Fresh Squeezed IPA and Fresh Haze IPA, side-by-side on the shelf.
Deschutes VP of sales and marketing Neal Stewart made the ask no fewer than 22 times on Wednesday during the Bend, Oregon-headquartered craft brewery’s distributor summit.
“The No. 1 obvious opportunity that is in front of us is building Fresh Squeezed and Fresh Haze, side by side,” he said. “That’s our mantra this year.”
Stewart added that the secret to selling more Fresh Squeezed IPA is to sell Fresh Haze alongside it.
“In chains, when Fresh Squeezed and Fresh Haze are side-by-side, we see an increase in velocity,” he explained.
Instead of cannibalizing each other, the two IPA brands push each other’s rate-of-sale up. Fresh Haze’s rate-of-sale increases 8% in chains when it’s added next to Fresh Squeezed, while Fresh Squeezed’s rate-of-sale increases 26%.
“That’s a massive velocity increase,” he said.
In the independent channel, both brands increase in velocity 30% when they’re placed next to each other on the shelf, Stewart said.
“That’s an amazing statistic, and that outlines very clearly the opportunity that we see with these two brands,” he said. “Getting distribution is the first step and velocity will follow.”
If Fresh Haze is added to the existing distribution of Fresh Squeezed, “that has an opportunity of 353,000 cases on an annual basis,” Stewart said. On the flip side, adding Fresh Squeezed where Fresh Haze is sold is a 238,000 case opportunity annually, Stewart said.
“Just by getting the distribution, taking existing gaps where we have one brand and not the other, adds up to over a half a million cases of opportunity,” he said. “Massive, massive opportunity for us.”
Citing year-to-date Nielsen data through August 8, Stewart noted that dollar sales of Fresh Haze and Fresh Squeezed are up double digits in off-premise retailers. They are among the top 30 best selling IPA brands and top 15 IPA 6-pack can SKUs. Fresh Haze 6-pack cans are also Deschutes’ top-selling SKU in scan data, a top 10 hazy growth brand and a top 25 total IPA growth brand.
“There’s a huge opportunity in front of us,” Stewart said.
In addition to its top IPA brands, Deschutes’ focus is on Black Butte Porter, which Stewart reminded wholesalers is “America’s best selling porter” and available in just 32 states.
“It’s No. 1 by far,” he said. “It’s bigger than the number two, and the number of three player players combined.”
The focus on those three offerings is part of Deschutes’ revised “flagship four” philosophy, which pivots to a flagship three plus one strategy in which the focus is on Fresh Squeezed, Fresh Haze, Black Butte Porter and one additional brand that wholesalers choose on a quarterly basis. That could be variety packs, Royal Fresh imperial IPA, Mirror Pond Pale Ale, Lil’ Squeezy Juicy Pale, Wowza or seasonal offerings.
“We’re getting focused on fewer brands that really drive our business,” Stewart said.
What that means for the future is Deschutes will avoid so-called “distractions” and “get off the innovation treadmill,” Stewart said.
“We can’t constantly look at innovation as filling the losses on a yearly basis,” he said. “So if we’re going to lose X number of barrels, from our core brands in a given year, we can’t say that we’re going to rely on innovation to fill that year after year. It just doesn’t work; it’s not sustainable. We have to be in the business of building brands.
“So just to be clear, we will still innovate, we’re just going to do it differently, we’re going to be more methodical about it. We’re going to be slower; we’re going to prove ourselves, rather than launching something on a grand scale and expecting it to fill that volume.”
As such, Deschutes’ big 2020 innovation play Modified Theory — an FMB that doubles as a mixer — is going on hiatus with no plans to sell the product in 2021.
“It’s not only not a priority, but it’s not going to be a brand that we’re selling next year,” Stewart said. “That quite honestly was a distraction for us.”
Speaking of distractions, Deschutes will not launch a hard seltzer in the near future.
“Does that mean that we’ll never launch seltzer? I’m not gonna say that, but I can tell you that we do not have any plans to launch anything within that space for the rest of this year or 2021,” he said. “We are 100% focused on our beer business, Fresh Squeezed and Fresh Haze.”
One thing that will be a focus for Deschutes will be 12-packs. In fact, Stewart called 2021 “the year of the 12-pack.” He admitted that the company under indexes on 12-packs from both distribution and volume standpoints, but the company will look to turn that around, starting with Fresh Squeezed and Fresh Haze 12-packs.
Currently, Deschutes’ category weight of distribution for its variety pack is 4.48%. If the company’s wholesalers matched that for Fresh Squeezed and Fresh Haze 12-packs, it would amount to 100,000 case equivalents for each brand.
As part of the “year of the 12-pack,” Deschutes is launching a variety can 12-pack, featuring Fresh Squeezed IPA, Lil’ Squeezy Juicy Pale, Black Butte Porter and a new West Coast-style IPA, Squeezy Rider. However, Black Butte Porter won’t be launching in standalone 6- or 12-packs in the Pacific Northwest.
“That’ll make that [variety] package very desirable,” Stewart said.
Seasonal 12-packs will also shift from glass to cans, starting with Neon Daydream hazy ale in the spring reset period.
“We think it’s a massive opportunity,” Stewart said.
After getting off to a slow start this year with Luna Jo Coffee Lager, Deschutes’ seasonal business picked up with Neon Daydream hazy ale and then Chainbreaker White IPA, leading to a smooth transition to Jubelale, which will begin shipping in a couple of weeks. Deschutes’ 2021 seasonal lineup will include the return of Red Chair NWPA in January, followed by Neon Daydream, and Twilight Golden Ale before going back to Jubelale.
Deschutes is also undergoing a slight packaging refresh, Deschutes marketing directory Stacey Payne shared.
In addition to slightly tweaked packaging for the Fresh family of beers, the 32-year-old brand is embracing consumers’ hunger for nostalgia with throwback packaging for its Black Butte Porter, Mirror Pond Pale Ale, Obsidian Stout and Inversion IPA offerings, which will launch around spring resets.
Deschutes is further leaning into partnerships in the Pacific Northwest.
Rip City Lager, Deschutes’ collaboration with the Portland Trail Blazers, sold out its first 500 cases within the first 36 hours of hitting store shelves. The next 700 cases were allocated within 24 hours.
In addition to partnerships with the Blazers, Deschutes will be partnering with Seattle’s athletic wear brand Brooks in 2021 for the launch of a Deschutes branded shoe in August 2021, Payne revealed. The shoe will receive a lot of promotion from both companies.
Finally, Deschutes has redesigned its website with a focus on e-commerce, and icons that drive consumers to online alcohol marketplace Drizly.