Summer sets on Shandy, Leinenkugel looks for a 'halo' effect
The sun has officially set on the summer of 2013 and you can't blame the brewers at Jacob Leinenkugel Brewing if they wanted the season to last just a little longer.
For the Chippewa Falls, Wis.-based brewery, this past summer was sizzling. As American consumers warmed to the ice cold pleasure of the shandy, a mixture of beer and lemonade, they reached in record numbers for Leinenkugel's Summer Shandy.
According to Nielsen data provided by Leinenkugel's parent company MillerCoors, nearly 10 percent of craft growth year-to-date is coming from the Leinenkugel Shandy line, and Summer Shandy is the fastest "turning" national craft beer on the market—meaning it's not spending a lot of time on the shelves.
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"Summer Shandy is 50 percent of our total business right now," said Jake Leinenkugel, president of Jacob Leinenkugel Brewing. "We never thought it would be that big but it continues to grow."
Leinenkugel launched Summer Shandy in 2007 and it has steadily gained momentum each year.
As recently as a couple of years ago, Leinenkugel sold 80 percent of its beer within six states in the Upper Midwest. Summer Shandy was the first Leinenkugel brand to be distributed in all 50 states and to have a national television advertising campaign.
"It certainly put us on to another level and I think it will have a halo effect," said Dick Leinenkugel, business development manager for MillerCoors' craft division, Tenth and Blake. "It gives us a real strong platform because there are more people than ever interested in our brand. After they discover Summer Shandy, they say 'what else do you make?'"
(Read more: Younger drinkers tire of the taste of light beer)
Dick Leinenkugel said he expects it opens the door for consumers to discover the brewery's other brands, such as its Hoppin' Helles lager, Oktoberfest and the Big Eddy series of higher alcohol beers.
Still it was the seasonal Summer Shandy that thrust Leinenkugel Brewing into the national beer drinkers' consciousness and the brewery is hoping a new fall release, Orange Shandy, can keep the success going.
The brewery raised some eyebrows when it released Summer Shandy in February, and Jake Leinenkugel admits the brewery has considered making Summer Shandy a permanent offering.
"Did we consider keeping it year-round? Sure. But to own summer, which is by far the biggest beer drinking occasion, is not a bad place to be from a business perspective," he said. "It's meant a lot to the beer drinker, and I think the beer business in general, to have something new and different in the summer months."
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Much like the Summer Shandy brand, Jacob Leinenkugel Brewing was not an overnight success. The family has been brewing beer since 1867, and it now has sixth-generation family members involved.
"It's very special. I have a lot people tell me that very seldom do family businesses go beyond the third generation, so for us to be starting in the sixth, we pinch ourselves and are appreciative of what we've been given," said Jake Leinenkugel.
While the brewery's sale to MillerCoors in 1988 has placed it outside the Brewers Association definition of "craft brewery," which requires a brewery to be independently owned, the Leinenkugel family's 146-year brewing heritage provides a unique perspective. As they see it, the debate over labels and definitions is misguided at a time when beer sales as an overall category are flat.
"From the consumer perspective, it's not part of their conversation," said Dick Leinenkugel. "They're really engaged with what beer are they going to buy for the occasion, and are they enjoying the beer they are drinking at that time?"
"I think we need to be smarter as a collective industry, get some common ground and rally around beer," added Jake. "Even with Leinenkugel and Blue Moon at MillerCoors or Goose Island (with Anheuser Busch InBev), there are still more than 2,500 independent, local craft brewers. There is a large beer industry that needs to get more beer consumption to be a healthier, more thriving industry."
—By CNBC's Tom Rotunno. Follow him on Twitter @TomRotunno.