Brewbound Podcast: The Aftermath of Dry January, Plus CiderCon Road Report

[00:00:00] Justin Kendall: Dry January is over, so what comes next? We'll talk about it on the Brewbound Podcast. Plus, Zoe fills us in on her CiderCon adventures. Hello, and welcome to the Brewbound podcast. I am Justin Kendall, the editor of Brewbound. And I'm joined by Jessen Fonte, the managing editor of Brewbound and Zoe Licata, Brewbound reporter extraordinaire. Got you both. Got the whole team back again.

[00:00:36] Jessen Fonte: Whoo. Yeah, welcome back, Zoe. Thank you. Glad to be back. Nice to see your face on this Zoom screen.

[00:00:43] Justin Kendall: Yeah. Well, if only the listeners could see it too. And I don't want to take us down the rabbit hole of recording podcasts because nobody wants to get ready for that at the hours that we record this in the morning. Absolutely not. Anyway, at this point, I will ask you all to please like, rate, review, subscribe to the Brewbound Podcast if you like what we're doing. And a plug for our guests this week. We are going to be joined by Partake Brewing, founder and CEO, Ted Fleming and Lagunitas Chief Marketing Officer, Paige Guzman. So stay tuned for that. But first, let's get to Zoe's CiderCon adventure. CiderCon was last week. Zoe was in Chicago for it all. And what are the themes coming out of this year's CiderCon?

[00:01:28] Zoe Licata: Yeah, overall general positivity for Cider and for CiderCon this year. This was my first CiderCon in Chicago at the lovely historic Hilton Hotel. It was overall the theme of just the conversations with people and a bunch of the sessions where Cider, despite their still small share of beer, seems to be doing generally positive. Everyone is really excited about more consumers coming to cider, more people making cider, the future and potential for cider. Regional cideries are about to really shine. A lot of the big brands or bigger producers, like national brands, have kind of fallen to the wayside, either just don't exist anymore or had super dwindling sales. And the regional cideries are pointed to kind of take advantage of that. So there's a lot of interesting sessions that we'll have some coverage on data-wise about how cider is doing and its potential opportunities, and also some interesting perspective from retailers on their excitement for cider and what that can do. But after what was potentially some scary time with the past few years with COVID and everything. It was just a very excited bunch of cider makers and excited about what can happen now. Specifically, cider is poised because it has that potential better for you option for some people producing. It is in this kind of beyond beer space. It's kind of like, is this a wine? Is this, could this be like mixed into a cocktail? There's so many crossovers with cider and some of the bigger trends happening in Bevalk that it just makes sense that they could, could take advantage of that. So it was great.

[00:03:22] Justin Kendall: Yeah, it's a segment that was largely dominated by Angry Orchard for so long. And I think we had Michelle McGrath from the American Cider Association on, I can't remember if it was the Frontlines or a podcast or whatever, both. And, you know, she was saying it was an exciting time because they had finally dipped below that 50% market share. And it really showed that regional cideries were, you know, on the come, I guess.

[00:03:48] Zoe Licata: Yeah, we talked about a little bit too during our we had the cider panel during Brewbound Live. And we had mentioned that, you know, the national brands kind of went above regionals again, kind of the latter half of 2022. But because of that initial dip that happened in the summer, like they expect that to kind of level out again, and Regionals are going to eventually kind of be stable above national brands going forward. So we've kind of passed the cusp of the national domination and now regionals can actually shine. The kind of key part of that is. it's going to affect CIDR's numbers overall. These national brands, because they've had that dominant share, if one or two of them are doing pretty poorly, it's going to impact the segment more significantly. So now that those regional brands are having a greater share, when they continue to grow, you're going to see that more in those CIDR numbers.

[00:04:48] Jessen Fonte: Cause you know, like the way the data used to be was like if angry orchard got a cold, the whole cider segment got the flu. That's like how it would show up in scan data. So what an exciting time, you know, I feel like, you know, not you guys, you know this, but regional cider has been like one of the best kept secrets in the industry. And, you know, so you touched on this a little bit, but cider is, you know, regulated and taxed as a wine, which means it gets A few more privileges than beer, you know, like cider is, if they wanted to, can take advantage of GTC shipping in a lot of states. And, you know, and cider, you know, in the regional level, I feel like they do six packs, you know, they do four packs, they, they mimic beer package formats, but they also can do these like really fancy, you know, high value, large format bottles if they wanted. A lot of flexibility in cider.

[00:05:39] Zoe Licata: Yeah, 100%. I'm a big fan of the cider bottles after this past week. They're just very pretty. Anything you fill with like a golden liquid, that's pretty nice. I appreciate it.

[00:05:51] Justin Kendall: O.I. is gonna love you. I know.

[00:05:54] Zoe Licata: I know, it's contrary to basically every conversation that we've had over the past couple of years of like everyone, we have to switch to cans, but I really liked the cider bottles.

