The Biggest Supplier You’ve Never Heard of: Geloso
If you’re in the half of the US that doesn’t yet know what Johnny Bootlegger or a Clubtail is, you will by next year.
The company behind those brands, Geloso, is the third-largest FMB player nationally in c-stores (52 weeks to 6/14), behind Mark Anthony and Boston Beer, although currently only in 30 states. They’re up about 23% in volume in that period, slightly more in dollars.
In some Southeastern states, they are the top FMB player by volume in c-stores.
And yet, many have never heard of ‘em. VP U.S. sales Paul Rene told BBD that’s by design.
But that’s about to change. They’re filling out the rest of their U.S. footprint, having spent millions to expand capacity (including a contract deal with City). They’re actually in stock. And their status as the largest FMB player without a seltzer offering is about to change too, BBD can report.
Paul strikes me as the Bill Hackett of FMBs, and it’s not just the office in Rochester: He’s a longtime industry vet. Kinetic. And very, very friendly.
GROWN EVERY YEAR SINCE ’05. Their two flagship brands, Johnny Bootlegger and Clubtails, have experienced double-digit growth since at least 2014. Total company, “since 2005, every month that we’ve been in existence has been higher than the month before,” says Paul. They’re “very proud of that.”
Currently, the 14-year old Bootlegger brand is estimated to do about 1 million cases in 2020, up 40% YTD. Clubtails, born in ’09, is now the company’s top product line, estimated to do 3.6 million cases this year, up 25%.
But despite having grown double digits for more than half a decade, they have no out of stock issues.
“Stock management has been pretty key for us with no real outages to speak of. Rate of sale increases have pressured production and logistics to move orders up to satisfy distributor partner needs,” Paul said.
$50 MILL EXPANSION TO GROW BEYOND 30 STATES BY NEXT YEAR. “We’re only in 30 states,” says Paul. “We had capacity issues at our plant. The plant is in Laval, Quebec, right outside of Montreal.”
They’ve just spent $50 million to expand the plant, “so I could start cutting my teeth in more new markets, because we got a lot of opportunities that we’ve had to kind of put on hold.”
Between that and a contract deal to produce in the U.S., Geloso plans to go national in the next 12 to 18 months.
“We’ve kind of done it the old fashioned way, door-to-door. We don’t assign brands over the phone. I’m an old purist… I’m the handshake guy. Get to know everybody, walk in; we’re not coming in with a multi-million dollar media campaign. So, we’ve done it through relationships — and what I like to call honest hard work.”
BOOTLEGGER A TOP C-STORE BRAND. “North Carolina was the first state that hit [and their largest market today], and Bootlegger just… I can’t explain it to this day. It’s become now one of the top IRI scanning brands in the convenience sector of anything in the FMB category. To this day, it’s just a huge brand for us.”
AS FOR CLUBTAILS… “This is kind of neat because it’s more cocktail in profile without all the carbonation.”
“It’s our second brand that’s never had a month that’s been smaller than the one before. We had our biggest month ever in June. Both in distributor sales and in brew sales. So, yeah. We tried to be under the radar, but that hasn’t really happened, and I guess what I love the most, we’re in 30 states, but the appointments we had in 2003, ’04 and ’05, they’re all with us, and they’re all up.” So they’re not growing by declining in one market, while adding new states.
Not has velocity per point slowed.
For that metric, “we’re down in only four states out of 30, year-to-date,” says Paul, and most of those down states don’t do much single sale volume.
Geloso does the majority of volume in single serve. But they’re adding larger packages soon.
GETTING INTO LARGER PACKS. With their latest expansion, they have the ability to go beyond single serve packages. “So our 2021 planning platform is going to include a lot more large format-type packages. For our volume in certain states, it’s a crime. You can’t buy us across the street at the grocery store.
“Harry, we just did a bin program [at a couple large grocers], and we got some great play. So we know we can do that.”
A ROADMAP FOR WHAT THEY’RE OPENING. “We’re not one of the big boys. We tried to stay under radar by design. That wasn’t a secret.”
That’s out the window now.
“But we’re in all the major wholesalers. We just opened up California,” mostly with Reyes, and then with A-B in the north. “We’re opening up Illinois in the next few weeks. Those are the last big populated areas we’ve got.”
As for their current network, “We’re split,” says Paul. “Half MillerCoors, and we’re half Bud. … Florida, we’re mixed. North Carolina, we’re mixed. South Carolina, we’re mixed. Georgia, we’re mixed. Virginia, we’re InBev pure. Mississippi, we’re MillerCoors pure. Alabama, we’re split 50/50.”
What do they have left to fill?
