In the wake of Breakthru Beverage’s acquisition of J.J. Taylor’s beer business in Minnesota, Summit Brewing Company’s portfolio has moved to A-B house Capitol Beverage Sales in the Minneapolis-St. Paul area, with pieces of territory doled out to College City (A-B) and Dahlheimer Beverage, a Molson Coors house.
The move ends Summit’s 28-year partnership with J.J. Taylor, which had been the company’s largest wholesaler. With J.J. Taylor’s portfolio, Summit, the 22nd largest Brewers Association-defined craft brewery by volume (118,037 barrels in 2021, +8%) was often neck-and-neck with Heineken USA as the company’s second largest supplier, trailing Molson Coors.
Speaking to Brewbound, Summit director of sales Brandon Bland said the goal in moving distribution in Minneapolis to Capitol and giving additional territory to College City and Dahlheimer was about bringing balance to the brewery’s distribution footprint.
“Working with J.J. Taylor for that long, they had been upwards of 60% of our overall business,” Bland said, adding that the company was appreciative of the “sweat equity” the wholesaler’s staff had put into building the Summit brand.
The number had fluctuated over the years, dropping to around 50%, which was still “too high for us to be comfortable to have so many eggs in one basket,” Bland added.
Following the move, Capitol will now control about 40% of Summit’s volume, which historically has amounted to about 800,000 cases, Bland explained.
“It’ll be less than that to start, but we think there’s plenty of opportunity to get it back up to that number,” he added.
The opportunity ahead with Capitol for Summit is in bringing in a new subset of customers that the craft brewery didn’t previously do business with, especially in the on-premise channel, Bland said. Over the nearly three decades with J.J. Taylor, Summit’s account base had become “almost static,” he added.
“We’re not anticipating losing any of that business that has been established for as long as it has, but really opening doors to new business that maybe we didn’t have an in before,” Bland said.
In rebalancing its distribution footprint, Summit gave additional territory to College City, which is now the company’s second largest wholesaler, and Dahlheimer. Those moves have created “a better balance” of Summit’s overall business and “more alignment on percentage of business” among Summit’s top three distributors.
Bland said the alignment between Capitol and College City opens up opportunities in chain retailers.
Three weeks into the move, Bland said the transition to its new wholesalers has gone “smoother” than anticipated.
“We’re a lot further along than I would have put us at this point,” he said. “The disruptions have been minimal at most, and we’ve actually gotten into that phase of exploring new opportunities a lot quicker than I anticipated.”
Beyond reworking its home state distribution network, Summit’s focus for 2022 was on rebranding Summit Keller Pils as Twins Pils, leveraging the brewery’s sponsorship of the Minnesota Twins baseball club and using its branding on packaging. The rebrand took hold in March, and over the first two months of the new product hitting shelves, “we’ve heavily outsold the biggest year that Keller Pils ever had,” Bland said.
“It’s only picked up steam since then,” he added. “It caught us off guard from a standpoint of we had big goals behind it. But it’s done even better than we anticipated.”
Demand initially outstripped supply, which Summit has since caught up on, Bland said. Moving forward, Twins Pils has the opportunity to unseat Saga IPA as the company’s second largest brand behind EPA over the next year.
“I anticipate that if it’s not this year, it’ll be next year where that’s our No. 2 brand,” Bland said.
Meanwhile, Summit’s on-premise business has seen “a slow and steady comeback,” Bland said. Pre-pandemic, the on-premise channel accounted for about 42% of Summit’s business.
“We’re back up to around 35%, to a 35%-65% split, just short of where I hoped we’d be at this point,” he said. “I would hope that we can climb back near that 40% number a year from now. But in the meantime, we’re trying to drive our off-premise business, looking at different opportunities there on the packaging side.”
In the off-premise channel, it’s been challenging in the current inflationary environment with prices climbing, Bland said. He added that Summit has taken a couple of price increases over the last 18 months and the company is going to do what it can to hold off until next year before considering another increase.
“Our price has definitely seen its biggest jump in our time at Summit over the past 18 to 24 months,” Bland said. “There doesn’t seem to be a slowdown on the supplier side as far as our ingredients go and packaging, raw mats and everything that goes into that.”
One bright point this year has been the return of sporting venues, which have come back “in a bigger way” at Target Field, the Xcel Energy Center and Allianz Field.
“People are starting to come back,” he said. “It helps that some teams are performing well, but I think as people have become more comfortable with getting back out in public in that setting, it’s starting to show up and really help us start to catch up overall. And now, bars and restaurants continue with the rate they’re on, I think we can get back to where we want.”