[00:06:04] Jessen Fonte: I don't know that this would resonate necessarily with those particular drinkers, but cider is so connected to American history. And that has kind of been forgotten and neglected. But there was a time, you know, in the colonial days up through the revolution, that hard cider was super, super popular. you know, drunk on par with wine and beer. And it was like really important. And, you know, through time and temperance and a lot of stuff, we lost a lot of the apple orchards in our country. So this is a whole conversation for another day. But to me, it's interesting.

[00:06:39] Zoe Licata: Yeah.

[00:06:40] Jessen Fonte: But I'm a nerd. What else did you do in Chicago? I saw you went to Pilot Project.

[00:06:45] Zoe Licata: I did go to Pilot Project. I had to stop at Pilot Project and bring my boyfriend Lawrence because I just like it. It's a fun spot. And I got to see it on a Saturday night, which we went during like a weekday. So it was kind of chill and it was bumping. There was a lot of people. It was mostly I would say people in their like late 20s, early 30s or early to mid 30s. a wide diverse array of people. It was just like a popping spot and it was pretty packed. We got in there kind of early so it was right before the rush and then everyone was in there so they seemed to be doing wonderfully. And I had a huge soft pretzel that was so good I had to tweet about it. We did all the touristy things, you know, we walked, saw the bean, we went to the water or the river. We just, I don't know, Chicago is weird to me because it's so flat, but so big that it feels like, I don't like that I can see, I don't know, straight across, like basically the whole city. I think that's the Boston thing where I'm just, or the Massachusetts thing, I'm used to the mountains of New England, but It's cool.

[00:07:53] Justin Kendall: It's definitely an adjustment. I mean, I grew up in Iowa and when we moved back, you know, when you see like the horizon and it's just not cluttered, it's just horizon.

[00:08:04] Zoe Licata: Yeah. Yeah. There's no buildings or anything.

[00:08:06] Justin Kendall: Yeah. It's a little alarming. Let's move on a little bit. We've done the Apple talk. We've talked about bottles, so why not just talk about cans? And Jess, you covered Ball's full year earnings call and, you know, shipments up. Q4 shipments, not great. And some of this is due to the Russian business that they're divesting of it, at least for now. You know, you got to put that asterisk there.

[00:08:32] Jessen Fonte: Yeah, Ball had an interesting year. their worldwide global shipments were up 0.8% for the full year, which is a teeny tiny bit. But in Q4 of 2022, they were down 6%. And yeah, there are differences that when you exclude the Russia business, things look a little different. The global canned shipments were up 2.1% for the full year and down only 0.9% in Q4. You know, Baal divested of their Russia business as did several other global brewers last year when the invasion of Ukraine started. And they do have the option to go back, you know, if things ever normalize and Russia was a big market for them. So we'll see if they choose to exercise that option.

[00:09:23] Justin Kendall: I think one of the things that, you know, we should really hit on was the inflation stuff, because the last call, they were really coming at beer producers. They had big feelings on the last call. Yeah. And now they're saying that there's a lot of promotional activity going on. And it's because everybody realized that they've taken too much price.

[00:09:43] Jessen Fonte: Yeah, it seems like they were having their see, we told you so moment, you know, they were pretty tough on beer producers for taking way too much price, which then affected volumes. And obviously the price increases that, that beer companies are reaping, which we do see in increased dollar sales, like those aren't flowing through to ball, you know, to ball, it only matters how many cans are selling. So when you're selling fewer cans, but making more money on those cans, ball is, shut out of those increases. So yeah, CEO Dan Fisher was saying how, I'll just read you the quote, because he really says it pretty great. Quote, people pushing price pushed it too far and there was price sensitivity that kicked in, meaning consumers were buying less beer because it was just too expensive. He continues, quote, beer was down the most. And I think what we're seeing is a return to more promotional activity right out of the gate in Q1. So I think there's recognition of what happened there in the last four to six weeks of the year. So he's saying that beer is basically being promoted right now, you know, through price promotions and all sorts of stuff, and that's helping volumes go up. So they're feeling pretty good about what they've seen so far in 2023. And we'll see if that continues. But, you know, somebody else, one of the analysts on the call asked how we felt about innovation in the beer category. with, you know, a lot of beer producers dabbling in either, you know, cross promotional like things with non-alcoholic producers or canned cocktails. And he was basically like, we don't give a fig. As long as you're selling the cans, we don't care what labels on them.

[00:11:07] Justin Kendall: It's an honest quote, but I mean, that's just kind of like a wild quote to me.

[00:11:12] Jessen Fonte: Yeah, yeah. And to be clear, he did not say that they don't give a fig. I think that's something that I picked up from my dad, but I hear the comments about the profanity I use and I'm just trying to improve. But yeah, Dan Fisher does not care what is in your cans so long as you're buying them from Ball.

[00:11:32] Justin Kendall: Yeah, they only care about volume and they win either way.

[00:11:36] Jessen Fonte: Yeah. They also said the price of base aluminum is going down, so that should help things a little. But yeah, they're closing two facilities, which we've covered. They think their existing network in the U.S. can pick up that volume.