The last 18 contiguous U.S. states to knock out are generally “in that north central corridor, the Dakotas, Wyoming, Utah,” and then the Northeast: “Maine, Vermont, New Hampshire; they’ve got 6% laws. Our big sellers are 10% and 12%. So, the New England portion up there. And the liquor states are always smaller in sales for us, so Mass… So we got to fill that corridor up.” Plus Wisconsin and Minnesota.
WHAT NETWORK DO THEY PREFER? Do they prefer to be outside a Mike’s house?
In the beginning, they went with whomever would take them. Now they can be choosy.
“Our biggest distributors have Mike’s. Our largest distributors of our top 10, probably five or six of them have Mike’s. So, I think we helped build the category. We had a chain early on, gave us an opportunity, and he said, ‘I love that you have a different taste profile. Mike’s [is] on fire.’ And we developed a two-for program where you could buy off the shelf. … And that really gave us some legs.
“In a perfect world, we want to go where there’s less skus. You still have some InBev markets that want to be pure or almost pure, which diverts us to the other side. We just have to work better and smarter because that’s not going to go away. That consolidation has hurt companies like ours, quite frankly. I mean, we’ve done very well, but it has been challenging because we should be national today.”
SELTZER WILL HIT NEXT YEAR. What’s next?
Seltzer, of course. It’s time for them to change their status as the only major FMB producer to lack a player in the hottest bev alc segment.
“It’s a 2021 launch,” Paul told BBD. “The beauty we have now is, we’re in most all the chains. We did this the old fashion way: door-to-door, grass roots.”
Now is the time, he says, because he believes that distributors will start to close the door on more brands.
“I’ve talked to a lot of distributors, and they said, ‘Paul, there’s going to be a window, 2021, because we’re going to cut a lot of them, because it’s so dominated by so few. … You’re a reputable player, we don’t have to buy trailer loads; we get trailer loads already. So you have a natural entry here.’ When [you] talk to a distributor, you learn a lot more by listening than talking. I took credence in [that].”
More soon. Stay tuned.
MOLSON COORS “HIBERNATING” SAINT ARCHER GOLD; MORE RESOURCES BEHIND VIZZY AND LIGHTSKY
Building a new brand during a pandemic has its challenges, particularly when the plan relies heavily on sampling.
Molson Coors sent a memo to wholesalers on Friday from marketing chief MSJ — which BBD obtained through nefarious backchannels — which indicated that they are “hibernating” Saint Archer Gold, their response to Michelob ULTRA. As we understand, their plans to massively sample the brand were obviously disrupted by the COVID landscape.
Instead: “We have decided to accelerate our play with Blue Moon LightSky and in hard seltzers with Vizzy and the forthcoming Coors Seltzer,” writes MSJ. “Vizzy and Blue Moon LightSky have emerged as two of the top category innovations through the first half of the year and are significantly outperforming expectations. Blue Moon LightSky is the top-selling new beer item in 2020, according to Nielsen, the Vizzy variety pack is the No. 3 new item introduced in 2020, and we have a strong launch plan and chain support for Coors Seltzer.”
MSJ stressed that this “decision is in no way a reflection of the team at the Saint Archer Brewing Company, their talents or their dedication to brewing high-quality beers. Moving forward, we plan to sell through existing inventory of Saint Archer Gold.”
THE NUMBERS. Saint Archer Gold, which went national at the start of 2020 and had a Super Bowl spot to boot, has done about $7.7 million in dollar sales YTD to June 14 in IRI multi-outlet and convenience scans.
Blue Moon LightSky, launched at the start of February, has doubled Saint Archer Gold’s sales, raking in about $15.5 million YTD.
Then Vizzy, which launched in April, has brought in a whole lot more dollars than SAG, too, around $12 million YTD.
OUR TAKE. MC is cutting bait early rather than putting good money after bad. The concept was a tough sell to begin with — a national brand with no national brand recognition, and now with COVID, no way to spend your way to it. Cut the dross on the hull, and break free, particularly during product shortages.
BAR RECLOSURES HIT NEVADA, LOUISIANA. Over the weekend, several more areas closed bars again amid rising coronavirus cases. Nevada shut bars down Friday night for seven counties, including Clark (Las Vegas). From USA Today: Those bars without food service were to close indoor operations (seems like to go is OK), and while restaurants are allowed to serve booze, “for now, you can’t grab a drink at the bar while you wait for your table.” And in Louisiana, Gov. John Bel Edwards ordered bars to serve drinks only in a to-go setting, effective at 12:01 Monday morning. He also mandated masks statewide.
Harry, Jenn and Jordan
“It is better to deserve honors and not have them than to have them and not to deserve them.” – Mark Twain
———- Sell Day Calendar ———-
Today’s Sell Day: 9
Sell days this month: 23
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: +1