Brewbound Podcast: New Belgium CEO Shaun Belongie on Asheville Recovery Efforts, Mini Ripper Cans, Hard Refreshers and Oberon Light

[00:00:00] Justin Kendall: What's on deck for New Belgium in 2025? Stick around to find out. Hello and welcome to the Brewbound Podcast. I'm Justin Kendall. I'm Jessica Infante.

[00:00:20] Zoe Licata: And I'm Zoe Licata.

[00:00:22] Justin Kendall: And this week, we're going to bring you a featured interview with New Belgium CEO, Sean Belanger. And he's got a lot to say. They've got a lot going on. They're brewing again in Asheville starting this week.

[00:00:36] Zoe Licata: Yep. Officially back in action, at least a little bit now. Well, that's exciting for them.

[00:00:41] Justin Kendall: Sean gets into a lot of things. We're going to talk about the recovery efforts in Asheville, their contingency plans, their plans for 2025, including the Voodoo Ranger franchise, Bells, new products like Lightstrike, their Mini Ripper cans for the Voodoo Ranger franchise, the higher ABV stuff. So a lot to stay tuned for. And we'll talk about teeing off.

[00:01:08] Zoe Licata: I forgot about that part.

[00:01:10] Justin Kendall: Yeah. Oh, we'll see if we cut that. But so Zoe, you are straight back from Palm Beach, Florida. Welcome back. How did the Beer Wine and Spirits Summit go?

[00:01:23] Zoe Licata: Good. It was very nice to just go hang out at the Breakers for a couple of days. A lot of familiar faces, a lot of content heard from basically every major beer company, and a lot of Delta 9 slash cannabis, you know, the hemp-derived THC beverages talk. It was weaved into almost every single conversation on stage leading up to the final conversation of the beer portion of the summit was a D9 dedicated A panel discussion with Scott Selix from Climate Kites, who was on at Brewbound Live, Kyle Cook from Lumber Boy, who they just launched Flower Boy, their new hemp-derived beverage, five milligrams of THC. What stuck out to me the most was there was a bit of a shift in people's feelings about it in a negative way, I would say. It felt a lot different versus the MBWA conference we were at in San Diego, where it seemed like everyone was pretty positive about, hey, these things exist. They're going to exist. So how do we make them benefit for beer? How do we put them on beer trucks and that kind of thing? And almost everybody on stage the past couple days were saying, we don't want to touch it. And that includes wholesalers, that includes major beer companies saying we don't want to participate in it. And I don't know exactly when that shift happened. I think maybe California scared a lot of folks because that seemed like a place where you would be a little bit more liberal with those kind of regulations to allow you to do that. And they walked it back and they had to take so many products out of the market. But yeah, people changed their tune quite a bit. Unfortunately, for the folks on the Delta 9 panel, they had to do a lot of just educating and kind of walking back some of the comments that were said. The other discussions to kind of fact check and be like, okay, these are what these beverages actually are, just so you know, we're not breaking any existing rules. And this is how we see the possible pathway for these beverages. But yeah, it was definitely a shift.

[00:03:27] Justin Kendall: Well, and we had our own conversation at Brewbound Live in December, and Scott Selix from Climbing Kites and Chris Herron, who's working to expand the distribution of Climbing Kites in the southern states, were there, as well as Ryan Bandy from Indeed Brewing, which was really been a first mover in this area. And it was just what you said. It was an educational conversation as well as I think they were a lot more optimistic even then on the prospects. And that was just a month ago. Right.

[00:04:02] Zoe Licata: Right. I think that was maybe potentially because we had, you know, from the mainly the supplier side of being like, hey, these are potential ways to bring in more consumers. But yeah, it was it was definitely a shift

[00:04:15] Justin Kendall: Even our distributor panel, though, was pretty positive on it.

[00:04:20] Shaun Belongie: I think maybe it's just the difference in size of suppliers that are at these conferences.

[00:04:25] Zoe Licata: Totally. And I would also caveat that the specific distributors that were on stage that talked about it were from Manhattan and from Quality. Quality's in Massachusetts, they can't touch it. So that one automatically, no matter what, they can't do anything with it. And Manhattan with New York, New York is kind of up in the air. They don't really know what to do with these beverages. There is that caveat that those wholesalers are kind of hand-tied. They can't really do very much anyway, even if they wanted to.

[00:04:53] Shaun Belongie: Yeah. Insiders can read about this. We had a story last week about the merger of Homegrown Distributing and Craft Collective, two craft-centric distributors here in Mass, but also in Rhode Island. And CEO Adam Oliveri and I talked a lot about this because I said, what do you see being next in Massachusetts? And he laid out how he sees there's basically four different paths. And right now, Rhode Island is on the path of basically they're working toward getting cannabis drinks into the liquor channel, but mass right now is dispensary only. So it's just, I think it depends on your size. I could see the big guys not wanting any part of it because they don't need it, you know?

[00:05:36] Zoe Licata: And it goes back to, I think what we've talked about a little bit before is like the big guys also whenever they launch anything typically tend to go big first, they go on a more national scale. And you can't really do it with these beverages, particularly like a main reason because of that is all the regulations and how they differ state by state. So if you're doing it on a smaller scale, you're doing it in one market where you know what the regulations are and God forbid something does happen, it's easier to pull back. It's not necessarily easy, but it is easier on a smaller scale than on a larger national scale.

[00:06:08] Shaun Belongie: Yeah, I can't imagine taking the commercialization infrastructure of Anheuser-Busch and aiming it all to launch a D9 drink in Delaware. That's lunacy. It's like watering a daisy with a fire hose.

