sierra Nevada has raised prices about 3.5% across the board, with some market-based fluctuation, he said. However, input costs still outpace the increases.
About half of the company’s growth this year is projected to come from beer offerings, while the other half will come from Sierra’s beyond beer portfolio, which includes Hop Splash, Tea West Hard Tea and Strainge Beast Hard Kombucha,.
Hazy Little Thing IPA has overtaken Pale Ale as Sierra’s top seller in off-premise scan data, increasing dollar sales +6.9%, to $31.7 million, year-to-date through April 17 at multi-outlet food and convenience stores tracked by market research firm IRI. The beers rank No. 3 and No. 4, respectively, in the top 30 craft SKUs in IRI’s data set.
“It’s on its fifth year of growth, and it’s up double-digits year to date,” Preslar said of Hazy Little Thing. “It’s a really delicious, approachable beer, and we think it has a really long runway ahead of it despite some of the beer industry trends.”
Additionally, sales of Big Little Thing Imperial IPA have increased more than 20% year-to-date. Hazy Little Thing, Big Little Thing, Wild Little Thing Slightly Sour Ale and Sunny Little Thing Citrus Wheat Ale are available in the Little Things Party Pack, which launched earlier this year.
“It’s something that you can buy and really satisfy everyone in your household and everyone coming over,” Preslar said. “There’s something for everyone there.”
The variety pack introduced wholesalers and retailers to Sunny Little Thing prior to its standalone launch, which has since happened and the company is pleased with the beer’s rate of sale, she added.
Although the Little Thing family is a bright spot in Sierra’s core beer portfolio, its older brands are struggling against tough comps. Pale Ale’s dollar sales have declined -13.2%, to $27.1 million, year-to-date through April 17, according to IRI. Dollar sales of Torpedo Extra IPA have declined -23.5%, to $9.6 million.
Sierra is bolstering flagship Pale Ale with a $10 million media spend and a dedicated campaign set to launch later in the year, Whitney said. The brewery has launched Atomic Torpedo IPA only in 19.2 oz. single-serve cans to capture sales in convenience stores. Its seasonal line has nearly completely turned over. Summer seasonal Summer Break (+30%), new in 2021, and Q1 seasonal Powder Day IPA (+20%), new this year, both posted double-digit gains over their predecessors.
In early 2022, Sierra launched a direct-to-consumer sales window for non-alc Hop Splash, “more for us to learn than anything else,” Preslar said. The product sold out within three days, and Sierra learned that the hopped sparkling water is “an incremental purchase …. not a substitution.”
The company plans to expand its alcohol-free offerings with a non-alc beer next year as a way to make inroads with the youngest legal-drinking-age consumers, Whitney said, pointing to data shared by marketing insights firm Kantar during last year’s Brewbound Live business conference that 22% of LDA Generation Z consumers shun alcohol completely.
“Think of where beer dollars from a marketing standpoint have gone – they’ve gone to entry-level drinkers, because everyone really wants to get that entry-level drinker and hold them for life,” he said. “Well, if the entry-level drinker totally rejects beer or alcohol, those marketing dollars aren’t going to work really well. So broadening your brand platforms, having a recruiting tool is important.”
Athletic IPO Within Next 2 Years, CEO Bill Shufelt Says
After hinting at the possibility of taking non-alcoholic craft beer maker Athletic Brewing public during Brewbound Live last year, co-founder and CEO Bill Shufelt said an initial public offering (IPO) could materialize in the next 12-18 months.
Athletic is ”extremely focused on operating our plan” and has “the luxury of having this amazing investor team” behind it, he said.
“Every time we’ve gone to build a new brewery – we’ve built three now – that team has come back and supported us,” Shufelt said. “It’s because we communicate so regularly with all our stakeholders.”
Athletic’s drinkers are evenly split between men and women, and 80% also drink alcohol. The brand is helping to create new occasions for the beer category.
“We want to take it back to a seven-day-a-week beverage,” Shufelt said, noting that beer consumption has become limited to about two days per week.
Build, Borrow, Buy Strategy Bolstering Molson Coors Portfolio
Molson Coors chief strategy officer Rahul Goyal offered a look into the company’s progress against the revitalization plan it rolled out in 2019 to focus on premiumizing its portfolio.
The country’s second-largest beer producer’s offerings now skew 26% above premium, as the company has launched big bets in beyond beer in recent years.
“We didn’t have this portfolio two years ago,” he said. “We’ve got some exciting things that hopefully everybody gets to taste soon.”
Molson Coors’ strategy has been to start with its three main constituent groups – wholesalers, retailers and consumers.
“We start from there, then we look at the portfolio – what are the gaps? Then we say OK, can we build it? Can we borrow it? Can we buy it?”
Two of the three approaches have paid off in the company’s hard seltzer portfolio. Molson Coors built Vizzy, but “borrowed” intellectual property from Coca-Cola to launch Topo Chico. Together, they now hold a 10% share in the hard seltzer segment, Goyal said.
In other examples of Molson Coors “borrowing” from partners, the company’s joint venture with D.G. Yuengling & Son is off to a “strong start in Texas,” where it launched last year. Goyal did not name any potential future markets for the Pennsylvania beer brand. Simply Spiked Lemonade, another partnership with Coca-Cola, has begun shipping and will hit retailers next month.