Craft Brews Draw Crowds as They Expand Distribution

Fat Tire, Others Play Up Arrival in New Markets, and Droves of Beer Lovers Respond

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At 6 a.m. on June 21, a two-block line of consumers waiting to buy New Belgium Brewery's Fat Tire beer on its first day of availability in Minnesota in 13 years formed outside Surdyk's liquor store in Minneapolis.
Now available: Fat Tire expanded into Minneapolis; Shiner is sold in Chicago.
Now available: Fat Tire expanded into Minneapolis; Shiner is sold in Chicago.

Not only did the spectacle compare to the unveiling of Apple's iPhone, sales were strong too: Surdyk's sold more than 600 $40 cases of Fat Tire in the first hour, roughly equivalent to 0.14% of the fast-growing craft brand's entire 2006 national shipment volume.

As sales of craft beers -- mostly local and regional smaller-batch brews -- continue to soar amid an otherwise sluggish U.S. beer market, arrivals of well-known but previously unavailable beers are becoming significant events. And craft brewers and retailers are going to greater lengths to stoke them.

Like Coors
The phenomenon is frequently compared to the hubbub surrounding Coors' slow crawl to national distribution during the 1970s, as that beer transitioned from a regional cult item that had to be smuggled east of the Mississippi to one that was suddenly available more widely.

"I'm old enough to remember people lining up for Coors," said store owner Jim Surdyk, who opened his shop an hour early that June day to stake a claim to selling the state's first Fat Tire. He also hyped the beer in advance radio and print ads. "After getting calls from people every day for years about whether we had it, I figured this could be the same sort of thing."

Mr. Surdyk's hunch about Fat Tire paid off, but the brand isn't the only craft brew generating frenzied buzz as it enters new markets.

Craft-beer dollar sales in supermarkets rose nearly 18% in 2006, according to Information Resources Inc., compared with 2.4% for beer overall. During the four weeks ending July 7, supermarkets were carrying more than 20% more craft-beer products than a year earlier, helping smaller brewers gain market share, according to an ACNielsen report.

Shiner Bock, brewed since 1909 by Texas-based Spoetzl Brewery, received an enthusiastic reception in Chicago in the spring, in part due to outreach to so-called "Texas exes."
Howdy: Texas-based Shiner Bock beer joins Lone Star State expats in Chicago.
Howdy: Texas-based Shiner Bock beer joins Lone Star State expats in Chicago.

Spoetzl built a database of Chicago-dwelling Texas expatriates by contacting alumni associations at the University of Texas, Texas A&M, Baylor, Rice and others. Once it got them talking, it followed up with teaser ads in the weeks leading up to the launch. Billboards mimicking Shiner's label declared "Hi, Chicago," and -- following the launch -- were peeled off to reveal the label itself. "We wanted to build a little excitement in advance," said Stacey Williams, marketing manager for Gambrinus Co., which markets Shiner Bock. The brand is handled by McGarrah Jessee and Webber McJ, both Austin, Texas.

'Like gold'
Fred Rosen, who owns Sam's Wines & Spirits, Chicago's largest alcohol retailer, said Shiner's launch is the second-most-prolific craft launch in his chain's history, behind only Fat Tire, in 2006. "The beer you remember from home but can't get here becomes like gold," Mr. Rosen said.

In its next new market, Iowa, Fat Tire is using many of the methods it employed in Minnesota, including print media, unpaid brand ambassadors and communications to newsletter subscribers, as well as sponsorship of a popular bike race. Its shop is Cultivated, Denver.

"In Minneapolis, it seems like we had a lot of pull before we even got there," a New Belgium spokesman said. "We're just doing what we can to help that along."
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