As Stone Brewing begins a new era under the ownership of Sapporo, the Escondido, California-headquartered craft brewery is focused on driving growth of Delicious IPA by building out the brand as a family in 2023.
The focus on Delicious is a shift from the last two years when Stone prioritized its Buenaveza Salt & Lime Lager, which will continue as a strong No. 2 priority this year.
Stone Brewing CEO Maria Stipp outlined the brewery’s strategy for 2023 in an interview with Brewbound earlier this week, as well as the company’s growth trends. Notably:
- Stone and Sapporo combined grew scan volume in NielsenIQ channels nationally (+10%), while both brands also increased scan volume in Southern California (+14%) for the 52-week period ending February 18.
- In off-premise chains, Stone has increased volume +10%, while the overall craft segment has declined -7%.
Highlights of Brewbound’s conversation with Stipp follow.
Delicious IPA Mixed 6-Pack Biggest Stone Launch Ever
Delicious IPA is Stone’s main priority in 2023, and the focus behind the brand is already paying off. Off-premise scan volume increased +22% for Delicious IPA, with New Belgium’s Voodoo Ranger Juice Force IPA as the only other IPA growing faster, Stipp shared, citing NielsenIQ total U.S.xAOC data for the 26 weeks ending February 18.
“We are super excited about the trend,” she said. “On the heels of that momentum, we are launching this Delicious brand family with the Delicious mixed six[-pack].”
The variety 6-pack includes original Delicious IPA (7.7% ABV), along with new brand family members Delicious Citrus IPA (7.7% ABV) and Double Delicious IPA (9.4% ABV).
“It’s turned out to be our largest launch of all time,” Stipp said of the variety 6-pack, which launched at the end of 2022. “It’s already a top 30 craft mixed pack in scan dollars, even with very low distribution. It’s very, very new.
“If you were to take in Southern California Total Wine, Whole Foods and AVP [Albertsons, Vons, Pavilions] SoCal scan data in the last month, Delicious mixed six was the No. 1 innovation in craft and the No. 4 innovation in all of beer,” Stipp continued, citing NielsenIQ data. “We’re going to build on that all of the year and continue to focus on that.”
In addition to 6-packs, single-serve 19.2 oz. cans present an opportunity for the Delicious brand family, with Double Delicious being among Stone’s best-selling velocity brands in the package.
Although Citrus Delicious is not yet in its own dedicated packages outside of the variety 6-pack, the brand is building demand for draft placements, Stipp said.
The Los Angeles market has become a main target area for Stone, with the company focusing its sales and marketing spend in the city, Stipp said. The strategy has worked thus far.
In Los Angeles, Stone’s scan volume is +19% compared to last year, while the overall craft segment has declined -9%, the company shared, citing NielsenIQ data. Stone’s share of craft in the LA market increased 1.1 points over the last year, the company added.
Buenaveza Salt & Lime Lager Stone’s Top Draft Brand
Buenaveza Salt & Lime Lager has become the third largest brand within Stone’s portfolio and the company’s top-selling draft beer.
“Craft Mexican lagers were up +9% in scan dollars in total U.S., so that is a growing style in craft for sure and despite the tons of SKUs in the category, Buenaveza continues to have growth of 1.2 points to 19 total share thanks to dollar gains of +17% behind only Firestone [Walker] 805 Cerveza,” Stipp said. “So very, very, very happy with how Buenaveza continues to deliver growth in a very crowded category.”
Sapporo Integration Means Doubling Capacity in 12 Months; Will Operate as Single Company
As Stone integrates into Sapporo and the Japanese beer maker shifts its U.S. production to the craft brewery’s facilities in Escondido and Richmond, Virginia, in September, the company will double its production capacity within a 12-month window, Stipp said.
“I’m just so excited about the scale that we’re creating with Sapporo and really becoming close to 800,000-barrel brewery,” she said.
Sapporo acquired Stone for $165 million on August 31. Stone Distributing was carved out of the sale to continue to operate independently.
By mid-year, the goal is for Stone to be fully integrated within Sapporo and operating as a single company, Stipp said.
“We chose to put our sales, marketing and strategy teams together right at the very beginning,” she said. “We kicked off our year with a sales meeting where we had all of our teams all together in January, and remember, this transaction was completed in September, so that’s very, very fast to pull everyone together. But I’ve been through this before, and I learned some things about things I did right and wrong. And the good news is that I kept my notes about the things that I needed to make sure to remember this time.”
Pulling those teams together early has already led to chain wins for both Stone and Sapporo, Stipp said. She added that there is “a lot of whitespace for growth” for both brands for expanded distribution.
The integration and additional production at Stone’s facilities will lead to additional hiring in the coming months, with around 150 new employees joining the organization by year’s end, Stipp said.
Relationship with Stone Distributing, Channel Strategy
Although Stone Brewing and Stone Distributing are no longer a part of the same corporate entity, the brewery remains the largest brand within the Southern California wholesaler’s portfolio.
“We’re very aligned on how we talk to each other and build our annual plans and our quarterly goals,” Stipp said.
Draft is among the strengths of Stone Distributing and remains one of the largest opportunities for Stone, Stipp said. Stone boasts the most draft handles in Southern California via Stone Distributing, and the company “will continue to press hard in the on-premise,” she said.
The convenience channel and Hispanic grocery stores also present opportunities for growth for Stone, Stipp said. As the company adjusted price to stay competitive with other national brands, the company has increased its distribution, including in areas of Los Angeles “that we wouldn’t have been invited to before,” Stipp said.
Finally, off-premise chains and driving mandates will be a key to a successful 2023 for Stone, Stipp said. The company recorded its “largest year of distribution pickups through mandates at chains” in 2023.
“We eclipsed what we had last year by a lot,” she said. “So now it’s all about executing that with our distributor partners.”