As Pabst Brewing Co. broadens its reach beyond the iconic Pabst Blue Ribbon beer, the global drinks company is increasingly leveraging its relationship with New Holland Brewing Co. to break into new categories.
After working with New Holland to launch Pabst Blue Ribbon Whiskey earlier this year, the company plans to extend the partnership into the ready-to-drink (RTD) or canned cocktail space with the debut of Pabst-branded Whiskey Soda & Lime and Ginger Whiskey Mule products in March 2020.
New Holland will manufacture and can the products for Pabst at its distillery in Holland, where it also makes PBR Whiskey.
“For Pabst Blue Ribbon, it’s a really clear, deliberate effort to move beyond just being a beer brand,” Pabst General Manager Matt Bruhn told MiBiz. “Being a beer brand’s awesome, but as consumers’ tastes change and evolve, we want to evolve with them. It’s pretty conscious. We’re now doing hard coffee, we’re doing a stronger seltzer, we launched a whiskey. And off the back of the whiskey, we’ll launch a bunch of canned cocktails.”
Bruhn, who worked at spirits maker Diageo PLC earlier in his career in his native Australia, described a collaborative process in creating the canned cocktails with New Holland’s team. The Pabst executive conceptualized the drinks and let Brad Kamphuis, director of distillery operations at New Holland, build them from flavor profiles “and make sure it worked.”
“We ship products back and forth between the two groups, but our team has spent a fair bit of time up there with them,” Bruhn said.
It was a natural choice to work with New Holland given the relationship the companies had with PBR Whiskey and New Holland’s experience bringing to market four canned cocktail brands, he said.
“We have a great relationship with Pabst, and RTD is a place we have some expertise that we were able to offer them,” said New Holland President and co-founder Brett VanderKamp. “It was a natural, easy continuation of our relationship.”
The partnership around spirits grew from a relationship that started in 2016 around New Holland’s brewing operations. At the time, the two companies signed a long-term partnership that allowed Pabst to sell New Holland’s beer via its nationwide sales channels in return for a percentage of the revenues. Under the terms of the deal aimed at increasing New Holland’s distribution footprint, particularly for its Dragon’s Milk barrel-aged stout brand, Pabst did not take an equity stake in the company.
The Pabst-New Holland partnership is one of several to emerge among West Michigan beverage companies helping national alcohol brands break into new markets. That includes packaged coffee maker La Colombe Torrefaction Inc. in Muskegon County, which is partnering with MillerCoors on a canned hard coffee product, and on a more local scale, Grand Rapids-based Vander Mill LLC, which is housing startup Proof & Union LLC as it launches its Fullbar brand of ready-to-mix cocktails.
The new canned alcoholic drink from La Colombe is made from cold brew coffee, alcohol and sugar. The Philadelphia-based company is producing the product at its processing facility in Norton Shores, where it expects to expand in 2020, according to documents filed with the state. However, the drink is only currently available in the company’s primary test markets in Massachusetts, Florida and Colorado.
Earlier this year, La Colombe received a Michigan micro brewer license for its production facility even though it does not brew any beer on site. Instead, the product includes a “neutral malt base” finished beer that’s produced by a third party, LaCrosse, Wis.-based City Brewing Co. and shipped to La Colombe, according to the filings.
MillerCoors is providing marketing and distribution expertise in the venture.
The partnership is possible because of a change in federal law in 2017 that allowed transfers of beer between two bonded facilities. The Michigan Liquor Control Commission order approving La Colombe’s license marked the first time the bonded transfer of alcohol was specifically allowed in the state.
Meanwhile, Proof & Union is also importing the alcohol used in its new line of canned spirits and mixers that launched this month. The Fullbar brand includes five different types of straight 80 proof canned spirits — vodka, whiskey, tequila, gin and rum — as well as accompanying canned mixers.
The spirits and mixers are imported from various parts of the world, according to Brian May, co-founder of Proof & Union. The alcohol and ingredients are sent to Vander Mill’s Grand Rapids cider production facility, which is also licensed as a distillery. May said Vander Mill serves as the company’s “production partner.”
“They’re essentially the spirits canning partner and then we’re doing all the brand development,” May told MiBiz.
Proof & Union is testing its Fullbar products in markets in Michigan and Florida and expects to expand to other states over the course of the next year, according to Eric Franco, who co-founded the company with May. The partners met while working at Grand Rapids-based Founders Brewing Co.
“Eventually, we’d like to be a national brand,” Franco told MiBiz. “We are fortunate enough to have very strong relationships with the chain retail organizations throughout the country, but we’ll expand out from here — the core.”
For its part, Pabst plans to “lean in pretty heavily” with New Holland as it seeks to grab market share in the canned cocktail space, as well as for other Pabst branded spirits.
“They really are great from a launch point for our spirits endeavors as a company, both full-strength spirits as well as ready-to-drink spirits,” Bruhn said of New Holland, which he described as the “principal distilling partner when it comes to the Pabst Blue Ribbon Brand.”
He also doesn’t rule out working with New Holland as well as other companies to take the Pabst brand into other white space in the beverage market, such as in CBD-infused products.
“PBR is such a cool brand, obviously. Our actions this year to evolve the brand outside of full-strength beer have been met with a great deal of positive response from consumers, both existing consumers and potential consumers,” Bruhn said. “It’s demonstrating that as long as we stay true to what the PBR brand’s about, we can play around and evolve into different drinks. That’s pretty cool. I don’t think we want to be reckless, but I definitely think we’ll be progressive in our drinks that we take to market.”
For now, Pabst and New Holland aim to continue to find ways to help each other under the terms of the existing 10-year sales agreement, which has an option to renew for another 10 years, plus whatever new spirits production contracts the two might sign in the future.
In the meantime, one tangible benefit from the Pabst contracts is that they are helping New Holland amortize its “big investment” in new canning equipment, VanderKamp said.
Bruhn wouldn’t rule out Pabst making an investment in New Holland at some point, but said it’s not part of any current discussion.
“At the moment, it’s a distribution agreement. Maybe eventually it grows into something different, but as of now, both parties are really happy where it’s at,” Bruhn said.
VanderKamp echoed that sentiment, noting that “there is no put or call option in the agreement” with Pabst. For now, New Holland remains focused on growing its own market share and “being a good partner” with Pabst around the spirits business and canned cocktails.
“The genesis of us making these products for Pabst sparked from us being a good partner,” VanderKamp said. “Have there been challenges? Sure. But we wanted to continue being a good partner and we wanted to explore how we could help them with this.”
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