It’s All About the Cold Snacks

Dear Client:

Between Tito’s, hard seltzers, and super premiums, traditional light beer  has a lot coming directly at their longnecks.

Add another growing genre to the onslaught: craft light lagers.

To that end, it’s been awhile since we’ve reported on Montucky Cold Snacks [see BBD 07-10-2018].  (Cold snacks is slang for cold beer in Montana.   Montucky is slang for rural Montana). Montucky is contract brewed at the former G. Heileman brewery in LaCrosse, Wisconsin, City Brewing Co; and at the rising contract brewer out of Denver, Sleeping Giant.

With just one brand, three SKUs (although they’re toying with a 40 oz. bottle and 24 oz. can) and 14 markets, they’re growing organically and simply. And while they do about 50% of their business through the on-premise already, they’re just now rolling a draft test in Colorado.

So there are lots of levers to pull for this brand that is small, but commanding some mighty attention, even among big wholesalers like Crescent Crown, and Breakthru, for whom the brand is a top SKU.

We sat down with the Montucky team at an Irish bar during CBC (Montucky and Irish whiskey is a popular bar call, if you can imagine) to get the latest.

Founder Chad Zeitner describes their long term vision like so: “revolutionizing the domestic lager world by having fun and doing good.”

Part of their model includes giving a portion of proceeds to local charities. That can be 8% of profits, sometimes higher. So then how do they make money? Consider, they don’t really have a traditional marketing budget, so the charitable angle helps spread their story, too. (They probably have actual marketing departments by now, but anyway, the Toms and Bombas-type, “sell some, give some” model sure seems to be working in other areas of CPG.)

MOVES, TRENDS. Yes, the brand is in 14 states at the moment, and only opened one new state — Arizona — this year. Despite that, they’re up 102% on shipments from the brewery to distributors YTD, so seeing mostly organic growth.

“This year every state we sell to is up at minimum 20% YTD, and 12 month rolling,” said VP sales Jeff Corteau, who came to the brand last year from Rogue, where he’d also been VP of sales.

Last year Montucky did about 23,000 barrels, but this year’s run rate shows that’s likely to more than double, to something like 50K. That’s with just three SKUs — a 6-pack, with 16 oz. cans; 12-pack with 12 oz. cans; and 30 pack of 12 oz. cans (but that one is only in about six markets).  

Montana is their home market and No. 1 per capita for sales, but Colorado is their largest overall, volume wise.  

What sort of distributors do they like? They like to be with distributors where they can be the lead domestic, where possible (obviously, it’s not always possible, which lends itself to wine and spirits distributors). They run them gamut of affiliations: as mentioned, they’re with wine and spirits, multi-state distributor Breakthru, in three markets, but they’re also in some large beer houses, like Crescent Crown.  

LEVERS TO PULL. Will they ever expand offerings? Maybe one day. For now, they have even lower hanging fruit. They’re just starting to really penetrate c-stores. “We currently sell in over 550 c-stores in our footprint, 90% of those are small regional chains or independents,” said Jeff.

All current c-store business is comprised of their 6- and 12 packs, with a few retailers breaking out some for singles. Montucky is looking to introduce a 24 oz. single serve format offering this fall.

As for new markets? They may fill out “a little more of the West Coast” later this year but are focused on “doubling down in our current markets.”  

FEBRUARY IMPORTS DOWN 2.1%, BUT MEXICAN IMPORTS GROW

February imported beer volumes came in at down 2.1%, the Beer Institute reported this week, representing the fifth consecutive month of declining imported beer volume. Shockingly, the 12-month trend is still up 2%.

Despite February’s negative showing, it was still a return to more normal trends than seen in January, where import volumes were down 12%, and Mexican imports were down double digits, at least in part potentially due to border issues, said chief economist Michael Uhrich.

Fortunately, Mexican imports returned to growth in February, up 2% during the month, but that wasn’t enough to overcome the number done on them in January, and Mexican shipments are now down 6.3% YTD.

BEER BRIEFS:

DOS EQUIS MEXICAN PALE ALE HITTING TEXAS AND NEW MEXICO THIS MONTH. After an on-premise only rollout last year, Dos Equis Mexican Pale Ale is finally hitting the off-premise. The hopped-up yet “refreshing” Dos Equis MPA that packs a hint of spicy heat is expanding into the off-premise in two states: Texas and New Mexico. The beer (5.5% ABV) will hit bars, taverns, restaurants and off-sale in bottles and cans in the two Southwestern states this month.

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ED. NOTE:  We are taking tomorrow off for Good Friday (unless big news breaks).  We hope you and yours have a wonderful Easter weekend, and we’ll be back at you on Monday with more insightful news.

Until Monday,

Harry, Jenn, and Jordan

“Quit now, you’ll never make it. If you disregard this advice, you’ll be halfway there.” – David Zucker

———- Sell Day Calendar ———-

Today’s Sell Day: 13

Sell days this month: 22

Sell days this month last year: 21

This month ends on a: Tues.

This month last year ended on a: Mon.

YTD sell days Over/Under:  0