Beer Marketer's Insights

Beer Marketer's Insights

Still cycling a flock of discontinued brands, Reed’s Inc reported flat topline for Q1, but the core brands on which it’s focusing enjoyed 15% surge.  Net sales rose 2% to $8.4 mil, but restaged Virgil’s craft soda brand soared 46% even as sell-in has begun on other revamped line, Reed’s Ginger Brew.  Move to “asset-light” model involving sale of co’s LA plant as well as greater price realization helped boost gross profit by 9% to $2.5 mil, and gross margin advanced to 30% from 28%.  But $1 mil in higher spending on sales & marketing widened operating loss to $2.9 mil from $1.1 mil a year earlier.  Net loss was $3.3 mil vs $1.6 mil.  Overall, REED is anticipating year-over-year core brand growth in 20-30% range, yielding $42-44 mil in revenue for full year as it tries to get back on growth track after disastrous production meltdown a few years back threw gears into reverse and ultimately led to new team at top. 

Still, speaking to investors yesterday afternoon, ceo Val Stalowir cited Virgil’s sales pop as harbinger of improvement anticipated as revamped Reed’s line grabs momentum this spring and summer, boosted by aggressive marketing campaign that broke a few days ago.  Among improvements, both have added stevia-sweetened Zero Sugar lines that have gotten good reviews on flavor grounds, and diversified reliance on glass bottles with canned format.  Val said it was too early to discuss prospects for flock of other innovation intro’d a coupla months back at Natural Products Expo West: alcoholic Moscow Mule that will test in SoCal (via Young’s Market) and Pac NW (via Odom), Reed’s Wellness Ginger Beer with Hemp Extract that will test in Pac NW, and Wellness Ginger Shots (BBI, Feb 19 and 27).  As sign of co’s improved prospects under new mgmt team, ValStal reminded, co was able to upgrade to Nasdaq market, move heralded last Fri with bell-ringing ceremony in Times Square.  Co has been funding the new-product and sales & marketing activity by bringing in new capital, most recently netting $14.9 mil via common share offering that was oversubscribed (BBI, Feb 21).

Among new ideas that current mgmt team is bringing is commitment to marketing that never existed in past.  Most ambitious such effort, which broke late last week (BBI, May 10), is dubbed “Ready for Real Ginger,” playing on consumers’ increasing recognition that ginger ale can have restorative benefit in easing inflammation or soothing upset stomach and pointing out that mainstream entries like Canada Dry have no meaningful ginger content, point highlighted during recent settlement of class action suit.  “Ginger is a superfood with many health benefits, but you’ve got to have a material amount for real benefit,” Stalowir said.  Campaign focuses on 5 key markets of NY, Boston, Seattle, LA and San Diego with media mix that ranges from radio to couponing and sampling.

Co also is returning to reliance on DSD distribution, strategy abandoned years back on cost grounds.  Val said co is in talks with range of beer and NA houses in key regions of Southeast, Midwest, South Central and Canada, as well as seeking partners in some international markets.  They occur as co rebuilds retail presence lost during period of extensive out-of-stocks and adds new doors, including placing 7 sku’s in 1,100 Walmart doors and entering 2 Costco regions.  On-premise also is a greater focus, particularly with last year’s addition of more intense ginger beer.  So far this year, co has added 500+ nightclubs to mix, ceo indicated.

Some Doors Open as Others Close in Hemp Biz   As for hemp entry, Stalowir made no bones about uncertainties that abound, but made case that “the only way to learn how to swim is to jump in the water and start swimming.”  Tho hemp/CBD are legal at federal level now, industry is waiting on direction from new FDA commissioner and seeing how things shake out at state level.  Day to day, he said, “it is still a moving target, where it seems more doors are opening in certain regions and then some are closing in other regions.”  In the meantime, REED is approaching distributors and “forward-looking retailers” who tend to be smaller in scale but more receptive to innovation.  Tho segment could some day be huge, co isn’t included meaningful amount of sales in 2019 forecast, Stalowir was careful to note.