[00:11:50] Justin Kendall: While we're on the topic of closing facilities, it sounds like our friends the Kings and Convicts are getting out of St. Archer not long after they got into those St. Archer facilities, the taproom and production facility. And this one, you know, it was a head-scratcher when they were announced as the, I don't know, acquirer, acquirer is the wrong word, the takeover or whatever, you know, once they hopped into the spaces that once You know, we're saying Archer RIP, you know, pour one out, but yeah. What's going on here because this was sort of confusing to folks.

[00:12:27] Jessen Fonte: Yeah, it was certainly confusing to me as well. So yeah, you know, last January, January of 2022, Molson Coors announced that it was sunsetting the St. Archer brand and that Kings and Convicts would be taking over the leases on two properties in the San Diego area, the Miramar production facility that used to make St. Archer and the taproom in the Lucadia section of Encinitas. which had been St. Archer Taproom. Those both became branded Kings and Convicts, which in case you do not know, Kings and Convicts was the teeny tiny Chicagoland upstart that acquired Ballast Point from Constellation Brands in late 2019 and kind of shocked the world, or at least shocked the two of us.

[00:13:13] Justin Kendall: And they didn't pay a billion dollars for it either.

[00:13:16] Jessen Fonte: No, they certainly did not pay a billion dollars for it. So I think maybe last year, the King and the Convict were feeling very positive about their own brand, thinking they'd be able to really make a go of things. But as we've seen in this decision, this is just facility and taproom they don't need. So they're gonna transfer King's and Convict's production over to Ballast Point's own production facility, which is also in Miramar. This is where I was getting confused. And they are just going to push it through Ballast Point facility and Ballast Point tap rooms. Ballast Point also added a new tap room to the FAM. Their San Francisco tap room is now open in the city's Mission Bay District. So just a lot of logistical location news from our friends over at King's, Convicts, Ballast Point.

[00:14:09] Justin Kendall: My memory is not always great, but I am almost certain that I have been to both the St. Archer facility that they're closing and the Ballast Point Brewery in Miramar that they're transferring production to. And that Ballast Point facility is, it's a big one.

[00:14:25] Jessen Fonte: Yeah. And the St. Archer one was big too, you know? Yeah. In our story, we've got 50,000 square feet, which is gigantic, a 40-barrel brew house, a five-barrel pilot system, you know, cellar, canning line. That's a whole lot. So it'll be interesting to see what happens and who, who takes this over. But, you know, here on the Brewbound podcast, we are super fond of calling this a hermit crabbing. And I think in this situation, this is where a crab has discovered a shell that was too big for it. And it's now going to stand next to it, float next to it, sit next to it. I don't really know what the crabs do and wait for another crab to come along who needs it.

[00:15:00] Justin Kendall: Well, get to calling crabs.

[00:15:03] Jessen Fonte: Yeah, seriously.

[00:15:03] Justin Kendall: Head up the king and the convict and get the deal done. Also, we covered the move that's going on over at Braxton Brewing in Kentucky. They're going to turn their garage beer lager brand into a beer company, a separate beer company. They brought on another partner in that deal, Andy Sauer. And he's going to be the president of Garage Beer Company and really lead everything on the sales and marketing side, while Braxton, which will maintain equity in the company, will continue producing that brand at its facilities. But the goal is to take that garage beer brand a lot wider than it has been. And one of the things that Jake Rouse from Braxton told me was, they're really good at marketing a brand in the Cincinnati, Kentucky area. But once it goes outside of there, they need a little help is what it sounds like.

[00:15:59] Jessen Fonte: So does everybody that's certainly not unique to them, but what is somewhat unique is that they recognize that. So kudos, very smart decision. I think we'll see how it goes.

[00:16:08] Justin Kendall: Yeah. More package formats coming for that beer to 16 ounce, four packs. It's 15 pack, 12 ounce cans, which was priced at 1599 is now priced around 1699. And then they're doing the 19 to single serve. So lots of options there. And. It's getting a makeover as far as the liquid goes and the packaging. So that's going to be rolling out in the next couple of weeks. That's one of the stories that you can read if you're a Brewbound Insider over at Brewbound.com and also on Brewbound.com. We have an update on Night Shift Brewing and their plans for this year, including making Whirlpool. It's New England Hail Ale, their flagship offering, and also getting into those 12-pack variety of cans and single serves. And then Zoe's got a story up on Greater Good, which focuses only on Imperial beers, and they want 50% market share in their distribution territory for those offerings, which, man, I am old and I do not know that I can drink very many Greater Good beers, but they've got a differentiator there.

[00:17:20] Zoe Licata: You're not drinking 8 to 12% ABV beers every day?

[00:17:24] Justin Kendall: There's a reason that we're talking about non-alcoholic beer. And also, Jess, your Frontline's conversation is up, speaking of non-alcoholic beer.

