Cincinnati-headquartered Rhinegeist Brewery will be launching its offerings in Chicago in March.
“It’s the biggest city we’ve launched in a long time, arguably the biggest city we may ever launch,” vice president of sales Matt Steinke told Brewbound. “We’re poised to grow it for a long time; we want to be in the city for a long time.
“We want to test our brand versus the best in the country,” he continued. “It’s certainly the melting pot of great craft breweries.”
Rhinegeist has signed with Reyes Beer Division subsidiary Windy City Distributing, which will sell its portfolio to the 5,500 retailers it serves. This marks Rhinegeist’s first distribution deal with Reyes, the largest beer wholesaler in the U.S.
“As a craft-only house, they really have their finger on the pulse of Chicago craft beer and what’s working and how to manage a brand,” Steinke said.
Plans to enter Chicago were put in motion before the COVID-19 pandemic upended the beer industry, Steinke said. However, the shutdown of bars and restaurants has forced Rhinegeist to abandon its usual new market playbook, which typically entails up to three months of draft-only sales to build consumer demand.
“As we’re approaching March, it doesn’t seem feasible to bring the zany Rhinegeist personality to Chicago and do the typical stuff — tap takeovers, on-premise launches,” Steinke said. “So, we’ll be launching a very soft launch with draft. Really disciplined. Keep it scarce for a while, and then launch in package with some support from local chains starting in early to mid-March, and then we’ll just kind of wait for the world to open back up before we hit the gas on draft.”
Rhinegeist will focus on traditional off-premise retail sales as it gains traction in Chicago with three offerings to start — Truth IPA, Bubbles Rosé Ale and Cloud Harvest IPA — with potentially more brands to follow.
“We want to win with the big retailers and the neighborhood retailers,” Steinke said. “Our approach doesn’t change relative to COVID — we are not short-term thinking.”
Rhinegeist’s post-COVID strategy even shows in the company’s job listing for the Chicago sales manager: “Represent brewery at festivals, dinners, tastings and events” is listed on the role’s responsibilities, as are “attend wholesaler(s) meetings (remotely in COVID environment)” and “ride with sales [personnel] (in non-COVID environment.)” The new hire will join a small Chicago-based team.
By the end of 2021, Rhinegeist plans to fill out Illinois, which will be its only expansion for the year.
“We made a decision a few years ago that we would open up one or two markets a year, no more and by markets, I literally mean markets, not states,” Steinke said.
Rhinegeist’s footprint includes statewide distribution in Ohio, where it self-distributes in Cincinnati and Columbus, and Kentucky; eastern Tennessee; western Pennsylvania; and Madison and Milwaukee, Wisconsin. Rhinegeist also has statewide distribution in Massachusetts, where it mostly sells its Cidergeist cider line, an experiment from the company’s early days when it wanted to see how the brand could perform away from Ohio and if cider was viable.
“We learned from the logistics of going out to Massachusetts and just from shipping and beer freshness and rate of sale and competitiveness how difficult it can be to expand away from home early,” Steinke said.
2020 in Review: Rhinegeist’s volume declined about 5% in 2020. Prior to the pandemic, 40% of the brewery’s volume flowed through the on-premise, which was shut down for several months. Without that channel, the company pivoted to focus on off-premise retail sales.
“All things considered, [we’re] happy with what we did last year,” Steinke said. “We had some great growth of some of our core brands. We held share in most of our markets or gained.”
When the on-premise channel, including Rhinegeist’s own taproom, shut down, the company deployed its taproom and event staff in other roles.
“Instead of laying them off, we turned them into merchandisers in self-distro,” Steinke said. “We woke up at four in the morning, and they all went out masked up before people were out and they merchandised grocery every day, and worked hard to keep us in stock.
“It was a one team, one dream attitude that got us through it,” he continued.
2021 Innovation Plans: The company refreshed its Cidergeist line with new branding and packaging and is adding a seasonal cider SKU, which will feature Bloom, a pear and elderflower style in the spring; Beezy, an orange blossom and honey style in the summer; and Snug, a cider with a five spice blend in the fall and winter.
“That’s exciting for us because I think for the first time, it separates itself from our beer portfolio,” Steinke said. “A lot of times, retailers were lumping it in with beer because we only had two UPCs and it was branded very similarly, so we really want to be in that cider door, and we’re invested in cider.”
Rhinegeist will also roll out 6-pack cans of Glow, a 4.5% ABV sour ale with acai, prickly pear, passionfruit and sea salt. The company is adding 12-pack cans for its seasonal beer lineup, which will feature SunSpun, a new shandy, during the summer months. Low-calorie IPA Mathlete will also be available during the summer selling season.
The company has no plans to dabble in hard seltzer, but will continue to innovate within its core beer, sour beer, barrel-aged beer and fruited ale portfolios. Rhinegeist’s fruited ale portfolio accounts for 20% of its business, which is about how much volume Bubbles Rosé Ale sold at its peak a few years ago. When rosé styles began to decline across the entire beverage alcohol industry, Rhinegeist developed a lineup of companion SKUs to offer alongside Bubbles, including Little Bubs, Slangria, Wowie and Zango.
“We were able to keep consumers in this mega brand family by offering more variety and not burdening wholesalers with a ton of SKUs,” Steinke said.