[00:06:22] Justin Kendall: Well, there is hope as I sent this photo to Jess and Zoe the other day because I was at Fairway here in my small town in Iowa. And Fairway is a conservative grocery store that is not even open on Sundays. And they have THC-infused beverages lining the single-serve shelf. packs of climbing kites at the bottom. They've got the whole bottom bin sort of full up in the, uh, cold box area. So even in Iowa, it's possible at least four milligrams worth, but yeah, that's out there. You can watch our conversations from brew down live as well at brew down.com if you're an insider. So check those out, but we should dive into some beer data and. 2024 was not a great year, at least in the off-premise as far as scans go. Beer category is down 0.6% in dollars and 2.6% in volume in Circona track channels, and sales topped $45.65 billion last year. A lot of price increases that help that dollar figure, but the volume is on the downward slope. And those numbers in NIQ for the year, which slightly different, dollars down 0.7%, volume down 2.9%. So tracking pretty similar. How are you feeling about 2024 in hindsight?

[00:07:58] Zoe Licata: I mean, it's not surprising. I don't think any of us are surprised by any of these numbers. We've been looking at them all year. Harry had an interesting comment on stage during his intro for this conference where he was like, he admitted he was totally wrong last year in his predictions for 2024. He said, I thought this was going to be a great year for beer because they had easy comps in 2023. that was terrible 90s thinking, easy cops does not guarantee growth. And beer really showed that this year. It's just because you had a difficult year and you have kind of an easier layup of, okay, we can potentially build on that by improving, it doesn't guarantee you're actually going to get growth. And beer continued to have some issues this year. Yeah. Well, I mean, it's the law of inertia.

[00:08:45] SPEAKER_??: Yeah.

[00:08:46] Justin Kendall: And only four segments were in growth in CirconaTrack channels last year. That was imports, flavored malt beverages, domestic super premium, and non-alcoholic beer. Non-alcoholic beer, of course. Everybody's always got a caveat it with off a small base, but grew the most. Dollars up 28.6%, volume up 23.1%, but still one of the smallest segments out there. And if you're wondering how Kraft did, dollars down 3.3% to more than $4.6 billion and volume down 4.8%. So that's your quick numbers and you can read the full reports in the Brewbound Insider Newsletter as well as on Brewbound.com, we have more stories going up, just kind of like data year-end reviews, so check all of those out. And speaking of year-end, well, not really year-end reviews, because everybody's got their own way of doing their calendar, and Tilray Brands Constellation do it a little bit different. And Zoe, you took care of the Tilray call on Friday, and the key point coming out of that was, They've got all these new assets and now they're like, oh shit, we got to cut some stuff.

[00:10:06] Zoe Licata: Yeah, they broke news that they are going to cut around 300 SKUs from their portfolio in this whole plan of Project 420, because of course that's the name, to kind of have some cost savings and potentially pull out some low-performing skews in specific regions so they can really focus on the more high-performing stuff. And then moving forward, after they do this initial cut, they're going to do a one-in, one-out policy where if they introduce a new skew, they'll take out a low-performing one. But they still have, even with that many cuts, they still have so much going on. They have 20 brands within adult beverages, so that's plenty to work with. They probably could make more cuts on top of that, but this is the initial plan. I don't know what to say about Tilray anymore. I'm just really curious to see what...

[00:11:04] Justin Kendall: Yeah, the number they threw out there was what they wanted to save $25 million. And they've already done 17 million in cuts. And you got to figure some of that came from some of the job cuts that they did last year. We know that they hit several breweries, including 10 barrel. This sounds a little bit like, oh, we didn't know what we had, you know, after we acquired all this, and now we got to figure it all out.

[00:11:29] Zoe Licata: They laid out other parts of this plan other than just the SKU cuts, and it was a lot of just buzzwords around efficiencies and stuff. And whatever that means, that usually means some more job cuts, that usually means potentially facilities being pooled together into one or something. So we'll see what else that means. But yeah, while we're talking about Tilray, I wanted to touch on they had a presence at the conference as well. And Prince Pinakot, I believe is how you pronounce his last name. He's their chief growth officer. He acknowledged that particularly the craft brands that Tilray Brands acquired They had their big moments. They were what they considered successful at one point, but that made them, his words, quote, somewhat lazy. And they didn't care about recruiting new customers because they were content with the consumers that they had at that time and thought those would sustain themselves forever. And so Prince said that they're really focused on how do we change up that strategy for these craft brands so that they are recruiting new consumers because that consumer base they had before doesn't really exist.

[00:12:38] Shaun Belongie: at least nowhere near the scale it was before. All right, Prince, go off. I mean, these are things that maybe we don't say out loud, but he's not wrong. Craft as a whole really needs to get interested in recruiting new consumers because, I mean, we talk about this all the time. The, Justin, I'm going to use you as an example, but the Justins of the world are not drinking as much craft beer as they were 10, 15 years ago. the stuff that attracted this group of men is not going to work to attract like younger legal drinking age men and women. Like it's the world changed. So I just, I will never for the life of me understand why Tilray Brands this many brands and they want more. You guys remember talking to Irwin over the summer and he said, we don't want ones or twos. We want like fives or sixes. Like my friend, this is an intervention. You have too many.

[00:13:37] Zoe Licata: You do not need all of them. And they specifically want, like, I think the words were struggling, like they want brands that are in a bit of a rough spot. Like the Grim Reapers?

[00:13:47] Shaun Belongie: I don't know. And like, if they did this for facilities, like, which is like a theory I've heard floated, which I guess I could see, but like, homies, like call City Brewing. They will make whatever you want. You don't need to buy 25 craft brands, breweries, facilities, taprooms. I should stop giving this away for free.