[00:17:35] Jessen Fonte: Yeah, yeah, we had a great chat with Lacey and Travis Richards from Nothing's Left Brewing in Tulsa. I know we talked about this in the pod a week or so ago, but they, every Monday in January, hosted what they called NADA, Not a Drop of Alcohol, it's a dry bar event. that they had, you know, alcohol-free cocktails, non-alcoholic beers, non-alcoholic wines. And yeah, it was a great combo with them. It sounds like, you know, they really got a lot of support from the community. People who had never been to the brewery came out. They were hearing from people who had said, you know, they've stopped drinking for myriad reasons, but we're just thrilled to have someplace to go and be social. And one anecdote they shared with me that I thought was just adorable was a pregnant customer came in to host your birthday party there, but so successful they're going to do it monthly.

[00:18:23] Justin Kendall: That's awesome.

[00:18:24] Jessen Fonte: Yeah. They, uh, they offered a lot of advice about how to do this. So if you are interested in hosting your own similar event, check out that episode of Frontlines.

[00:18:32] Justin Kendall: Yeah, I think that's a great one to check out because I know there's a lot of tension. I'm probably overblowing this. There's some tension with beer producers about, you know, Dry January and people abstaining. And, you know, I think this is, you know, an example, as you said, of someone who's showing a pathway to making that a profitable month or, you know, integrating that into your business.

[00:18:58] Jessen Fonte: Yeah, I mean, look, if you can't beat them, join them. And I don't think this trend toward consumers participating in moderation is going away. So rather than, you know, telling people that they should feel bad for abandoning your business for a month, maybe you should offer them something that they, you know, can come out and support.

[00:19:14] Justin Kendall: Yes, go check out that. Subscribe to Brewbound, become a Brewbound insider, you can watch it, you can read everything. But let's get to our featured interviews with Lagunitas' Paige Guzman and Partake's Ted Fleming. Dry January, the month some abstain from alcoholic beverages, is over. So what comes next for non-alcoholic beer producers as they try to integrate into consumers' daily lives? This week, we'll chat with a pair of NA beer producers about where the segment goes from here. First, we'll chat with Ted Fleming, the founder and CEO of Partake Brewing. Then we'll be joined by Paige Guzman, the Chief Marketing Officer for Lagunitas Brewing. All right, let's bring in Ted now. Ted, thanks for joining us. Yeah, thanks for having me on, Justin. So how did this Dry January go for Partank?

[00:20:06] Partake Brewing: Dry January is always a pretty special time of year for us. It brings in a ton of new customers, ton of awareness. I've been in this business for almost a decade now, and so we've seen pretty exciting uptick Dry January. I think this last January, we were up a healthy double digits from the year prior, and we've been in the e-commerce game for, like I said, almost a decade. So that's pretty impressive, given the size of our business and the track record we have in e-commerce and in non-ALC.

[00:20:37] Justin Kendall: There's definitely more awareness behind Dry January than there has been in previous years. So how is this year different?

[00:20:44] Partake Brewing: Yeah, I think we had a lot of additional website traffic, for sure. Lots of people exploring non-ALC as a way to moderate, whether they're doing a full Dry January, whether they're just dipping their toe into it, if you will. But it's certainly become part of the lexicon of society. I even had someone say something to the effect of, I've been sober for many years due to a medical condition and someone said to me, are you real sober or are you trendy sober? And the fact that you know there is such a thing as trendy sober is a is a pretty big departure from when I started in this industry and I think it just speaks to sort of the broader awareness and broader appeal of people looking to to moderate their alcohol consumption but still I think for many people they're looking for you know what's that balance in their life it's not I think for most people they're not going sober completely but it's it's trying to find a healthier balance for each individual that suits them as as individuals but can still have them socialize and do a lot of the things that they they love doing around beer or or other alcoholic drinks.

[00:21:52] Jessen Fonte: So Ted, you just mentioned that you had so much web traffic this Dry January in particular. What exactly did your team do to capitalize on this? Because it's great that everybody knows about it, but you know, having organic category awareness doesn't always lead to sales. So what specific tacks did you guys take this year?

[00:22:10] Partake Brewing: Yeah, it's kind of an interesting year because I think us and maybe some of the other companies that have been in the non alcoholic beer game for a while I think I think all of us just based on conversations with other other industry leaders, you know, I think we've taken some dollars out of digital spend because of, you know, just. customer acquisition costs got a little higher. The algorithms were a bit more difficult in trying to target customers. So we actually spent less on digital marketing and still got a nice bump in Dry January. So again, there's this organic interest in the category. Like I said, we've been in it a while. So our organic search results are quite high. And we're seeing both digitally, but also in traditional retail as well. And there's a, I think there's a positive feedback loop as you get into, you know, more traditional bricks and mortar retail that people start to discover you there and they say, Hey, maybe I'll, I'll buy you digitally online, direct from your site as well. So I think those two things kind of reinforce each other in a, in a month, like Dry January. And, you know, I'd be remiss if I didn't say like, Just having a community, which we do have a really strong and vibrant and passionate community around our brand. They're our best brand advocates and they're out there telling people, hey, you should try Partake. Awesome.

