Brew Talks Denver 2021 CBC: Panel 1: Creating a New Legacy Building the Traditional Beer Brands of the Future While Supporting Your Core

Justin Kindle [00:16] Hey everyone. Welcome to Brew Tas. We are live in Denver, Colorado, and this is very weird for

Speaker 2 [00:25] me. It's, we're back. Yeah, I know.

Justin Kindle [00:30] We're like Michael Jordan, we're back, right? I'm Justin Kindle, the editor of Brewbound, and we are psyched to have you all here. I can't believe I'm actually in front of people right now. That feels weird, but check

Speaker 2 [00:44] to make sure we're all wearing pants. We're like, are we on Teams meeting or do we got our pants on? We got our pants on.

Justin Kindle [00:49] It's not a Zoom, Sam. It's not a Zoom. I would like to introduce my colleague, my co-host, my tag team partner in all things Brewbound, Jess Infante. What's up, Jess? Not much, Justin. How are you? Oh. Denver, I gotta ask you guys, like, how are you all doing out there? That's pretty good. That's better than I thought we were gonna get. So thanks to all of you for coming out. Thanks to everybody at home who are watching this on the live stream. Thanks for supporting the Colorado Brewers Guild. We've got proceeds going to them from this event, so thank you to all of you for supporting them. Give yourself a hand. And we got to thank our sponsors, our presenting sponsors, Dogfish Head and OI. We got to thank John I. Haas, the Reyes Beer Division, Orchestra. We've got G&D Chillers. We've got Inland Packaging and sky fabricating, right? Yeah, yeah, we've been doing this. We've been practicing the, uh, the last two days, so. I also want to shout out our Generation Z correspondent Zoey Lacata down here.

Speaker 2 [02:07] Zoey.

Justin Kindle [02:09] Zoey and Jess are gonna be co-hosting the uh Generation Z marketing panel that we want you all to stick around for after this panel.

Speaker 3 [02:17] And we decided you were too old for that job.

Justin Kindle [02:19] I am definitely too old for that job, so you gotta know when to like step away when you're on the verge of 44. So, and I wanna thank our AD team, Sarah, Megan, everybody holding it down so we can be up here and do all of this. Thank you to them. So with, with all that out of the way and thank you for clapping for them. We got a cheap plug. We've got Brewbound Live coming up in Santa Monica, California, November 30th, December 1st. If you like what you see here, we're gonna do that times 10 out in California plus we'll be by the beach. I mean, there are a lot of selling points there. There's JJ, there's all the after hours networking, so come join us in Santa Monica and with that, let's get started here. It's CBC and we really couldn't start off or come back to you all with a panel about hard seltzer or RTDs right away. We wanna talk about core beer, traditional beer, and we've got a bunch of OG craft brewers up here to do it. So without further ado, let's introduce them. Sam, the co-founder of Dogfish Head, thanks for being here, Sam. Good to be back to backs and sisters.

Speaker 2 [03:32] Thanks to Herman's hosting this. Thanks for Charlie and Kevin for hooking up the Randall in the back here.

Justin Kindle [03:47] Always excited to have you and we're excited to have Carrie Juncker, the EVP of Bell's Brewery. Thanks for being here. And bookending me over here is Steve Fetchheimer, the CEO of New Belgium Brewing Company. Thanks for being here, Steve.

Speaker 4 [04:06] Thanks for having

Justin Kindle [04:07] me.

Speaker 4 [04:07] Welcome

Justin Kindle [04:08] everybody. So like I said, we spend a lot of time talking about hard seltzer and RTDs and with good reason, those are some growth drivers, but we wanna talk about beer. So Sam, how do each of you view the state and health of the traditional craft beer scene in 2021?

Speaker 2 [04:29] Well, you know, as we've talked about, there's tons of energy around the 4th category, and, uh, you know, we've talked about that in past panels, and I'm sure we'll talk about it again, but when you think about the historic context, you know, there were 3 categories for thousands of years, and there's only been a 4th category for a few years. And so the excitement and sexiness of, of craft beer and beer in general will come back and at a greater frequency than the, the sexiness of mead, which comes back into vogue about every 500 years. I think we're looking at just a few year, uh, cycle. I also love the way that you wrote this is the state and health of the traditional beer category in 2021 because I do think one of our great superpowers as brewers is to think outside the box of just the four traditional beer ingredients. And when you think about all the opportunities to play both in the fourth category and in beer with malt-based beverages, I think we're perfectly situated, you know, for this moment that we're coming into as, as brewers and beer makers. Carrie,

Justin Kindle [05:28] how are you feeling about traditional core craft beer heading into the back half of 2021 and 2022?

Speaker 5 [05:36] Yeah, thanks. So I mean, as I see it, we are at a place where there's always an occasion to drink beer and to Sam's point, that 4th category is super exciting, but at the end of the day, people are drinking beer, craft beer for hundreds of years. That is not going to go away. This will be an ebb and flow as we've seen with any other cycle, um, whether it or any other segment, and so I think that us brewers are positioned to continue to make quality beer and there's always an occasion to drink beer, frankly.

