Brewbound 2022 Rising Stars Interview: Hi-Wire Brewing

Speaker 1 [00:06] Let's meet our next rising star, Chris Frosaker, the co-owner of Hi-Wire Brewing from Asheville, North Carolina. Thanks for being here, Chris, and congratulations on Hi-Wire being one of our rising stars this year.

Speaker 2 [00:19] Thank you, uh, excited to be here.

Speaker 1 [00:21] So, yeah, it's been a standout year for Hi-Wire. You've opened several new taprooms this year, including Birmingham, Alabama, Cincinnati, and Charlotte. I'm very curious about this multi-state taproom strategy. How do you open that many taprooms nearly simultaneously?

Speaker 2 [00:39] We've, um, I think it was back in 2016, you know, we, we had the idea that, um, we wanted to start doing satellite taprooms. Um, you know, the, the beer industry is, uh, continued to get more and more competitive, more complicated every year. Um, at the same time, um, everyone wants local, local, local. Um, so we, we kind of did an experiment and, uh, opened up our first location outside of Asheville in Durham, North Carolina. And, and what we saw, um, was not only was it just great for the brand, you know, people can come in and experience Highwire firsthand and, and get to, get to look and feel and smell, uh, everything we do, um, that translated to our wholesale sales in that territory, uh, going up pretty significantly right away. Uh, so we, we, we. Felt like we had kind of a, a winning program on our hands. Um, since then, we've opened up enough, um, and we're, we're a pretty organized company that we, we actually have, uh, an SOP, a standard operator procedure on how to open a taproom. So myself and, uh, Christine Ferguson, who's our director of retail operations, um, we kind of joke around that we kinda have it down to a science. So, um, We, uh, once we felt comfortable that we had a winning formula of what we were doing, um, and, and we knew what our brand wanted to look and look and feel like, um, we made a, uh, big commitment to open up 4 taprooms in a calendar year. So, uh, we're, we're about halfway through. Um, we, we opened up, uh, locations in, in Charlotte, North Carolina, and Birmingham, like you mentioned. Um, this year, and we actually have two actively under construction right now. So one in Cincinnati, Ohio, and one in Nashville, Tennessee.

Speaker 1 [02:22] Those are some great craft beer markets, uh, to be going into. Yep,

Speaker 2 [02:26] yep, we're, we're excited, so great beer towns.

Speaker 1 [02:29] Do you have a number of taprooms that you, you eventually wanna have within the fold? Do you see sort of a An endpoint to the expansion, or yeah,

Speaker 2 [02:39] yeah, we, we do, um, after, um, Nashville opens in the spring, uh, we do not have any other plans to open up new locations. Um, we've said all along, you know, there, there isn't really a magic number, um, but we, we want them to make sense, you know, we, when we, when we go to new markets to, to, um, put up, uh, physical locations, um. We need to see, you know, you know, good potential wholesale, wholesale growth in that market. Uh, we need to be in love with the city, um, and really Asheville as a brand needs to resonate in that town. Um, that's, that's very important to us. Um, and we're kinda, we're kind of, uh, I don't wanna say we're running out. Of those markets, but they're, they're not, they're, they're not as many options as there were before. So, really, after this gangbusters year of opening up four locations, um, 2023 is really gonna be kind of like a cohesion year for us. We really, um, you know, we've been grow, grow, grow, um, after Nashville, we're gonna kind of slow down, fine tune, and really just get, get really good at what we're doing.

Speaker 1 [03:43] So do you start with distribution and then the, the brick and mortar space follows? Is that, is that the model that you guys go with?

Speaker 2 [03:50] Exactly, yep, yep, we, um, we'll, we'll launch a market, um, for, you know, whatever reason, whether it's important for a, a chain grocery partner, um, or whether, uh, we just like the feel, feel of the market. That we can add to that beer market there. And if we like the vibe, we like our whole, you know, really good great relationship with our wholesaler, um, that's when we kind of decide to, to do that. Um, we've never opened up a retail location in a market, we do not already distribute it.

Speaker 1 [04:19] Do you ever have to sell your wholesalers after the fact, like, no, this is gonna be good for you eventually. And if you do, like, how do you, you know, bring it home to them?

Speaker 2 [04:29] Absolutely. Um, it, it goes back to that first location that we opened up in Durham outside of Asheville, um, and, and that story has happened each time we've opened up a new one. we opened up this location and our wholesale sales, um, go up on average 20-30% overnight. Um, so we, we have this data, uh, to show our wholesale partners that, hey, um, we're not here to take, take food from anybody's mouth. In fact, you're actually gonna be more successful, um, and, and numbers don't lie, and, and wholesalers love, love numbers. I mean, it's a beer, beer business and numbers business. Um, so showing them that, that data, uh, makes them excited and, and really on board with the brand.

Speaker 1 [05:09] Data is a great

Speaker 2 [05:10] equalizer. Yep, absolutely.