[00:23:27] Zoe Licata: Obviously, you know, January is just the first month of the year. So you guys have to keep selling beer throughout this year. How are you building off of that momentum and maybe continuing to bring in those consumers who maybe tried Partake Brewing January and encouraging them to keep trying it throughout the year?

[00:23:47] Partake Brewing: Yeah, for sure. Like we've always used Dry January as sort of a springboard into the rest of the year. You know, I think there's a misunderstanding that Dry January isn't this huge month for us relative to the summer like we still you know, the summer beer where we sell most of our is just this, this month outperform our alcoholic it's a nice, you know, sel say to retailers, hey, yo non out because it helps the softness and on the of your business. So it's month for us, but we stil depend on that summer beer drinking season when people are drinking it for refreshment and hydration and all the social occasions that come in summer. You know, I think for us on an ongoing basis, innovation is a big thing to keep people engaged and excited about the brand. We just launched our Hazy IPA as a full-time SKU, which got tremendous feedback from our community. And that's been sort of e-commerce has been our launchpad for innovation. We tried on e-commerce You know, if it's a resounding success, then we tend to bring it to retail and swap out something that's maybe not performing as well in retail. So we try to keep focused on our retail skews, but really use e-commerce and that digital audience to test new things and discover what really resonates and what we can bring to retail. So the innovation side is really important to keep consumers excited. And those longtime customers and fans are really engaged about the brand and be excited to be partake fans.

[00:25:20] Justin Kendall: There's a lot of optimism around what non-alcoholic beer can be, like how big the segment can grow to be. And we've seen a number of competitors join the set, so it's getting more competitive for shelf space and just those, you know, non-alcoholic beer dollars. How do you see this segment evolving from here?

[00:25:43] Partake Brewing: Yeah, certainly lots of competition. You know, if I put my consumer hat on first, you know, I gave up alcohol over 10 years ago, as a consumer having the choice and variety that was, that was a huge reason for me launching partake is it just as a non drinker, it was a very difficult environment to be in. It was it was, you know, you really felt like a second class citizen. In many ways, you were handed the kids menu when you went out to a bar or restaurant and said, you'd be lucky if you got a Shirley Temple. It was mostly soda, water, and juice. So to see these other companies come in, I think, is a testament to what Partake has done and some of the other early companies in non-alcohol, basically proving there's a market here. And so I think for the long term, it's good. I think in the short term, there's going to be a lot of noise. There's definitely some concerns about whether some products are pasteurized and some are not, we're definitely 100% of our product is pasteurized. I think there'll be a bit of a weeding out, but right now it's a bit of a noisy category. But I think in the long term, it's going to be good to have that variety on shelf and that choice for consumers. And if any company that puts consumers first, I think it's going to do well.

[00:26:56] Justin Kendall: I'm glad you brought up pasteurization because that's usually one of the first questions that the three of us ask non-alcohol beer producers. And it seems that there's at least, you know, in some circles, a little bit of tension around that as far as what they've called gatekeeping. But I also think that there may be a lack of realization that this is a different product than a beer product. This is, you know, regulated as a food product.

[00:27:25] Partake Brewing: Yeah, it's regulated as a food product. I'm up in Canada, so I often use an analogy of a hockey game, but it could equally be soccer, where a product that's not pasteurized, I feel like they're playing with defensemen, but no goalie. And if you have a pasteurized product, you're playing with both the defense and the goalie. And so I think it's going to become a big issue. And we're trying to be an advocate, along with some of our peers in the industry, for pasteurization to be the standard. And I can understand from some brewers perspective that that feels like it's a bit of a gatekeeping mentality. But again, like if you put consumers first, that should be a standard.

[00:28:05] Jessen Fonte: I think that metaphor is perfect. And I am a noted non-sports person, but I doubt it. So excellent work. I also super appreciate that just the clarity and transparency about pasteurization. And we could talk about this all day, but we're not going to, you know, We talked about this a little bit before we started recording, but Partake recently brought on Caitlin Landsberg as a board member and advisor. And Caitlin's name is probably familiar to some of our Brewbound podcast listeners as she founded the Sufferfest beer brand, which was targeted to athletes and acquired by Sierra Nevada in 2019. What has she brought to the table so far? How's that relationship going?

[00:28:41] Partake Brewing: It's great. We're super excited as a company, as a board. And then I think, you know, me as a founder, just having someone that I can talk to who's been there, done that before is incredibly valuable, particularly someone who's done it in the U.S. Again, you know, we started the business in Canada. We've had success in the U.S. for sure. But it is different in some ways, more nuanced ways that are important to understand. And she brings you know, a ton of experience. She's an incredibly brilliant marketer. And, you know, I think for us, just getting the brand awareness out there is really top of mind for us. And I think she's as good a resource for me and for us as a company as you're going to find.

[00:29:23] Jessen Fonte: Founders are a special breed, so I'm glad you have a buddy.

[00:29:27] Zoe Licata: Also in the news from you guys last year is you closed a $16.5 million funding round. And at the time you said you're going to be used mainly to build brand awareness. So since then, how has that been going and what resources have you been able to use to build the awareness for Partake?

