ROCHESTER, N.Y. -- North American Breweries (NAB) stands as the fifth-largest beer brewer in the United States. And with regional favorites such as Genesee, Labatt Blue and Pyramid, among others, it would seem the odds of breaking out of that position are unlikely.
But NAB has a secret weapon, an ace in the hole that it sees as its ticket to national distribution and an avenue to bring its now-niche drinks to a larger consumer audience.
During an exclusive visit to NAB’s brewery in Rochester, N.Y., CSP Daily News got an inside look at the beer maker's facilities and its breakout strategy. Here are five highlights from that visit …
1. Seagram’s secret
NAB’s Seagram’s Escapes flavored malt beverages (FMBs) go back as far as 1985, a boom time for the wine-cooler movement. As a survivor from another generation, the colorful drinks, now available in 18 flavors, have seen a comeback in recent years as FMBs have found an audience across multiple generations.
FMB category case sales were up 6% in convenience stores in 2016, according to IRI, a Chicago-based market research firm. The Seagram’s Escapes brand family grew 96% in case sales in all channels and 146% in c-stores during the 52 week period ending July 16, according to IRI data.
A big part of growing Seagram’s Escapes has been a focus on c-stores that began about two years ago. And NAB quickly learned the way to standout in the cold vault was to offer something different.
“There are a lot of watermelon and lemonade flavored FMBs out there,” said Jennifer McCauley-Toper, associate brand director of progressive adult beverages for NAB. “We had something different.”
That something different was Jamaican Me Happy, an original, fruity flavor with a taste of the islands. It’s the best-selling flavor of Seagram’s Escapes and set the stage for NAB’s next move into c-stores and a national presence.
2. The new line
As the best-selling flavor of the 3.2% alcohol by volume (ABV) Seagram’s Escapes, Jamaican Me Happy was the perfect jumping off point for NAB’s move into a high-ABV line extension: Seagram’s Escapes Spiked.
Spiked will launch in October in two flavors: Jamaican Me Happy and Strawberry Daiquiri, the No. 2 flavor of the 3.2% ABV line. At 8% ABV, Spiked follows a trend of recent FMB product innovation, from Mike’s Harder (8%) to Four Loko (14%). But McCauley-Toper felt there was an opening for something different.
“Most flavors of FMBs are offered only in the 3.2% ABV, so we saw the need” for some variation in higher alcohol, said McCauley-Toper. “It’s the same consumer, but it opens up different occasions.”
NAB expects the new spiked drinks, packaged in 23.5-ounce cans, to find a home in c-store cold vaults alongside other single-serve beers and FMBs.
It also sees the combination of Escapes and Spiked as the ticket to national distribution.
“Seagram’s is our first chance to really be a national brand,” said Kevin Kraft, director of strategic accounts for convenience stores. “It’s our opportunity to get some scale.”
3. Flavor first
While Seagram’s Escapes Spiked haven’t launched yet, NAB knows innovation and variety are what keep customers coming back. So it’s already got a line extension in the works; third flavor Calypso Colada will roll out in February 2018.
“The consumer shops this category by flavors,” McCauley-Toper said. “Everything is about flavor and taste.”
The secret to coming up with innovative new flavors is to watch trends elsewhere in the consumer products world, she said. “We look at other product categories. We look at milk, coffee, gum."
In fact the most recent addition to the 3.2% ABV line of bottled Escapes was Cucumber Lime, a flavor “borrowed from Gatorade.”
4. Beer next
Once NAB builds a distribution network for its Seagram’s products, the door is open for expanding the brewer’s beer products.
“Seagram’s is the one [brand] that we look at as opening the door,” Kraft said. “[Once that happens], how can we make our portfolio brands more relevant to the customer? And the answer begins with distribution and innovation.”
Currently, Labatt accounts for 50% of NAB’s sales volume, followed by Seagram’s (25%), Genesee (16%) and craft beer Magic Hat (4%).
“We’ve got a lot of runway for our current brands, and we’ve got a lot of runway for innovation,” Kraft said.
5. In the brewery
In the meantime, NAB is powering up for the increased volume it hopes to see. Its primary facility, the Genesee Brewery in Rochester, N.Y., is in the midst of a $49 million renovation, a five-year plan to create a Genesee Eco-Brewery District "that will sustain and grow the business, spark innovation and raise quality standards," the company said.
“We’re rebuilding the brewery from the ground up,” said Mike Gaesser, director of packaging innovation. “We’ll be fermenting in new tanks by next spring, which will make us faster and leaner.”
The project includes installing an improved brewing system, expanding the brewhouse restaurant and adding new event space.
The brewery was built in 1878. The last renovation of the space was done when the brewery ran only four brands of beer. Today, it makes hundreds of products.