To kick off the new year, Orange County, California-based The Bruery and Offshoot Beer Co. announced several in-house promotions as part of its 2022 goal to strengthen its distribution footprint and continue growing off-premise sales.
In the wake of consumer spending shifts caused by on-premise channel restrictions due to the COVID-19 pandemic, the off-premise sales channel makes up 65-70% of The Bruery’s total sales, CEO Barry Holmes told Brewbound. He estimates that percentage could increase to 80% in the next few years.
“I’m pretty bullish on 2022, which is part of the reason we’ve made some new hires and moved some things around to grow, especially in the distribution channel,” he said. “The off-premise is poised to grow with us a lot more, especially over the medium term, two to three years.”
Those new hires and promotions include the elevation of Matthew Hartsook to the newly created position of national sales director for both The Bruery and Offshoot. Hartsook joined the company in 2021 as national accounts director, with a focus on national on- and off-premise chain partnerships such as Yard House, Buffalo Wild Wings, BevMo and Publix. In the role, Holmes said Hartsook “demonstrated a real understanding of the distribution network and how to manage the whole team,” and will now be able to use those skills to lead the company’s overall sales strategy.
From a regional standpoint, the company has also promoted former California sales manager Sarah Lynch to senior regional sales manager (RSM).
Lynch previously worked as Southern California sales manager for Portland, Maine-based Allagash Brewing Company, working closely with Wine Warehouse on distribution. In 2018, Wine Warehouse took over distribution for the Bruery in its home state, buying its rights from Stone Distributing, its largest distributor at the time.
“Wine Warehouse has obviously done a great job with Allagash; they’re everywhere,” Holmes said. “So we promoted [Lynch] into a senior RSM role, where we’ve added in Nevada and Arizona to her responsibilities too.”
Additionally, the brewery hired Jess Gerencser in 2021 to serve as Northeast regional sales manager. The company plans to add up to three additional sales representatives this year, including someone to lead Midwest sales, Holmes said.
“The goal is to finish the year where we can round out the rest of the distribution footprint with an RSM support, and we’re also going to hire another sales rep in Los Angeles,” he said. “That’ll at least get us in-market with all the wholesalers, because now we’re fragmented and some people just don’t get the attention we really want to give them.”
Offerings from The Bruery and Offshoot are distributed in 28 states. The company expanded its geographic footprint last year by adding South Carolina (Low Country Craft Distribution), Idaho (Craig Stein Beverage), Kansas and Missouri (Speakeasy Distribution). It also expanded distribution through a new partnership in Tennessee with Lipman Brothers, and transitioned from Reyes Beer Division subsidiary Windy City Distributing to Heartland Beverage in Chicago and from Cavalier Distributing to Craftroads Beverage in Indiana.
Holmes said the distribution changes better cater to balancing both Offshoot – a “premium brand with chain potential” – and The Bruery, which “has more of a niche following.”
“We wanted to find distributors that were boutique, but had chain potential, and sometimes that’s hard to find,” he continued. “I think the really big distributors aren’t a great fit for us at this stage, but someone like Heartland’s a good example of they’re hungry, they’re relatively small, but watching what they’ve already done is pretty encouraging.”
The Bruery also offers direct-to-consumer (DTC) shipping in California, Nevada, New Hampshire, Ohio, Pennsylvania, Virginia, Vermont and Washington, D.C. Many of its DTC sales stem from its membership program, the Reserve Society. Through three different membership plans, consumers can have access to members-only discounts and releases, including barrel-aged stouts and sours, and beer-wine hybrids.
“When you have a member versus a customer, in many ways your expectations are higher,” Holmes said. “It’s actually a gift, because they’ll tell you where you’re doing well, and where you’re not, whereas a customer just won’t come back.”
Membership enrollment has increased by double-digit percentages for the past two years, according to Holmes, who would not disclose the club’s member count.
The brewery produced 20,000 barrels of beer in 2021, according to Holmes – a nearly 14% increase from 2020 (17,570 barrels), according to the most recent data available from the Brewers Association (BA).
That growth was led by the continued success of its Relax hazy IPA, a 2018 Offshoot release. Holmes said Retreat, its hazy double IPA, is a close second in sales. This month, the brewery launched its first nationally distributed hazy pale ale, Coast – a 5.2% ABV “anytime hazy pale ale” fermented with the same yeast strain as Relax and Retreat.
As far as further innovation this year, the Bruery is staying away from hard seltzers, but Holmes said they are “definitely working on some other beyond beer initiatives.”
He noted that the company recently received conditional approval for a wine license, which relieves them of responsibility of making sure all its beer-wine hybrids are at least 51% beer.