[00:14:09] Zoe Licata: I'm curious to see how Tilray's extensions of some of these craft brands are doing because that's kind of their main strategy now for bringing attention back to some of these brands. They have that Long Island iced tea inspired extension of Shock Top and they have Pub Ice from 10 Barrel. But we've seen kind of very mixed results with extending craft beer brands into other categories and segments. I mean, BK Kruger from Bump Williams talked about it on stage at BrewBot Live. It does not guarantee you success because it does not always translate. So yeah, I'm really curious to see when we finally start getting more numbers on those because those just launched last year, how those are being received.

[00:14:53] Shaun Belongie: And it's not just the extensions of the craft brands that they've acquired, they're also creating like brand new brands.

[00:14:58] Zoe Licata: Yeah, yeah. They created a canned water brand called Liquid Love. No comment there. They made a non-alcoholic beer brand, Runner's High, which Ty Gilmore from Tilray said was doing decently well when he was on stage. And, oh, they had introduced finally putting out THC products to the market, so they introduced a Delta 9 brand. That makes sense to me.

[00:15:24] Justin Kendall: The knockoff Smirnoff. Hub Ice.

[00:15:26] Shaun Belongie: Yeah, that's the pub ice. Interesting stuff to watch.

[00:15:31] Justin Kendall: Well, that's up there as long as the Constellation brand's earnings call. And we've got plenty of reporting on that. We should get to our featured interview with New Belgium CEO, Sean Belanger. Shaun Belongie's first year as CEO of New Belgium Brewing was an eventful one, with the continued evolution of the Voodoo Ranger brand, several leadership moves, and dealing with the aftermath of Hurricane Helene. Sean is joining us now to discuss 2024 and give us a look ahead to 2025. Thanks for being here, Sean. But yeah, really glad to be here. Thanks for having me. I heard you laugh at eventful year. So I don't blame you after just that's, that's just like a little taste of what you had to endure in year one. So, you know, when you look back at 2024, from a business perspective, how do you reflect on the year?

[00:16:28] New Belgium: Yeah, I mean, I think you did a really good job of outlining it. I was reliving a little of the trauma, which was the chuckle. But yeah, certainly as a category for craft, we continue to see some really big challenges, which is making it hard for everyone in the category. And we're no exception. And as you also outlined, we had leadership changes at New Belgium, And then of course, Hurricane Helene, which took out 40% of our capacity in one fell swoop, along with obviously just the kind of coworker impact, the human impact that we certainly felt. So yeah, a very challenging year, but in that challenge, some really good continued business momentum. So if we're looking for the kind of silver lining, as I try to do throughout all those challenges, certainly the business success that we continue to see has been that silver lining. We'll finish the year positive again to where we ended 2023. We would have seen even better shipment results, but obviously with the Asheville impact, that took away some of our ability to actually just fulfill orders. But depletions remained really strong as we were able to use distributor inventories to keep product flowing to the shelves. We're up probably four to five percent on depletions. for the year, which is really strong. As we look at the category as a whole, we are now firmly in the top 10 suppliers, which seemed like an impossibility probably five years ago as this little craft brewery. And when we look at percentage of volume growth, so how fast we're growing, we continue to be the leader of that metric in 2024, with Constellation being second. So just to kind of say, hey, your volume growth is higher than Constellation, which has obviously been the the growth champion of the category for a while is really positive. I think as we look at what are the drivers of that, we had the number 1 and number 2 new item launches in beer as a whole, which again, we used to get excited about number 1 craft launch or maybe number 2 craft launch. Now, to be in the conversation around actually meeting the beer category, with Tropic Forest and hard charge tea is a great place to be. So obviously, as it's kind of said, and you outlined at the beginning, some real challenges, but through that, we've seen our business be pretty resilient in the face of, again, this kind of category dynamics and the Asheville crisis that we had. And so feeling pretty good about the momentum that we continue to carry into 2025.

[00:19:20] Zoe Licata: Yeah, everything we talk about today and everything that's happening in New Belgium, you, we are going to have this backdrop of you guys are also just working on recovery efforts and everything that went on in Asheville. Like that's massive. What, what is the current status of that, of how things are going there?

[00:19:35] New Belgium: Yeah. It's just been amazing to see how this team has really kind of hunkered down and said hey we're going to move really fast on this. So if you think about it there was kind of two big pieces we had to sort out. I mentioned just earlier that Asheville represented about 40 percent of our total capacity as a company. And so first things first is obviously beyond making sure that all co-workers are safe and that we're taking care of them, is then how are we going to replace that capacity? So there's been a huge amount of work to kind of go into how can we ramp up Fort Collins and Daleville and Comstock or Bellsbury to help kind of lighten the load from the Asheville crisis. And then also looking at co-packers and ramping up with partners to help us brew some of the beer. So that was a huge chunk of work. And then obviously the other big chunk of work is getting that brewery back up and running. So really exciting news. We will brew our first batch of beer next week, which is pretty remarkable when you think about how much had to get replaced. Certainly it could have been a lot worse than it was. We ended up probably with 18 inches to 24 inches throughout the brewery of water. And as they tell me, electrical stuff doesn't like water. Particularly muddy water is very bad on motors and electrical equipment. But to get the replacement that we had to do and all the checks and work that had to happen to get ready to brew in beer in three months, essentially, is pretty remarkable. So it'll take some ramping up from there. Brewing one batch of beer is not where we'll need that capacity eventually. But we hope to be, by the end of February and early March, kind of back up to full capacity and shipping packaged product at the rate we would expect to see from that facility.

[00:21:38] Zoe Licata: for anyone who hasn't been there, that it's an extremely big campus, really, that you guys have going on there. So to have that back and running in just a few months from now, it's going to be huge.

