By: Nan McCreary
When entrepreneurs Brandon Perry and Scott Hansen launched Island Brands USA in 2016, their goal was to create a mainstream, easy-drinking beer with the highest quality ingredients. That was challenging given the hyper-competitive landscape and complexity of the three-tier system. But they were undaunted, and through ultra-strategic planning using branding and technology, they found a niche among “thrill-seekers, outdoor enthusiasts, and beer drinkers everywhere.”
By 2020, the Charleston, South Carolina company saw combined sales of its two existing brands—Island Coastal Lager and Island Active—grow 70% to $1.9 million in sales, according to IRI data. In 2021, sales grew 99% to $4.2 million. Today, Island Brands is the fastest-growing super-premium domestic beer in the Southeast U.S. and is poised to take an even bigger bite out of the competition this year.
For Perry and Hansen, the journey began on a “rum-soaked” trip to Cuba, where they discovered that the only beer available was of limited quality. This inspired them to make better beer more accessible to Cubans, and they began working on a recipe for an all-clean, easy-drinking brew to build a lifestyle brand.
“They decided from the beginning to only use the finest ingredients,” Island Brands’ Director of Operations Valerie Williams told Beverage Master Magazine. “Their first beer, Island Coastal Lager, was made with only water, malted barley, hops and yeast—no fillers, no adjuncts—to create a crisp, clean, crushable lager that had only 137 calories and an ABV of 4.5%. They contracted with a brewery in Florida to make their product, then they hit the road and started selling it.”
Their success was immediate. “Publix Super Market, the largest and fastest-growing employee-owned supermarket chain in the United States, loved it in a big way and started putting it in every store,” Williams said. “Now we have multiple products in 1,250-1,300 stores.”
In 2020, Island Brands launched its second beer, Island Active, a crisp and clean premium light lager. Developed as a “Better for You” beer, Island Active is only 88 calories with an ABV of 4.2% and, like Island Coastal Lager, is made without fillers or preservatives. These flagship products quickly set Island Brands apart.
According to Williams, Island Brands’ beers are fully pasteurized and have no fillers that could cause the beer to “go skunky,” giving them a shelf life of 365 days, as opposed to 110 for most beers.
Riding on this wave of success, in November of 2020, Island Brands launched a crowdfunding campaign with StartEngine, where everyday people can invest and buy shares in startups and early-stage companies. Within 34 days, Island Brands raised its maximum funding goal of $1.07 million. These investors, called the Islander community, are on the front line of Island Brands’ marketing objectives. As a community, they help support the company’s brand. In turn, they receive discounts on merchandise, beer, events and travel.
“The key to our success has been our following,” Williams told Beverage Master Magazine. “Crowdfunding was huge in getting us started. It provided a way for folks to engage with us and support our brand to help us grow.”
The Islander community are not just advocates for the beer: They also promote Island Brands’ lifestyle partners, including merchandise from Island Supply Company, guided Adventure Experiences and the flagship Island Cabana Bar in Charleston. This diversification is specifically designed to help reach Island Brands’ target demographic.
Rounding out Island Brands’ marketing efforts is a partnership with Carnival Cruise Line to serve Island Coastal Lager to 14 million passengers as their ships navigate the world. The partnership is a perfect fit for Island Brands’ founders, whose approach to life includes a love of travel, the outdoors and an appreciation of high-quality beers. “Our partnership with Carnival has been enormous,” Williams said. “It makes sense to have our beers on a cruise. Passengers come off the boat and start asking for our products. When it’s available in their market, our Islanders make sure it’s kept in stock wherever they shop.”
While Islands Brands has built brand recognition, they have also employed data-analytics strategies to get their branded products in front of their target market. The key to this is digital technology. “Technology is the cornerstone,” Williams said. “We are a small company—there are only 18 of us—and with distribution in seven states, we have to sell by proxy. Our relationship with our middle tier, our distributors, is critical to us. To provide them with what they need and when they need it, we rely on data analysis, whether it be to evaluate market trends or determine inventory needs.”
According to Williams, when Perry and Hansen founded the company, part of their business plan was to use technology to collaborate with the middle tier and the consumer. For that reason, they assembled a team with over 100+ years of combined experience that includes technology, marketing and consumer packaged goods.
“We’re all technical,” Williams said. “We have two data analysts on our team, and they’re constantly digging into data and identifying potential issues so we can address them.”
To facilitate operations, this data—including branding and marketing tools—is shared across the board with internal teams as well as external collaborators.
Island Brands ‘ use of data analysis has been a lifesaver in today’s market, where supply chain issues have plagued the industry. “Our biggest enemy,” Williams said, “is being out of stock. By providing data and guidance to wholesalers, we can anticipate volumes and ensure that there is no single point of failure in the supply chain. We have multiple vendors, and if one doesn’t have availability, we go to another one. If we have shipping problems, we optimize our loads or call on multiple logistics providers to potential solutions. Strategy plays a big role. You can have the best liquid in the world, but if you can’t get it on the shelves, then you’re dead.”
Island Brands’ marketing strategies have paid off. In 2021, the company sold 160,000 cases in seven states: Tennessee, Alabama, Georgia, North Carolina, South Carolina, Florida and Virginia. Beers are available at Walmart, Costco, Publix and other southeastern grocery stores. But it’s not just consumer demand that has led to this success: It’s strategic planning, with growth carefully timed and targeted.
“We analyze data on items that are growing or not growing in certain territories and work with our wholesalers to collaborate and strategize,” Williams said. “When we bring a product to our wholesalers, we ask them to help us grow in their territorial footprint, and, at the same time, ask how we can help them get the items they need to fill voids in their portfolios.”
Energized by success—and demand determined via data analysis—in 2021, Island Brands introduced two new products: Island Lemonada, a balance of the finest premium beer and freshly-squeezed lemonade, and Southern Peach, a combination of sun-ripened peaches, fresh-brewed Southern tea and premium beer. Like Island’s flagship brands, these are flavorful beverages without added fillers, made for easy drinking with an ABV of 4.5%.
In 2022, Island Brands will enter the Flavored Malt Beverage category, one of the most rapidly growing segments in the beverage industry. Created under the CRUSH brand, flavors include Lime Margarita, Strawberry Daiquiri and Tropical Punch. “These will not be super-premium beverages,” Williams told Beverage Master Magazine, “but will still be better for you than others out there, as they have natural flavorings and less sugar than competitive brands. ABV will be 10%.”
Beyond that, Island Bands has set its sights on expanding distribution (they will add Mississippi and Louisiana in 2022), opening more Cabana Bars in the Southeast, adding another brewery for contract production, and increasing its crowdfunding goal (now at $5 million). According to Williams, the company expects to double its sales in 2022.
The key to success, she said, is leveraging technology to keep up with the growth. “Behind all of this expansion, we have to make sure we can honor our retail commitments,” she told Beverage Master Magazine. “We will use our data to determine when we can launch, where we can launch, and how much we can launch.”
For more information on Island Brands USA, visit www.islandbrandsusa.com