Speaker 1 [05:12] And, and these are hot markets, you know, Charlotte, Birmingham, Nashville, Cincinnati, those are all, you know, super popular areas, you know, Nashville is one of the hottest cities going right now, uh, you know, what, what's it gonna be like for the brand to be in there, and what do you think that, you know, that'll eventually do for your business?

Speaker 2 [05:33] Um, again, it just, it localizes us. Um, we, uh, with a, with a brick and mortar location, um, people really get to know what Highwire is and what the brand is, as opposed to, um, just perusing a bottle shop shelf and, and finding a cool looking can. Um, so, really, you know, the goal is to become embedded in these markets. Um. Really, really support the town, support local nonprofits, um, be a good neighbor in the beer industry, and really just, just join in. Um, that's, that's, that's the plan, uh, in every city that we go to.

Speaker 1 [06:06] Hi-Wire also shifted from 12 ounce cans to 16 ounce cans this year. Um, that's a big move. Uh, why was that the right decision for Hi-Wire and, you know, how'd that go over with your wholesaler partners?

Speaker 2 [06:19] Um, the decision started, um, same reason why, why the taproom decision came about, of why we wanted to start opening these new taprooms. Um, you know, it's over 9000, I think we're nearing 10,000 breweries, uh, in the country right now. Um. What do you do to be different? Um, what do you do to set, set yourself, uh, apart, you know, every, most people at this point are making great beer. Everyone's got a great IPA. Um, what, why, why buy Highwire from Asheville, North Carolina if you live in Ohio, when you have Um, you know, hundreds of awesome local Ohio breweries. Um, so, we started, we started building these, these satellite taprooms to build brand awareness. Um, the 16 ounce can, um, idea came again to differentiate ourselves. Um, More and more breweries, less and less shelf space, um, continued wholesaler consolidation, um, how do we stand out? How do we convince the, uh, the Kroger's of the world to give us a chance, um, put us on the shelf when they, when there's only so many limited spots for craft beer, especially with, you know, rise of seltzers, RTDs, um, there's, there's just constant competition coming. Um, so we really wanted to make a bold move. Um, and, uh, just be different. Uh, so we do all of our, our core and seasonal beers now in 6 packs of 16 ounce cans. So we're basically giving away a free beer, um, every, for, for every, every 6 pack. Um, again, you know, I mentioned data before of, of how to sell this to our wholesalers through our taprooms. Um, we, 2 years ago, 2021, we did an experiment and did it just with our flagship, uh, high pitched mosaic IPA. And the rate of sale, um, skyrocketed. Um, customers are noticing that. Um, they're seeing the value of a, a quality, uh, regional craft beer and a more affordable, more accessible, um, pack size. And so, um, that data, led us to do it, do it through our, our whole portfolio this year. Um, and I credit that to, uh, a main reason why we're up this year. Um, you know, craft, craft as a, as an industry is really struggling right now. Um, numbers are down. Uh, again, there's just a lot of noise out there, um, and we hear it from our wholesalers a lot, like, what are you doing different? How are you doing this? How are, how are you growing right now without launching new markets, um, really with our points of distribution, kind of staying flat for the year, um, and it's the fact that I think we've made ourselves stand out, um, with that value play.

Speaker 1 [08:57] How have you made that the economics of that work, because you, you mentioned giving away a, a free beer, essentially, you know, how, how do you make that work economically for you guys?

Speaker 2 [09:08] Yep, um, we, we did a lot of, um, a lot of calculations, a lot of thinking, again, into, into data. We're a very data-focused company, um, and it's kinda, kinda twofold. Um, the rate of sale increase, um, actually helps tremendously, um, you know, you Uh, selling more beer, uh, more volume, um, it, it, it continues to add to the bottom line. Um, the other thing that was kind of, I don't wanna say lucky for us, um, but we, we were planning on raising, you know, we're raising price opposed to everybody else at the beginning of the year, and little did we know that inflation was gonna start going wild and most of the industry was gonna raise price. So, When we raised price, the, the, the whole industry raised price. So we're actually on par with um a lot of our peers, if, you know, it's not 50 cents to $1 more, but, uh, consumers still see the value.

Speaker 1 [10:02] We talked a little bit about it. You've increased production from 19,000 barrels to 23,500 last. Last year, uh, you have plans to hit 30,000 this year. Uh, are you feeling like you're on pace to hit that goal?

Speaker 2 [10:15] We're gonna be a little short. Um, I think we're gonna come in at about 28,000 this year.

Speaker 1 [10:20] Still, that's a, a, a, a nice chunk of, uh, volume gain.

Speaker 2 [10:25] Yeah, yeah, absolutely. Um, I, I, I owe it again to our, uh, our taprooms, um, as well as our, our phenomenal sales team and just sales strategy. So I, I think, uh, Uh, this, this amount of growth in this climate is something to be really proud of.

Speaker 1 [10:39] Yeah, absolutely. So when you look back at 2022, what stands out to you as the highlights for Highwire?

