The near future for Sierra Nevada will see the Chico, California-headquartered craft brewery launch an upscale “lifestyle” hard tea brand and once again line extend the Little Thing family with a wheat beer.
Sierra Nevada execs laid out the vision for the back half of 2021 and the whole of 2022 during the company’s recent national sales meeting. The meeting comes as Sierra Nevada’s total business is up +0.8% this year, with the Little Things portfolio growing +23.6%, and Big Little Thing IPA as the No.1 new craft brand.
Sierra Nevada president and CEO Jeff White opened the meeting pointing to the declining volumes of traditional beer.
“The beer industry, real beer, beer flavored beer — not including FMBs and seltzers and things like that — is in steady and significant decline,” he said. Even if the Alcohol and Tobacco Tax and Trade Bureau classifies hard seltzers as beer, consumers do not, he emphasized. ”But that doesn’t mean the days of beer are over. Far from it.”
White said Sierra Nevada believes craft can still appeal to and remain relevant with a new generation of consumers, and the company plans to lead the charge.
“Our primary focus has been, and will continue to be, beers from Sierra Nevada Brewing Co.,” he said. Nevertheless, White said it’s clear that “beer alone will not be enough” for the industry or the company, as “the consumer wants more,” whether that’s alcoholic or non-alcoholic options.
To keep pace with consumer trends, “we need to be in the beverage business,” White said.
So, even as beer remains Sierra Nevada’s “prime directive,” the company will look beyond its traditional offerings to meet consumers’ desires.
Tea West Launching Now in 3 Test Markets
As such, Sierra Nevada will launch Tea West, which the company dubbed as an “easy drinking hard tea.” Sierra Nevada chief commercial officer Joe Whitney called Tea West (5% ABV, 100 calories, 3 carbs, 0g of sugar) an upscale “lifestyle” brand meant for beach, barbecue and backyard occasions.
“What we’re trying to do is dial in on refreshing fruit flavor for a brand that’s light on calories and carbs,” he said. “We think this is going to be a difference maker.”
The brand is rolling out in three test markets — Chico and Santa Barbara, California, as well as Minnesota — in three flavors — Lemon the Dream, Black Rad-Berry, and Just Peachy — sold in single-flavor 6-packs of cans. In the spring, the brand will go statewide in California while adding Florida, North Carolina, South Carolina, Georgia, Montana, Nevada and Arizona. Sierra Nevada will also add a fourth flavor, Strawberry Mint, in variety 12-packs of cans, as well as single-serve 19.2 oz cans of Lemon the Dream, which is expected to be the flagship flavor.
Sierra Nevada will also support the brand with a 360 marketing campaign, including digital and influencers.
The Little Thing Line Adds a Wheat Ale
VP of marketing Noelle Haley said the company will look to establish the Little Thing family as the most “inclusive craft brand” with something for everyone.
Haley said the No.1 area of “whitespace” and biggest volume opportunity for the Little Thing family — which includes Hazy Little Thing IPA, Big Little Thing IPA and Wild Little Thing — is to add an “approachable wheat” beer. So the company is introducing Sunny Little Thing wheat ale (5% ABV) first in a variety 12-pack with the rest of the Little Thing family and then launch it on draft in January and 6-pack cans in March as part of spring resets.
For 2022, the campaign behind the Little Thing family will be “What’s your thing?” aimed at reaching multicultural consumers.
New Innovation Center in Chico
The new products are part of a concentrated effort by Sierra Nevada to increase its innovation efforts. Founder Ken Grossman said the company “doubled down” during the pandemic and is investing in those efforts, including breaking ground on a new facility in Chico focused on innovation. The facility will feature high-speed canning lines, a new keg line, and packaging capabilities for variety packs and can fillers capable of doing everything from sleek/slim 12 oz. cans to 24 oz. cans.
Sierra Nevada has also invested in building its innovation pilot brewing capabilities for each of its facilities in Chico and Mills River, North Carolina, with the addition of two 3.5 barrel brewhouses, dedicated pilot packaging lines and new pasteurizers that will be installed later this year. The goal is to produce new beverages, test market them to prove the concept and then ramp them up, Grossman said.
Those new brands may or may not feature the Sierra Nevada name, and will push the company into new product categories, both alcoholic and non-alc.
Core Gets ‘Hops Not Hype’ Tagline
Another focus for Sierra Nevada over the next year will be returning its core to “healthy growth.” For the core, the tagline in 2022 is “hops not hype,” and the focus will be on “integrity,” Haley said.
Whitney laid out the plans for Sierra Nevada Pale Ale — which accounts for 58% of the company’s sales — including strengthening its position on retail shelves, building its on-premise position and re-engaging consumers with “reverence and relevance.” Part of the strategy for Pale Ale is building “a lot of energy” around it,” Whitney said.
“By creating more excitement around it, more people are going to find it on the shelf,” he added.
Sierra Nevada will also look to reinvigorate Torpedo Extra IPA, which accounts for 10% of what Sierra Nevada sells and is the company’s top-selling single-serve offering in its core lineup.
To stop its slide, the company has “contemporized” Torpedo’s packaging and made “IPA” more prominent on its labels. Torpedo will also receive a new line extension — Atomic Torpedo (8.2% ABV), which the company described as a “dank West Coast IPA meets juicy East Coast IPA” brewed with Magnum, Mosaic, Cascade and Centennial hops.
Atomic Torpedo will first be released in a variety 12-pack of bottles this fall, followed by a spring launch in 19.2 oz single-serve cans for C-stores.
Whitney called it a “no-brainer” that Sierra Nevada would come out with a hoppy variety pack — featuring Torpedo, Pale Ale, Dankful and one rotating proprietary beer, starting with Atomic Torpedo. That pack will turn over at least twice a year, he said.
Within the core, Sierra Nevada is reworking its seasonal program to focus on IPAs. Whitney said the company found that 80% of its seasonal drinkers are existing Sierra Nevada consumers and thus an “incremental purchase.”
Those consumers want IPAs, so Sierra Nevada will give them four, starting with Powder Day, a 7.7% ABV double dry-hopped IPA that will ship in December, followed by Summer Break session IPA, which will return after outperforming 2020’s Summer Fest. Summer Break increased sales volume 31% and rate of sale 16% compared to its predecessor. Celebration will remain Sierra’s winter seasonal, while the company will discontinue its Oktoberfest in favor of a yet-to-be-named IPA that will release in the fall.
Sierra Wants to Lead Hard Kombucha Category
Finally, Sierra Nevada will look to build brand and category awareness via its Strainge Beast Hard Kombucha brand. The approach for Strange Beast is built on “authenticity” through a campaign called “Let’s Get Strainge” and will include a lot of sampling.
“We recognized that most hard kombucha looks, sounds and feels the same, which we also recognized is kind of odd for such a unique beverage,” Haley said.
Sierra Nevada will launch new creative for the brand in January. The goal is to “own the on-premise” and become the category leader, Haley said.