• by Erik Oster , July 28, 2023

It’s not an easy time to be a brewing company.

Last year, spirit sales rose to 42.9% of the alcoholic beverage market in the U.S., overtaking beer sales in market share for the first time ever, according to the Distilled Spirits Council of the United States. Beer shipments are down 4.7% year-over-year through May, according to Beer Insights.

Today, the ascendant cultural cachet of craft beer -- which fueled Heineken’s purchase of Lagunitas in 2017 -- now seems like a relic of a bygone era. Consumers are increasingly passing up pints of beer in favor of alternatives like canned cocktails, hard seltzers, and non-alcoholic beverages.

With such a stark market outlook in recent years, breweries have been looking for ways to diversify their brand portfolios. Lagunitas is no exception, with Hoppy Refresher -- the non-alcoholic, dry-hopped, sparkling water it introduced in 2019 -- playing an increasingly important role for the brand.

This month, Lagunitas appointed Hannah Dray as interim CMO, tasking her with leading a brand refresh. Dray had joined Lagunitas earlier this year as senior brand director, following a solid half decade as brand director for Heineken’s Dos Equis. At the time of the latter announcement, Heineken reported an active search to fill the CMO role for Lagunitas full-time, and Dray stressed this search was ongoing.

CPG Insider connected with Dray to discuss Lagunitas marketing in depth.

This interview has been edited for length and clarity.

CPG Insider: Are the challenges facing craft beer right now especially pronounced for larger, established legacy brands like Lagunitas?

Hannah Dray: It’s a dynamic time in the industry, especially for craft brewers. We are at a pivotal moment. I believe in craft beer, and all of Lagunitas’ brews are topnotch in quality. My focus is to reestablish our disruptive and rebellious nature in order to bring Lagunitas back to growth. This will happen in stages, and we are just getting started.

CPG Insider: What are you doing to position Lagunitas’s brand to stand out?

Dray: There are three key areas:

Refining our brand identity: We want to get tighter on communicating the essence of Lagunitas and regaining our mojo. We have started the work with our brand refresh, and now we need to demonstrate what we’ve long been known for: being irreverent and disruptive.

Historically, we’ve demonstrated that through the naming our products, as well as our stunts and marketing programming. Speaking candidly, we may have lost a bit of that. We want to make clear what we stand for, and make sure we’re considering how we do that across every single touchpoint.

We are also fixing some basics in order to win back point-of-purchase. It boils down to creating sales tools where featured products and promotional visuals are more consistent from account to account.

The last piece to our transformation is to innovate, innovate and innovate.  We want to win new consumers by taking what we’ve learned from releases like Hoppy Refresher and Tiki Fusion Zombie IPA, that are out in the market currently, while making the most of our taprooms as playgrounds to test and learn. We want to leverage consumer insights and combine them with our brewers’ magic in our Innovations Lab.

CPG Insider: What are the bright spots for the brand right now, and how is Lagunitas planning to capitalize on them?

Dray: Lagunitas has an iconic line of hop-forward brews and has been championing IPA for 30 years. This time of year, we turn that into a big celebration for our fans, and earlier this month we launched a $1 million, circus-themed “Come One, Come All” campaign ahead of IPA Day on Aug.3.

CPG Insider: Is part of the challenge for craft beer as a category overcoming preconceptions and reaching new audiences? How is Lagunitas approaching that?

Dray: At Lagunitas, we’re fully committed to innovate because we believe that there’s a seat at the bar for everyone. So that means we’ll continue serving our loyal fans with the brews we know that they love, but also keep brewing something new to bring new friends to the table.

We’re focused on growing within the IPA category and reaffirming Lagunitas as a core IPA brand. From there, we’ll leverage non-alcoholic, beyond beer, and limited-edition releases to attract new consumers.

Hoppy Refresher, which continues to be the number one Hop Water brand, is also attracting younger consumers, and female consumers, due to its versatility as a night extender, a mixer, and a non-alcoholic product. Hoppy Refresher has 30% higher volume than any of our competitors in that market and three times the distribution. So right now, we’re very much focused on Hoppy Refresher.