Beer Marketer's Insights - 3 Floyds Production +4% to ~112K Bbls in 2023; Core Focus, Gumballhead Innovation, New IPA & Spirit RTDs in 2024

3 Floyds volume kept marching upward last yr as co continues to climb the ranks among top craft brewers in the country. That's even as volume came in below initial growth targets as the industry faced (and continues to face) "a lot of headwinds," sales & marketing prexy Jason McMackins and marketing director Cory Just shared with CBN. Production grew 4% to 111,850 bbls in 2023 vs 2022, including 3 Floyds brand up 2% to 90K bbls and WarPigs brand up 14% to 21,500 bbls. After co started up 8% thru 1st half of the year, 2d half "really tightened up for us," Jason acknowledged. Yet volume was flat in 2d half. Its 4% growth for the year significantly outpaced total industry and craft beer declines last yr, he pointed out. And co's still posting 7% CAGR over the last 5 years. Cans Now Half of Volume, Up 22% LY; Draft Flat, Bottles Soft 3 Floyds package mix has changed dramatically in recent yrs, with cans now making up half of co's volume. Cans grew 22% to approx 56K bbls last yr. Draft volume was flattish in 2023 and still makes up 37% of its mix overall. That's below 42% of its mix pre-Covid, but total draft volume is above pre-Covid levels as co gained more than 27K bbls since 2019. Gotta note, total beer keg volume was down in 2023 vs 2022 and remains 3/4 of pre-Covid levels in available data. So 3 Floyds is bucking the trend on kegs too. But like many established craft brewers, bottle sales are the biggest drag on 3 Floyds overall biz. Bottles declined steep double-digits in 2023 as 3 Floyd's is no longer innovating in bottles and "expansion on cans" is coming at the expense of bottles in its portfolio. But that's driven by consumer and retailer preference toward cans, Jason added.Zombie Ice 9,600 Bbls in Yr-1 While Zombie Dust Grew Too; Variety Pk 8,400 Bbls with Room to Run 3 Floyd's launched two sizable new brands in 2023 that added an incremental 18K bbls to the portfolio. Zombie Ice reached 9,600 bbls and 3 Floyds first-ever variety pk reached 8,400 bbls, Jason shared. Both Zombie Ice and variety pk were among top-4 new BA-defined craft innovations in scans last yr, he highlighted; variety pk was #2 and Zombie Ice #4. Key stat for Zombie Ice: core Zombie Dust managed to grow slightly for the year while adding a ~10K-bbl line extension. So even with 2024 setting up to be a challenging comp for Zombie Ice, co's looking at Ice as a strong complementary brand that can "sit right next to" its flagship pale ale. Variety pk was another story, and a package type that co's just getting started in, Jason and Cory detailed. 3 Floyds couldn't keep up with demand on variety pk in year-1. So co expects to have run room in year 2 and beyond, Jason thought. It also launched new Power Pack variety pk, combining 3 Floyds and WarPigs brands with Zombie Dust, Zombie Ice, Foggy Geezer and Blinding Light Show IPAs.Gumballhead Lookin' to Curb Declines w/ LTO Variety Pk, New Styles, 19.2s & More in '24 As Zombie Dust pale ale rose to become 3 Floyds #1 brand, its original lead brand Gumballhead wheat pale ale has faced challenging declines in recent yrs. It's still co's highest category weighted distribution (CWD) brand but it's "taken a back seat," Jason acknowledged. "We haven't innovated around that as much," but that "will change this year," he declared. Gumballhead LTO variety pk will launch in Apr, featuring 3 new variants in different beer styles altogether: hazy IPA (6.5% ABV), double IPA (8.5% ABV) and blood orange & lemon pale ale (4.8% ABV). They're "having fun with the brand" working with artist Rob Syers for unique crayon designs on packaging. And co's adding 19.2oz cans of core Gumballhead to the mix as well. This brand is still "big" among craft wheat brands in its footprint. So this yr co's trying to "put a little [more] attention to it" while striking a healthy balance to "reinforce the core" and draw new consumers.RTD Line Launching in Core Mkts; 5% ABV Vodka Sodas & 9% ABV Vodka Splashes 3 Floyds is taking a stab at the bustling RTD spirits biz with four new canned cocktails launching next week. This includes two 5% ABV vodka sodas, coconut lime and pineapple mango, plus two 9% ABV vodka splashes in pineapple, lemon & lime and orange, lemon & pineapple flavors. They'll be available in 4pk 12oz standard cans for $10.99 to $12.99 at retail. Recall, 3 Floyds has been distilling since 2019, finetuning its small-batch bottled spirits biz. Co initially experimented with creating canned whiskey sours and/or ways to riff off of the Zombie brand in cocktail form, but ultimately landed on vodka-based drinks to "cast a wider net" for its RTDs, per release. Yet "everything we do" is intended to "reinforce the core" thru branding, artwork and more. And this is intended to be a "small piece" that can be an "opportune piece if we do it well," Jason noted, acknowledging that the shelves are already crowded and lots of suppliers of all sizes are coming after it. 3 Floyds RTDs will launch in IL and IN plus WI, MN and OH for starters.Turbo Reaper IPA Enters the Mix; Jinx Proof Pilsner Back in Core; Foggy Geezer 19.2s 3 Floyds is launching a new "tried and true" west-coast style IPA called Turbo Reaper. That's as Barbarian Haze has been phased out amid tuff declines after its initially successful launch amid a crowded space. But Turbo Reaper "fits naturally" with a "great looking package," not looking to over-extend it. Jinx Proof lager will graduate to year-round availability after returning last yr for limited release. And WarPigs Foggy Geezer hazy IPA will get a 19.2oz can, giving 3 Floyds company its top-4 brands all available in 19.2 format.Core Focus & Innovation Expected to Keep Co Rollin' in 2024 3 Floyds increased focus on core brands and complementary innovation is expected to help fuel more growth going forward, even as craft challenges aren't expected to let up, Jason and Cory shared. "Nothing gives the impression" it's getting "any easier in the short term" for the segment, said Jason. But WarPigs is expecting similar low-double-digit growth pace this year as co drills deeper in existing footprint and expands further, viewed as having "a lot of upside." And on top of bigger push on core and new innovations for 3 Floyds brand, co will benefit from late 2023 launch of IA thruout most of 2024, continued growth in newer mkts like western PA, and stronghold in core midwest mkts. Marketing team is "hitting full strides" with Cory and team only in place since end of 2020, Jason noted. New, more streamlined website is up and running since mid 2023, and co's "really doubling down" on how to "breathe new life into" core brands with consistent and connected strategies, Cory added. This yr will mark the 20th anniversary of Dark Lord day and 2d year back since Covid shutdowns, leaning into marketing of the festival thru social channels and beyond. Its taproom is in "early phases" of construction with hope to get it up and running by late 2024.

3 Floyds Production +4% to ~112K Bbls in 2023; Core Focus, Gumballhead Innovation, New IPA & Spirit RTDs in 2024

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