Next month, Mass Bay Brewing Company – best known for its Harpoon and UFO labels – will celebrate the five-year anniversary of establishing an employee stock ownership plan (ESOP).
A lot has changed in the beer industry since 2014 when the Boston-headquartered craft beer company transitioned nearly half of its business to employees.
Growth of Brewers Association-defined craft beer has slowed from 18 percent in 2014, to just 4 percent last year. At the same time, more than 3,500 craft breweries have opened their doors and dozens of breweries have sold to larger beer companies such as Anheuser-Busch, Constellation Brands, and MillerCoors, consolidated with other craft breweries, or been acquired by private equity firms and family offices.
Like other sizable regional brewing companies, Mass Bay Brewing, ranked by the BA as the 18th largest craft brewing company in the U.S., has struggled to grow over the last half-decade.
Since Mass Bay established the ESOP, production slipped from 209,000 barrels to about 185,000 barrels last year.
However, that could change in 2019, especially if the company’s recently released Arctic Summer hard seltzer brand, produced in partnership with Polar Seltzer, takes off like co-founder and CEO Dan Kenary believes it could.
“The response so far has been great,” he told Brewbound. “We are very encouraged at the response and the rate-of-sale we are seeing.”
According to Kenary, Mass Bay Brewing shipped 100,000 cases of Arctic Summer to wholesalers in the five weeks since it launched. Depending on the success of the brand through the balance of the year, Mass Bay Brewing could return to positive growth in 2019.
“Tastings have been our most effective weapon at building the brand so far,” he added.
The release of Arctic Summer also coincides with a search for the company’s first chief marketing officer, something Kenary considers to be “the most important external hire” the 33-year-old company has ever made.
“I am looking for someone to be the maestro of our brands, to be the creative force behind our marketing efforts, to lead from the front, and to contribute from day one as a seasoned, thoughtful senior executive,” he wrote in a job posting. “I am not looking for someone who just checks all the boxes as a marketing professional.”
Speaking to Brewbound, Kenary said interviews for a CMO are underway, and he hopes to hire someone who can “roll up their sleeves” and not “ask someone else” to do their work by the end of the summer.
“It used to be a sales- and brewing-driven industry,” he said. “If you made fun packaging, and got it on the shelves, it would sell. As the number of breweries has continued to expand and explode, branding has become more important, and we need to become a more brand-driven company.”
In doing so, Kenary and his team have worked over the last 2.5 years to deemphasize the “Harpoon Brewery” brand on offshoot labels such as UFO, instead creating or elevating unique brand identities for the company’s various products, including its own small brewery acquisition, Clown Shoes.
“How do you do justice to Clown Shoes if you are calling yourself the Harpoon Brewery?” he asked. “It’s one of the reasons we’re hiring a CMO.”
But even before a CMO comes on board, Kenary has initiated a rebrand of his company’s hard cider offerings.
“Based on the limited research we have done in the cider world, it doesn’t help your cider brand to be considered a craft beer or made by a craft brewer,” he said.
So, next month, the company is rolling out a reimagined version of its dry cider called “City Roots.”
“It’s a whole new line,” he said, noting that pumpkin and rosé flavors are also planned. “It’s going out on its own, and it’s going to get some support and attention.”
And now that Mass Bay Brewing – not Harpoon Brewery – consists of five individual brands (Harpoon, UFO, Arctic Summer, City Roots, and Clown Shoes), it’s hard not to see similarities to a much larger competitor in the same city: Boston Beer Company.
That business, the largest in the craft industry, owns the Samuel Adams, Angry Orchard Hard Cider, Truly Hard Seltzer, Twisted Tea, and Dogfish Head labels, among others. It also recently hired only its second-ever CMO.
Kenary chuckled at the comparison, noting that Mass Bay is employee-owned, not publicly traded, but admits the two companies do “share a zip code.”
“We are not trying to emulate anybody,” he said. “If you had said to me five years ago that we would be a seltzer company, I would have looked at you and said what do you mean? The craft brewers that have been around for over 30 years are doing a lot of things to stay successful in this marketplace.”