[00:21:49] New Belgium: Yeah. And I just can't say enough about the coworkers in Asheville. A lot of people there are dealing with their own challenges. And fortunately, we didn't have a significant number of people who had major losses, but we did have some. And, you know, to one degree or another, everyone was impacted in a pretty significant way. And, you know, their jobs, if you think about it, aren't their jobs that they have in the past, right? So if you're brewing, it's like, well, there's no brewing right now. But would you be interested in going to help in our distribution center, which wasn't impacted, to load trucks? you know, if you're a packaging person, can you jump in and help us at our liquid center and try to get that ready? So people are just we're so willing to, I mean, there's such a pride that people have in that brewery, which is just kind of mind blowing to me how people really consider it their own who work there to jump into anything that needed to be done to kind of make that happen, which is it's I mean, I'm always humbled to see that it's really awesome.

[00:22:58] Justin Kendall: Did that facility have any specific products to it, or was it pretty much across the portfolio?

[00:23:05] New Belgium: It was really across the portfolio. So it really acts as a sister brewery to Fort Collins. And most of the products we make in Fort Collins also are made in Asheville.

[00:23:18] Justin Kendall: Okay. Yeah. Well, glad to hear that you're brewing again and that you've, do you feel like, you know, you have everything sort of solved in the meantime, those contract partners lined up and, and all those things going on now? Or is that still sort of unraveling?

[00:23:37] New Belgium: Each week, there's, you know, a new mini crisis to defuse. You kind of keep feeling like, oh, yeah. And so I wouldn't say everything's smooth sailing, because it does seem like every week, there's something new that pops up that's like, oh, shoot, now we have to kind of figure out this thing. But again, there's just been this attitude of problem solving of just, hey, how do we fix this? How do we work through this? And I will say as well that the craft community as a whole, and really I would say the entire beer industry as a whole, has stepped up to help us in a whole variety of ways, whether that's a specific part that we needed that has a 16-week lead time or something like that. to just get jumping in quickly to help us brew beer that we otherwise couldn't brew at our facility. That's been huge as well. So I think every time we've seemingly run into a brick wall where it's like, oh shoot, now that's going to mean something bad. We've been able to sort it out and often with the help of either suppliers, partners who are producing equipment in the industry, or even just competitors, in fact, who are going, hey, we compete. But also, if I can help and find you something that you need, like, I want to compete with you, which is, I think, probably atypical for most most categories, but it's again, kind of heartening to see through this through this crisis.

[00:25:10] Justin Kendall: Through that crisis, did it change any of the plans that you had in place for 2025? Did you have to alter anything like that would have happened this year? I guess I almost said next year, but yeah, fortunately not.

[00:25:25] New Belgium: The plans that we had continued forward the timing continued forward. We've had to make a couple of decisions relative to looking at our portfolio and saying are there any items that we can pull back for a while that are there's less distribution. lower priority. And so that's been able to kind of, in some ways, be a safety valve of what we can actually produce. Because what we did want to do is have really crappy execution across everything. We really, as we talked to particularly our distributors, wanted to make sure that when we said, hey, we can supply this item, we actually could supply it at a level that they would feel good about and that they can count on is going to be there. The only real issue that we've had is just, again, it probably represents 5% of our portfolio probably. It's been those items we said, hey, we're going to specifically take them off our ordering portal to give a relief to all the other items that are higher priority, more distribution, to make sure that we're able to supply those. at the right level. And we've gotten back to a place where we're in the three-week inventory range with distributors, where we typically look to be three to four weeks. So when we talk to distributors, when I've met with distributors, they're feeling really good about that supply that we have on the core items in the portfolio. And so to answer your question as well, it hasn't impacted any of our innovation plans either. We've, again, been able to sort out with the combination of thinking through the portfolio and then working with other partners to kind of find a way to make that, you know, still be in play.

[00:27:07] Zoe Licata: So let's dive into some of those things that are happening this year. From just a broad standpoint at first, what is kind of been your learnings from last year that you're hoping to bring into 2025?

[00:27:20] New Belgium: Yeah, I think what I continue to believe and see play out in our results is the importance of brands, particularly in craft. I think as I look back on the evolution of craft, There was so much innovation around styles and that, in some ways, really drove the category. And I think as we have gotten to the breadth of suppliers in the craft space, it's become harder and harder to stand out just by innovating on a style. And so that's where I think brands have really become an important part of how people can actually distinguish one brewery from the next. And we've seen that play out certainly with Voodoo Ranger. And on the Bell's portfolio, Two-Hearted is kind of the lead brand. In some ways, it's kind of the cousin, sister, some kind of sibling or relative from the New Belgium side. Two-Hearted is kind of that lead brand on the Bell side. And we've worked to kind of build out that brand to not just be Two-Hearted, but really this idea of a hearted family behind Hazy Hearted, Big Hearted, and then this Hearted Variety Pack, as we're calling it. And that combination, again, we've seen growth. So Buddha Ranger, as you can imagine, we continue to see growth across that brand. not surprising, given we had some of the success we did on innovation on that brand. But we're seeing a similar thing on the two-hearted or hearted family from the Bell side of that combination of offerings across a family. It really has done a lot of good work to help that brand continue to grow within the core States that we focus on for Bell. So so from my perspective that that continues to be the focus of how do we Continue to build these kind of key brands across the portfolio Versus chasing a bunch of different, you know style ideas or different beer types that tend to struggle to kind of gain traction it also feels like your approach to innovation next year is a

[00:29:28] Justin Kendall: It doesn't really lean on, like you said, new style as much as like something like a Mini Ripper can for Juice Force and tropic force. Or then you've got the entirely different, you know, FMB light strike, which is, I think you officially announced it this week, sort of in the sports hydration bottle. resealable 16.9 ounce. So I guess is that a way that you're viewing 2025 in sort of an era where distributors and retailers are calling for focus and maybe less new news?

