Sleeping Giant Brewing Company had its best January and February on record this year, starting off the Denver-based contract brewer’s first year of expected double-digit growth in more than two years, Matthew Osterman, president and founder, detailed to Brewbound.
While Osterman declined to share specific production numbers for Sleeping Giant, he said the brewery is projecting about 50% year-over-year (YOY) growth in 2022, combining production for companies from across the country, including Hawaii. It will be a stark contrast to the company’s “basically flat,” low single-digit growth in 2020 and 2021, due to the COVID-19 pandemic.
“We were doing all these great things [in 2019] to set us up for success to crush in 2020 and take a large step forward, and then the pandemic happened,” Osterman said. “We’ve kind of returned to that same thought process, except this year, hoping that we won’t have a pandemic interrupt everything that we have set out to do.”
Sleeping Giant’s 2022 growth will be partially dependent on the brewery’s new “bullish” focus on non-alcoholic (NA) beer, supported by the construction of a third cellar in 2021, and a partnership with Sustainable Beverage Technologies (SBT), a Golden, Colorado-based brewing technology company.
Through the partnership, breweries seeking to produce NA beer get set up with small pilot production at SBT’s own brewhouse. Then, “once it’s ready for commercial production,” a brewery moves production to Sleeping Giant.
Sleeping Giant’s new cellar buildout and equipment update – a nine-month project estimated at around $3 million – included the installation of proprietary NA production equipment from SBT. With the addition, Sleeping Giant has been able to add SBT clients to its own portfolio, including a top-15 Brewers Association-defined craft brewery (who has asked to remain anonymous).
“They’re large and an O.G. super well-respected brewery, so they put us through the wringer in a good way,” Osterman said of the craft brewery. “We’ve gotten to learn a lot from them and sponge off them and just collaborate with them on different quality improvements.”
With the NA beer expansion, Osterman estimates NA beer will make up about 15% of Sleeping Giant’s production in 2022.
The brewery has also expanded its hard seltzer production, due in-part to its partnership with Maui Brewing Company in Kihei, Hawaii.
In November, Maui Brewing announced it would move some of its production to Sleeping Giant, marking the first time Maui offerings would be produced off-island. At the time, Garrett Marrero, Maui co-founder and CEO, told Brewbound the decision was made to support mainland distribution, which was heavily impacted by the pandemic.
The first batch of Maui’s hard seltzer made at Sleeping Giant went into production November 1, while beer production began earlier this year. Osterman said the two breweries have maintained a “really collaborative” relationship, which he believes shows a new direction for contract brewing.
“We’re really forging a pretty serious partnership and will be an important part of their growth,” Osterman said. “It’s cool to see the growth that they are able to have and are experiencing already just with unlocking more production from us and getting into more parts of the U.S. that they haven’t really done before.”
Maui – which broke the BA’s Top 50 Craft Breweries by volume list in 2021, ranking No. 43 –
is targeting 100,000 barrels this year, up from an estimated 65,000 barrels in 2021, Marrero told Brewbound in November.
In the pursuit of transparency, Maui has adapted its packaging to display a map, which visually shows consumers where their beer was produced depending on where they are drinking it.
“It’s just further evidence to what I’ve been saying for a long time, which is that the stigma surrounding contract brewing is dead,” Osterman said. “It makes too much sense, especially with everything we’re seeing now with drastic price increases related to cans and other goods and labor.
“Over time, if not now, consumers are going to have to continue to choose between do we care that much? Or, do we care about access to the beer that we like, and do we care about getting it for a more economical price? Because you can’t have both.”
Osterman also estimates Sleeping Giant’s hard seltzer production to be around 15% of total production this year. The rest of production will be beer, with a small portion of CBD water.
Other key clients within Sleep Giant’s 20+ brewery portfolio include Los Angeles-based Calidad Beer (targeting 15,000 barrels in 2022) and Denver-based Station 26 Brewing Co.
Recent growth for Sleeping Giant hasn’t gone without challenges. The company’s “lackluster” 2021 saw high freight costs, supply chain constraints and labor shortages. And this month, the brewery’s boiler broke down, and the lead-time estimate for a new boiler was projected to be one year. A replacement has been temporarily installed to keep production going.
“We had to buy a used boiler that was very expensive to install, and we’re just gonna have to take it out in a very short amount of time to put in a new one,” Osterman said. “But we can’t wait a year for a new boiler to come in.”
“Effectively all” of Sleeping Giant’s clients were also affected by the new order minimums put in place earlier this year by Ball Corporation, the world’s largest aluminum beverage can manufacturer. Ball operates a facility in Colorado “15 minutes away” from Sleeping Giant, previously providing a convenient and affordable aluminum can supply option for the contract brewery’s clients.
Ball increased its minimum order for printed cans from one truckload (204,000 cans) to five (more than one million cans), and ceased its warehousing services. The changes were originally set to take effect January 1, but were pushed to March 1.
In response, Sleeping Giant found a third-party “satellite warehouse” to store client can inventory for breweries that can use and afford Ball’s five truckload minimum. Additionally, the brewery has found temporary supply solutions for clients from suppliers such as Crown Holdings and Ardagh Group.
“People have stocked up, and a lot of our clients are covered pretty much for the year,” Osterman said. “They don’t necessarily know what they’ll do in 2023 and beyond, but have bought themselves time.
“We’re trying to get past a couple uncomfortable years of COVID where we didn’t grow as much as we wanted to,” he continued. “It boils down to three things: one is helping our existing clients grow; one is adding new clients; and the third is diversifying our production capabilities.”