Stone Brewing Reports 18 Percent First-Quarter Growth

Stone Brewing Company got off to a self-proclaimed “epic” start in the first quarter of 2017, reporting growth of 18 percent through the first three months of the year.

In a press release, the San Diego-based craft brewery noted that its performance during Q1 outpaced “both the year-to-date, IRI-stated grocery craft category growth of 4.4 percent and the category’s 52-week growth rate of 6.4 percent.”

“2017 is off to a great start for Stone Brewing both on-premise and off-premise and it‘s showing us that craft beer fans nationwide appreciate our genre-defining styles of IPAs and our new complementary San Diego style Pale Ale – in Stone Ripper,” newly appointed CEO Dominic Engels said via the release. “In a category that seems to be talking more and more about slowdown, we are pleased to be talking about continued double-digit growth.”

In an email to Brewbound, Engels pointed to several initiatives — including new product innovation, a more “simplified strategy and beer plan,” as well as better planning and alignment with wholesalers and retailers — as reasons for the successful start.

“We have streamlined and prioritized better, which is driving more commitment for the Stone brand with our accounts and distributors,” he wrote.

Stone also credited the company’s fast start to the strong performance of its core beers. Notably, sales of flagship Stone IPA, which was reformulated last year, increased 8.2 percent while sales of Delicious IPA grew an impressive 142 percent compared to the same period in 2016.

The company also found hits in two new year-round products: Ripper San Diego Pale Ale and Tangerine Express IPA.

Ripper launched nationally in January and market research firm IRI Worldwide recently named the brand “one of the top five new six-packs in U.S. Food.”

Meanwhile, strong year-to-date depletions for Stone Tangerine Express IPA, which launched in late January, helped that brand become the “fifth largest draft IPA brand and the hottest new 22 oz.,” according to the company.

Sales of Stone’s seasonal All IPA Mixed Pack — which includes Pataskala Red X IPA, Ruination Double IPA 2.0, Delicious IPA and the in-pack exclusive Hop Revolver IPA — also increased 14.7 percent year over year, the company said.

Engels also denied speculation that lower pricing had contributed to the increased volume sales.

“We have not taken prices down,” Engels wrote to Brewbound. “Our sales mix has moved to higher volume packages like 12 packs and away from 22 oz. singles, making the price per CE [Case Equivalent] lower.”

“We are very confident in maintaining the growth with the right stable of beers in place and great alignment across our sales teams and distribution network,” he added.

The news comes as Stone — bolstered by its now fully operational East Coast brewery in Richmond, Virginia — prepares to fill out a 50-state distribution footprint later this month. (The brand will be available throughout the U.S., including Washington, D.C., Puerto Rico as well as in 35 countries.)

Stone Brewing’s Berlin brewery, meanwhile, is on track to produce and sell more than 20,000 hectoliters — a little more than 17,000 barrels — in its first year of operation.

“It’s been really amazing to see the traction on a global basis with fans and retailers thus far,” Engels said in the release. “We’re excited as we look toward the horizon with even more expansion and distribution plans across the European market and beyond.”

Last August, Stone hired Engels as its new CEO following a yearlong search that began when co-founder Greg Koch announced he would move into a new role as “executive chairman.”

Last October, shortly after Engels joined the company, Stone laid off more than 50 workers. At the time, Engels described the move as a “restructuring,” and blamed the cuts on “recent declines in domestic growth for the category and for Stone.”

Stone, which produced more than 325,000 barrels of beer in 2015, was ranked as the ninth largest craft brewery by volume last year, according to trade group the Brewers Association.

 

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