Justin Kindle [06:06] Steve, you have a lot to feel good about heading into the end of 2021 and 2022. Voodoo Ranger is on fire. So what's your perspective on Kraft heading into the back half of the year in 2022?

Speaker 4 [06:22] I certainly agree with everything that that Sam and Carrie said about the industry and, and there's definite ebbs and flows. I do think though it's, it's helpful for all of us to realize that. You know, within beer, craft beer is actually losing share, um, and especially if you include seltzers in that, and then the beer industry is losing share to wine and it's losing share to spirits in particular, and, and these things do ebb and flow, and you can go back and look 20 years back and 50 years back and 100 years back, and there's different market shares for these different categories, but we have a real opportunity in getting together here for CBC's an awesome starting. Point for that, but to have a real conversation around how do we reinvigorate the beer category because I'm with Carrie, every occasion is an occasion for beer, um, and, and that's a really important, um, thing for us all to remember, but right now we're just not winning enough occasions as an industry, and I think we can do better as we think about brand building, as we think about product offerings, um, to, to really reinvigorate the industry because that's, that's good news for everyone who's in this room.

Speaker 3 [07:17] Steve, I'm really glad you brought up wine because we're gonna talk about that in one second, but quick plug for our text line. Everybody here and watching at home, if you want to ask a question of any of these guys, you can text it to 617-336-8560, and then we'll be able to see them and we'll get you some answers. So. That said, sorry. It's hard to do this with a beer and mic and an iPad.

Speaker 4 [07:42] This is an occasion for beer though. This

Speaker 3 [07:43] is, if there ever were an occasion for beer, it's certainly this. So, About a month ago, industry watcher Mark Gallo, who's a prolific tweeter and probably watching, hey, Mark, he threw out a tweet asking whether traditional beer or traditional wine needed a bigger reset or makeover. Does traditional beer need a reset? Why or why not? What do you guys think? Steve, let's start with you.

Speaker 4 [08:09] I don't think traditional beer needs a reset. Um, it's, you know, a core 3 category. It's part of a core 4 category now within our industry. Uh, huge amounts of occasions to which it's relevant, and I just think we need to be focused as an industry as much as possible on brand building and explaining to people why they should. Interact with the wonderful beers that we're all making on a more regular basis and why they're relevant to occasions and why they fit with their passions and why they fit within their communities and, and, and why it's relevant to them because I think that's how we bring people back to the category and spirits. I came from the spirits industry for people who don't know, kind of think about the world a little bit differently and so does wine and we have a really important, um, differentiator, um, within our industry in terms of the occasions we're relevant to and I think we just need to tell that story better, um, and, and get people more excited for our category than they are right now.

Speaker 3 [08:57] Carrie, what do you think? Do we need a makeover to get people more excited?

Speaker 5 [09:00] You stole my word, so I was gonna also say I don't know that we need a makeover. I do think we need focus in particular on traditional beers, on beers that convert folks from potentially macro light lagers into craft beers, and that's part of how you build those brands, and you need to be clear with your consumer about when is the occasion for your beer. You need to help them understand that because they have a lot of choices, to your point.

Speaker 3 [09:24] Sam, you guys have made some portfolio-ish tweaks and stuff. What, what do you say to the focus point?

Speaker 2 [09:30] I, I, I would say, you know, not needing a reset or or agreeing, uh, you know, 100, 100% of what's said so far, uh, beer itself not needing a reset, but I think how we sell beer, how we talk about beer, uh, might need a bit more of a reset when you think about the inflection point that we're at. If you look like, look at the top 100, you know, IRI defined craft skews, now most of those beers and those labels on them are, are literally of linking legal drinking age themselves. They're at least 20. 21 years old, those beers, which means that the person that just turned 21, that LDA drinker, grew up with, with two-hearted with fat tire with 60 Minute in their parents' fridge, and I think part of becoming an adult is kind of rebelling against the generation above you. So I don't think we should be surprised that they're finding newer beverages, uh, that are appealing to them in their messaging and their, their, their taste profile, but I think craft beer has everything those other beverages have. We just have to kind of reframe how we're. Presenting our stuff. They might not want to talk about the founders of the breweries as these, you know, crazy pioneers. They don't give a shit about that. There's 9000 founders now. It's not some magical trick that, that, that, that happened, but talking about the brands with passion and what makes them distinct, uh, with, with fun, with authenticity, talking about the values of the brands, um, in a way that appeals to younger drinkers, I think we do need a little bit of a reset there, but I don't think our beverages need the reset, just how we, we frame them with younger consumers.

Justin Kindle [10:59] So let's zero in on some of those flagships and how your view of them has changed over the last 24 months or so. Carrie, what role is, is a brand like Two-hearted playing in Bell's portfolio now and how are your wholesalers and retailers viewing them?

Speaker 5 [11:17] Yeah, so I mean to be fair, our view on Two-hearted over the past 24 months has not changed. It continues to be, you know, the most relevant growth driver for us, and really what we've seen from consumers and retailers is a bit of a hunkering down to trusted quality brands that they can depend on. They're a little less risk adverse to try the blueberry, lavender, honey, sour, you know, etc. etc. uh, beer and are really looking for beers that can land and will drive velocity for them.