Icelandic Glacial is dialing up its retail presence by half with addition of 8K new doors, as growing demand for naturally alkaline water prompts addition of 2d shift at plant in Iceland’s Olfus Springs and possibility that 3d shift will need to be added too. Avalanche of new doors to total of 22-23K is encouraging LA-based co to hold off on its marketing plans until resets have occurred by Jun, ceo Reza Mirza told us in recent conversation. Recall that brand has long boasted minority investment from Anheuser-Busch InBev and national presence in brewer’s blue-chip distribution network, but sometimes seemed to suffer from scant focus accorded to NA brands there, particularly after Monster Energy left fold years back.

 LifeAid Beverage Co has finally deemed the time right to address sugar concerns of its fitness-oriented demo, launching zero-calorie versions of both its core FitAid entry and its creatine-infused FitAid Rx extension targeting Crossfit boxes, gyms and other endemic channels.  New FitAid Zero and FitAid Rx Zero entries, which employ blend of monk fruit and stevia as sweetening agents, went live online today, and is heading into select retailers and gyms.  Co is waiting to gauge reaction on core sku before propagating zero’s among its other sublines, such as LifeAid, ImmunityAid, FocusAid and PartyAid.  Santa Cruz-based co is claiming over $100K in pre-orders for new entries, which are line-priced at $2.99 per 12-oz slim can. 

In conversation this morning, sales vp Dan Leja said co had timed entry strategically to period when it knew it generally wouldn’t make spring resets at its national retail partners, preferring to seed it in its core gym channel, nutrition stores like Vitamin Shoppe, smaller chains and indie stores to gauge performance, including effect on core sku’s.  With several of LifeAid’s other full-calorie entries still in early stages of development, it made sense to wait on launch zero extensions of those, tho formulation work has been completed.  Initial reception has been strong, he said, and some of larger retailers are reaching out to discuss when they can bring in the new items.  He allowed that zero-sugar options may be a bit overdue, considering that many ardent consumers are following ketogenic diets or are in body-building community that’s gravitating to no-sugar bevs, but reminded that co has sought to stay methodical in its growth. 

Launches come as there’s been movement on other fronts in portfolio.  As reported, FocusAid just dialed up caffeine content from 53 mg to 100 mg and repositioning as an “energy blend,” yielding quick uptick in velocity, enough in some cases to pass FitAid.  Of course, this is in broader context of energy category that’s been disrupted by challenger brands like Bang, C4 and Celsius that have origins in nutrition space, a trend that Leja views as beneficial to LifeAid, as emphasis on diet and fitness plays to LifeAid’s origins and strength.  LifeAid’s entries often are shelved near Celsius or, at Walmart, next to C4.  Unlike many of those new entries, all of LifeAid’s products are clean enough to warrant entry into natural retailers like Whole Foods.  Recall that LifeAid launched about 8 years ago within Crossfit community with FitAid sku, which contains BCAAs, turmeric and 45 mg of caffeine from green tea, and has since built out extensive suite of functional items with moderate sweetener levels. 

Meanwhile, in another sign of maturing of 8-year-old brand, it’s finally ready to enlist strong network of DSD partners, starting out west with partners like DBI near NorCal base and Odom in Pac NW and engaging in talks with NIDA alliance of indie distributors in Northeast.  Leja said co intends to be strategic in buildout, targeting key regions as it increasingly penetrates general-market retailers.  Among its newer partners have been likes of Walmart and CVS, with Target and Publix among key partners LifeAid still is seeking to enlist.

Great yarn in Forbes about kombucha pioneer GT Dave seems to break some new ground, revealing discussions with potential acquirers in wake of 2010 category recall, capturing founder’s outspoken view that category may be headed toward Palookaville as rivals dumb down recipes, and offering glimpse of $40 mil new plant (along with Dave’s modernistic, art-filled hilltop home in Beverly Hills) in related video that can be viewed here.  

As story details, over past year Dave has opened $40 mil, 260K-sq-ft plant in industrial suburb of Vernon south of LA that’s capable of producing over 1 mil gals per year.  He’s defiantly sticking to small-batch process of fermenting blend of black and green tea in 5-gal jars for a month, tho as story makes clear, path from that crucial step is highly mechanized, with 200-head, 200-ft-long line filling brand’s trademark 16-oz glass bottles, then moving them on to quartet of robotic arms that fill, stack and move finished cases.  Story estimates co’s sales at $275 mil.

