Article

Craft Business Daily

Does Wheat Beer Have a Problem?

August 29, 2011

Dear Client:
On the recent CBA call, Andy Thomas and Co. let onto a new strategy for Widmer Hefeweizen. The brand would “continue to evolve and draw crossover consumers,” though it’s “not going to hold the same place in our portfolio that it once did.” One Q2 earnings caller pressed Andy Thomas on the insights they’d mentioned mining about the brand. Andy responded cryptically that it would take him a day to go through. (We’ve been promised more on that later this week.)
But for the bigger picture, the comments reminded this editor of rhetoric surrounding another mature hefe brand. NAB’s distributor meeting last January addressed Pyramid Haywire’s somewhat stagnant growth. Brand managers promised the distributor crowd that they’d been digging into their sales network for insights and found that the name and packaging weren’t resonating. Key, however, was that it is still seen as “good beer” with “craft credentials,” and that it was “good for social occasions.”
That insight could help answer the question of whether there’s some sort of consumer backlash against the taste of wheat beer, or if we’re simply seeing the maturation of these flagship brands. Surely not all wheat brands are doing badly – Oberon, for example, is Bell’s bestseller, even though it’s only available for half the year.
SOFT IN MOST MARKETS. But there does seem to be a softening of the style in most markets. So far this year, case sales for craft wheat are down 0.6% after its most intensive season in supers; last year the style was up 2.5% overall.
The Northeast is down 8.2% YTD, after having been up 25% in 2010. In fact, the only regions the style is not down in are South Central, Southeast and Great Lakes. The South Central region, which had previously been down 12% and 14% for 2009 and 2010 case sales in supers, are now up 8.4% YTD. Great Lakes region has been a strong one for wheat in the last few years, up double digits in food channel case sales; YTD, it’s up 23%. So some pinball action with numbers there.
Could it have to do with where palates are after the maturation of certain markets?
POTENTIAL PROBLEMS. Boulevard Wheat is one of the industry’s biggest American wheat brands: At the half-year mark it was at just under 100,000 cases. Despite their momentous Tank 7 brand and super popular Smokestake sleight of offerings, wheat is still their No. 1 brand in markets like Colorado, Dallas, and Chicago. Sales and marketing vp Bob “Sully” Sullivan says that’s not necessarily by the brewer’s design. It’s the brand the Midwestern college (of age, of course) kids drink because of its sessionability, so that’s the one they gravitate to when they find themselves in new markets with it.
But Boulevard Wheat was still slightly down in all-channel data at the half-year mark. Bob admits it hasn’t grown as fast as their other brands, which is common of flagships anyway. But he points to another culprit: Slow draft sales. He hopes on-premise will pick up when the economy turns, and help the brand grow again.
Another challenge for this brand in particular is educating the other two tiers about the American wheat style, which is considerably different than a hefeweizen or Belgian wit due to the absence of strong coriander, banana or clove notes. Some distributors even have a hard time differentiating this.
Which begs the question of whether consumers may be confused about what they’re getting when they order a wheat. Even their inter-industry categorization is somewhat tricky: SymphonyIRI cobbles hefeweizen and American wheats into a craft wheat category, but Belgian wits have their own.
WHAT ABOUT WITS? And since we’re talking wheat-based Belgians. Allagash makes one of the most popular at the moment, up 15% in a category, craft Belgian wits, that was down almost 10% in YTD numbers ended June 12. The majority of brewer Rob Tod’s 30,000 barrels are the White, which has been on fire for about the last five years. He says he couldn’t give the stuff away for the first 10.
Rob is not a spreadsheets-and-marketing-trends kinda guy. But he can tell you why he likes the beer more every year: “There’s so much going on with an authentic Belgian style white beer: huge flavor complexity, huge flavors in the beer. But yet, it’s pretty refreshing and quaffable. You can sit down and have a few Belgian whites and you’re not just overwhelmed with these big flavors.” Sounds like that flavorful sessionable beer everyone keeps talking about being the next big thing.
BEER BRIEFS:
PRESSED ON YARD HOUSE’S EXPANSION INTO PORTLAND, one of eight new locations, CEO Harald Herrmann gave OregonLive some interesting tidbits about the chain. They don’t tout themselves as having the world’s largest selection of draft beer anymore. They no longer serve yard-long beers. They can get uber-crafty in some markets (like Portland). And, interestingly, they feel like the directive in that savviest of savvy craft markets is to mind how their progression coincides with that of the Apple store in concurrent development. More here.
NORTH DAKOTA IS EXPECTED TO DROP BEHIND Montana and Idaho in barley production this year, according to the Associated Press, having been in a wet cycle the past few. “North Dakota farmers are expected to produce 24.8 million bushels of barley this year, down 43 percent from last year,” according to the story.
Until Monday, Jenn

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Jenny McLean
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