Firestone Walker Brewing Company is sailing into 2022 “with the wind at our back,” co-founder David Walker said in an intro video to the company’s annual business plan presentation, streamed virtually to distributor and retailer partners late last month.
Current projections place the Paso Robles, California-headquartered craft brewery finishing 2021 up about +20%, Walker said, despite the continued challenges of the pandemic.
“Pandemic, pandemonium, pain in the ass, whatever you want to call it — it’s been real for the last 18 months, I think you’ll agree,” Walker said. “I don’t think it’s an exaggeration to say that this has probably been the most disruptive time for the beer business since Prohibition.
“The fact that all of the pubs in the land were shuttered for an extended period of time is extraordinary,” he continued. “What’s even more fascinating is the beer business has continued to thrive.”
Year-to-date through early September, off-premise dollar sales of the Firestone Walker portfolio have increased +1.9%, to $83.5 million, compared to the same period last year, according to market research firm IRI. This does not include on-premise sales, which chief marketing officer Dustin Hinz said accounted for about 30% of the company’s business at the time bars and restaurants shuttered nationwide in March 2020. That shift brought about some fundamental changes to the company’s strategy, such as a focus on chain business and more variety packs.
“We lost 30% of our business overnight when COVID hit, and everything shut down, so we had to get stronger on the chain side and the team just absolutely shone,” Hinz said.
“They crushed it,” chief sales officer David Macon added, pointing out that the chain team secured 14,000 new points of distribution this year, a company record.
Following that insight, Firestone Walker is introducing several variety packs for fall resets and 2022 across several of its brand platforms, including the Mind Haze Tropical Hazy Mixed Pack, the Firestone Walker IPA Mixed 24 Pack and two variety pack offerings from the recently acquired Cali Squeeze brand, a fruited hefeweizen variety pack and a hard seltzer variety pack.
“Our trends on mixed packs have been nothing short of amazing,” Macon said.
In 2021, the Firestone Walker brand family has lost share in just one of its key markets (Colorado) and only by -0.01 sharepoints, according to NielsenIQ data Macon and Hinz referenced. The brand family posted its largest share gain (+1.72 sharepoints) among all craft beer in Nevada, followed by +1.43 sharepoints among all craft beer in Arizona. In Arizona, dollar sales have increased +22.9% year-to-date over 2020, and +99.7% over 2019.
“With the exception of a slight share loss in Colorado, you’ll see we gained share three successive years,” Macon said. “As we’ve been cycling the pandemic year of 2020, all year long, we have not only gained share, we’re gobbling share. And I think that just speaks volumes about our health and some of our most important markets.”
Hinz pointed to the company’s “really aggressive” stance on innovation and marketing, such as the launch of 805 Cereza, and a willingness to “trim some fat” during the pandemic, discontinuing better-for-you IPA Flyjack.
Macon estimated that the company’s on-premise business is about 65% recovered to 2019 levels.
“It’s come a long way but due to staffing issues across the board resulting in shortened hours/more days closed, it’s been stalled out a bit,” he told Brewbound. “Still have a ways to go before we can say ‘mission accomplished.’”
Two Different Consumer Bases
Firestone Walker views its drinkers as falling into two camps: Firestone Walker drinkers, and drinkers of 805, the brand family that includes 805 Blonde Ale and 805 Cerveza.
“One of the things you’ll see between 805 and Firestone is distinctly different drinkers, which is good for us because that means we can continue to diversify our portfolio,” Hinz said. “It also means that we have to keep them pretty separate when we’re telling those stories and we’re merchandising.”
805 drinkers skew younger, slightly more female and more diverse than the older, male-leaning and whiter Firestone Walker drinkers.
The company views the 805 platform as a way to target premium domestic and import drinkers between the ages of 25 and 44, whereas the Firestone Walker platform targets craft drinkers between 25- and 55-years-old. With the Mind Haze family of hazy IPAs, Firestone Walker is targeting new and existing craft drinkers between the ages of 21 and 45. Cali Squeeze, which the company acquired from SLO Brewing in April, aims to recruit drinkers aged 21 to35 who drink fruited beer, hard seltzer, kombucha, hard lemonade, and ready-to-drink canned cocktails.
“Cali Squeeze is the tip of the spear for us, huge acquisitional brand — it’s about flavor,” Hinz said. “805 is right behind it. It’s a lifestyle beer brand. It’s attracting a lot of young drinkers. And then Mind Haze and Firestone are other great portfolios for us to invest into.”
Cali Squeeze drinkers are evenly split between men and women, while the other brand platforms lean more male to varying degrees — 805 is 65% male, 35% female; Mind Haze and Firestone are both 70% male, 30% female.
Highlights will follow later this week of Firestone Walker’s plans for each brand platform: 805, core Firestone Walker, Mind Haze and Cali Squeeze.