Molson Coors Beverage Company’s hibernation of the Saint Archer Gold brand is benefitting upstart active lifestyle lager maker Island Brands.
In the Southeast, grocery chain Publix has begun filling the void left by Gold with the Charleston, South Carolina-based beer maker’s Island Active — an 88-calorie (per 12 oz.), 4.2% ABV light lager, which launched in March just ahead of the COVID-19 pandemic.
In addition to Publix stores, Southeastern Grocers (Winn-Dixie, Bi-Lo and other store chains) has also begun placing Island Active in the holes left by Gold in nearly all of the grocery chain’s 800 stores in the southeast.
Similar to Gold, Active is meant to be an active lifestyle alternative to Anheuser-Busch’s Michelob Ultra, which is now the second-best-selling beer in U.S. off-premise retailers year-to-date through July 12, with more than $1.4 billion in sales (+24.4%), according to market research firm IRI.
Island Brands is hoping to cut into a fertile domestic super premium market that is dominated by one brand and has totaled more than $2 billion (+20.5%) year-to-date through mid-July.
Portfolio-wide dollar sales of the Island portfolio — which includes Active and Island Coastal Lager — have accelerated, +182% over the last four weeks, +165% over the last 12 weeks, and +125% over the last 26 weeks, Island Brands reported, citing data from market research firm IRI.
In Publix stores, dollar sales of the Island portfolio have increased 175% over the four weeks ending June 14, the company said. That made the Island brand family the second-fastest-growing brand family, posting higher dollar sales than Gold, Kona and Shiner over the four-week period, the company said.
Speaking to Brewbound, Island Brands co-founder Scott Hansen recalled Publix calling the Tuesday after Molson Coors announced it was pulling Gold. The grocery chain wanted 12-packs of Active to go with the 6-packs that were already on its shelves.
“Our sales data showed that our 6-packs by dollar volume are outperforming their (Gold's) 12-packs, which is a magic trick in and of itself, especially for the limited amount of PODs (points of distribution) that we were in relative to them,” he said. “We’re really fortunate that Publix came along and then shortly thereafter Winn-Dixie. And now, several other smaller grocery chains have decided to take Active in some form, whether it be a 12-pack or 6-pack.”
Backfilling the Saint Archer Gold shelf space essentially served as a fall reset for Island Brands in the southeastern grocery chains.
Active was set to launch in March — which was met with a global pandemic that derailed spring resets and fierce competition for slim cans. Nevertheless, the brand was able to gain 1,200 points of distribution at Publix stores, and has since gained an additional 4,200 points of distribution, Hansen said.
Given the lack of opportunities to trial the brand and a go-to-market strategy that was initially built around lifestyle and fitness events that were no longer happening, Active has held its own, Island Brands co-founder Brandon Perry said.
“We were fortunate to get it into the plan-o-grams where we wanted in our footprint, and they eventually did make it in there,” he said. “We’ve got the majority of the placements where they need to be, and the brand is pulling.”
Nationwide, the company’s Active 6-pack is the second fastest growing new lager 6-pack in all geographies over the four-week period ending June 14, trailing just Anheuser-Busch’s Budweiser Nitro Reserve, according to Island. Keep in mind that Island’s two offerings are only sold in just eight states.
In Florida, dollar sales of the Island portfolio have increased 187% over the latest four weeks, and Island’s portfolio is the second fastest growing brand family, the company added. Across the southeast, the Island portfolio of brands have increased dollar sales 160% in off-premise retailers during that same period. Dollar sales are growing triple digits in several southern states in that same time, including Tennessee (+382%), Georgia (+130%) and Alabama (+207%), with the company’s offerings ranking as the fastest growing lager brand family in the latter two states.
Hansen and Perry launched the Island Coastal Lager brand at the end of 2017, with ambitions of growing to 100,000 barrels. They struck a co-packing agreement last year to produce their offerings at New Belgium’s facility in Asheville, North Carolina.
In its first full year in production, Island Brands produced 6,000 barrels. The company is on pace currently to produce 12,000 barrels by the end of 2020. In 2021, the goal is to produce anywhere from 50,000 to 60,000 barrels, according to Hansen.
To get to those lofty goals, Island has two innovations set to launch in the spring — and neither of them is a hard seltzer. The goal, according to Hansen and Perry, is to release high volume, better-for-you offerings in the domestic super premium space.
“We really want it to be the tip of the spear to compete with industrial corporate beers,” Hansen said.
As such, the company will release Island Lemonada, a shandy made with fresh fruit puree and Island Coastal Lager as the base.
“Roughly 88% of the shandy market is held captive by one one company,” Hansen said. “And so we see this as another opportunity to be the tip of the spear against macro.”
The second innovation will be Island Southern Peach, which will be made with southern peach tea and Island Coastal Lager base.
“Those are all in the easy drinking beer family,” Hansen said. “Island Southern Peach, when you look at that category, hard tea is again held by one particular company that has the majority.”
All of Island’s offerings are line-priced in the super premium domestic set, with 12-packs retailing for $15.99 and 6-packs priced at $8.99.
Island Brands is now targeting “a breakout year in 2021,” while going “three miles deep” in the southeast and maintaining its southern roots, Hansen said.
"We really want to go as deep as we can in the southeast, and do it right," he said.
Even as it looks to strengthen itself in its home market, Island is also looking to export Island Coastal Lager, with plans to ship to Costco stores in Shanghai, and potentially Japan, Australia and New Zealand.
The push comes as Hansen and Perry have removed the word “craft” from their pitches. Their aim is to be a player in the domestic super premium space.
“Month over month we’re breaking our own sales records, including this past month of July,” Perry said. “So the trajectory is good. Are we going to get to 100,000 barrels? I think the answer is yes. How fast will that happen? Really that is dictated by some things that we can control and some things that we can’t, so we’re going to try like hell to get there as soon as possible.”
Getting there will include a greater focus on the convenience channel. Island is in the process of hiring a national accounts manager to build its business in c-stores and small format chains.
“It’s an important vertical for us, and it’s long overdue,” Perry said. “It just needs more attention.”