Sierra Nevada leadership shared highlights of its year so far, revealed its sales and marketing strategy for 2024 and provided an update on its Can Do Innovation Center during last week’s meeting with wholesalers.
Sierra Nevada VP of sales Ellie Preslar led the meeting and founder and interim CEO Ken Grossman offered a high-level overview of the Chico, California-headquartered craft brewery’s year so far and extension beyond craft beer.
“Although it’s been a tough year, the past few months our momentum has been really positive, with Hazy still continuing to grow, Pale Ale showing some really great trends, and Torpedo coming back to life,” Grossman said in a welcome video. “We’re planning on doing a lot of innovation, which is one thing that I think we’re very proud of and we do well.”
Sierra Nevada’s Can Do Innovation Center in Chico will be coming online within the next couple of weeks, Grossman shared. The facility will focus on beyond beer and non-alcoholic (NA) innovations. The first products from the new facility will ship by early September, he added.
“We’re gonna be able to do a lot of outside-the box brewing here, non-alcoholic products as well as products out of the beer space,” Grossman said.
Later, in a Q&A session, Grossman said he’s excited about the added capabilities Sierra Nevada will gain to produce NA offerings via the Innovation Center. He mentioned previously wanting to produce a NA IPA but didn’t have the capability to do it safely. The new facility will feature flash and tunnel pasteurization capabilities, key equipment for NA beer production.
Sierra Nevada is also adding a vacuum distillation unit built in Germany that is en route to Chico, Grossman said. Once installed, the unit will enable the company to make 0.0 NA beers and potentially NA cocktails.
(Sierra Nevada brand director Kyle Ingram shared more details on Sierra Nevada’s NA plans. Read that previous coverage, including details on the brewery’s plans for all its brands, here).
Preslar laid out Sierra Nevada’s “sales vision and strategic focus areas” for 2024, which is a continuation of 2023’s plan:
- Lead in all channels with Hazy Little Thing as the No. 1 priority. The brand has posted six years of consecutive growth and opportunities await across all classes of trade;
- Return Pale Ale to growth by driving awareness, distribution and visibility at retail;
- Innovate within beer and beyond, building long-term sustainable brands.
“We feel confident in the results that we have delivered in 2023 to date, and the momentum we’re building as we go into 2024,” Preslar said.
2023 Results So Far
Sierra Nevada sales strategy director Aubrey Herbert shared NIQ data showing that Sierra Nevada has outperformed beer and craft in dollar and case sales since April.
Craft sales are up +0.1% year-to-date (YTD) through August 12 and +0.9% in the last four-week period in NIQ tracked off-premise channels. Although craft started the year slow, it’s been trending positive over the last four months “and Sierra has been driving a lot of that craft growth,” Herbert said.
NIQ off-premise scan data shared today shows Sierra Nevada dollar sales +3.7% YTD and +6.9% in the four-week period ending August 12. In the same period, Sierra’s volume has declined -0.9% YTD but up +2.1% over the last four weeks.
Herbert noted that the top 15 craft brand families collectively generated $57 million of growth YTD, and represent 47% of craft’s dollar sales. Sierra Nevada is one of five top 10 craft breweries growing this year and ranks second in velocity, she added.
Overall, Sierra Nevada ($203.5 million) ranks third in dollar sales, trailing New Belgium ($290.825 million) and Blue Moon ($209 million).
As far of brand performance, per Herbert, citing NIQ data:
- Hazy Little Thing is the third ranked craft brand with $68.8 million in sales, +7.9% over last year. Hazy is the second best-selling IPA and top-selling hazy IPA;
- Pale Ale is the sixth best-selling craft brand ($59.1 million), the top-selling pale ale and accounts for 34% of all pale ale sales;
- Torpedo IPA, behind a packaging refresh, has returned to growth, generating around $20 million in sales (+0.8% YTD). In the off-premise, Torpedo’s rate of sale increased +5% compared to last year, and has been growing since April;
- Sierra’s seasonal offerings are the fourth best-selling seasonal brand, with $9.5 million in sales. Summerfest sales increased +5% compared to last year and with two fewer selling weeks. Summerfest rate of sale is up +11% and Oktoberfest is showing early signs of success.
Herbert also called out Sierra Nevada’s track record of success with new items, including:
- Big Little Thing imperial IPA in 2021, which was the top-selling new craft brand at $21.8 million;
- The Little Things party pack was the No. 2 ranked new craft brand in 2022, with sales of $13.7 million. In 2023, it ranks third in assorted craft brands;
- Sierra’s Hazy rotator, Juicy Little Thing Hazy IPA, is the second best-selling new craft brand and the fifth best-selling overall new beer brand of 2023.
Marketing Strategy for 2024: Consolidate Under Master Brand Campaign
Sierra Nevada VP of marketing Lesley Albright shared three commercial goals for 2024:
- “Amplify the Sierra Nevada Brewing Company brand;
- “Protect and grow our position in craft;
- “Broaden our appeal to attract new drinkers,” by focusing on new occasions and need states and exploring the broader bev-alc category.
“In order for this brand to live another 42 years, it is critical that we amplify and protect the scroll over time,” Albright said. “And we have a lot of opportunity to be crystal clear about what makes Sierra Nevada different from other craft brands, and we’re going to be really focused on that this year.”
As such, Sierra Nevada’s 2024 marketing strategy is focused first on consolidating under a master brand campaign, Albright said.
“To us, there really is one brand, and that is Sierra Nevada,” she said. “And all of our products under the Sierra Nevada portfolio are manifestations of that brand in the world.
“That doesn’t mean that we’re not going to have product specific activation or support at retail, just that we are going to have more clear connectivity and a singular top-line message for the Sierra Nevada brand, regardless of channel.”
Q&A Highlights: C-Store Gains, Crisp Little Thing Future, Hazy Rotators
During a Q&A session, Preslar admitted that Sierra Nevada was underdeveloped in the convenience channel coming into 2023. Early results were soft but have since “dramatically” improved over the last three months as the company shifted programming to the key summer selling period.
Sierra has also “been building on getting the right distribution into those chains, the right programming associated with that, and then just really executing the fundamentals well.”
The future of Sierra Nevada’s Crisp Little Thing lager is “TBD,” Ingram said, with the company “exploring multiple options and paths forward for that brand.”
“We know that we need to address the easy-drinking beer segment and that’s something that we’ll be looking to do in 2024 in some capacity,” he added.
Meanwhile, Sierra Nevada’s upcoming Hazy IPA variety pack – featuring pack-exclusive hazy IPAs, Tropical Little Thing and Dank Little Thing, and staples Hazy Little Thing and Juicy Little Thing – will rotate in new exclusive beers either in fall 2024 or spring 2025, Ingram said.