[00:29:45] Partake Brewing: Yeah, so, you know, the money was largely for brand awareness, but also for some some team development within within the US marketplace. So we've, you know, we've recently hired a chief commercial officer to run the commercial side of our business, largely with a US focus. So that's that's a recent key hire that we use some of the funds for. you know, a lot of it is is sort of going back to basics, like a lot of a lot of the tools we had as a CPG company or as a beer company, whichever you whichever category you want to put us in, you know, the sampling, the getting out to events, the being in front of customers, the engagement with customers like that was that was not on the toolbox for a couple of years. And so we've almost had to kind of reinvent that that part of our business again and get out in front of people sample. So that's that's sort of how we approach brand awareness. And again, we talked about Some of the changes in how we spend, we're spending a little bit less on digital. We're still spending some, but it's, it's a reallocation towards some of those, those tried and true sampling events, and also working within the confines of the retail store, building displays, getting the promotions that we need to take consumers where they're, where they're at that point of purchase. Who'd you bring on as chief commercial officer? We recently hired Evan Cohen. He was with, uh, Sazerac, uh, most recently and Miller Coors before that. Gotcha.

[00:31:07] Justin Kendall: Well, uh, we don't want to keep you. We know you got a flight to catch, but you know, when you look at the agenda for Partake Brewing 2023, what are the things that you're going to need to do to be successful or to make this year a successful year?

[00:31:24] Partake Brewing: We've got some exciting things coming down the pipe from a brand perspective. A bit of a refresh there. We've been using the same branding and same brand positioning for almost six years. I kind of came up with it myself on the back of a napkin and I'm an engineer. So, you know, we got a lot of time and a lot of great success out of that, but it's time for a bit of a refresh there. So the team's really excited about that. Got some new retail partners like Target and Whole Foods we're launching into in the next next few months. So just making those those new partnerships, you know, strong successes like we have with other retail partners we've had, you know, that's top of mind for me. And then that builds the foundation for us to have a much bigger year in 2024 with with a much broader retail footprint, hopefully.

[00:32:10] Justin Kendall: Yeah. Well, Ted, thanks for the time. We appreciate you hanging out with us for a few minutes and filling us in on what's going on. Awesome. Thanks for having me on, guys. Let's bring on our next guest, Paige Guzman, the Chief Marketing Officer for Loginatus. How are you doing, Paige? Doing great. How are you? I'm doing well. It's great to have you back. And I wish people at home could see your Hoppy Refresher background.

[00:32:37] Ted Fleming: Yeah, as we said when I first joined, it's like I live in a Hoppy Refresher universe, which is a beautiful place to be these days.

[00:32:44] Justin Kendall: Jess and I can attest to that, having drank more than a few of them at the Beer Summit last month. So we've got another Dry January in the books. Lagunitas has built a portfolio of NA offerings such as Hoppy Refresher and IPNA. So how did this year's Dry January shake out for Lagunitas?

[00:33:05] Ted Fleming: If I could insert round of applause, jumping up and down, dogs barking, fireworks, that's what would happen right now. I know we're a little low tech at Lagunitas, but we were thrilled and it's really just begun. This is a big bet for us this year on Hoppy Refresher and the January numbers are proving that our bet is paying off. First thing that really we can attribute a lot of our success to is a mandatory placement in our good friend, Target. So over 790 points of distribution we received in Targets. And that really kicked off a giant display contest for us. But we want to do the numbers as they say. We were up 64% versus last January. We gained 4,500 points of distribution. And in the on-premise, we doubled our volume, doubled Granted, it was on a small base. I'll give the disclaimer there, but we added 790 points of distribution. And I think that's really. The big aha for me is that while we all see the on-premise, it's coming roaring back. I think many folks have looked at the on-premise opportunity in beer as non-alcoholic beers. And I think with Hoppy, it gives you really a three-in-one solution. It can be a night extender, it can be a mixer, or it can be that non-alcoholic product that we're all looking for. So its versatility is giving us a higher addressable universe.

[00:34:33] Jessen Fonte: That's awesome. Now, what are the plans to build off this momentum? Cause you've got a lot going right now.

[00:34:38] Ted Fleming: So I assume we don't want to waste it. We do not. And thankfully we made the strategic decision to put a significant amount of investment behind the brand this year. It is my number one investment brand. So I'm putting more money in Hoppy than any other singular brand in our portfolio. And that really comes with digital and out of home advertising. You'll see some out of home in California and Chicago, two of our biggest markets. We came out with the variety pack. So we have two flavors and new flavors under development. Our hope is to rotate in new flavors in the variety pack, similar to how we all do in this industry with other traditional variety packs. And really stepping up our sampling this summer at a variety of different music festivals, including Bottle Rock in our backyard in Napa. So really pumped for people to have a chance to have another alternative when they're out in the sun all day listening to great music.