Story offers personal glimpse of Dave, now 41, with home in Beverly Hills, 8 acres in Kauai and contemporary art collection, tho he emphasizes, “I didn’t start making kombucha because I wanted to be rich,” statement it’s hard to question given non-existent state of market when he started in 1995.  At that time, article notes, he was failing classes at Beverly Hills High under influence of moneyed, drug-taking friends, so he got his GED early and decamped, launching GT’s from home from same mother strain that his parents had used for years and that he believes played key role in his mom Laraine’s recovery from breast cancer. 

Article describes GT’s empire as “under siege,” its share down to 40% as army of 350+ kombucha brands invades retail, collectively “slurping” $340 mil in institutional and strategic funding (if that’s counting PepsiCo’s $260 mil takeout of KeVita, that figure may even be low).  Along way, Dave derides Health-Ade, with estimated $50 mil in sales, as “Cherry Berry.  Tropical Punch. . . . They make it basic, make it mainstream.  If your claim to fame is that you’re in amber bottles, or you’re 3 cool hipsters behind this product, and that’s it?  Your days are numbered, in my opinion.”  Pow!  As story notes, he seems particularly aggrieved at category price war that Health-Ade has helped foment.  As for Pepsi-owned KeVita, Dave argues it shouldn’t call itself kombucha because “it uses lab-created probiotic strains, adds a tea flavoring and pumps it full of artificial carbonation.”  He adds:  “If you want [a drink that’s] clear and consistently sparkling with no vinegar flavor, that’s called carbonated flavored water.  You can get it for 99 cents at the thrift store.”  Superkapow!

Story takes Dave at face value in his suggestion that GT’s played no role in alcohol crisis that resulted in 2010 category recall (our own coverage over the years suggested that GT’s was most consistent offender), or that co had any legal vulnerability when it settled for modest sum a trio of class action suits involving alcohol content and health claims.  (“Corporate extortion at its finest,” Dave inveighs.)

Tho he’s adamant that he has no intention of selling out now, GT acknowledges getting deep into discussion with pair of unidentified food cos after 2010, wooed with “roses, champagne, limos to meetings” and promise of boost in distribution and invitation to evangelize for kombucha via TED talk.  “It sounded good, but both deals required him to give up control over his formula.  He passed,” as Forbes summarizes outcome.  Tho he’s committed to forging ahead as indie co, Dave is hedging his bets with lines like Alive drinking vinegar, acquired CocoKefir brand and CocoYo coconut-based yogurt, given his anxiety about where kombucha category is headed.  “This category – that I feel that I was instrumental in allowing it to be what it is – is slowly being killed by all the noise and all the success.  I say that with almost tears in my eyes.  The future for kombucha may not be as bright.”  Or as he says in video, “You’re seeing kombucha trying to become a new-age soda, which is just a sparkling, flavored something.  I’m going to fight that with every fiber in my being because kombucha is the opposite of that.  It’s frustrating.  It’s kind of like watching a world that you created slowly catch on fire and you’re just hoping it’s not just going to torch everything but it does keep me up at night, I must admit.”

Chief Product Officer Canek, a GT’s Vet, Departs Health-Ade after 5-Year Run   Tho GT Dave derides Health-Ade for recipes he believes are too soda-like, his rival in nearby Torrance appears to have stayed equally true to commitment to small-batch production – to point where those who move in dealmaking circles tell us it may be hampering co’s efforts to find exit, whether from minority investor Coca-Cola or other potential acquirer, given inefficiencies inherent in scaling up via thousands of small jars as Health-Ade has been intent on doing.  It’s not clear whether issue has created any internal stresses there, but there’s been recent transition as production chief whom Health-Ade recruited from GT’s, Ramon Canek, recently left, hoisting shingle as consultant under banner RC Consultants, as his LinkedIn profile confirms.  In his 5 years at Health-Ade, Canek said he got new plant in Torrance fully operational in just 8 months, while also helping to create new flavors.  Before joining Health-Ade Canek had spent a decade working at GT Dave’s side.

