Dear Client: 

The latest big craft entrant into non-alc beer? That would be Lagunitas. Come this December, they’ll start to roll IPNA, a non-alcoholic version of their iconic flagship IPA, at under 100 calories. 

Citrusy, piney and dank like the original, IPNA is dry-hopped with the same Citra and Columbus hops from Lagunitas’ Yakima Valley farmer partners. 

It’s hard to quantify just how big non-alc beer is currently in the U.S., as some of it goes through the direct to consumer channel. Last we checked, per IRI, it was a mere 489,900 barrels, roughly, the 52 weeks to 8/30. That’s about the size of Bell’s Brewing Co.. 

But it stands to get a lot bigger as companies like Athletic Brewing Co. continue to grow and build out capacity, and big craft brewers, like Brooklyn Brewery and most recently, The Boston Beer Co., jump into the space. They are taking on one of the central barriers to category growth: Quality.   

New Lagunitas chief Dennis Peek, now in the captain’s seat for six months, explained the proposition. 

IPNA will start rolling in December, in bottles, line priced with Lagunitas IPA. (Why bottles? They think it’s a bit more premium.) 

“The sky is the limit, we believe, with non-alc beers,” Dennis told CBD. 

Indeed: “we believe it can become 10% of our flagship IPA [volume] in the next few years. We are going national, based on the feedback of our distributor network,” which has been “very enthusiastic” about their launch at year’s end, in time for Dry January.  

And in fact, Dennis thinks other big players’ entry into the category is a great thing. 

And so he believes it’s “the right moment to step in,” with “multiple players” and their “big budgets” making their own splashes, but also upping the ante on quality. 

WHY? The IPA style of beer is now about 5.5% of the overall beer category. With Lagunitas’ stated mission to “have an IPA for everyone, everywhere, at every time,” says Dennis, non-alc IPA is a necessary play. 

But it’s also a natural play for Lagunitas: Obviously, with Lagunitas IPA, the company has the top IPA brand sold in tracked channels. And it’s up more than 20% YTD.

Beyond that, however, Dennis points out that they already have the top craft non-alc brand in Hoppy Refresher, their non-alcoholic hopped water. It’s up 130% in Nielsen YTD (FDCM+ through 8/29/20). The 4 pack is also no. 1 non-alc craft SKU.

These types of beverages are growing not just because they serve new occasions for beer drinkers, but also, because about 30% of U.S. adults don’t drink alcohol. 

Distributors and retailers are excited about the product, says Dennis, because it’s very incremental, both on the trucks and in the store. And it’s all about premiumization.  

WHAT IS IT? Lagunitas “Brewmonster” Jeremy Marshall explained the genesis of IPNA, which evolved over the last couple of years. 

It actually started with Hoppy Refresher.

The back story there: When Jeremy’s wife was pregnant years ago, he bought her a six-pack of non-alcoholic beer. 

Five bottles remain. 

“I will pass those down to my son, who will pass those down to my grandkid,” Jeremy says (jokes?). “I feel like that’s really a sad story for beer.” 

“So we developed Hoppy Refresher as a reaction to how bad a lot of that macro, non-alc lager was.” He admits “it sounded like a joke: It’s just dry-hopped water.” But: “We dry-hop everything at Lagunitas, so why not?” 

Those who pay attention to cannabis know that Lagunitas also has a successful non-alc beverage in that space, dubbed Hi-Fi Hops. 

Hoppy Refresher was “very much the launch pad” of that brand, too. 

But then, “we wanted to continue that conversation into something that was a little more beer like.” Coming up with the brand was “as natural as just adding a letter.” 

Of course, their own process of making non-alc beer involves “different technology than what you’d normally find.”

A lot of methods involve more or less cooking the alcohol — and unfortunately the hops — out of the beer.  

“So what we want, is all the pleasure but none of the guilt,” says Jeremy. But in this case, “the pleasure isn’t the booze, it’s the hops.” They basically replace what’s lost in removing the alcohol, with hops. 

Because they’re after their own IPA drinker with IPNA. 

“We really, really want the same people to be able to experience what they like about our beer in the IPNA,” says Jeremy. “The fresh hop character is so important.

“The way to get that … involved a lot of out-of-the box thinking. It almost meant keeping Germans as far away as possible. We had to go about it very much as emotional Americans.”  

WHERE WILL IT GO? But from where on the shelf will IPNA beckon?  

We often see even some of the fastest-growing non-alc brands shoved in a little bottom row of the cold box’s end. 

But where possible, says Dennis, they want this one next to their flagship, in the fridge. 

It’s incremental, so it can pump up basket sizes. It’s better for the beer’s hop character. And, of course, it creates a halo effect. 

“So our priority is in the fridge,” says Dennis, but they also want to be in the non-alc section. “It’s a dual play.”   

More from Dennis on his six months at the helm of Lagunitas later this week. 

HEAVY SEAS LAUNCHES LOW-CALORIE HAZY IPA

You would think this is a health rag. 

Not only are we seeing plenty of non-alc brews belly flop into the beer pool, but for those who still like a little booze, low-cal options continue to abound — especially for IPA.  

The latest: Maryland-based Heavy Seas Beer announced the release of its City Sipper Low Cal IPA. The hazy IPA will be available in 4-packs of 16 oz. cans through a curbside can release from September 25-27.

The 4% ABV, 95-calorie beer is made with “malted and flaked oats, torrified and malted wheat, Sabro, Citra, and Simco Cryo Lupulin Powder hops, along with just the right amount of fresh Key Lime Juice,” according to brewmaster Christopher Leonard.

“We’re really fortunate to have so many opportunities to develop new, interesting, unique beers in our 15 Barrel Brewhouse,” said Christopher. “City Sipper Low Cal IPA was a true test of our ability to employ non-traditional brewing techniques and ingredients to create a truly enjoyable, flavorful experience.” 

City Sipper can artwork is by Chris Gipple of Nightshift Creative out of Baltimore. Chris will also design all taproom exclusive beer labels for the company in 2020.

BEER BRIEFS:

NEW HOLLAND TO RELEASE UPDATED DRAGON’S MILK RESERVE. New Holland Brewing Co. will be releasing an updated Dragon’s Milk Reserve, reports Snews. The new bottling will be available starting October 1 as part of a limited release. It will be available in 4-packs of 12 oz. bottles at select retail locations as well as on tap at New Holland’s pubs in Michigan. The new bottling pairs the Dragon’s Milk Bourbon Barrel-Aged Stout with vanilla and chai spices, “a modernized throwback to the 2016 blend aptly named Vanilla Chai.”

BREWPIC: Lagunitas IPNA, hitting retailers before a Dry January near you. 

Until tomorrow,

Harry, Jenn and Jordan

“Save a little money each month and at the end of the year you’ll be surprised at how little you have.” – Ernest Haskins

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