Justin Kindle [11:47] Steve, Fat Tire has long been the flagship of New Belgium, but you've got Voodoo Ranger coming on very, very strong. How are you viewing that brand in relationship to this hotcoming brand?

Speaker 4 [12:02] I certainly think flagships are critical. I think it's actually hard to keep up with the level of innovation and if you're gonna have a brewery of size and scale, you actually need really big brands that carry the day and things that consumers want to come back to day after day, week after week as, as a core brand within their portfolio that does come back to brand building and relevancy to those individual beer drinkers on, on a weekly basis for us, Voodoo Rangers. Honestly, is our flagship now. We'll sell 3 times more Voodoo Ranger this year than we'll sell Fat Tire. They're both huge brands, uh, but you know, Voodoo Ranger on its own would probably be a top, is a top 5 craft brewery if it was its own brewery today, and, um, we're, we're coming at it by asking distributors to focus on those brands and yes, we have innovation and. And we have some new SKUs that are out there in in certain markets, but we're really on our 4th year of saying Voodoo Rangers our #1 priority for our distributors. Fat tires our #2 priority for our distributors, and that consistency is, I think, incredibly important to continuing to build those, those, uh, flagship brands.

Justin Kindle [13:05] Sam, what's the view on 60 Minutes now? How's that playing in your portfolio?

Speaker 2 [13:10] Yeah, I think to Steve's point, you know, I think perception is reality and those of us that are in the room that aren't like, you know, uh, taproom breweries where you can really decide every day what your focus. Is going to be and move it around those of us that are relying on multi-state distribution where our message is likely more controlled by two tiers, frankly sometimes more than ourselves we have to be really prescription prescriptive and for us, uh, we talk about. You know, that really 60 Minute isn't our flagship. 90 Minute came two years before 60. So really, you know, continually hopped IPAs are our flagship, and we've been making 60, 90, and 120 minute together for uh 22 decades. So kind of talking them to, you know, in concert, collectively, those three beers are 52%-ish of uh Dogfish head sales. Having those conversations and again, not really talking about. Deviating from focusing on the liquids but always trying to make sure it's not static in terms of how we present those brands in marketing, uh, you know, redoing the, the, the packaging, bringing things like Randall's to events so consumers see how a beer that was continually hopped in the room that they're drinking it, uh, is impacted, um, keeping that stuff fresh, uh, but focusing on the fewer skews with your distributors and tight messaging on your priorities with your distributors is critical.

Speaker 3 [14:32] So Sam, Dogfish had just turned 26, and in that time you've built an enormous following as you're trying to evolve and grow the brand, how much do you worry about alienating existing customers while trying to attract new ones?

Speaker 2 [14:44] That's a timely one for us. Uh, so recently, so Tuesday of this week was National Craft Beer Lovers Day, and we put up on our social, which is a beautiful thing for millions of craft beer lovers, and we put up on ours, you know, uh, uh, a thing that I've said for many years. which is the craft brewing community is 99% asshole free in the context of that day we're talking about of course the giant giant community but very quickly the discussion on our social channels talked to a very serious issue about industry workers and a lot of unfortunate things that have happened and been exposed and been discussed uh in the last 16 months. So my wife's. Smarter than I am and runs our social, you know, said, OK, this is happening. Let's not back out. People were saying, oh, take that down, da da da da, and we're like, no, this is the right moment for the, for the discussion. Uh, so yeah, probably we alienated both some, some longtime drinkers and some, some newer drinkers, but the, the, the mixed message was pretty equal, uh, and we thought it was worth letting that debate continue, uh. To play out. So sometimes that stuff happens and it's not fun, uh, but I don't think it's bad either. A British, uh, poet once said, what's so funny about peace, love, and understanding, that stuff's not supposed to be, uh, funny, but it's important, so we're letting that stuff play out and it'll probably alienate some people who have drunk dogfish and as we continue the discussion, hopefully we'll, uh, have others embrace us as well.

Speaker 3 [16:10] It was smart to leave it up, I think. I think it shows that you guys were thinking about it.

Justin Kindle [16:15] So are there a lot more assholes now?

Speaker 2 [16:19] Uh, uh, I'm not gonna say no to answer. I'm not gonna say no. It's hard for me to say no. You don't have to answer. I, I would say when, when Dogfish opened, there were 600 breweries in America. Now there's 9000, but thankfully, there was probably hundreds of people that love beer. Now there's millions. So odds of math are there's a lot more amazing, amazing people than there are assholes, but there's more assholes.

Justin Kindle [16:46] Thank you for answering that. Carry Bell's was founded in 1985. What are the challenges in marketing an established brand to a new generation of consumers that, again, I am too old to speak to and that's why Zoey will be up here later.

Speaker 5 [17:04] Yeah, I mean that's something that we think about particularly with a brand like Two-hearted that's been, uh, you know, around almost as long as the brewery has and as we think about that we're very careful, you know, we do not want to alienate the loyal craft beer fans who continue to vote us the number one beer year after year. We, we have to be mindful of that and while we do that, we believe that too, you know. An example of too hard is messaging of, you know, it is built on quality, it is simplicity, it is a delicious beer, and we think those kind of messages we can reach a younger generation we need to go through the right channels to reach them, right? So it's not necessarily traditional marketing and those pieces we need to meet them where they are and tell them why too hard is important.

