Thought I would share a bit of beer insider press. It carries some industry jargon and viewpoint but I hope you will find it interesting. This article appeared in today’s Craft Business Daily. To Jenn Litz, thanks for the coverage; it’s much appreciated. Hope you do not mind my sharing. ;-)
August 11, 2014
Deeper Home Roots Changing Terrapin’s Chain Business, Route to Market
Dear Client:
Growth of course has spurred changes for Georgia’s Terrapin, one of the premier hop-centric craft producers of the Southeast. They’re up 46% YTD, sales and marketing chief Dustin Watts recently shared. Much of that growth is coming from the seeming unending wellspring of their backyard: Atlanta, where they’re with United Distributors, is up 57%.
“In order for us to be great long-term, we gotta win the backyard,” said Dustin. “That starts in Athens,” their home-home market, where they are up 42% with Northeast Sales Distributing. That’s not on a small base: that market is at about 18% of their planned 47,000 barrel output for 2014.
It’s also making them reconsider their to-market plans in unopened territories. After some great openings with Premium in DC last November and New Orleans/Baton Rouge with Crescent Crown in January, they had plans to open Kentucky and Ohio, which they’re “still heavily pursuing.”
“By no means are we pumping the breaks” for the new markets, said Dustin. But they may readjust how they plant the seeds there. That could involve more phased, 4-6 month launches, instead of hitting entire states at once. “We don’t want to come into a market and just kinda blow it up real quick, with beer everywhere; we want a slow approach, draft approach first … in 2,3,5,10 years, there will be the opportunity to grow the root deeper.”
KROGER FIRSTS. Indeed, as breweries hit those high growth numbers in their backyards, they must not only prioritize markets but also channels. As Terrapin has grown the depth of their backyard roots, they’ve hit a first with their local chain business: With Recreation Ale, they’ve had the No. 1 craft can package in the Kroger Atlanta RNA for the last 26-, 13- and 4-week periods.
“Our company has never had a win like that. That’s a big deal, said Dustin. “And it’s a growing segment.”
But it’s a win they’ve been preparing for, having moved one of their regional sales managers into a chain director role at the year’s outset. They’ve since seen great growth in chain grocery and upper-end c-stores. That “definitely takes time, and building relationships,” said Dustin. But it also takes “understanding that arena, ’cause it’s definitely different. But we’ve seen a lot of great success. The Kroger company has definitely embraced a lot of what we’ve been doing, especially in the state of Georgia.”
Good news for Terrapin — but also a sign of the times, where chain stores will become increasingly competitive for the craft segment. We can’t tell you how many brewers — some even smaller than regional size — have told us they’re doubling down on chain this year.
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