Surfin’ U.S.A.: Surfside Goes National
Dear Client:
After a breakout year this past year, in which it grew 563% to 1.3 million cases sold, and put vodka-based hard tea RTDs on the map, Surfside is now making moves to try and own the subsegment it helped create, across the map.
Indeed, the brand announced today that it’s expanding distribution to 48 states this summer, which is more than double the amount of states it started with this year (20), and six times the amount it started with in 2023.
On top of the massive distribution expansion this summer, the brand is also launching a handful of new flavors for the key-selling season and a gang of new baseball partnerships both in the Major League and Minor League.
BBD caught up with Surfside chief Clem Pappas to hear all about these big moves and more on Beernet Radio this past week.
Off the bat, we had to ask Clem about the timing of this expansion: What precipitated the decision to go nationwide in such short order?
He called to mind a saying from his grandmother – “opportunity is not a lengthy visitor” – and explained, “We really felt like we’ve got a real opportunity here to sort of own this little subsegment of the category” and decided to “go out and get it.”
“WE WANT TO BE FIRST TO MARKET.” Clem did acknowledge the rapid national expansion taking place by Boston Beer with a similar product in Sun Cruiser, but said that their own decision to also rapidly expand wasn’t “directly in response” to that particular launch.
“There’s a lot of teas launching out there,” he said, and noted that they’re hearing of “other major names” fronting products that “line up” with what Surfside is doing (non-carbonated vodka tea in a 12-oz. slim can that’s 100 calories). “So, it’s not the first and it won’t be the last,” Clem said of Sun Cruiser.
As competitors file in, Clem said Surfside’s plan is simply to keep doing what they’ve been doing. “We think we got a great product, a great brand, and we’re trying to stay ahead. We do think that first to market matters in this business and we want to be first to market.”
HEAVY HITTER BEER DISTRIBUTOR PARTNERS.
With Surfside’s expansion news, we asked about noteworthy wholesaler partners for the brand.
Here it’s worth noting, as we have before, that one of the fastest-growing spirits RTDs has chosen a largely beer wholesaler-centric network.
“Reyes is huge for us,” said Clem. “They’ve been a great partner. We’re obviously [in] early stages in a lot of their markets, but it’s been great, a lot of early chain wins and really excited to see how the season plays out. But we’re just about ‘global’ with them. There’s only maybe a few houses that aren’t aligned.
“And then I guess the next biggest one would be Glazer’s; we’re aligned with Glazer’s in all of Glazer’s houses.”
He also mentioned Crescent Crown, and, around the Manhattan Beer HOBO network territory, they’re with most of those houses – though by law, they can’t be with that network in their Philadelphia back yard (which would be Origlio). Instead, “we’re through the state and self-distribution.”
Beyond that, “we’re enjoying an excellent start with the Bud Network in Ohio. We are getting ready to launch with Columbia in Washington and pretty much the Molson Coors network in Texas as well: So, Andrews, Houston, Faust, Reyes, Fisher 59, Keg One. So yeah, some great partners.”
Regarding partnering up with such heavy hitters, Clem muses that the dynamism of the RTD spirits has led them to good fortune, explaining that “when we go to beer distributors, they’re still looking for what is going to be their workhorse in this RTD spirits category. So, it’s a real unique opportunity for an emerging company like ours to be able to get in on day one with a Reyes or an Andrews or one of these major Bud distributors that otherwise might be harder to get a look at.”
LAUNCHING LINE OF LEMONADES TOO. As hinted
to up top, in addition to more states, Surfside is also bringing on more flavors. Chief among them is a line of new lemonades, like Raspberry Lemonade, Strawberry Lemonade, and Black Cherry Lemonade – all of which will show up in a new Lemonade Variety 8-Pack.
And while the flavors and variety pack are new to Surfside, lemonade is not. Surfside has carried a standalone lemonade flavor (no tea) as well as a lemonade & tea variant in its tea variety pack.
So clearly the company sees the two going hand in hand, and believes this is an appropriate extension without overexposing the brand. They also see the two playing in “slightly different use occasions” due to their different flavor profiles and the fact that tea has naturally occurring caffeine, while lemonade does not.
Note that this new line of lemonades will not roll out to Surfside’s new expanded footprint just yet, Clem said, telling us that they’ve made “the initial decision to put those in our core markets in the Mid-Atlantic where we’re a couple years in and ready for some more innovation.”
They’re starting to hit those core markets now and “the feedback’s been unbelievable, both on the flavors and the concept,” Clem said, adding, “we think it’ll be pretty incremental to the category that we’re trying to build here.”
In addition to the coming lemonades, Surfside also announced a couple new flavors on the tea side in Raspberry Iced Tea as well as Green Tea.
BUY ME A SURFSIDE AND CRACKER JACKS…
Moving on to the new partnerships in baseball, Clem told us that this is one of their “big swings,” allocating “a lot of budget” to an occasion that they’ve found “works really, really well” with their brand.
Yes, in case you forgot, Surfside was an absolute smash last year in Citizens Bank Park (home of the Philadelphia Phillies), as they cleared nearly 20,000 cases in the park during the season, outselling any other bev ale SKU, according to Clem.
Now, this season, they’re going beyond their hometown ball club of the Phillies and striking MLB partnerships with the Atlanta Braves, Baltimore Orioles, Cleveland Guardians and the Pittsburgh Pirates, while also inking a deal to become “the official RTD Vodka Iced Tea and Vodka Lemonade” of Minor League Baseball.
All in, “we’re going to be in about 90 stadiums throughout the country this year,” says Clem. And he believes this could be the start of a long-lasting match. “It’s baseball, it’s summer, you’re outside” and a “refreshing” Surfside just goes with it, Clem submits.
“I don’t want to be overly presumptive, but I kind of feel like, hey, we can make this, you go to the game and you get a Cracker Jack and get peanuts,” and maybe their adult beverage, too. “It’s like, we want Take Me Out to the Ball Game… and ‘buy me a Surfside and Cracker Jacks.”‘
PROJECTIONS AND POSITIONING.
With all the new states, new flavors and new partnerships, we couldn’t help but conclude our conversation with Clem asking about projections for the year.
With just Surfside, “we’re projecting over 4 million cases this year,” Clem said, though he notes “you could drive a tractor trailer through the amount of variance in that projection.”
He adds that they think their Stateside Vodka Soda will be “over a million cases or darn close to it this year.”
Looking even further ahead, “we have an awful lot of runway,” Clem said, pointing to spring resets and how they have “just scratched the surface” in terms of ACV in “most of these chain states.”
And when it comes to goals, Clem shared that when you look at the top players in spirits-based RTD, you see High Noon way at the top with over 20 million cases depleted, and the next biggest brands are two to four million cases.
“We certainly think that this year we should be closer to number two, and going forward, we should definitely be number two. And then over time it’ll be, ‘do we have it to really challenge for that number one spot?’ That’s our goal anyway, audacious, but that’s what we’re going for.”
Hear more from Clem on managing the complexity of such a major expansion, his thoughts on the on-premise, how he green lights innovation, where they’re at on single serves and much more in the latest episode of Beernet Radio.