CSD volume swung from 1.6% decline to 2.6% gain last 4 wks thru May 4 in mid-cycle update of Nielsen all-channel data reported by Morgan Stanley.  Avg prices rose 2.7% vs 4.6% for 12 wks.  Note that Easter holiday is included in this 4-wk period but was not a year ago.  Coca-Cola CSD volume shot up 7.6% (up from +1% for 12 wks) as avg price increase moderated to +1% for 4 wks vs +4.2% for 12 wks.  PepsiCo CSD volume eked out 0.2% gain (vs -2.9% for 12 wks) while avg price increase was cut in half to +2.1% last 4 wks.  Keurig Dr Pepper improved to -0.5% volume trend (vs -3.9% for 12 wks) on still-solid price hike of 5.8% last 4 wks.  Private-label CSDs were down 2.7% on avg price gain of 1.6% last 4 wks. 

Monster Still Sliding on Higher Pricing   Energy drink volume increased 6% last 4 wks on avg price gain of 5% last 4 wks.  That’s just ahead of segment’s 12-wk trends.  Monster Energy volume fell 7.1% (down from -6.4% for 12 wks) on avg price increase of 5.8% last 4 wks.  Red Bull’s volume gain slowed a bit but still rose a solid 5.9% on modest price decrease of 0.3% last 4 wks.  Rockstar volume sagged 18.2% (vs -14.7% for 12 wks) on avg price increase of 4.8% last 4 wks.  PEP energy brands tumbled 9.2%, double its 12-wk decline as avg price increase shot up to +12.5% last 4 wks.  That’s departure from recent months, where Rockstar, which moves mainly thru Pepsi system, has declined at slower pace than PEP’s own brands, notably Amp.

Solid Price Gains Slowed Sports Volume   Sports drink volume went from small gain (+0.3% for 12 wks) to 2.5% decline as avg price increases reached +6.7% last 4 wks.  PEP (Gatorade) volume decrease doubled to -5.1% on avg prices increase of 4.5% last 4 wks.  KO (Powerade) volume down even steeper, off 5.6% (vs -2.9% for 12 wks) on avg price gain of 1.3% for 4 wks.  No data on share-winning Body Armor reported here.

Nestle Water Prices Head Higher  Bottled water volume rose 4.3% (down from +5.1% for 12 wks) on small avg price decrease of 0.3% last 4 wks in all-channel.  Nestle volume dropped 12.9% as its avg price increase went higher to +9.2% last 4 wks.  Coca-Cola water volume was off 3.1%, nearly matching its 12-wk trend, while its avg price increase edged a bit higher to +3.1% for 4 wks.  PepsiCo volume was up 1.3% on avg price gain of 1.5% last 4 wks.  Very similar to its 12-wk trends.  Private-label waters up 16.9% last 4 and 12 wks with avg price cut of around 3%. 

Is chocolate milk due for a further reboot? Pair of Boston-based entrepreneurs are taking Fairlife concept of lactose-free, lower-sugar liquid and repackaging it into somewhat more male- and adult-branded via 11-oz slim cans under brand name Slate, with view to launching in 3 flavors this summer or fall as they get copacking infrastructure in place. They figure using canned format should give items more adult, male tilt while also overcoming increasing skittishness about plastic among consumers and corporate accounts.