[00:35:35] Zoe Licata: We talked with Ted Fleming from Partake Brewing earlier, and we talked a little bit about how there's more awareness for Dry January and just the non-alcoholic products that are out there. From La Guinita's perspective, how was this year different, if at all, from previous years as Dry January, either what consumers were looking for or how they behaved?

[00:35:55] Ted Fleming: Yeah, I mean, I'll start with the retailer, right? In our category, it's very hard to do anything until the retailers are on board. And we saw more non-ALC, Dry January portfolio programs or industry-wide programs than we've seen before. So Rising Tide raises all ships. We're proud to be a part of it with other brands in the industry. So we saw a lot of major retailers putting big space in their ads, circulars, and displays as well. I think the other thing that we saw last year it was the first year that we invested in a campaign called Drink Without Drinking and that kicked off in January of last year. And we always look at repeat purchase rate when you're investing behind brands like this or within a thematic right that consumers are coming towards. And if I look at the numbers, the first in January, we had a repeat rate of about 24%. By April, we're at 48%. So it's not just tied to January. I think as you invest in awareness and visibility tactics with consumers, you're solving a problem that's out there. And that's where the magic happens.

[00:37:07] Justin Kendall: So you mentioned those additions to the hoppy refresher family, I guess. You're building it out with berry lemon and blood orange. You have a variety pack. We know variety packs are rocking for craft beer now. Within non-alcoholic beer, what do you see as the opportunity with a variety pack that maybe, you know, isn't out there right now?

[00:37:29] Ted Fleming: Yeah, I think if you're looking specifically at non-alcoholic beer, there certainly is an opportunity for variety. And I think for us at Lagunitas, as you guys well know, our brewers are always tinkering. So we have a new non-alcoholic on draft in our tap room right now called Nano Juicy. That is delicious. I participated in Dry January, so it's what I was slurping back every happy hour. So I wouldn't go so far as to say I have plans for a variety pack and not out beer per se, but it is something that we are keeping a close eye on. Our challenge is we're not going to put the Lagunitas name on it unless it is absolutely delicious. So we would need to beef up our not out beer portfolio a bit more. When you look at the consumer overlap between IPNA and Hoppy Refresher, there's only a 7% shopper overlap. Basket data tells us that. loyalty data, so it's two very different consumers, so I don't think you were inferring this, but just to answer it, I don't think there's ever a world where we would have a variety pack of poppy and IP and a and then something else because it's just a different consumer.

[00:38:37] Zoe Licata: That's such an interesting point, because whenever we have conversations about alcoholic beer styles, we're always talking about who the consumer is, but NA consumers tend to be squashed into one chunk as a whole unit, but there's actually diversity within those consumers as well.

[00:38:55] Ted Fleming: 100%. I think for us, it also is reflected in the distribution that we're able to gain and then maintain, right? Anybody can do a quick incentive and get distribution. It's sustainable distribution that matters to us. And where we see IP and a holding distribution is in those smaller craft accounts, both in the on and the off premise, whereas happy can go into a larger. retailers and there is consumer demand because it's a sparkling water to some people. And as you guys know hops can be polarizing and not everybody understands the plethora of breadth of depth of flavor that you can pull from all the different kinds of hops. So I think a lot of our job is communicating. Yes the name is hoppy refresher. But even if you don't like hops give it a try.

[00:39:42] Jessen Fonte: That's what surprised me the most in my trying it for the first time a month ago was I know about all the different varieties of hops and I know how different they all can be based on where they grow and all of that. It didn't, you know, rip the enamel off your teeth. It didn't have this intense burn. It was just all the pleasantness of hops without some of the, what some people might consider unpleasantness. I really enjoyed it. Yeah. Paige, you mentioned that you yourself just did Dry January. How did it go? Like what did you, obviously you drank a bunch of hoppy refreshers, but I assume you do that under normal circumstances too. Like did you miss drinking? Yeah.

[00:40:20] Ted Fleming: What was it like for you? Yeah, you know, I'll actually one up through January. I, it started because I got COVID in November. And so with COVID, I was like, maybe, you know, I'll not drink a delicious craft beer every single night while my body is healing. And then I just stuck with it. And honestly, I think it's great in this industry to be able to step back and take a look at other brands in the category, what kind of, I would say, scratches the itch. for when you want a moment of transition or you want to relax. And for me, hoppy does that because it has that great almost bite in the end. And it's a bite that I also get with kombucha. So I mix kombucha with hoppy refresher. And that is sort of my cocktail in the evening. But yeah, it's actually been since November and is the 6th of February and I'm still going strong. So not making any promises. I did this a couple of years ago. I lasted five months. I went out to dinner with my family, we ordered pizza, and I wanted a beer, and so I had one. So I am human, but I think it's good to challenge ourselves every now and then.

[00:41:25] Zoe Licata: For sure. Well, you mentioned Target earlier was a great partner for you guys. How is that your NA offerings like the hobby refresher? How's that being merchandised in those markets? Because you said some people think of it like a hard seltzer, excuse me, like a regular seltzer. So what has that looked like in those retailers?