[00:30:06] New Belgium: Yeah, I think two things I talk about is one, from a craft perspective, I think that's exactly it. We've really thought about how do we, obviously from a Voodoo Ranger perspective, we've expanded that family quite a bit. And it felt like we really needed to step back and go, where are the continued opportunities? And do we actually have the tools that we already need? And it's more about how do we focus on the execution behind those ideas? And so that's been more of our thought process from the craft perspective. And then as we think about expanding outside of craft, As we've worked as a leadership team, we've kind of come to the conclusion that we don't want to just keep ourselves isolated to craft, that as we think about what we're good at as a company, It's product development, whether that's beer or beyond beer. We think we're really good at developing flavors, developing products. We're pretty good brand builders. I don't want to toot our own horn, but with Voodoo Ranger and some of the work we've done on bowels, I think we've kind of demonstrated that we can build brands. And obviously, as a human-powered business, we would bring this mentality of having some of the best people who are so passionate about driving our business to build these brands, both in terms of how we bring them to market and how we produce them. So it's really thinking about expanding outside of craft to those places that make sense. And so it's a combination of Kirin Ichiban, So taking over both the manufacturing and marketing and sales of that brand from Anheuser-Busch, which we think there's a real opportunity to put more focus on that. For us, that's a big brand. For Anheuser-Busch, that's a very small brand. So we do think there's a real opportunity to grow that, again, outside of traditional craft. And then as you mentioned, LightStrike continues to be, it's going to be a real opportunity. I meant to say continued along with a hard charge T for Food Arranger to be something we want to play with in that kind of F&B, RTD space, where again, we think we can bring something to the table from our craft roots in a very different way. So, you know, in some ways from a craft perspective, it's more, hey, let's continue to focus on the fundamentals. Let's make sure that we're executing against the brands that are successful, as you said, focus, which we're hearing a lot from distributors and retailers. And then as we, as we think about expanding, it's into some of those segments where there's probably a bit more tailwind behind them than we're seeing it craft. And again, we can think we can bring something meaningful to that space that is going to be incremental to both distributors and retailers.

[00:32:51] Zoe Licata: For some of these Beyond Beer offerings, I mean, we've seen a handful of things come out of New Belgium. We also had like Fruit Smash or Wild Nectar in the past. How are you gauging how long you want to keep pursuing those types of products? Because sometimes companies can be super quick to both bring them out there and then take them away. So what is New Belgium's approach to pursuing some of these offerings in the Beyond Beer space?

[00:33:13] New Belgium: It's important to set the right, you know, set metrics from the start. And we've talked a lot with our distributors about that, of how do we set the right metrics so that we're not kind of arguing down the road, hey, this is successful. And they say, well, no, it's not successful. And we go, well, What are we measuring? I don't know. I thought we were measuring this. You thought we were measuring that. So we try to be clear on that. And we're not seeing the kind of both rebuys, which is one of the key things that we look at, but also just kind of retailer minimums of what they expect to see. And obviously, that continues to be the challenges. The shelf space or the cooler space, depending on where you're at and how you want to talk about it, is not expanding. So it's just more and more competitive. And if you can't see pull, at least to a level, and I think that's in combination with rebuys, because that in some ways can kind of tell you, hey, we may not be seeing the velocity that you'd want to see at this point, but we're seeing really strong rebuys. That sometimes also gives you that confidence. But it's a thing trying to set the metrics from the start. so that we have a collective thing that we're looking at and it's market by market. But I think, frankly, we would like to get into a cycle more so where we are able to do test markets and to more slowly expand than where we've traditionally sat, which is, you know, we kind of go, hey, we think we have a really good idea. We don't hold it back, which just makes sense. But at the same time, like, When you go national, it's hard because you may not perform everywhere the same way. And that's sometimes where it becomes a challenge. Again, metrics help there. But, you know, that's where if we can get a bit more out in front of things, I do think kind of taking a more localized and then building out approach is kind of where we want to go.

[00:35:15] Justin Kendall: Voodoo Ranger going into its eighth year, which I can't believe it's been eight years since that brand really launched. And, you know, when you look at this brand going into year eight and where it is and what it's done, how do you see that brand evolving and connecting with consumers, you know, as it continues to, I guess, build and, you know, grow and evolve and age?

[00:35:46] New Belgium: The interesting thing, and we talk to our distributors a lot about this, is that in some ways, it is eight years. It's obviously the biggest brand in crafts. In some ways, you go, well, you've kind of hit the summit. That's it. Now, it's probably downhill. And I think if you looked at it as a traditional craft brand, you might come to that conclusion. But I think as we look at it and just some of the success we've had in a lot of different markets, when we look at our ability to bring in new people into the brand who wouldn't consider themselves traditional craft drinkers. And beyond that, just the retail channels and outlets that we're in, where distributors would say, that's not a craft store like that. We've never had success selling craft in that store. We would never even think about trying to bring a craft brand in. And Voodoo Ranger has kind of proven that wrong. And they go, Oh, okay, well, I guess craft does work here. And that conversation we have with them is, I don't know if craft works there. I think Voodoo Ranger works there, which is this kind of craft plus thing, because it certainly attracts a ton of people who are craft drinkers. But it also has, I think, expanded the tent and we see that play out in the consumer data from the brand. So I think as we think about it, we look at the awareness level of Voodoo Ranger across all beer drinkers, and it's still pretty low. And we look at the two most successful items that we have in our Voodoo Ranger franchise, which means they're some of the most successful items in craft, which are Imperial 19.2-ounce cans and Juice Force 19.2-ounce cans. Both those are sitting at kind of 40% ECD. And when you look at some of the bigger brands in the beer category, they tend to be around 60% to 70%. And again, a lot of markets, we look more like that in the sense that we have that kind of distribution and we're selling in that kind of wider footprint. But there's still a lot of markets where we're not in that kind of footprint. And so that combination of both low consumer awareness relative to the size of the brand and our footprint, which I think still has a lot of room to expand. And it's not just, hey, let's go get distribution, because that's, I think, where distributors kind of eye roll and go, yeah, everyone wants more distribution. Got it. It's really about, no, I think this is a consumer opportunity. You can get this into places that it doesn't exist, and I think we can attract a different type of person. who hasn't been a craft drinker in the past. So it's just, it's a real opportunity to expand where the Brandt Gehrs, not just a, hey, put me in another store, because, you know, I want more sales. So those two things, I think, when we talk with distributors, still feel like we're kind of in the early innings, even though the brand has been around, you know, eight years, as you said.

