E-Malt.com News article: US, CA: Tioga-Sequoia Brewing Co. making the first steps to take more shelf space at supermarkets

The Tioga-Sequoia Brewing Co. took a big step toward living up to its "drink local" catchphrase this week, rolling a second batch of beer off the production line at its new downtown Fresno brewery, The Fresno Bee reported on March, 28.

The Fresno-based company had been outsourcing much of its brewing to Northern California since opening in 2007. Tioga-Sequoia's owners wanted to build the brand before making a big investment in a local brewery, said Tioga-Sequoia marketing manager Michael Cruz.

Now that they're making the beer in Fresno, the move could mean bigger profit margins, more production and the ability to push the "drink local" campaign.

The idea is to start small and build up brands it serves at the Sequoia Brewing Co. restaurants and sells at some supermarkets - Gen. Sherman IPA, Tamarack Amber Lager and other Sierra-themed beers.

The 7,000-square-foot microbrewery on Broadway Avenue also provides proximity to a potential market - sports fans at Chukchansi Park - and the opportunity to play a role in downtown revitalization.

If successful, it would reverse Fresno's checkered history with breweries that tried but failed to get a large, lasting presence on store shelves.

Among the flops: the $4 million Butterfield Brewing Co.'s downtown brewery, Bulldog Brewery in Fig Garden and the historic Fresno Brewery that closed in the 1940s.

The area has several successful brew pubs that make beer for their restaurants or bars, including Full Circle Brewing Co. But selling beyond the restaurant crowd is a different story.

Tioga-Sequoia hopes to be the main character in that tale.

It plans to learn from others' mistakes and piggyback on the increasing popularity of craft beers, said Tioga-Sequoia brewmaster Kevin Cox.

"We're catching the wave right at the cusp of it," he said. "We're hoping to appeal to the 22-year-old college girl and the hard-core beer enthusiast."

Indeed, sales of craft beer - beer made by small, independent brewers - increased 11.8% between 2009 and 2010, according to the national Brewers Association. The amount of craft beer produced rose 11.4% in that same period.

Tioga-Sequoia has its roots in Sequoia Brewing Co., which makes its own beer at the restaurant of the same name in the Tower District.

Tioga-Sequoia bought the beer recipes from Sequoia Brewing, which owns a second restaurant at Champlain Drive and Perrin Avenue in northeast Fresno and plans to open a third within the next year, said owner Scott Kendall.

The Tioga-Sequoia beer sold outside those restaurants, however, is brewed elsewhere.

The beer sold at Save Mart, Whole Foods and several restaurants, including Me-n-Ed's pizzerias, is produced by a separate company. That production was contracted out to bigger breweries -- most recently in San Jose.

Tioga-Sequoia first started work on the downtown Fresno brewery last year.

The entity that owns it, run by a couple who farm in Kettleman City, invested hundreds of thousands of dollars in equipment. The brewery started making beer in its six 950-gallon fermenting tanks this month.

The brewery's location was strategic.

Heineken and its Tecate brand own the rights to advertise within Chukchansi Park. It would be near impossible for Tioga-Sequoia to come up with the money and clout to be the stadium's main beer sponsor and advertise inside the ballpark. But the company can advertise just outside the stadium, said Cruz, the marketing manager.

An 8-foot-high sign in the shape of Tioga-Sequoia's green-and-yellow logo - a play on the U.S. Forest Service shield - soon will be on the roof, within view of thousands of baseball fans.

And plans call for Tioga-Sequoia to host pre-game beer gardens, including one on April 9 during the Grizzlies' opening weekend that coincides with a Fresno wine trail event.

Raising the brand's profile will spur sales, hopefully leading to more on tap at the stadium and more shelf space in stores, Cruz said.

Cox said they also chose the location because they want downtown to be successful -- and not just because he is married to Terry Cox, project manager for Fresno's Redevelopment Agency.

"Everybody goes to a Grizzlies game," he said. "We're right in everybody's face here."

But the challenges are great.

"It's dog-eat-dog. It's a very competitive marketplace," said John Shegerian, who opened Bulldog Brewery in Fig Garden Village in 1998. He had hoped the restaurant and brewery would prompt stores to sell its beer; by 2003, the business had closed.

Shegerian said he wishes Tioga-Sequoia well, but said competing against popular beers like Budweiser and Coors is an uphill battle in a price-conscious city.

But Cox noted that Tioga-Sequoia already has won space on store shelves and is looking to expand.

He also said he has learned from past experience, when he worked at the former Butterfield Brewing Co. downtown. The popular brewery on Inyo Street opened in 1999, but defaulted on its loan and closed a few years later. Its Tower District restaurant was sold to the current owners of Sequoia Brewing.

Cox said Butterfield was "aiming to be the next Sierra Nevada," the Chico-based beer maker that sells nationwide. But Tioga-Sequoia, he said, "is aiming to be a local brewery."

Cox vows to start small and not grow too fast. For now, the brewery employs three people.

"Our whole goal is to saturate the Central Valley and stay there," he said.

Tioga-Sequoia is in about 35 Save Mart stores now and hopes to be in dozens more between Bakersfield and Modesto, Cruz said.

While the Gen. Sherman IPA brand is the most prominent in stores, Tioga-Sequoia is working on stand-alone racks that will feature all its brands.

The industry also has matured since Butterfield Brewing made its splash in Fresno, said Craig Scharton, director of the Downtown and Community Revitalization Department.

"It was like the gold rush when Butterfield's started," he said. "Microbreweries were popping up everywhere. It was not a really long time-tested business model."

Now, breweries like Tioga-Sequoia know how much effort sales and marketing take, Scharton said.

If all goes well, Tioga-Sequoia envisions a tasting room at the brewery. It would like to be part of the local tourism industry, attracting visitors who taste its beer and tour the brewery, Cruz said.

"It's all about getting the customer in Fresno to associate our product with 'buy local,' " Cox said.


30 March, 2011