With sales surging, Hop Valley bucks trend in Pacific Northwest

Oregon's Hop Valley Brewing Co. continues an impressive surge even as overall craft volume in the Pacific Northwest region has declined.

The Eugene-based brewery, which sold a majority stake to MillerCoors in September 2016, has grown sales dollars by 34.5 percent and volume by 33.9 percent year-to-date through Sept. 9, according to Nielsen.

While some of that growth is due to expansion this year into six new markets – Northern California, Nevada, Arizona, Alaska, Hawaii and the front range of Colorado – Hop Valley is growing at a double-digit clip in its Pacific Northwest home.

Fueled by robust performance of its "Hop Mixer" 12-packs and its hop-forward IPAs such as Citrus Mistress and Alpha Centauri, Hop Valley sales in Washington and Oregon are up 23.2 percent in dollars on a 22.9 percent jump in volume year-to-date through Sept. 9, according to Nielsen grocery data.

That's compared with a 1 percent rise in dollars on a 3.4 percent drop in volume in the overall craft market in the two states, some of the most competitive for craft beer in the country, according to Nielsen. Much of the decline is the result of weak sales of the state’s established craft brewers, including its largest, Deschutes, which is down 15.9 percent in dollars and 20.4 percent in volume.

Hop Valley, part of the MillerCoors division Tenth and Blake, now has the top-selling craft can in Oregon with its Alphadelic IPA. Citrus Mistress, meanwhile, is the IPA with the largest year-over-year dollar growth in the state.

"Once the gun went off (after selling a majority stake to MillerCoors), we tried to sprint as fast as we could," says Chuck Hare, one of Hop Valley's four founders. "Once we got over some of the initial concerns from customers and the local beer community, we've had one of the most-crazy runs in our history."

Hare, who remains involved in the day-to-day operations of the brewery and as an investor, says Hop Valley was able to surmount uncertainty surrounding the sale by reassuring its customers that the culture of the brewery would not change, the beers they loved would not change and that he and others would still run the brewery.

"The beer we brew hasn't changed, but it has gotten better in quality, thanks to some of the investments MillerCoors helped us make," Hare says.

As a result, each of the brewery's top three brands are growing at a breakneck pace, with Citrus Mistress leading the way up 48.5 percent in sales dollars year-to-date, according to Nielsen data.

The brewery has outperformed the market virtually every year since it was founded in 2009 as a small brewpub in Springfield, Ore. Hop Valley brewed around 3,000 barrels in 2012; 10,000 in 2013, 20,000 in 2014, 40,000 in 2015 and 52,000 last year, Hare says.

Since the MillerCoors marriage, Hop Valley also has pushed into new venues, such as AT&T Park in San Francisco and Safeco Field in Seattle, with its innovative "hop boxes." The bright green shipping containers were retrofitted as concession stands pouring Hop Valley beers.

"Those things are money; they're one of the best investments we've made with our new partnership with MillerCoors," says Walter Macbeth, a Hop Valley partner and the brewery's vice president of sales and marketing. "They've absolutely slayed it at the ballparks, providing a wonderful sampling opportunity for us."

Another wave of those mobile boxes is slated to roll out in 2018, giving Hop Valley more tools to reach new customers. That will come on top of an expected boost in early 2018 when Hop Valley expands into Southern California, one of the largest retail markets in the country that's also home to another scorching MillerCoors craft brewery, Saint Archer.

San Diego-based Saint Archer, which MillerCoors acquired in 2015, has increased volume 42 percent year-to-date through Sept. 10, led by its IPA, which is up 92 percent year-to-date. Saint Archer expanded into new markets this year: Oregon, Washington and Idaho. That's after moving into Arizona and Las Vegas in 2016.

It also has bucked trends in its home state, ranking as the fastest-growing craft brand in California, according to Nielsen data. "To be the most-desired California craft in the U.S., you have to be able to win at home," says Brad Nadal, Saint Archer president.

“Hop Valley and Saint Archer are kicking ass and bucking the trends in the west,” says Paul Verdu, vice president of commercial for Tenth and Blake. “Both breweries are loaded with talented and passionate people. Their brands and brews complement each other nicely. And our wholesalers are fully committed and know that they pack a strong 1-2 punch in market."