New Boulevard Beverage Company Debuts Spirits-Based RTDs

Dear Client:

Boulevard Brewing Company, a well-known Midwestern brewer of established brands like Tank 7 and Boulevard Wheat, is getting into something completely different: A suite of spirits-based RTD canned cocktails, for which they’re partnering with (mostly) local distillers. They’re starting a new company, dubbed Boulevard Beverage Company, to do it.

The RTDs are called Fling Craft Cocktails, but Boulevard brass says these are just the first in a line of non-beer innovations for the new company, if all goes well.

“All natural” Fling comes in four “low-cal, low-carb varieties,” per announcement, to include a Blood Orange Vodka Soda, a Cucumber Lime Gin and Tonic, a Margarita, and a Mai Tai. They come in 4 packs of 12 oz. regular cans. Because they are spirits-based, for which excise taxes are higher, they’re targeting somewhere around a $12.99 PTC in most markets.

Only the vodka soda has a calorie callout on package, at 100 calories and 2.4g carbs. The other drinks contain 180-200 cals and 7-9g carbs; so not that low cal or carb, but you do get a decent bang for your buck: While the vodka soda is 5%, the others are 7%-8% ABV.

The creation of the flavors has been primarily done at Boulevard, said VP marketing, Natalie Gershon. But, again, the spirits were outsourced.

“For our Blood Orange Vodka Soda, we partnered with 360 Vodka; our Cucumber Lime g&t, we worked with Restless Spirits Builder’s Botanical gin,” said Natalie. “And then for our margarita, there’s a small company called Mean Mule Distilling, who makes an American agave spirit.” The Mai Tai utilizes a rum brand from the Virgin Islands.

Though the spirits come from other companies, Duvel Moortgat USA and Boulevard chief Jeff Krum says they are sourcing all the ingredients, blending and packaging them at the brewery. Boulevard Beverages will share a sales force with the brewery as well, at least for now. And these brands will go through Boulevard distributors (so long as they are equipped to sell spirits).

Which begs the question: Why make it a separate entity? “It’s a separate company, but it’s really just a subsidiary of the brewery,” Jeff said. “The main reason we did it was just to try to eliminate confusion, and to draw a bit of a line between our basic, primary beer business and non-beer business.”

Recall that Boulevard is part of Duvel Moortgat USA, which also includes Firestone Walker and Brewery Ommegang. Asked if either of those brewery partners were in on this new company, Jeff said not at the moment. “But they are watching with interest.”

Fling will debut at Kauffman Stadium for the Kansas City Royals’ opening day on March 28. Regional distribution will follow the next month, with national expansion slated “throughout 2019.”

As we heard during the recent Cutwater Spirits A-B announcement [see CBD 02-20-2019], venues will be a big potential target channel for the RTDs.

Natalie said they’re “looking at relationships with just about every concert venue,” and added that they have a lot of opportunity to leverage this product in places where “speed beats accuracy” in the mixing of cocktails.

Besides that, it’s a predominantly off-premise play, says Jeff. But all the natural can plays — “stadiums, sporting venues, concert venues, golf courses, swimming pools” — are on the table.

We wondered whether they’d posted projections yet for this new arm. If they have, they aren’t sharing. “To be honest, our expectations from a budgeting standpoint are quite modest,” Jeff told CBD. “But our hope and dream and anticipation is pretty expansive. We view this all as incremental to ourselves and wholesalers.”

He’s not sure what their next offering will be outside of Fling. They’re “starting to kick the tires” but there probably won’t be anything new in the next six months.

“We hope in year or two to have another, what we think is another great idea,” said Jeff. “I can probably tell you what it won’t be: We’re not interested in jumping into a space that’s already got dozens of well-capitalized competitors that are producing a variety of really good offerings. So we’re not likely to jump into hard seltzer.”

WHAT ABOUT BOULEVARD? Of course, we also had to ask about recent Boulevard trends, as broader context of the new beverage innovations.

Jeff said the brewer ended last year at about 160,000 barrels, in 41 states. They are not in a rush to fill out the last nine.

“We’ve been in the same boat as so many of our well-established, larger colleagues that’ve been around for decades, and have flagship brands that are hitting headwinds of a declining beer category,” and so many new brewery openings.

So: “Last year, our volume was off single digits; our revenue was better, because of mix shift and the fact that we’re not participating in a race to the bottom on pricing.”

But he offered a whisper of even more exciting news to come.

“Even aside from Boulevard Beverage Company and Fling, we’re almost to a person more optimistic for 2019 than we have been for several years,” said Jeff, “because of a lot of really cool things happening, outside this particular announcement, some which we’ll be unveiling in coming weeks.”

Stay tuned.

BEER BRIEFS:

LEFT HAND HITS 42nd STATE, NEBRASKA. Colorado’s Left Hand Brewing Company will team up with Premier-Midwest Beverage Company (a MillerCoors house) to bring its brews to Nebraska next month. Premier-Midwest will begin to distribute an array of products from Left Hand, including flagship brew Milk Stout Nitro, in Omaha, Lincoln, and Grand Island markets next month. The entrance into the Cornhusker State brings Left Hand’s distribution footprint to 42 states.

Addendum: To be clear on yesterday’s announcement that Saint Archer Gold is now imminent for test markets (which we first identified back in September), it was never supposed to roll sooner than March 1. However, we understand that MillerCoors did move up the Arizona entry to sample it at the Waste Management Open, “and some distributors started selling it a bit earlier to seed in independents because there is a lot of excitement for it,” per comms chief Pete Marino.

Until tomorrow,

Jenn, Jordan, and Harry
“It is better to know some of the questions than all of the answers.”

  • James Thurber

———- Sell Day Calendar ———-
Today’s Sell Day: 20
Sell days this month: 20
Sell days this month last year: 20
This month ends on a: Thurs.
This month last year ended on a: Wed.
YTD sell days Over/Under: +1