SweetWater Brewing Co. is “firing on all cylinders,” says cofounder Freddy Bensch. The Atlanta-based brewery saw its volume increase 34 percent to 192,400 barrels last year, and while 2015 numbers weren’t available at press time, Bensch reports continued gains.
SweetWater is America’s 18th-largest craft brewer, according to the Brewers Association, and has distribution in 18 states and Washington, D.C. The company’s footprint is mainly in the Southeast—Georgia is its top market—but spreads as far as Connecticut, Illinois, Texas and Colorado.
Bensch began working in the craft beer business in the early 1990s as a student at the University of Colorado at Boulder. He and his roommate Kevin McNerney moved to Atlanta in 1996. With loans and help from family and friends, the pair opened SweetWater on the west side of town in 1997, naming the company after the local Sweetwater Creek, where they often kayaked. In 2004, the brewery moved to its current location in midtown Atlanta. McNerney left SweetWater after 12 years, but occasionally collaborates on special brews. About three years ago, SweetWater completed a $19 million expansion of its brewery, increasing capacity to 400,000 barrels.
The executive team at SweetWater has also expanded in recent years. Kim Jones joined the company as CFO in 2013, following senior financial and management positions with Spanx Inc. and The Coca-Cola Co. Last year, Jones was promoted to CEO, and Bill Waters, the former chief strategy officer at Molson Coors, replaced her as CFO. In 2014, private equity firm TSG Consumer Partners acquired a minority stake in the brewery. “TSG has a history of working with many consumer goods companies, and that experience makes for a good fit,” Waters says.
SweetWater is now positioning itself for sizeable growth and national distribution. While Waters says the Atlanta brewery can be expanded to a capacity of 600,000 barrels without significant investment, the company is also scouting locations for second and third breweries. SweetWater purchased equipment—including a fully automated 130-barrel brewhouse—from the closed Pyramid Brewery in Berkeley, California, last year, and Waters says the company will open a second brewery in the western United States in 2017. “While we’re continuing to develop the East Coast, it’s time for us to also start looking out west,” Bensch says, adding that the recently purchased equipment will eventually allow SweetWater to produce an additional 420,000 barrels a year. “It’s almost identical to what we use in Georgia and gives us a great head start on moving westward.”
In addition, last fall SweetWater began searching for a site for a third brewery in the central United States. Bensch notes that the addition of two new breweries in different regions is an effort to get the freshest beer to customers. “We want to distribute across the nation,” he explains. “Having breweries in the central and western areas of the United States will result in shorter trips and decrease our carbon footprint.”
SweetWater’s year-round offerings include SweetWater 420 extra pale ale, SweetWater IPA, Take Two Pils, Hop Hash Double IPA, Blue blueberry ale and Georgia brown ale, sold in six- or 12-packs of 12-ounce bottles or cans, as well as 16-ounce single cans (pricing varies by market). Waters says 420 and SweetWater IPA are the company’s top two brands by volume, and the IPA is its fastest-growing brew. The company also produces the limited or seasonal “Catch N’ Release” series (pricing varies), which includes the experimental, one-time-only “Dank Tank” line.
The “Cork N’ Cage” series of high-gravity brews is based on classic styles. These beers are packaged in 750-ml. bottles (pricing varies), and current releases include a Bourbon Barrel–Aged imperial stout. “The first limited release from the series, the Pit & the Pendulum, was so popular that we decided to add it to our regular rotation,” Waters notes. Like other craft brewers, SweetWater has begun canning some of its beers. “We’ve seen great consumer acceptance of this packaging,” Water says. “Cans are an important part of the mix now.”
SweetWater is unique among craft brewers for using the resin by-product that’s scraped from hop pelletizers—known as “hop hash”—in some of its brews. “Due to the favorable response to Hop Hash and the India brown ale Hash Brown, we’ll be releasing a new seasonal offering that’s also infused with hop hash,” Jones says, noting that the beer could be released as early as this spring. “We’re extremely excited about this new series and about the fact that we’re one of the only breweries, if not the only one, using hop hash.”
The on-premise comprises about 60 percent of SweetWater’s sales, with draft beer accounting for about 40 percent of the total. “Bar operators are aware of the brand’s power now,” Jones says. But she notes that the brewery is also making strides off-premise, particularly with grocery chains like Kroger and Publix.
SweetWater’s motto is “Don’t float the mainstream,” which encourages consumers to “do their own thing,” according to Jones. She and Bensch say the lifestyle and authenticity associated with SweetWater permeate its marketing support and help the company connect with consumers. “Interfacing with our fans is important,” Bensch says. “The best way to deliver that experience is to get folks to the brewery so they can feel the vibe. It’s also important to build goodwill in communities where folks are drinking our beer.”
Marketing support generally focuses on brewery and community events, social media, and consumer education. The company has hosted the annual SweetWater 420 Festival, a celebration of music, the environment and craft beer, in Atlanta since 2004, and the 12th festival is planned for this April. The company’s Save Our Water campaign—which includes sales of its Waterkeeper hefeweizen, as well as a boating event called the Big Float—helps raise funds and awareness to keep waterways clean. The events are promoted via on- and off-premise merchandising, and Jones notes that the brewery strives to educate both retailers and consumers about craft beer. “More drinkers are converting to craft,” she says. “Because it’s becoming a more crowded space, consumer education is increasingly important.”
Waters concedes that the proliferation of new craft breweries has created a more competitive environment. However, that challenge has pushed SweetWater to be sharper in its day-to-day operations, as well as in driving innovation. “We think interest in craft beer is a great thing, and we’re well positioned to capitalize on it,” Waters adds.
Bensch agrees that SweetWater’s trajectory is bright. “We believe that the craft industry will continue to grow,” he says. “For us, that growth is about getting the freshest beer into more hands, as well as building relationships with consumers and communities.”