[00:38:50] Justin Kendall: What are some of those uncharted spaces that you're prioritizing going into this year?

[00:38:55] New Belgium: Yeah, I mean, so convenience store continues to be one, for sure. And then I think the other thing is, so this yin and the yang that we have, I think, we've discovered as we, you know, really built out this four series with Juice Force and fruit forest and tropic forest, is that there's crossover, obviously, but that's a different group of people than perhaps somebody who's shopping in food or grocery stores, and maybe is more traditional craft drinker. So we're really thinking about how does our portfolio best suit the needs of both those groups. And again, knowing there's crossover for sure. And so C-Store continues, convenience store continues to be a big opportunity. And obviously, as I talked about the distribution, but then the other thing, and you had referenced it earlier, is Mini Ripper, as we're calling that, that's really a grocery-focused launch. And as we look at the data across Kraft, it's not just Voodoo Ranger, of course, but the six-pack offering has been a foundation for the Kraft segment. It's been critical. to recruiting people into the segment in the first place, and it still makes up something like 50% of the volume. And so as the pricing thresholds have continued to push up, what we've seen is that you've hit some price points where people are like, I might have been interested in that. But maybe there's some substitute that either has a flavor component to it, or maybe has a premium component to it that makes me feel like that's a good substitute for what I'm thinking about from a craft perspective. And so we've lost a ton of people. And that's just, again, rearranger craft as a whole. So if you look at the six pack data, it's my goodness. Red is not. Red does not describe it. So I think that's where really the Mini Ripper idea came from, was the idea of how can we get to a different price point now seeing some of the innovation that's happened, you know, outside of craft and the category more broadly. That's where it started. And I think this idea, which I think makes it a much more interesting idea than just the price point, because the mini cans obviously helps you get to a lower absolute price point. But I think where it got really interesting was when we started saying like, well, why would you why would you want this? Beyond that it's a good price point, why would you want a smaller can of beer? And I think with Juice Force and Tropic Force, which we ended up having as the two, I think that this came with the 9.5% ABV, it did kind of come to this place where it was like, well, yeah, you can imagine a situation where you don't necessarily even want a 12-ounce can of that because that's a it's pretty high ADV. It's certainly maybe not a 19.2 ounce can, but then you might want a mini can of that. And there's probably a bunch of different reasons you could imagine having a smaller can of a high ADV product. This idea of a shot in a beer format. And that's where it got exciting, where it was like, it wasn't just a price point thing, but it was a brand idea. And again, I think the Mini Ripper helps to explain to people, how could you use this? What would this be for? And so I think that's a very grocery focused offering that again, does some really, you know, an interesting thing for a price point, but also perhaps gives a whole new usage occasion, which could be exciting.

[00:42:08] Zoe Licata: I am a big fan of the mini cans, selfishly, just because I feel better about myself having a mini can at the end of the day than a full can. But also, I really liked that you were explaining the concept of it in New York a couple months ago. It's also like an activity. You could envision this as people will start using Mini Ripper as almost like a verb or something like this. We're going to have a Mini Ripper before we go out. You're encouraging this kind of experience, which we overuse that word all the time, but it's that giving the consumer an experience with the package size too, which I think was super interesting.

[00:42:43] New Belgium: Yeah, I think that that's what makes it exciting is just that whole idea of just the whole different way to think about what, you know, obviously a craft beer can be, but also just maybe what a beer can be. Um, cause I think how you would think about it is probably different than obviously there's been a lot of success from the Modalitos and the Cornitas and, and kind of those smaller packages, but those are, you know, in a very different space than what I think this can be. Uh, so yeah, we're excited to kind of see how people react to it. Do people still tee off, Zoe?

[00:43:16] Zoe Licata: Do they still tee off?

[00:43:18] Justin Kendall: Do you know what teeing off is?

[00:43:19] Zoe Licata: No, what is that?

[00:43:21] Justin Kendall: So, teeing off is shotgunning a twisted tee or similar product ahead of going out. So, I mean, when you say re-envisioning, you know, something like that, I can see somebody doing the Mini Ripper can.

[00:43:35] Zoe Licata: Definitely.

[00:43:36] Justin Kendall: Maybe not shotgunning.

[00:43:37] Zoe Licata: Shotgunning still exists for sure. I don't know if as many people are doing it with... I don't know. Twisted T is doing just fine. So I'm sure that still exists.

[00:43:47] New Belgium: I love these. I love these because I always learn something new. I learned a new thing. Teeing off. Have you split the G yet? Yes. Yes.

[00:43:56] SPEAKER_??: Okay.

