As its flagship IPA continues to show declines in chain stores, Goose Island Beer Company is turning to the latest trend in beer as a way to boost sales.
Brewbound reported this week that the Chicago brewery and once-anchor of Anheuser-Busch InBev's craft unit—now known as the Brewers Collective—will be adding So-Lo IPA to its nationwide lineup starting in 2020. The 3%, 98-calorie IPA has been sold in the company's home city since late summer in six- and 15-packs. Both are priced in the same range as its regular American IPA counterpart, according to the outlet.
This release comes at a pivotal time for the storied business, which has shown production declines for two straight years, losing 9% of volume from a high of 605,000 barrels in 2016 to 550,000 BBLs last year. At the same time, the Goose Island portfolio of beers has struggled in its local market, declining at the same rate of 9% in Chicago grocery stores in the latest 52-week period ending Oct. 6, as tracked by IRI, a market research firm that compiles scan data from grocery and other chain stores.
As for the brewery’s core IPA brand, Goose Island IPA, the beer has gained about 4% in Windy City grocery store volume in the last 52 weeks, but the regular calendar-year sales (Jan. 1-Dec. 31) have been trending downward since 2016. 2019 will also likely show a decrease for the IPA as well as the brewery’s portfolio.
Enter what many regional and national breweries are seeing as a panacea: the low-cal, low-ABV IPA. In coming months, Abita Brewing Company’s Hop 99, Oskar Blues Brewery's One-Y, and Saranac Brewery's IPA 100 are just a few of the offerings moving into this space, which is already occupied by the likes of Dogfish Head Brewery's Slightly Mighty IPA. All measure around 100 calories and 4% ABV.
In an interview with Brewbound, Goose Island’s president Todd Ahsmann told the outlet that the brewery wanted to fill demand from wholesalers for low-calorie options and that in Chicago, the beer was tops in gaining share at Jewel-Osco grocers.
“We’re not positioning this as an extreme ‘change your lifestyle’ kind of beer,” Ahsmann told the outlet. “This is a beer for your lifestyle that’s now. That’s for people that’s just a little more mindful of what they’re drinking and eating and how they’re living their lives.”
In an interview with Brewbound, Brewers Collective president Marcelo Michaelis said he doesn’t think the new IPA will cannibalize sales from the brewery’s other IPA brands, but with total production and chain-store sales declining, it may not be an issue to worry about. The simple act of adding a new product to market will artificially boost numbers initially, so it’s the staying power that will matter most. On a national level, in IRI-tracked grocery, convenience, and other chain stores, Goose Island’s portfolio (-3%) and IPA (flat) are both showing trouble, too.
On the flipside, AB InBev’s other Brewers Collective business, Elysian Brewing Company, is also getting a new IPA at a time when its two core India Pale Ales can’t be stopped.
Nationally, Elysian has added 24% more volume growth in IRI stores over the last 52 weeks ending Oct. 6, with Space Dust IPA (+30%) and Dayglow IPA (+29%) showing significant gains. Joining them in 2020 will be Contact Haze IPA, which, at 6% ABV, is technically a "low-ABV” entry from the brewery into the national market. (Space Dust, at 8.2%, and Dayglow, at 7.4%, are both much higher.)
The play here, according to Elysian’s general manager Kyle Fitzsimmons, is to corner a part of the market that hasn't yet been defined by national, New England-style IPAs. The business has been successful in the IPA category as a whole: through the first nine months of 2019, Elysian added sales volume of about 17,400 BBLs in IRI stores, almost entirely from its Space Dust and Dayglow brands.
“There are 210 brands that make up like 75% of the dollar sales in the IPA category, but only seven brands contribute to like 75% of the dollar sales in the hazy category,” he told Brewbound. “So a pretty small amount of hazies that are contributing to a lot of growth in the hazy category.”
So far, Sierra Nevada Brewing Company's Hazy Little Thing has been the leading Hazy IPA brand for widely-distributed beers, increasing in volume by 160% in the last 52 weeks and selling almost as much (about 87,000 BBLs’ worth) in national IRI stores as Space Dust (about 94,000 BBLs’ worth). Samuel Adams' New England IPA (+182%) and New Belgium Brewing Company's Voodoo Ranger Juicy Haze IPA (+66%) are two of the other leaders continually trending up in the New England-style category with far-reaching distribution.
Both of these releases emphasize the changes faced by Goose Island (acquired by AB InBev in 2011) and Elysian (acquired by AB InBev in 2015). The former has slowly been on the decline and fighting to keep up, sending new beers to market that play off hazy, juicy, and, most recently, wellness-focused trends. The latter, in the last year, has become a cornerstone of AB InBev’s larger play in the hop-forward arena of U.S. craft beer. Elysian’s Space Dust has fast become one of the defining IPA brands for consumers thanks to a powerful distribution footprint. And the soon-to-launch Contact Haze IPA should fit within an area of increasing sales and biological preference, and may prove to be a powerful third prong for wholesalers looking to load up on IPAs, particularly as the style continues to drive sales and growth.
Either way, both examples show ABI’s willingness to lean in, as well as its hopes that its size and scope will help draw more interest and sales dollars from consumers.
Words by Bryan Roth