(Woodlinville, WA and Portsmouth, NH) – The famed Redhook Brewery turns 30 next year. The brewery is making some big changes but will they be enough to turn around sagging sales?
The label you are looking at above is actually the new artwork for a beer launched this past April known as Redhook Rope Swing Pilsner. The beer will now be known as just Redhook Pilsner and similar changes will extend to other brands such as its top-seller, Redhook Long Hammer IPA, in an attempt to re-connect consumers with the everyday drinker’s brand.
The Long Hammer name, for one, didn’t last long. According to this year’s Craft Brewers Alliance annual report:
The Company engaged in systematic initiatives to re-branding Redhook IPA into Long Hammer IPA and relaunching this brand with new packaging and a concentrated focus as the Redhook flagship in January 2007. Leveraging off of the growth of the India Pale Ale (“IPA”) category, this re-branding effort resulted in an increase in shipments of Long Hammer IPA from 2007 to 2008 by approximately 15% and it became the number one brand in this category, a position it continued to enjoy at the end of 2009.
As part of these initiatives, the Company re-examined its pricing strategy and increased the brand family to price points comparable to the market leaders in the last couple of years. As the IPA category continues its growth, the number of competitors entering this category has increased significantly, with scores of smaller craft brewers producing both draft and bottled products that compete directly with Long Hammer IPA. These smaller craft brewers’ products are especially effective in their local markets. The overall Redhook brand family, including Long Hammer IPA, has been most competitive in its core and traditional markets where the brand identity is well established.
The next annual report will read quite differently. The competitive climate for the category has changed dramatically over the past couple years with the introduction of year-round IPAs from players much bigger than Redhook including Samuel Adams, Sierra Nevada Brewing and New Belgium Brewing. Those brands are challenging Long Hammer’s position as the top-selling IPA in the country.
Symphony IRI data released in July showed that Long Hammer is struggling a bit with a 1.5% decline in YTD sales compared to last July. The brand was ranked as the 10th largest beer in the craft beer category but will soon be, if it hasn’t already been, passed by the surging Sierra Nevada Torpedo Extra IPA, also knocking it out of the top IPA spot. Making matters worse for Long Hammer, New Belgium Ranger IPA, launched this past February, has already ate up a chunk of the IPA category with sales nearly half that of the category leaders
Brand issues go well beyond the IPA though. Redhook ESB sales were shown to have declined 7.6% in the same report. Even more concerning, brand shipments plummeted from 200,800 to 183,600 from 2008 to 2009 according to its annual report. That is an 8.6% drop at a time where the shipments in the craft beer category, as a whole, rose 7.2%.
Packaging appears to be at least one answer to that problem. In addition to the new look, the brewery will offer its beer in cans for the first time next year according to a source.
Redhook operates by a different set of rules from most small brewers as part of a publicly traded company though the news brings to mind a recent interview with Lagunitas founder, Tony Magee, in which he says…
The big breweries, and maybe some craft breweries, for all I know, they spend a lot of time figuring out who they think they are, and make beer that fits that persona, or give people their opinion for them and buy beer to fill that need. It’s all kind of manipulative. I suppose that if Aerosmith does an album now, they have to make it sound like Aerosmith, even if they might like to do a jazz album. A lot of breweries act that way. It’s sort of sad. I like things that express themselves, as they are, in time, whether it’s music, poetry or beer. I like to think of ourselves as somewhat artistic, and what we’re doing is really soulful. We don’t know if it even is or not. You’re just trying a way to recode what you are, what your values are. It’s a bottle full of liquor with a label on it. You put it out there and it’s really truthful, it works. You don’t need to promote it. People are hungry for authenticity.
Will Redhook’s new brand ‘persona’ help it re-connect with consumers? Wait and see.