[00:43:57] Zoe Licata: So moving to Bells, you talked about Hearted as like this family now that you're really focused on, but what are those specific growth opportunities for that portfolio?

[00:44:08] New Belgium: This is the boring part of the podcast where I go, well, just about execution. But that is actually the opportunity, at least on the hard-hit family, in the sense that what we know is that you put two-hearted next to hazy-hearted, both those sell better. You put two-hearted and hazy-hearted, big-hearted, all three of those will sell better. Even in Michigan, which obviously, my goodness, the brand in Michigan is so ubiquitous, meaning Too Hearted, there's still so much distribution where we have stores where they just have Too Hearted and they don't have Hazy Hearted or Big Hearted or even the Hearted Variety Pack. So that's a lot of the focus. And that's the boring part, but it's actually the part that I think there's still a lot of opportunity for us to go find. From a new product perspective, and just maybe now people can tune back into the exciting part of the podcast, is Oberon Light. So obviously, Oberon is bigger than Two-Hearted in that March, April, May timeframe where that brand launches. And if you've never been to Oberon Day, we'd love to have you at some point. It is mind-blowing to see what kind of turnout you get for a seasonal beer release. It's what it turns out to be. But it's incredible what that brand can do in those months. And so the thing we continue to see is that the opportunity for that brand is for people... Oberon is a 20-25-year-old brand now. And that beer style is a bit heavier just in terms of what was the expectation at that point. And so Oberon Light is a real great opportunity for people who love the taste of Oberon, love the brand, to be able to drink more than a couple. I don't think we're going to see any slowdown on that launch time period where people are like, Oh, it's back. But then as you get into the summer months, and it's hot, because Michigan actually does get hot. It's a very brief window, but they do have a summer. And once you kind of get to that point, it's like, maybe I don't want a bunch of wheat ales, but a more sessional version of that. And then the team has just done an awesome job with that beer to get it to 99 calories. And with the flavor profile it has, it's awesome. So those will be in slim cans. And we'll launch along with Oberon in March when we do that release and we'll be around for the entirety of the Oberon calendar. So that's a really, I think, cool opportunity for us to kind of just extend the window for when people are picking up Oberon throughout that kind of season. Oberon day, March 25th? Yes, that sounds right. I'm not positive. So that's why I ask. It is a Monday. I can't get to my caliber now because I shut that off.

[00:46:56] Justin Kendall: 24th or something. I don't know. March. Or March. Yeah, I guess it is. Is that 25th? March 24th. 24th. All right.

[00:47:04] Zoe Licata: March 24th. We'll get there one day.

[00:47:07] Justin Kendall: Yeah.

[00:47:07] Zoe Licata: The Slim Cans is interesting. Was the decision to do that just because, you know, Slim Cans associated with some of those like lower calorie products already?

[00:47:16] New Belgium: Yeah, I think it's just a way to kind of give people a really easy visual cue that this is what you should expect. It's going to be lighter, it's going to be more sessionable, perhaps lighter in calories, just kind of leveraging what people already understand about other brands and products. Makes sense. How do you approach pricing on something like that? So pricing on that is line priced to Oberon. And so, you know, from the start, and again, part of this is like the not sexy part of beer sales and marketing is the execution of it. The confusion you create when you create multiple price points is always challenging. So the thought is like the real opportunity is when these things get displayed together. We get massive displays, as you can imagine, in Michigan and the kind of surrounding markets. Having to be together, you need them to be priced together.

[00:48:07] Zoe Licata: Any other focal points for you going into 2025? We're here now. What is on your priority list? Anything we haven't chatted about?

[00:48:16] New Belgium: Yeah, I mean, I just I'll go back to light strike, because I think that's a really interesting opportunity. And you referenced that earlier on and did a nice job of kind of setting up what what that is. But I think, you know, as we looked at the RTD broadly F&B kind of category, we see an opportunity to kind of bring a more full flavor or just kind of bold flavored product with a bit more session ability. When you look at some of the brands that have had a lot of success in the space, they tend to be bolder flavors of Buzzballs or Beatbox, for example. But they also tend to be that higher ABV. And so this idea of bringing that kind of flavor profile to a more sessionable, lower ABV product, again, with some kind of packaging format that kind of gives people a really good idea of what it is that this thing is. And having some kind of form factor with resealability in the plastic bottle allowed us to kind of, I think, create something that is just very different from the category we've seen a tremendous response from both our distributor network and the retail network. So for example, Kroger has made this, I can't even remember exactly what the category that they described this as, but it's like Platinum Plus, which means it's in every store with huge displays. And we've seen some of these pictures and it's kind of like, whoa, Boy, that's a lot of product on the floor. And so they've really gotten behind it in a big way. And so I think that's a really exciting opportunity for us. And obviously stretches us quite far from where our initial foundations were as a Belgian-style brewery. But I do think it just speaks to some of the foundation we had as a company, which really always been about innovation. And this just kind of stretches that even further. Excited to see how that plays out. I think there's a real opportunity for continued innovation. And what we've seen generally in that category is if you try to match what someone else has already done, people don't seem to respond to that, which is great because it actually then supports this idea of brands do matter. So we really pushed ourselves to say, well, how can something we're gonna do be very different? And whether it works or not, at least it's gonna be incremental to what some of the other brands are in the category. Who do you see as the consumer for that? I think it's a seltzer-like occasion is the way we've talked about it. The research we've done on the brand is in that kind of, and I always hate to talk about ages because it makes you sound very old when you talk about ages that you clearly are not. But it is that like 21 to 30 to 35-year-old who really is responding to this brand. And I think, again, one of the critical things was just the packaging format to kind of go, oh, this is like that. And we don't want to be really literal about it of like, yes, you should expect this. No, it's just like, we want people to understand this is what it's going to taste like. And so I think when people have actually then been able to have the product and try it, it does fit more of a need that you would have in a sessionability type of format. You'd have a couple of them versus you'd have one of them if they were a high ABV product. And so I do think it plays in that seltzer occasion, just perhaps with a younger consumer legal drinking age to maybe 30 to 35.

