Surly, the 34th Largest BA Craft Brewer, Just Now Hitting 6 Packs
How did Minnesota’s Surly Brewing Co. jump from 39 to 34 on the most recent Top 50 Craft Brewers list?
It wasn’t new markets. We caught up with Bill Manley, now the brewer’s VP of Marketing, who came over from Sierra Nevada at the beginning of last year (where he’d spent about a decade).
He told us their jump may have had a bit to do with other brewers’ consolidation.
It wasn’t just that.
Bill conceded: “we’re just being a little bit smarter about how we’re producing beer.” Now they’re forecasting to sales better: “producing on demand, more in line with what we’re gonna sell.” Variety packs have driven growth, too, as have 12 packs of 12-oz. cans.
They finished 2018 up close to 6%, and Bill is grateful for the trend.
“Looking at all the other regional breweries, [with many] flat to down, minus a couple anomalies … those double digit, triple digits growth days are probably behind us,” he said.
Surly is only in eight states, and Minnesota is about 80% of their sales, mostly via Twin Cities metro.
This year they’re “just flirting” with 100,000 barrels; they’ll brew about that much and ship something like 95,000-97,000 barrels this year. The other 5,000 or so will go through their own premises. At their destination brewery in Minneapolis, which has a beer hall and pizzeria, they average about 480,000 guests per year.
“We’ve got a fairly conservative forecast for this year,” Bill says. They hope to finish 2019 up about 2.5%. “That’s a comfortable number,” he says, and they “don’t have to invest in too much more infrastructure.”
Thinking about cap ex projects is “not really viable at the moment,” in this climate.
“We’ll probably top out at 125,000 [barrels] with our current infrastructure,” said Bill. “So we’ve got a few years of room to grow, at a slow and steady pace. That’s probably gonna last us for a little bit here.”
So, no new markets then?
“Well… I’m not sure yet,” says Bill. For now, they’re seeding some markets, like New York, Northern California and Nevada, with Brew Pipeline [see CBD 04-01-2019].They could follow that with more high-spotting East Coast and Pac Northwest distribution through this Brew Pipeline model, mostly just with their flagship, Furious. Recall, this model “pulses” some brands in and out of markets briefly in narrowly targeted craft retail outlets.
BIG PLANS IN 2019. Surly’s biggest news this year has been 6 pack 12 oz. cans.
Sounds crazy, for such a staple package.
But “for us, that’s sort of a big deal,” says Bill.
He points out that Minnesota is sort of an anomaly, where “a 4-pack of 16 oz. cans is still pretty much the principal format here in the state. A lot of that has to do with Surly; we’ve always kinda done it that way.” In fact, he says even some giant light beer brands sell 16 oz. 4-pack cans in the market.
Surly’s 6-packs are helping their chain business in some of their outside markets, like Wisconsin, Iowa and Illinois.
BIG PACKAGING CHANGES COMING NEXT YEAR. For 2020, big moves include a brand refresh and “new brand guidelines and standards that will roll out to wholesalers this fall.”
“We think [that] will help us get [our] message out into the world,” says Bill. “We haven’t done a really big package refresh for quite some time now.
“I think we’re kinda firing on all cylinders to get where we need to be.”
HOT TOPICS. We had to wonder: Any seltzers in their sights?
That “feels a little off” for their brand, says Bill. Not that they don’t do low ABV brews: One promising low-alcohol offering they released this year is called Grapefruit Supreme, a 4.5% “crusher of a beer,” that’s been driving their variety pack sales for Q2 (in fact, Q2/3 is where they do the vast majority of sales), and will get its own small run next month. It will likely return next year as well.
What of their state of the union as a company? Surly had announced the search for a COO a couple of years ago, but Bill says they decided they don’t need one.
“[We] spent a lot of time last year restructuring our corporate culture and management structure; moved a lot of people around,” he says, and have a “really strong leadership team now” that are “really involved in all aspects of day-to-day.” Bill believes they have a “really nice team together, and feels “really good about where our future is.”
“We have state of the union conversations pretty often,” he says.
LEFT HAND OPENS ITS 43rd STATE: SOUTH DAKOTA. Left Hand Brewing Company has partnered with Dakota Beverage to bring its year-round and seasonal lineup of beers to South Dakota this month. The rollout in South Dakota brings the Colorado-based brewer’s footprint to 43 states.
CBMTRA REACHES 50% SUPPORT IN U.S. SENATE WITH 51 CO-SPONSORS, the Brewers Association announced today. Recall, the legislation, enacted into law in December 2017, was reintroduced in February; the current legislation providing for some excise tax relief is set to expire at the end of this year; the reintroduced bill seeks to make the current federal excise rate language more permanent. “With 28 Democrats, 22 Republicans and one Independent as co-sponsors in the Senate, and 86 Republicans and 70 Democrats in the House, support for the bill demonstrates the immense impact the federal excise tax has had on America’s small and independent brewing industry, empowering these small businesses in an extraordinary way,” said BA chief Bob Pease.
Jenn, Jordan, and Harry
“It is amazing what you can accomplish if you do not care who gets the credit.” – Harry S Truman
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