 Fever-Tree, which awakened Americans to potential of tonic water with broad range of entries, is turning that expertise to ginger ale side now, extending its Premium Ginger Ale entry with Smoky Ginger Ale, Spiced Orange Ginger Ale and Refreshingly Light version of core sku.  The aim, as Brooklyn-based US marketing dir Amanda Stackman pointed out, is to diversify beyond Fever-Tree’s focus on gin, which accounts for only 6% of premium spirits sales, to the dark spirits like whisky and Cognac that account for 60%.  The new “expressions” (don’t call them flavors) employ same blend of ginger from Ivory Coast, Nigeria and India’s Cochin region as Premium entry and are launching in influencer on-premise accounts like Bar Sardine, PDT, Saxon + Parole and Red Farm in NY and The Anderson in Miami, as well as in gourmet/specialty channel and online via Reserve Bar, at $5.99 per 4-pack of 200-ml glass bottles.  Smoky entry employs Besmoke’s PureSmoke technology to attain liquid that holds its own among dark spirits like whisky, while Spiced Orange employs South African clementines and Sri Lankan steam-distilled cinnamon for ingredient that matches well with aged spirits like cognacs and rums . . . In what seems clear reaction to inroads being made by Body Armor, at time that Gatorade Organic has proved slow starter, PepsiCo is prepping launch this Jul/Aug of Bolt 24, which melds “natural flavors/sweetness, contains less sugar than core Gatorade, and uses watermelon and sea salt for sodium,” per research note last week by RBC’s Nik Modi.  It’s due for launch in c-stores, positioned as “off-the-field hydration,” per Beverage Digest.  Tho details haven’t been released to the trade, new entry would seem to play upon work that indie brands like WTRMLN WTR and Tsamma Watermelon have done in building consumer awareness of watermelon’s hydration properties.  PEP has been claiming strong growth in new Gatorade Zero as it seeks to reignite growth in key franchise brand . . . Grass-fed protein marketer Iconic is incorporating greens benefit in its latest extension, Cacao + Greens, which combines 150 mg of antioxidants from unroasted cacao with 1 serving of organic veggies per bottle.  Like rest of line, item delivers 20 g of protein sourced from grass-fed dairy in New Zealand, but just 1 g of total sugar.  It offers first green tinge to lineup that so far has consisted of Chocolate Truffle, Vanilla Bean, Caffe Latte, Turmeric Ginger and Coconut Matcha entries, packed in 11.5-oz PET bottles, all with just 3 g of sugar.

Bay Area brand is positioned as “artisan iced teas blended with probiotics and kefir water.”  But since that’s a mouthful, The Living Apothecary is going out more directly as Organic Probiotic Tea, as it wrestles with the challenges of being a RTD player in fermented-bev set where brands identified explicitly as kombuchas are making most of the noise, all while building out its self-production capability, assembling its first professional sales and production staff and finally cracking East Coast, more than 6 years in. 

Cofounder Shari Stein Curry, who serves as ceo, detailed various branding and marketing dilemmas of her “six-and-a-half-year-old startup” in call today, as co leverages its first institutional round, $1.4 mil brought in last fall, and preps for next one.  Her cofounder, Traci Hunt, serves as coo. 

The capital round last Oct led by LA Libations and Venice Brands has helped fund some key hires and relocation of fully integrated plant from 6K-sq-ft space in Richmond to 23K-sq-ft space elsewhere in city.  Co has never relied on copackers for complex production process that involves brewing tea and kefir separately, then bottling blended product, and it only reluctantly made transition from glass vessels to stainless steel, thankfully without suffering any quality erosion as once feared, Shari told us today.  Co now is in process of bringing in ancillary gear that by late Aug should enable co to extend shelf life.  Playing a key role in rejiggering things is consultant firm called Red Decimal (see below). 

Tho Stein wouldn’t discuss relationship in detail, one reassuring sign that brand is on right track has been durable presence within Trader Joe’s chain, millennial lure that’s famously tough to crack for branded items.  Among other key customers of Living Apothecary in core West Coast markets have been Nugget Market, Berkeley Bowl and Rainbow Grocery in Bay Area, and Erewhon and more recently Bristol Farms in SoCal.  Brand has tiptoed into Pac NW, in part via Trader Joe’s, and now has gotten toehold in NY via Fairway.  Tho brand has been resolute about not getting too far ahead of itself, “it was time to make a move” into East Coast, Stein said.  It’s employed some DSD along lines of Rock Island in NorCal but so far has bridled at contractual terms required to crack some of bigger refrigerated players.  LA Libations has helped brand crack HEB chain in Tex, like Trader Joe’s a direct-ship account.  It’s also entered some Walmart and Costco stores, and is expanding chainwide thru Vons’ Pavilions banners this month.  Tho glass bottle, refrigerated supply chain and elaborate production process are expensive, Living Apothecary is able to get brand as low as $2.99 at direct-ship accts, while aiming for $3.49 at West Coast accts and $3.99 at East Coast accts moving thru broadline distributors.  Flavors include likes of Hibiscus Apricot, White Tea Lavender, Peach Black Tea and Lemon Black Tea with Tamarind.  They contain 2 bil cfu’s and come in at 35 calories per 13-oz bottle, thanks to combo of lemon juice, cane sugar and monk fruit as sweeteners. Co also has launched keg biz in recent months.  A line of “fruit-based, superfood kefir water” is in the works, co has said.

