For the first time, Molson Coors Beverage Company is taking one of its craft breweries fully national. Hop Valley Brewing Co. has played on its home turf of the Pacific Northwest until now—but its IPA-driven lineup could be the cheat code that earns it coast-to-coast attention.
The Eugene, Oregon brewery has been one of the quietest, but strongest, beer success stories this year. In 2020, Hop Valley is on pace to grow sales 13% to more than $40 million in chain retail stores, as tracked by market research company IRI. Molson Coors says the brewery has seen overall sales growth of 21% in 2020, bolstered by a strong performance in the Pacific Northwest—two-thirds of its added dollar sales in 2020 have come from Oregon alone.
This growth also speaks to why now is the time to bring the IPA-forward brewery to more outlets. The ways in which COVID-19 has changed how and where consumers shop have only benefited Hop Valley. The brewery has strong chain store placements, offers the 12-packs and variety packs consumers want, and sells at a price point in line with national breweries like Lagunitas Brewing Company, Sierra Nevada Brewing Co., and New Belgium Brewing. Given that such purchasing habits are unlikely to reverse course any time soon, Hop Valley plans to double down on its strategies—on a much larger scale.
Hop Valley is currently distributed to 10 states and will see its multinational expansion in spring 2021, bringing its beers across the U.S. and to Canada. As part of the rollout, Hop Valley will receive an unprecedented level of marketing support and investment. Paul Verdu, vice president of Tenth and Blake, Molson Coors’ craft-focused division, says the company has prepared a “substantial” amount of financial backing for a national rollout, but declined to quantify what that meant.
For drinkers outside the Pacific Northwest—and even some within the region—Hop Valley’s boom appears to have come out of nowhere. Founded in 2009, the brewery largely flew under the radar until its acquisition, but has been on a steady climb in recent years, more than doubling sales in IRI-tracked chains since 2016, when it was purchased by then-MillerCoors.
“Before the Molson Coors sale, they had no reputation,” says Jeff Alworth, the Portland, Oregon-based writer of the blog Beervana and author of several beer books. “It’s a brewery so generic it resists even keeping in one’s mind.”
But what some might perceive as generic, Molson Coors saw as latent, mass appeal. Hop Valley had a name and an IPA—Bubble Stash—that Molson Coors bet could be accelerated into a regional or even national brand associated with the Pacific Northwest and with IPA, craft’s best-selling style by a wide margin.
IPA sells more in IRI-tracked stores than the next three style categories combined (seasonal, Pale Ale, and Wheat). Along with the brewery’s already-strong performance in large grocery stores, chain pharmacies, and club stores, Molson Coors’ distributor relationships and marketing dollars could take the brand to the regional or national level. For a company that has long sought a home-grown hit of some kind, now is the time to cash in all of Hop Valley’s equity.
Overall sales had already been trending upward going into 2020. Then, when COVID-19 put a premium on one-stop shopping and large-format packages, Hop Valley’s beer was sold where drinkers were shopping: in chain stores. The brewery sold 85% of its beer in retail stores (as opposed to bars, restaurants, and taprooms) before the pandemic, according to Hop Valley’s vice president of sales and marketing, Walter Macbeth.
“To have IPA-focused variety packages on top of that, and big packages the consumer is looking for, it’s basically a license to print money,” Macbeth says.
Macbeth lays out the four tenets of Hop Valley’s success in grocery and other chain stores:
Getting onto those stores’ shelves, and having distributors’ attention in making those placements.
Pricing the beer so that Hop Valley will retail at the same price as other competing Pacific Northwest brands, including Elysian Brewing Company and Deschutes Brewery.
Being distributed widely enough that chain retailers can include Hop Valley in so-called “ad and feature” buckets—the beers that have special pricing and appear in weekly sales circulars.
Offering packages drinkers want, including 12-packs of cans, IPA variety packs, and single-serve, 19.2oz cans.
At each step, Molson Coors’ sales and distribution support has only lifted Hop Valley’s fortunes. The brewery had “voice and share of mind” with Molson Coors’ distributors from day one, says Macbeth, which was crucial in helping the brand secure shelf placements alongside other national craft breweries with strong IPA brands, like Lagunitas, Elysian, Sierra Nevada, and New Belgium.
Regional distribution in chains also allowed those retailers to count on a steady supply of Hop Valley beer, enabling them to price it in line with competing national brands, at roughly $14.99-$16.99 per 12-pack and $7.99-$9.99 per six-pack. (Many small craft breweries can’t afford to lower their prices to match national brands.)
The strategy isn’t to introduce Hop Valley to beer geeks via their favorite bartender. The strategy is to go straight to mainstream shoppers—in the ways that matter to them, i.e. price and placement—as they push their carts through Costco or Walgreens.
There’s no Hop Valley success without IPA. The brewery’s five strongest-selling SKUs—Alphadelic IPA, Citrus Mistress IPA, Bubble Stash IPA, Cryo Stash Imperial IPA, and an IPA variety pack—are all variations on the theme.
Cryo Hops, a proprietary hop concentrate developed and sold by Yakima Chief Hops, are the stars of the brewery’s Stash line of beers. Cryo Hops concentrate the lupulin of whole-leaf hops, which contain aromatic oils and resins, allowing brewers to impart more aromatic compounds without increasing bitterness or adding unpleasant, vegetal flavors.
But even Verdu admits there’s not a lot of mainstream awareness of Cryo Hops, and that educating drinkers about them is a component of Molson Coors’ national marketing strategy for Hop Valley.
Alworth is skeptical of how much shoppers will pick up from a grocery store placard about hopping techniques.
“A ton of breweries use Cryo Hops; we’re not talking about something so rare,” he says. (Breweries including Dogfish Head Craft Brewery, Breakside Brewery, SweetWater Brewing Company, and Sierra Nevada have all brewed beers with concentrated products like hop oil, nitrogen-frozen hops, or hop hash.) “Other companies have not leaned into that, because I think it’s a hard story to sell.”
But even if the only message drinkers take away is that Hop Valley uses some kind of special hops to brew its IPAs, that might be enough. According to Nielsen, Hazy IPAs and Double IPAs were the top two best-selling styles brewed by Brewers Association-defined craft breweries in 2019. Hop Valley will soon offer them on a national scale, in packages shoppers want, and at competitive price points.
In selling Hop Valley in Canada, Molson Coors sees perhaps an even greater opportunity to stand out as a national IPA brand.
“In Canada, IPAs are the fastest-growing segment but still on a smaller scale than the U.S. and with less variety,” Verdu says.
The company plans to ramp up Hop Valley production to service these new markets, brewing the bulk of the beer destined for the next 40 states of distribution at Molson Coors’ 10th Street Brewery in Milwaukee.
If it’s successful in its multinational rollout, Hop Valley will have effectively written a new playbook for beer sales—one in which brands aren’t built in beer bars and taprooms, but in grocery store coolers.
Words by Kate Bernot