Aiming to expand outside of the Midwest, Wisconsin-based craft brewery Sprecher Brewing Co. has acquired the brand portfolio of regional soda maker WIT Beverage Co. (WBC) for an undisclosed sum.
First reported this week in Beverage Business Insights (BBI), the deal includes the Green River, WBC Craft Soda, Caruso’s, Black Bear, III Dachshunds and Claire Baie brands. Sprecher Brewing CEO and president Sharad Chadha and chief sales officer Gary Goldstein told BBI that the deal is expected to boost Sprecher’s topline by more than 10% and will also increase the company’s footprint in the Chicago area.
Speaking to BevNET, Chadha and Sprecher chief commercial officer Tom Aslin said the brewery, originally founded in 1985, has largely shifted its focus from beer to craft soda over the past two years, with nearly 90% of the company’s revenue coming from its soda products. Despite a large consumer shift away from sugary beverages in recent years, Chadha noted that craft soda is a fast growing segment where he believes Sprecher can establish itself as a national name.
“In craft soda there’s maybe a couple hundred brands, but in craft beer there’s thousands of brands across the country,” Aslin said. “So certainly the competitive situation is a little bit more in our favor in craft soda.”
WBC VP of sales and marketing James Akers told BevNET that the company had not been planning to sell its portfolio until Sprecher approached them. WBC, he said, is a subsidiary of an unnamed private owner which will continue to operate within the beverage industry by “going back to the roots” and focusing on contract packing and production.
While the WBC and Sprecher will eventually operate independently, Akers said WBC will be working with the brewery during the transition.
“They looked at the brands differently than we did and at the end of the day they’re going to add depth to their portfolio,” Akers said. “They have their goals for the brands and I’m going to do everything I can to help them achieve those goals.”
Sprecher was acquired last year by a 14-person, Milwaukee-based investor group led by Chadha, who previously held executive positions at Samsung Electronics, GE Healthcare and Electrolux.
As Chadha works to transform Sprecher into “the craft beverage icon of America,” as he stated in January 2020, the company has focused on diversifying its portfolio with not just sodas but also sparkling waters, low and zero sugar CSDs and mixers. However, with its existing portfolio marketed under the Sprecher name, Chadha said the company purchased WBC’s brands on the advice of distributors who said the company would benefit from a multi-brand portfolio.
The WBC portfolio will provide Sprecher with a legacy following as well, particularly through Green River, which was founded in 1919 and acquired by WBC in 2011. Though only available in limited distribution, the brand has remained a nostalgia item for consumers and even lent its name to the classic Creedence Clearwater Revival song “Green River.”
Chadha said Sprecher hopes to grow the product’s awareness beyond Illinois by tying it to St. Patrick’s Day celebrations in other states.
Meanwhile, products like Caruso’s, an Italian-styled soda, will be launched in New York and other markets with large Italian American populations, while Black Bear gives Sprecher a product packaged in PET bottles.
“When we talked to our retailer partners and distributors they said ‘You can’t be a one trick pony,’” Chadha said. “You have got to have a Good, Better, Best and you have got to have a variety to be a category captain and have that shelf space like the Cokes, the Pepsis and the Keurigs have. And we’re not trying to be like them, but we want to be big enough as a craft [brand].”
Sprecher is also looking to expand its packaging formats outside of its traditional glass bottles and into aluminum cans, Chadha said, and has added a new canning line to its production facility, opened up a second production shift and created 40 new jobs.
Looking ahead, the company works with a number of DSD partners in the Midwest and Texas and is now targeting expansion into the Mid-Atlantic, Southeast, Texas, Arizona and Colorado. Chadha said Sprecher is targeting mainstream channels, including retail partners like Costco, Walmart, Target and Kroger. However, the company also sees opportunity in club, dollar, restaurant and bar and liquor stores.
“We have a very, very comprehensive strategy to expand from the Midwest, to the South, the Southeast, and then the Arizona area, and then across the nation,” Chadha said.