[00:51:52] Zoe Licata: Justin, I wish you could have seen the video that Sean shared of some of the consumer testing that they did. And it was a lot of very, very Gen Z, Gen Zers, just like having the most stereotypical responses. Very positive, but it was, it was pretty great to watch.

[00:52:10] New Belgium: Yeah, those, those were great to watch because I, you know, we kind of said like, make sure we get this in front of it. Because I think, you know, just generally people, there's this element of it where it's like, huh, that's weird. I've never seen a beverage alcohol product like that. And so, yeah, certain people are going to love it. And I think certain people are going to be like scratching their heads over it. And so it was really fun to see those in-person reactions to the product itself. Because it Whether the product is for you or the brand is for you, I think everyone who's been able to have a product, and this is where I go back to our team, has just done such a good job from an innovation and product development perspective. The product itself is just delicious. I mean, it's like, wow, that is exactly what I would expect it to taste like. It's super sessional despite having this kind of really bold flavor profile. So even if you aren't necessarily the person for it, I think most people that I've talked to, including myself, can appreciate what it is and go, hey, maybe it's not for me, but I think it could be a really interesting thing for the category.

[00:53:19] Zoe Licata: A lot of what we've talked about in the discussion has been off premise and what you guys are doing to expand things on shelves. But how are you all approaching the on premise this year?

[00:53:29] New Belgium: There's a there's a couple different ways that we're thinking about it. One is absolutely just from a sampling perspective and we think about kind of all the different brands that we're trying to build out in the sense of hard charge tea, which we haven't talked a lot about, you know, that brand, a light strike brand, you can imagine that those really will benefit from getting sampling and on premises is, I think, the best place for that. But I think more broadly, we look at it and go, we, again, are underrepresented, particularly on the Food Arranger side. If we look at Two-Hearted, and there's always opportunity, I think, to expand out in terms of number of handles that a Hearted account will have, for example. But we have pretty strong distribution in the on-premise from a Bell's perspective. But when you look at Food Arranger, that brand has been built so much in convenience store and off-premise, to your point. Zoe that there's so much run room to get that brand into more distribution in the on-premise. And I think one of the things we continue to hear, which we obviously continue to try to build with our distributors is, this is the number one IPA brand in the country. And people come in and we've all done this probably or seen it happen of like, what's your IPA? Hmm, I haven't heard of any of those. Okay, what do you think, you know, and it becomes almost like wine type thing, which I think is problematic for the category. So to have a brand that people recognize, like, okay, great, that's a brand I recognize, and that's a beer that I know, I think that has a lot of power. And even while you can still have some of maybe other local brands, for example, or regional brands that people may or may not know about, and if they're looking to experiment, those are there. But just having that kind of consistent, hey, I know that brand or that beer, I think has a real power to it. And so we really try to continue to build that out with our distributors. Obviously, there's so many IPAs out there, and they're all fighting for a decreasing number of tap handles. But I think we've continued to see a ton of growth. in that space for us. And I think a lot of it's driven by... I do think there's a real benefit for operators to have a brand that people know and that there's going to be a certain level of consistency as well. And this is going to be the beer every time. And so that's where we continue to talk about it with both distributors and operators.

[00:55:58] Justin Kendall: As we wrap up here and you're heading into year two, you got a big picture vision for what this New Belgium platform is going to be. What is 2025 going to be as far as building toward that vision?

[00:56:16] New Belgium: The way we've talked about it is, and we've described this as the new New Belgium internally as really kind of the strategic plan. And really what all that's saying is, hey, we have this core foundation of craft. We need to continue to see that be successful. But then as we look to build around that, where are the places that we see opportunity from a segment perspective that we think make sense for us. And so again, that just comes back to imports. And we've seen Japanese imports really accelerating collectively with Ichiban itself, kind of leading the way from a growth percentage perspective. So this year is really kind of getting that brand solidified. You can imagine as we work through distributor transitions and all this kind of stuff that happens when you kind of move things from one supplier to another, this is the year to get that stabilized and ready to go. Same thing from a Beyond Beer perspective, it's really looking at hard charge tea and light strike and going, hey, what do we have? What's going to be the thing that we want to build on going forward? I look at that as a, hey, we got to keep the craft engine going. Again, there's a lot of momentum there, but then these other two chunks of segments that we're looking at, how do we start understanding what we're working with and kind of building a foundation to really start accelerating those as well. It sounds like taking on a lot in year two. Yeah, it's definitely not going to be boring. I think we'll find ways to keep ourselves occupied. Because obviously, in addition to that, we're still going to be standing Asheville back up in the first three months of the year, at least, and getting that really ramped up. We're putting in a new can line at the same time that we're get the actual brewing again to increase its capacity generally. And so there's a lot of work just to kind of get that foundation set for the future. But we kind of have that picture of where we're going. And then I think it's just trying to understand where are the places that we're really going to be able to lean on in these different areas of the business.

[00:58:31] Justin Kendall: Well, we'll be watching, and I'm sure we'll catch up with you again very soon, but thanks for doing this, Sean. Absolutely, yes, we will have to share a Mini Ripper soon. Definitely. Yes. Well, that's our show for this week. Thanks to Sean Belanger for joining us. Thanks to Zoe for hanging out and helping do this interview. Thanks to Jess for everything she does. Thanks to our audio team, and thanks to all of you for listening. We'll be back next week.