On staffing side, Living Apothecary has brought aboard as sales leader Marty DeLaat, former Zico exec fresh off a 4-year run at Chameleon Cold-Brew, now owned by Nestle.  As plant mgr, co brought in Michael Spady, from craft beer side at Drake’s and Seismic in NorCal.  It’s also brought aboard Presence Marketing as broker. 

Shari didn’t disguise challenge of finding space for fermented probiotic bev that’s not identified as a kombucha, often settling for just 3-4 facings not at coveted eye-level spots commanded by bigger kombucha brands.  Co recently updated bottle graphics but she conceded it’s a constant work in progress, as co tries to find right route to recognition in cluttered category dominated by kombuchas that often employ opaque production methods.  “No short cuts, no vague ingredients,” Shari likes to remind people.  She’s banking on Living Apothecary’s commitment to quality and transparency sustaining co thru turbulent period where lotsa other probiotic-oriented entries, including kombuchas, have been swinging for the fences via aggressive national expansions.  As some bigger players encounter challenges in finding an exit, she’s banking on those qualities ultimately making Living Apothecary more “acquirable.”

KeVita, Core Vets Offer Facility Design Services under Red Decimal Banner   In view of Living Apothecary cofounder Shari Stein Curry, valuable weapon during plant expansion has been outfit called Red Decimal, whose 3 principals all played instrumental role on production side at KeVita and then Core Nutrition.  KeVita of course sold out to PepsiCo, while Core was recently acquired by Keurig Dr Pepper.  The 3 partners are Nate Patena, who went from setting up high-output KeVita plant using 60-head filler (BBI, Dec 16 2015) to serving as both coo and cfo at Core Water marketer Core Nutrition, along with Jon Ballas (with earlier roles at Neuro, Coco Libre and Sunkist Naturals) and Ben Rush (who earlier enjoyed 17-ride at Anheuser-Busch).  Red Decimal offers range of facility design and corporate development services throughout N Amer.

Reed’s Ginger Brew is continuing its pr assault on Canada Dry ahead of Mother’s Day, arming retro-attired women with signs declaiming, “Canada Dry Fooled Your Mom – Try Reed’s for Real Ginger.” It’s part of multi-city effort set for NY, Boston, Seattle, San Diego and LA that builds off Canada Dry’s settlement of class action suit in which co essentially acknowledged there’s no meaningful amount of ginger in its ginger ales positioned as “made from real ginger” and agreed to drop that slogan (BBI, Feb 27). Canada Dry owner Keurig Dr Pepper has rattled legal sabers vs Reed’s but apparently not pursued matter since being rebuffed by LA-based indie altsoda marketer, but that could change as Reed’s turns it into broad-based summer campaign. BBI encountered NY effort by chance today at edge of Madison Square Park, where marketing chief Phil Trotman said it’s part of effort that includes outdoor and digital media elements, including hourlong presence on 14 electronic screens in Times Square late this afternoon as co celebrates its ascension to Nasdaq, which is based there. Buys on Sirius XM and Hulu also are in media mix. Co also will be activating groceries, sending in blitz armies to reset shelves and distribute samples . . . Having newly entered oatmilk fray with brand called Planet Oat, HP Hood has been seeking to get word out via popup stores in Boston, LA and Portland, Ore, staffers said at Well Now healthy-food event last night at NY’s Metropolitan Pavilion event space. Dubbed “Planet Oatariums,” stores feature baristas dispensing coffee confections and baked goods under dome on which are projected constellations. After brief run in Boston, concept heads to Portland next weekend and then on to LA at end of month. Meanwhile, co also is planning push into coffee channel, where product shortages of often-preferred Oatly brand have encouraged entry by range of new players from Califia Farms to Elmhurt Dairy. Planet Oat is out in 52-oz gabletop cartons in Original, Extra Creamy, Vanilla and Dark Chocolate flavors priced at $3.99. They run 90-140 calories per cup.