Speaker 2 [10:48] Um, I think nailing our 16 ounce can transition, uh, that, that was a, that was a beast to pull off, you know, just, just, a, making sure sell through on all 12 ounce cans is, is, is, is executed and out there. Um, also just, uh, speaking to our wholesalers and our retailers about that, um, cause it's, it's different, it's unique. Um, we really, uh, had to do a lot of work to get our placements on shelves to be a 3 facing instead of a two facing. Cause if it's a two facing, you know, there's a lot of breweries who sell in 4 pack, 16 ounce cans. And if it's just a two facing, you, you can't really tell what's different. Oh, it's just another quarterback. So we've really kinda worked territory-wide and worked, worked with our, um, our chain partners to, to really get that three facing so the consumer can see it. So that was a lot of work and something that I'm really proud of that we were able to, uh, to, um, execute. Cause, you know, chain, it's potential loss based on a, on a shelf, but proving that it's gonna be more profitable, more money in their pocket, higher rate of sale, um, worked out. Um, also super proud of our, our taproom growth right now. Um, we've, we opened up, you know, two super busy locations, uh, so far this year with, with two more to go. Um, Birmingham and, um, Charlotte are in our top 4, volume wise. So, um, Two out of our, you know, we opened up back to back, huge, very busy taprooms, right, right, right back, back to back, so, very proud of that. Um, the final thing is, um, you know, we've, uh, post-pandemic, we've, we've really worked hard as a company to increase communication with our staff and our employees, especially since we sell in 9 states and we have 9 locations, we have people spread out everywhere. Um, so, we really, really are starting to fine tune that, tune that, and I think that, um, Our internal communication and just company culture is really, really clicking right now, so, really proud of that.

Speaker 1 [12:45] Yeah, that's awesome. Um, so, other than taking a deep, you know, breath in 2023, uh, what are you looking forward to the most? What do you see as the biggest opportunities for Highwire?

Speaker 2 [12:59] So we, when we first started, uh, we opened in 2013, um, and our, uh, original business plan, you know, we want, we're all about trying to be different, you know, you gotta, you know, even back then, we thought it was crowded, and there was, I don't know, 3000 breweries, something like that. So, when we opened, we thought, what do we want, what, what can we do to stand out? Um, first was packaging and, and six packs. Uh, back then in Asheville, at least, there were only 2 other breweries doing it, which is crazy. I mean, that feels like, it feels like the Stone Age a little bit. Um, but also, um, we wanted to make lagers, you know, not a lot of craft breweries were making lagers at the time. And, um, lagers have been kind of the, the core of who we are since the beginning, you know, staff favorite, we're all drinking lagers, our head brewer is a lager nerd, we love lagers. Um, we even have a specialty one-off lager series, we're, we're always making lagers. Um, and we always kind of had this joke that like, oh, this year is the year of the lager, we're gonna, we're gonna, we're gonna push lager, and uh just kind of never came to fruition, everyone just wanted more IPAs, more IPAs, more IPAs, um. Well, this year, you know, again, we started kind of data mining, um, our, our products and our rate of sale, and we started to notice a trend in some of our loggers that um they were our highest, despite having the lowest amount of placements on average, you know, most people are trying to buy in in IPAs and Funky big stouts and everything. Um, our lagers, their rate of sale are, are higher than everything else we do. So we're like, we're onto something here. Um, so we are really, really gonna dig into lager next year. Um, we, we have a brand new brand called Leisure Time Lager coming out, um, very, very accessible, easy drinking American Lager. Um, it's gonna be at a really good price point, so it's gonna Be priced a little less than our, our current core beers, and we're really gonna go after that lager business. Um, try to stand out, try to, try to be different because we know, again, according to our data, according to our numbers, that if we get our lagers on tap, they sell, they pull. So, that's gonna be a big focus for, for 2023. Um, it's our, uh, it's our 10 year anniversary next year, so. Kind of feels appropriate that, you know, maybe it'll finally be the real year of the lager for us. So.

Speaker 1 [15:11] It's the, the biggest, uh, chunk of the beer business, so I, I don't blame you for going after it.

Speaker 2 [15:17] Yep, yep, absolutely.

Speaker 1 [15:18] Yeah. Well, one last question for you, uh, what's one thing that you've learned over the last year that, uh, some type of piece of advice that you'd offer the entrepreneurs out there?

Speaker 2 [15:29] Um, man, that's a, that's a, that's a good question. Um, I think the biggest challenge this year, um, especially since we've been in a big growth mode, and that combined with, uh, inflation, the economy, you know, cost of goods constantly rising is just Manage your cash, uh, invest in accounting. That's a, that's a very, not something that all the, you know, people who are thinking about starting breweries think about, you know, they're thinking about their, their beer, their recipes, their, their marketing, um, but it's, uh, it's tough out there, so really, really manage your cash, invest in accounting. That's, that's something that we've, uh, we've learned over the last few years that we wish we'd have done a lot earlier.

Speaker 1 [16:10] Yeah, that's a fantastic tip. So, Chris, thanks for joining us. Thanks for doing this, and congratulations to Highwire. Thank you,

Speaker 2 [16:17] I really appreciate it.

Speaker 1 [16:18] Yeah, no, we appreciate it. So stay tuned for more Brewbound Live.