Speaker 3 [17:45] So Steve New Belgium turned 30 this year, which is a big, big number. Uh, what challenges are you guys facing in, in just growing and changing and evolving?

Speaker 4 [17:55] I think it's probably no secret to, to most people who are fans of craft beer, fans of New Belgium that as we put a focus on becoming a national brewery, we probably tried to make Fat tire appeal to a broader group of core consumers, and that makes a lot of sense when you're trying to go national and it's like how am I relevant in New York City or how am I relevant in Boston and, and what ends up happening when you do that is you kind of water down what the brand. stands for and as we thought about it a couple of years ago, um, I joined the company in 2017 and, and into 2018 we said look, the core of this brand is more of an outdoor lifestyle brand and if you're gonna build a brand today in any category, right, Fat tire is actually something you would really aspire to have, um, and it's built on sustainability, it's built on outdoor lifestyle, it's aspirational for a lot of people. People regardless of where they live all around the country, so we need to bring the brand back to what it always was and what and what drove its prominence, and we moved away from the packaging with our somewhat historical bicycle on a somewhat nondescript sidewalk and said no this is about it's a Colorado brand, it's about the outdoor lifestyle we went back to having, you know, um, influencers and a focus in, you know, our some of our. Core states and the mountain states and so this is our brand and it may not appeal to everyone, and that's OK, but there's a ton of 21 year olds for whom that is still a super relevant brand message. And if we're true to the brand and we're true to what it really stands for and we operate our company that way and we treat our people that way and everything we do is lined up behind the brand, then that's OK, we'll, we'll recruit new people and we don't have to recruit everybody because if you try to win with everybody, you're probably gonna win with nobody. And that's just a really important part of the marketing and the and the brand building behind Fat Tire,

Speaker 3 [19:32] yeah, for sure, Sam, Instagram posts aside, how are you guys growing and changing at the ripe old age of 26?

Speaker 2 [19:40] So I mean, I would say we definitely think about geography similarly where we have, you know, focus areas of geography. There might be another question later on that, but obviously we're an East Coast oriented brand, so we're doing more experimentation with more SKUs, uh, closer to home and really using, you know, our Miami, uh, you know, and Delaware locations as sort of the Jackson Pollock, you know, galleries to throw shit at the wall while we're using Milton Moore to dial in some warholes to send out, uh. You know, coast to coast and really, you know, unpretentiously approaching it as art first and business second, having that, you know, discussion with, with, with consumers and, and, uh, experimentation, I, I would say is, is a big core tenant of, of the Dogfish brand and I do think that's pretty, uh, you know, timeless. Sometimes our messaging is different like when we're at Firefly next month, the beer fest, the big, you know, music festival in our area and. Selling 60 Minute and 90 next to newer brands like HazyO, we know that that discussion's gonna be very different, you know, for, you know, a Lizzo Lizzo fan, uh, than, than when, when an older band plays on that, that, that stage and so making sure your, your, your messaging is relevant to the people you're talking to and being more intentional about that messaging per audience is something that I think craft breweries are just starting to get into verse one message, uh, for all.

Justin Kindle [21:03] So we've got an audience question here that I want to jam in, um, and this is to the panel. Is there anything that Kraft has been doing over the last several years that has hastened the slowdown that we should think about not doing anymore?

Speaker 2 [21:20] 750 mL bottles, are we still doing those?

Speaker 5 [21:24] Bottles in general, are we still doing bottles in general? Sorry, OI, I see you on the, you know,

Justin Kindle [21:29] sponsor here. Yeah, no, no, we love you. Go ahead, Steve. Jump on that grenade.

Speaker 4 [21:37] Everyone's passing it over to me. Um, I, I think it's really important that we're focused on making great beer, and that's, that's a really important part of this is that anytime someone's interacting with our industry that they're having a really good experience with the beer that. They're having and it's true in New Belgium, right? We, we run multiple taprooms all around the country and it's really important that that 7th, 8th, 9th, 10th tap is also a really good beer and, and we all make certain beers exceptionally well and sometimes, you know, you have a bad batch or you have some issues and. You want to make sure that no matter what if someone's coming into this industry that that they're having that kind of world class beer experience that's how we talk about it at at New Belgium and I think that's that's a really important focus for all of us that every touch point is, is a world class touch point for people because they have so many other options right now.

Speaker 2 [22:28] I'd also say like in the last, uh, as all agree with everything and um I'd also say like in the last few years, I feel like because craft has slowed down and there's a bunch of dark capacity in our industry, oftentimes, there's too many brands that are launched that are more fast followers than pioneering concepts, and you get it if somebody's going to pay off their stainless to a bank, they're less willing. To take a risk, but then it crowds segments that, you know, the burgeoning, the, the, the, the starters in that, that category, you know, founded before the, the category even took hold. So the opportunity to be, you know, uh, um, more, more judicious and have more faith in your innovations versus just spending time saying, oh, that's the hot thing in IRI the last 13 weeks, I better quickly release that. Would be something that I think has been a challenge for Kraft in the last 24 months or so.