 Acquisition of Dogfish Head Brewing by Boston Beer has been making lotsa waves since formal announcement yesterday afternoon, with observers noting that deal unites two uncommonly pathbreaking beer innovators who once vied in arms race on alcohol levels in beer and have pioneered use in craft beer of ingredients like cranberries and grains of paradise (Boston Beer) and acai and dust from lunar meteorites (Dogfish Head).  Key focus of future collaboration mentioned several times in deal announcement is “beyond beer,” area where Boston Beer in particular has been aggressive in building big franchises of cider, hard seltzer and alcoholic iced tea, while nurturing newer experiments in hard kombucha, artisanal hard tea and post-workout beer.  By contrast, Dogfish Head’s wild experiments with oddities like palo santo wood and bottle-conditioned malt liquor called Liquor de Malt have occurred mainly within definition of beer, tho it was among first brewers to launch parallel distilling arm.  Still, Boston Beer cofounder/ceo Jim Koch said this morning that putting 2 innovative brewing teams under one corporate roof insured that “we’re going to get some magic.”  He particularly heralded Dogfish Head founder Sam Calagione’s bent toward incorporating culinary ingredients in his beers as inspiring fresh thinking around beyond-beer forays.

Koch and Calagione were speaking in compact brewhouse of Birreria, rooftop brewery erected at Eataly outpost in NY’s Flatiron District a few years ago by Dogfish Head with pair of Italian partners.  (It would have made more sense for pair to have done event yesterday at time of announcement, but Koch insisted on keeping prior commitment to appear at Mellow Mushroom pizza joint, reflecting customer-first priority that Calagione said he’s always respected in rival.)

Lurking quietly on fringes was Boston Beer ceo Dave Burwick, longtime PepsiCo exec who joined a year ago after 5-year run at Peet’s Coffee, where he expanded RTD array under Peet’s and Stumptown brands and orchestrated investments in Revive Kombucha and Forto Coffee Shots.  We sought him out for perspective at time that beer and NA bevs increasingly are blurring.  Since Burwick arrived, Boston Beer has been on alt-beer blitz, launching hard kombucha under Tura brand name, more artisanal alternative to its Twisted Tea brand under Wild Leaf name and beer-as-hydration entry called 26.2 Brew, named for length of marathon run. 

In Burwick’s view, fast growth in Twisted Tea and Truly Seltzer is supporting overall biz enough for it to proceed slowly with some of its more alternative entries.  “Unlike hard seltzer, it can be a slow burn rather than a big boom out the gate,” he said.  So Tura Hard Kombucha so far has launched only in presumed kombucha hotbed Southern Calif, where Dave said he’s been amazed to observe how many people still don’t know what kombucha is.  Wild Leaf, meanwhile, has stuck to a dozen Northeast and Central states with higher proportions of non-chain retail accounts, serving as less sweetened and caloric alternative to Twisted Tea franchise that he compared to Mtn Dew (a brand he once marketed at Pepsi).  Boston Beer is also proceeding slowly with 26.2 Brew, 4% ABV entry that contains only 120 calories and is marketed as post-run refresher, along lines of other beers like alc Sufferfest (recently acquired by Sierra Nevada) and non-alc Athletic Beer (profiled here yesterday).  It’s national now, but co is looking to “build it the right way,” Dave said, getting involved in running clubs, Boston Athletic Assn and other endemic groups.  Interestingly, Burwick remains skeptical of non-alc beer segment, despite big push being undertaken by rival brewers, drawing on his NA bev experience to note that, while Europe has strong beer culture, it has relatively underdeveloped NA bevs, meaning beers are more likely to be accepted there for occasions that in US can be filled by increasingly rich repertoire of innovative NA brands.