Fueled by the growing popularity of craft beers, Milwaukee’s Lakefront Brewery has doubled its monthly shipments of beer to the Chicago market over the past 18 months.
Much of that increased traffic to Chicago is due to the rising demand for New Grist, Lakefront’s gluten-free beer that was introduced in late 2005. New Grist is made from rice and sorghum, and contains no wheat products.
The beer is made for people with celiac disease, an autoimmune disorder. Those with the disorder are not able to eat foods containing gluten, a protein in wheat.
“I know a lot of people with the disease, and they asked me to make them a beer,” said Russ Klisch, president of the brewery. “I thought it would fit with our niche of small specialty products.”
Klisch also needed the federal government to change its definition of beer, which at the time stated that all beer needed to contain at least 25 percent malted barley. That definition wouldn’t allow for the creation of a gluten-free beer, he said.
The brewery started selling its New Grist beer in Milwaukee in October 2005. By the end of the year, the beer was being sold in Chicago. And that’s when things started to get interesting for the company.
The University of Chicago has a celiac disease program, dedicated to promoting awareness, treatment and research into the disease. Patients at the university’s hospital began telling their doctors about the beer, and physicians began telling other patients about it, said Orlando Segura, national accounts manager at Lakefront.
“(Celiac patients) are very much label readers,” Segura said. “They’re highly educated customers, and they’re the best advertising and PR you could get.”
Because most beer contains barley, most people with celiac disease can’t drink it. Giving that population a beer it can consume is, in some ways, giving them back a normal life.
“Beer has such a social element to it,” Segura said. “It’s not just a beverage. It’s life. It’s fun. It goes hand-in-hand with Midwestern life.”
Lakefront Brewery expanded its brewing capacity by 4,000 to 5,000 barrels in 2006, Klisch said. Lakefront increased wholesale shipments of beer to 8,863 barrels in 2006, up 41 percent from 2005.
Some of the growth is due to new distribution channels – Lakefront beer is available in dramatically more markets today than it was in late 2005.
However, Lakefront’s sales in the Chicago market have doubled since New Grist was introduced.
“(Before we introduced New Grist) we’d send a skid or two down a month,” Klisch said. A skid contains 70 cases of beer. Each case contains four six-packs. “Now we’re sending three or four skids a month.”
Those sales will likely be increasing in 2007, both Segura and Klisch said.
Whole Foods Market Inc., which opened its first store in Milwaukee last year, is planning four new stores in Chicago that will incorporate features similar to the Milwaukee store, Segura said. Aside from its traditional liquor section, customers in the Milwaukee store can also buy tap beer. Several of Lakefront’s products are available in the store.
Whole Foods is planning to have at least one Lakefront beer on tap in its Chicago stores, Segura said.
“They’ll have the organic beer (Organic Extra Special Bitter) and maybe the Cream City (Pale Ale),” he said.
Milwaukee’s proximity to Chicago is giving Lakefront an easy introduction to people who live in the larger city, Segura said. When the Chicago Cubs play the Brewers in Milwaukee, many Chicago visitors take Lakefront Brewery tours, he said.
In addition, many of the owners of the new condos being built along Commerce Street are “Chicago transplants,” Segura said.
A Chicago travel site recently linked to Lakefront’s Web site when it was writing about road trip possibilities in Wisconsin.
The combined effect has given Lakefront a brand that’s starting to be noticed in Chicagoland, Segura said.
“There might be a bigger identity for Lakefront beer in Chicago than there is in some parts within 50 miles of our brewery in Milwaukee,” he said.
Aside from brisk sales of its New Grist beer, Lakefront also is selling a fair amount of its other brews in the Chicago area, Klisch said. He said the city has a large number of consumers that enjoy craft-brewed beer, which has helped drive sales there.
“There are good beer bars there, like Sheffield’s,” he said. “The formula we’ve used has been with the good beer bars there. When you have a quality, high-end place, people want to taste your beer and get to know who you are.”
Lakefront is projecting 30 to 40 percent sales growth this year. The company is entering national distribution channels now. Its beer will soon be available in Oklahoma and Missouri. It was recently introduced to Nebraska.
“Beer is starting to get close to what wine is, especially with the organics,” Klisch said. “People have a list of their favorites, but they also like to try new things.”