Speaker 3 [23:22] That's a great point. Perfect segue to the next question. Each of your companies has established some new brands. You've worked really hard to do it, and you found a lot of success with it between HazyO and Sequence and the whole Voodoo Ranger family and and Domingue and Official and No Yeah. I mean, Sam, how are you balancing your new priorities with your existing ones?

Speaker 2 [23:39] Uh, so, you know, using like, using on-prem coming back, you know, for, for an example, which we may talk more about as well, um, you know, we're basically thoughtfully saying we want to make sure as consumers come back to on-prem, there's both the, the brands, you know, Carrie said that like they recognize that they want to get behind. I enjoyed it. I was telling her an awesome pint of too hard with deep dish pizza somewhere on the street with a. Buses, uh, yesterday, uh, um, so we're saying, you know, our 22 primary focuses on prem 60 Minute, which is a 20-something year old brand, and Hazy, which is a less than 1 year old, uh, brand, and they both are, we think pretty complimentary, you know, a more, you know, traditional West Coast style with a unique continual hopping and then the first, you know, oat milk infused, uh, hazy IPA. Uh, so having that balance between new and flagship, uh, is something we, we think about, uh, every day.

Speaker 3 [24:33] Steve, you mentioned before that Voodoo Ranger Imperial has really kind of overtaken Fat Tire. It's now the #2 overall selling craft beer offering in the off-premise, #1 selling IPA, which is huge. How is that beer and that brand family changed the trajectory of New Belgium and opened the door to younger consumers?

Speaker 4 [24:50] For us, I think I mentioned before, you know, in 2018 we told our distributors your number one priority is Voodoo Ranger, and that was a big shift, and we just opened a whole bunch of new states on the East Coast sort of under the promise of Fat tire, and we actually said, you know, you know what, there's a bigger opportunity here with Voodoo Ranger, and then you're right, within that, uh, Imperial is the largest, sort of the largest variant within the, the Voodoo Ranger family, but still only makes up maybe 3 to 40% of the, of the brand overall, um, and is, is standalone, the, the largest IPA. It's given us a chance to go have a conversation with different communities that are out there, and that's what's been really important to us as we've recruited a new generation. I talked earlier about Fat Tire and being an outdoor brand. Voodoo is really centered in the art community, in the gaming community. Um, and, and that's a different set of consumers to go and talk to, and it's, and it's a huge community as well, and what we've tried to do and going back to the, the earlier question, um, around, you know, what, what have we not done as well as an industry to, I don't think we've reached out to communities. We've tried to grow the craft beer community, we've taught people what makes. Craft beer really special. We've taught them about hops. We've taught them about brewing processes. Now there's an opportunity for us to go into their communities and participate in what they want to do. And so if we show up at, um, you know, if we show up at gaming events or we show up at art, uh, events, that's us participating in a different community with our beer, and we think that's a great way to reach new consumers.

Speaker 3 [26:14] I wanna go back to something that you said at the beginning of this answer. So in 2018 when you went to wholesalers and said, hey, here's your new priority instead of fat tire, how was that received?

Speaker 4 [26:25] We were actually at Colorado State University. That's where we have our, at least in that year, that's where we had our distributor conference. Unfortunately they're mostly virtual now. It sort of felt like, uh, someone dropped the mic, right? And, and, uh, or the record stopped, whatever analogy you kind of wanna use, but actually people really quickly bought into it and, and that's what was really cool, and you see it in the, you actually see it in the numbers, so it's very easy to say, hey, we're gonna change our priorities and if you have a real factual reason for that, and then there's real momentum behind the brand. And now we went from, I don't know, a 200,000 barrel brand to over a 600,000 barrel brand and the number one IPA in the country. People start to believe in it because they're, they're seeing the numbers, right? They see green numbers on their distribution sheets every single month. That's a really good place to be, uh, and, and then we can continue to build on and we can continue to invest in those brands.

Speaker 3 [27:12] I assume they're pretty happy about it now, so

Speaker 4 [27:15] everyone agrees that was a good decision in 20. Sometimes we make bad decisions. We don't always, always, we don't make all good decisions, but that. One was a good decision.

Speaker 3 [27:22] Carrie Bell's is doing something a little uncharacteristic for itself, launching a brand familyray play. Well, what can you tell us about that? Sure,

Speaker 5 [27:31] so we took, you know, our most iconic brand, Two-hearted, and in the middle of a pandemic decided it would be a great idea to launch our lifestyle brand, uh, lighthearted attached to it, and I think, you know, we were deliberate and, you know, admittedly slower than my friends to my right and left to really take. That leap of faith of that brand family piece and we are really seeing that pay off and even if you think about something like Oberon, which is a seasonal yet a flagship also different than most other breweries and we have taken that and launched Oberon variants inside of the Oberon season and the goal for that is to drive Oberon sales as much as it is for you to pick up a tropical Oberon, right? It is really in order to take a look at looking at things that make sense and particularly as we looked at Two-hearted. You know that whatever beer, any beer that we put with that brand family has to live up to the expectation when you pick up a two-hearted and have a deep dish pizza with it, you know, so that's why, you know, we're a little more intentional. I mean, we're also the only regional brewery sitting, you know, sitting up here, and that is certainly not lost on us as well. It's

Speaker 2 [28:34] Oberon by volume number 2. Oberon

Speaker 5 [28:37] by volume is number 2, absolutely.

