Decorah, Iowa-based Toppling Goliath Brewing Company has expanded to multiple new markets in recent months.
Since March, the company has added or expanded distribution in Arizona (via Scout Distributing), Texas (via Ben E. Keith), western Michigan (via Alliance Beverage Distribution), California (via Delta Pacific Beverage), and New Hampshire and Maine (via Vacationland Distributors). Toppling Goliath’s offerings are now sold in 32 states, according to the company, including central Florida as of February 2019 through Sunshine State Distributing, and Massachusetts and Rhode Island as of February 2018, through Atlantic Beverage Distributors.
The 12-year-old brewery’s growing footprint is due in part to the company’s switch to what co-founder Clark Lewey described as an “on-demand” business model.
“We do not chase volume,” he told Brewbound. “When we move into [a] market, what we like to do is take a look at the craft beer specialty accounts — the on-premise and off-premise — and then take a look at the chains that really help us drive volume without any type of discounting.
“It’s been very important for our company to recognize the power of both the local independent retailer, and the chains,” he continued.
Lewey started Toppling Goliath with his wife Barbara in 2009. Since then, it has expanded into a 75,000 sq. ft. facility with more than 100 full- and part-time employees, Lewey said.
Lewey said he models most of his business after his “best customers” from his previous career at Iowa Rotocast Plastics, a plastic fabrication business where he worked for more than 20 years with a client list that includes the world’s largest beverage companies: Coca-Cola, Anheuser-Busch InBev and Molson Coors.
Chain sales have driven much of the company’s expansion, according to Lewey, who said the decision to go into a new market comes mostly at the request of chain retailers. The brewery has built relationships with several top retailers, including H-E-B, Publix, Whole Foods and Hy-Vee.
“One thing where I think we really shine is our relationships we develop directly from the brewery with retailers,” Lewey said. “We work very hard with our wholesalers with weekly or every-other-week meetings, [and] we’re constantly looking at the forecasting. And for each market we’re in we either have our own sales team in the market, or we have somebody that is assigned to that market.”
To help with these relationships, the company appointed Rick Laxague as national sales director in April. Laxague brings more than 20 years of experience in sales and chain account leadership, including more than three years as a managing partner at Craft Beer Consultants, as well as sales positions at Paul Mueller Company and Green Flash Brewing Co.
In his new role, Laxague has taken over executive and administrative tasks from the company’s field managers, allowing them to focus on building relationships, Lewey said.
“It just helps having that one person with vast experience being able to deal with the distributor launches and give our more talented boots-on-the-ground people that time they have [for] one of the most important things we do, which is develop a relationship,” he said.
Because of the shift to on-demand sales rather than “volume-chasing” sales, Lewey said Toppling Goliath runs the risk of out-of-stock issues. However, he said it’s worth the risk to bring consumers the freshest product possible.
“We have 90 days no problem with our beer, but the consumer really wants to see 30 days,” he said.
Toppling Goliath ranked No. 43 in the Brewers Association’s list of top 50 domestic craft brewing companies by volume. The company increased production 18% in 2020, to 53,100 barrels of beer, up from 44,930 barrels in 2019 and 39,919 barrels in 2018.
Lewey said the brewery is on track to produce between 55,000 and 65,000 barrels this year with the addition of several tanks. He added that the company in the future plans to invest $250,000 in tank additions, used primarily to expand production for on-premise sales.
“I think we could grow a little bit faster,” he said. “We’re just being a little cautious. Right now, raw materials are scary.”
The on-premise channel has been a key focus for the brewery since establishments have begun reopening, with the goal of being 75% packaged product, and 25% draft. Before the pandemic, the company produced about 70% packaged product and 30% draft.
To help gain consumer attention in a smaller tap share — national tap averages are still down -50% from 2019, according to BeerBoard — Toppling Goliath has been sending partners stouts, barrel-aged beers, and other brews that it typical did not offer on-premise in the past, according to Lewey.
“We’re sending some of our exciting beers to those accounts to try to help them bring in the consumer [and] get consumers back in and get their business back to hopefully normal,” he said.
Two Toppling Goliath stouts — Kentucky Brunch and Mornin’ Delight — rank as two of the top all-time beers, according to RateBeer, with Kentucky Brunch No. 1 overall. The company also boasts five beers in BeerAdvocate’s global Top 50 list. Nevertheless, Toppling Goliath’s hoppy beers drive sales, namely Pseudo Sue single-hop pale ale and King Sue double IPA.
Beyond beer, Lewey said the company has explored producing hard seltzers for the last two years and has slowly developed a no sugar, no carb Pseudo Seltzer line that he teased will be released in the coming months. To make the line, the company bought four horizontal tanks specifically for its seltzer program. But the release will be a slow roll-out that won’t have a large off-premise scale, according to Lewey.
“It’s gonna be hard for breweries like us to really enter and think you’re gonna get in there and compete with White Claw and Truly,” he said. “We’re not going to.”
The brewery is exploring other innovation projects, but has faced capacity issues. To ease those constraints,Toppling Goliath worked with the Iowa Brewers Guild to change state law to allow local breweries to operate two taprooms in the state. Lewey said it plans to open a new 10-barrel pilot brewery in the future.
The company also plans to invest $2 million in a new high-speed bottling line to be completed by spring 2022, as well as expand its offering of barrel-aged sours in an external brewery that brewmaster Mike Saboe has been developing for six years.
“Our motto used to be ‘great beer brewed in small batches.’ We never want to lose that feeling,” Lewey said. “We can’t really say we brew in small batches — our brew system is a 100-barrel system, we make 400 barrels a day. [So] the brew team coined a phrase: We’re making ‘big beer with small batch magic.’
“We’re trying to remain consistent with what we’ve always done: experiment with experimental hops [and] take the hops that are known and bring the best out of them,” he continued. “We want to remain true to our commitment of representing our beers in such a way that you’re basically tasting liquid hops.”