[00:41:45] Ted Fleming: So we have a little store here in Petaluma called Petaluma Market that is a bit of an incubation area for us, that we go in and try things there before we go anywhere else. And it helps that they're in our backyard and we've known them for years. So when we launched Happy Refresher in 2018, we first said, hey, put us in the craft beer aisle. OK, we did well there. Then we said, put us in the sparkling water aisle. We did well there. And we said, let's do a side stack across from the cold box. We did great there. And we took this very scientific approach here. And our first goal is always, let's get in the craft beer aisle. Because a lot of times, that's where if there is an NA craft, that's even better. But we all know mods and sets look different everywhere. But if we can be where there's craft beer, fantastic. And then secondly, we want to be where there's sparkling water. What we found is craft NA consumers don't go to the sparkly water aisle. We know that. So that's a different consumer. You're not going to get both consumers in both areas. So where we can get two points of distribution, great. And then when we're on display, any time we have a stack of any Lagunitas product, we asked to do a side stack of Hoppy.

[00:42:55] Zoe Licata: I was actually in a Target in Chicago the other day and noticed the Lagunitas Hoppy was on like a bit of like an end cap of an aisle, but it was right near kind of all those like sodas and healthier like seltzers and things, but you're also still very close to that craft space. So you're still, you're basically walking from the craft to the seltzer space and Hoppy Lagunitas was right there. So those refreshers right in between. Great.

[00:43:23] Jessen Fonte: I think a perfect spot for it. Paige, we had a question in here that you preemptively answered, which was, how do hoppy refresher drinkers differ from IPNA drinkers? And you said they differ completely and there's almost no overlap. So what can you tell us about each of these groups of drinkers?

[00:43:40] Ted Fleming: Yeah, I would say we look at shopper loyalty data to validate a lot of what we talk about. I wish I could just make stuff up about my consumers, but they don't let me do that anymore. Everything has to be validated. Here's who we think is drinking our product. But I think as we look at the data, most folks that are purchasing IPNA also have if not Lagunitas IPA, some other type of IPA or alcoholic product. It is not for the completely sober consumer. It is typically someone who wants to be a great party host, might then offer something for a variety of their guests. It's somebody who might be taking a break from alcohol, but they are a traditional craft beer consumer. Whereas if you look at the hoppy refresher baskets, they're all over the place. Most of them do not have a lot of, I would say, a heavy preponderance of craft beer. They have spirits, they have beer, but it's a much wider assortment without a ton of loyalty to one category.

[00:44:41] Justin Kendall: You mentioned the very successful start to the year. Overall, how are you going to measure success this year for the NA portfolio? What does that look like for you? And it doesn't have to just be numbers.

[00:44:55] Ted Fleming: Yeah, it's a couple of things. I think from a marketing perspective, I'm always going to look at household penetration, right? How many households are purchasing Hoppy Refresher versus ZeroGal? My brother from another m our head of sales is goin distribution, our rate of And then, you know, we'll to it right now. You know, two flavors and then the base flavor. Add one more towards the end of the year and then see if the velocity on that upticks or not, if there's any difference. But it certainly there's a big spreadsheet of KPIs on all of our brands, but it really starts with how many more households are purchasing and finding Hoppy Refresher.

[00:45:44] Zoe Licata: You mentioned earlier too, that Hobby Refresher is like your number one focus for like your marketing investments and everything. How big of it is it now within the Laguna News portfolio and how big do you see it becoming as part of your overall brand focuses?

[00:46:01] Ted Fleming: So as a member of a publicly traded company, we're probably not going to get into exact numbers, but I would say right now it is of my investment brands that is the smallest, but it is growing the fastest. What I hope for it to be, I feel like it's limitless, but I would love for Hoppy to be 10, 15% of our total revenue. And I focus on Hoppy right now, like certainly we'll come out with other non-out beers and that may change the mix a little bit. But right now what I have in the market is Hoppy and IPNA. And I think that Hoppy can get easily to 10 to 15% and then we'll see where it goes from there.

[00:46:44] Justin Kendall: Do you have more innovation coming or, you know, line extensions to the IPNA family this year?

[00:46:51] Ted Fleming: Whether it will be under IPNA or not may mean I'm not sure. Will we come out with another non-alcoholic in my crystal ball? I see that in our future.

[00:47:05] Justin Kendall: Very near future or are we talking like fall future?

[00:47:09] Ted Fleming: The leaves are falling.

[00:47:14] Justin Kendall: Well, I think that's probably a good teaser and a way to end it. Thanks for doing this, Paige.

[00:47:20] Ted Fleming: My pleasure. Thanks for having us. And thanks for drinking Laganina South Beer Refresher. We always appreciate it.

[00:47:25] Justin Kendall: Keep those beer conferences stocked and you've got at least two to three drinkers right here. So for real. Yeah. And that's our show for this week. Thanks to Paige and Ted for coming on the show. Thanks to Jess and Zoe for all they do. Thanks to our one man audio team, Joe. And thanks to all of you for listening. We'll be back next week.