Justin Kindle [28:39] I'm glad you mentioned Oberon because Bell's is known for some heavyweight seasonals. You've got Oberon, you've got Hop Slam. Tell me a little bit how you're capitalizing on extending those brands a little bit further. I, I think you've got a new series too that you're, you're using for that.

Speaker 5 [28:57] We do so really you know being candid, we were struggling a little bit with our traditional seasonal so think something like Bess Brown, the craft beer drinker didn't wanna wait until October to drink a brown ale, right? So we have really taken that seasonal skew, the Oberon drinker if you will, which you know has that shared UPC and trying to drive incitement excitement back into it. So we've got a new beer coming out. It's an entirely rotational wheat series, you know what we do really well, Bell's IPAs and wheat beers. We do them exceptionally well, so we are capitalizing on that. We've got Rhind Over Matter coming out. It's out now if you can find it, uh, sort of a citrusy wheat beer, and then we've got a new one, Low Sun, for those very. Ancient craft beers may remember what Oberon used to be named, which will, I will not say on the stage, but, uh, that is a low calorie wheat that will be out in time just in time for your New Year's resolutions. So we are really taking and looking a different look at seasonal and transitioning that into a wheat beer rotational, which is something our brewers do well, a category of wheat continues to be, you know, a big driver for us.

Justin Kindle [30:05] Sam, how are you approaching seasonals now?

Speaker 2 [30:09] Yeah, I mean, we, we, that's always been an important part of our portfolio. The first beer we ever, I ever brewed as a home, home brewer and entered into competition was our pumpkin ale, and we were among the first to do pumpkins commercially in the mid 90s. Uh, and that's still by far our biggest seasonal release. But about five years ago when for certain distributors, seasonal became a dirty word, we evolved that, uh, that cadence of quarterly releases to be called our art series and as the official brewer. Record Store Day, you know, we align with artists who do we gig posters we love, uh, and we have them do the art of the Fourers but what we do is we try to keep that dynamic other than punk and ale, in that quarterly thing gets more than 2 years. Uh, they all share one UPC so the goal is to keep them in market and keep that that placement everywhere, but we. Try to bring a lot of our innovation through that distributors and retailers love that too because it's also uh at the higher end of our pricing side. So we do still sell a lot of beer and glass. Our 90 minute uh and art series are are mostly in six packs at 14.99 and uh so that's an important category for us. And similarly with our canned variety packs, we're also doing, uh, finally a series of different 12 packs. 3 times a year that UPC meant to be kept in 11 thing for 12 months. The one we just released our hoppy variety pack which is a scratch and sniff on it on the outside of the pack you can smell the hops, which is nice, and the other thing when you're building flagships is that variety pack that more and more of us focus on particularly outside of our home, you know, the opportunity to always keep your flag. Crackerjack innovations is just a great sort of sampling and remembrance for folks who might not have returned to your flagship as frequently as you'd hoped and we do do do that in our variety packs.

Speaker 3 [32:13] Uh, Steve Voodoo Ranger was built on IPA, but you're gonna be introducing a light lager under that brand. So why is that the right play and what are the risks of going outside the IPA wheelhouse?

Speaker 4 [32:24] Um, so we actually have launched the lager. It's in market. I think it's, it's interesting to think about how do brands span categories, right? As breweries here, we obviously all span different categories within beer, and you see within our industry brands spanning categories, and you certainly see it outside of beer as well as people are looking into, into how do you, how do you take trusted trademarks and trusted brands and make them relevant in, in more occasions. We don't know what voodoo, right? That's the honest answer is we think that brand is strong enough and consumers have enough passion around it that it can be more than just an IPA brand. But we're testing it and so the light lager Voodoo 999 is available in North Carolina, so we've got a test market going. It's been going incredibly well, but it's 3 or 4 weeks of data and I think everyone says their new launches are going incredibly well after 3 or 4 weeks regardless of what the data tells you. That's always what ends up in, in your publications and others, but it, it, we, we are excited with where it's at, and we'll learn. And if we, if we see that that brand can expand beyond the traditional IPA category, then there's a lot. A lot of places you can take it and if we see that consumers really think of it as an IPA brand, which honestly might be where it sits in consumers' heads, then we'll think about innovation going forward on on a different, in a different way. But it's important to be able to do those tests and learns and understand where can your brand grow, how do consumers really think about your brand? How are they gonna react to the point of purchase if they see you participating in a different category? And so we're excited to push forward with the test and actually super appreciative of all the retailers out in North Carolina who supported the test.

Speaker 3 [33:58] That's, uh, I mean, the best thing I learned in, in graduate school for marketing was that your brand is not what you think it is, it's what your consumers say it is. So that's definitely the way to go about it. So on the same similar topic, we are at fall reset time. Um, how have discussions with wholesalers and retailers gone overall and, and what are they looking for this year after the, the year and a half that we've had?

Speaker 4 [34:19] Are you still looking at me? Oh, OK. I'm just checking. You've been passing the questions around

Speaker 3 [34:24] polite. I,

Speaker 4 [34:25] I think that the key word for retailers right now is incrementality. And it doesn't help if they take out a two-hearted listing and put in a Voodoo Ranger listing if they sell the same number of 6 packs at the end of the month and it's, it becomes about how do we help the retailer attract more consumers, win more occasions, and grow their overall business and we've all been so focused on our own brands, you have to flip that around and say if I'm the retailer, what, what allows someone to make an extra purchase. While they're in their store or what causes someone to stay for, if you're talking on-premise, right, for a 2nd drink or a 3rd drink because there is so much profitability for, for retailers on and off in that incremental purchase and so we have to be offering that and so as we've thought about innovation, it's less about, hey, what's that next logical spot for, for voodoo? What part of the IPA category don't we participate in because let's be honest, lots of. Other breweries participate in whatever that place is that we don't and that may not be incremental, but it's how do we bring something new to the category and new to the brand that's actually gonna drive incremental purchases in in the on premise and in the off premise.

Speaker 3 [35:30] Carrie, what is Bell's hearing from wholesale and retail partners as we go into fall recess?

Speaker 5 [35:34] You know, we're hearing this, uh, what I feel like is an unfair a little bit of mixed messaging, right? So we want variety and we want simplicity at the same time. So I do think that a lot of what we're hearing is, you know, driving towards variety packs which balls will start to participate in next year in earnest, um, and you know it was already mentioned that that really is a great way to drive sampling and the core brands, traditional brands that you have and be able to get feedback from those consumers so. UPC simplicity is a piece that we are hearing um and then certainly you know they're also asking for making sure that we have the right styles and sizes for each of those occasions whether it's how many 192s can I make versus how many six packs and making sure that we're lining up those right sizes with where they're looking to sell beer.

Speaker 3 [36:21] Sam, what have you guys been hearing from your partners?

Speaker 2 [36:23] Yeah, similarly, I already mentioned the the variety pack, you know, is, is an ask that's getting louder and louder nationally as a focus, a higher level focus than it was for us. Um, I'd also say Hazy that folks see that that's a well differentiated with the oat milk in a sea of IPAs and staying on the sea theme, you know, we kind of, one of your questions that I don't know we'll get to is, you know, which brands are healthy, which ones are having challenges in 60 Minute. And 90 both compared to average craft are are healthy. One that's not right now for us here today is sequence. It was a self-inflicted wound as, uh, as, uh, you know, on-prem shut down last year we made the decision to say, OK, we can only have a finite of draft priorities and we said let's focus on, on 60 and, and uh Hazy and stop doing sequence and it really did hurt, uh, the sequence trends and so now we're just listening to our.

Justin Kindle [37:39] So you mentioned the on-premise with the Delta variant. How are each of you approaching the on-premise with a little bit of uncertainty out there, and we'll start with Carrie.

Speaker 5 [37:50] Yeah, I mean, I think more than most breweries realistically prior to COVID we were about 40% of our business on premise. We are a pass the beer across the bite, you know, kind of brewery, so we really had to pivot really quickly and it's important to us though that, you know, if you think about many bars that are built on, you know, 100 tap handles, 60 and variety. You are seeing them call that down to 20 beers that they know are gonna sell time after time and again drive that velo velocity so you know we're going in with the messaging saying it's you know we call it our double tap it's Oberon and Two-hearted those are different drinkers for us and they're trusted brands and we're, we're trying to support the on-prem as much as possible. I mean we own an on-premise all of us do, right? Whether it's staffing challenges or how do I even send, you know, 46 different state COVID regulations and manage that to even get to the door to get somebody to have a conversation about which Oberon, you know, Oberon or two hearted or, you know, handle of you lovely people do I wanna take, right? Uh, that's, that's an important piece.

Justin Kindle [38:55] Steve, how are you approaching it?

Speaker 4 [38:57] I mean, I think first with empathy, which is really what Carrie was saying, it's, it's been incredibly tough for our on-premise partners and we all know that because of our taprooms that we operate and how and how difficult that's been. And really trying to understand what they need and, and again like Carrie, it's it there's the offerings are being reduced. They want more known brands because they know those will pull through. Price is mattering more in the on-premise than previously. It used to be really about selection and variety, but you can appreciate if your bar's been closed for 6 months or you're running a 40% of your. Sort of normal volumes that that price becomes a really important lever for bars to understand and dig into a little bit and, and those are really the things we're focused on. We have some brands that are incredibly well known, really high velocity we're fortunate to be able to get that there at a, you know, a relatively good price in most cases and that's the conversation we're having with people and, and listening to what they really need.

Justin Kindle [39:52] Sam, you mentioned the uh self-inflicted wounds to sequence. So how are, what's the strategy this fall and going into the early part of next year in the on-premise for you?

Speaker 2 [40:03] Yeah, I mean, there's definitely a, a more regional approach for us, right? So we're, we're strongest Maine to Miami, we're a nautical themed brand, so we're, you know, over, you know, we're, we're overindexing really in that space on how many SKUs we're bringing in draft and then nationally it's 60 hazy opt-in for sequence sort of west of the Mississippi, uh, and art series are really our only draft, uh, focus, uh, beers on prem.

Speaker 3 [40:33] Glad you brought up NA because we have a great audience question about it. Do the panel members have any thoughts or insight on the growing NA craft beer segment? It speaks to the point of reinvigorating the conversation of beer branding and inclusion. Will, can, should a non-alcoholic option be part of the conversation in the future? You guys, you launched one. How's it going? What do you think?

Speaker 2 [40:51] So yeah, we launched both under Sam Adams. We will launched just the haze and we and we launched Lemon Quest. We're really proud, proud of the liquids like we're using both. We, we installed a dekalization system and low gravity fermentation and then we're blending both the and the and the and the low grav. So it has real, you know, both have really great beer flavor character. I'd say so we're more proud of the liquid, frankly at this point than we are of the launch. It's really, really hard like to, you know, when you think of how blurry the 4th category has made retail and then you look at non-elk and uh where it should sit in the store, how we should be talking about it both with consumers and strips, the unfortunate fact that the TTB views it as alcohol in terms of how we can talk about it. Even though it's not non-alcohol, those have been like real barriers I think we're facing as an industry, but I do think the consumer wants us to figure this shit out and less about those that are walking away from alcohol and more about those that are either looking at a pacer opportunity in the night or just they wanna, they wanna drink something while they're kayaking or or paddleboarding or golfing, that tastes like real beer. So I don't think we should give up, but I don't think we should. Put the weight of like seltzer volume on its shoulders. We should nurture this one and talk about it and serve it at all our booths and our events if we're making them and let it grow organically the way crafted in the 80s and 90s.

Speaker 3 [42:15] Carrie and Steve, how is non-el factoring into the conversations that you're having?

Speaker 5 [42:18] Well, as per usual in Bell style, we have the equipment's on order. We are gonna let these two figure it out, see how it goes, um. And then we're going to come in with a delicious tasting beer that rivals what they're doing. It's very

Justin Kindle [42:32] generous of you. Steve, are you guys diving into

Speaker 4 [42:40] NA? We, we, we aren't, uh, actually, for, first of all, I, I think it's there's a real category there, and I think actually, in fairness, the Heineken 00 launch probably reinvigorated that non-L category and, and took it off the sort of back dusty shelves of, of retailers and, and. Brought it to the forefront and there's some good craft offerings out there. I think it will be niche and therefore if you're gonna be successful, I think you actually have to really make a great beer and it's pretty difficult to make a great NA and we're focused on trying to understand that and if we can get there, we might put something out into the market that we can be really proud of, but that's, that's a bit of the, the limiting factor is, is how do you get something out there that you think consumers are gonna be really excited about are gonna add to that conversation and we haven't, in fairness, unlocked that yet.

Speaker 3 [43:26] So another great audience question. There was a huge shift during the pandemic on how customers purchased their beer and many smaller breweries benefited. This shift tested the three-tier system. Is that a concern to you as bigger regional and national craft breweries?

Speaker 2 [43:40] That's an interesting view as they ask the question because I'd say, you know, the pantry loading to a large degree benefited, uh, bigger craft breweries more so than the small guys that I know in our state or, you know, our local, uh, you know, laws as the pandemic started really made it hard for the smallest, uh, suppliers. Um, so, you know, I don't know, I frankly don't know how to answer that other than. To say, you know, we're an industry of like plucky entrepreneurs as ubiquitous as maybe some of the brands we're talking about today, all of us collectively still less than 15% market share. We figure out a way to thrive in challenging moments. So I don't think it's as much about the scale of the brewery as it is the pluckiness of the entrepreneurs, uh, driving them through, through the challenging moment.

Speaker 5 [44:27] I would, I would add to that that I agree, you know, pantry loading was two big brewers' benefits realistically and the piece that I think is important as we look at as we look at that was it was a lot for us at least about order fulfillment, you know, our distributors were stretched so thin they have staffing challenges no different than, you know, our on premise and we're seeing and so for us we were able to capitalize because we could keep our distributors in beer and respectfully maybe some of those smaller breweries don't have that same, you know, opportunity.

Speaker 3 [44:57] Stevie you anything to

Speaker 4 [44:58] add? I think just a huge appreciation actually for the three-tier system. There's no way we could have had, you know, all 8000 of us as breweries going in and out of every retail store in the country in the middle of the pandemic and there was a huge service provided by the distributor tier in terms of being able to keep. Keep all of our accounts in stock and and help all you know if they're not delivering beer and we're not making payroll and they they had a huge part in keeping the industry afloat during the pandemic and um you know I think trying to pay back that appreciation by continuing to invest in brands and. Grow the business for everybody.

Justin Kindle [45:33] So that's how we're gonna have to end this panel. Uh, everybody out watching at home, please stick around for a special interview with OI. We all love glass, don't we, everybody up here? Absolutely, absolutely. And also stick around if you're here for the Jess and Zoey show, they're going to be talking about Generation Z. They've got a great panel. So let's get some beers and network.