Chocolate Ale Update, Part 2

Posted February 3, 2012

Category: General

Deliveries of Chocolate Ale continue today (Friday, February 3) in Greater Kansas City, though our distributor informs us that almost all of the Smokestack seasonal beer has already been received by retailers. We continue to receive numerous calls, e-mails, and postings with questions and comments about this rather unique release, so we thought it would be a good idea to try to publicly address the most frequently mentioned topics. (For background and further details, please see these previous postings: January 19 and January 31.)

Why is Kansas City not first on the list? After Chocolate Ale began showing up on store shelves outside of Kansas City, many of you began openly wondering, "Where's ours?" As we’ve explained previously, many of our wholesalers pick up beer from our warehouse only once or twice a month. In order for them to have the beer to sell on our target release date of February 1, all of them had to get it in January, so we began shipping it shortly after the first of the year. Because our wholesalers are independent businesses, the amount of control we are able to exercise over when they deliver a particular product to retailers is limited. We will, however, be taking a long, hard look at this for 2013, and will attempt to apply some of the lessons we’ve learned this year.

Related questions have included "Why did you send Chocolate Ale outside Kansas City?" "How come other cities still have bottles?" and "Why does it cost so much?" The answers to these questions are not quite so simple. As our reputation outside of our hometown has grown, so too has demand for our beers, especially our highly regarded Smokestack Series offerings. Smokestack beers help our business a variety of ways; they allow us to invest in new equipment, hire more people, and expand opportunities for our brand in a highly competitive industry. It's true that Smokestack beers are sold at a higher price – it’s because they cost much more to produce. In the case of Chocolate Ale, the additional ingredients make it far more expensive to brew than our popular Tank 7, although we sell both to our wholesalers at the same price, and our wholesalers in turn sell both to retailers at the same price. Neither we nor our wholesalers have any legal right to control the price charged by a retailer for any of our products, and, unfortunately, it seems that some have taken advantage of the demand to jack up their prices.

The Greater Kansas City area accounts for about 35% of our total sales, but received more than half of our entire production of Chocolate Ale. In most other markets, Chocolate Ale was not subject to the same level of demand we’ve seen in KC, so stores did not tend to establish strict limits on purchases, and in certain places, the beer may still be sitting on retail shelves. The decision to again make Chocolate Ale available in kegs as well as bottles is one that we will again carefully examine, but the intent was simple – to  make the beer available to as many people as possible. Draft beer accounts for over 40% of all Boulevard sales, and most beer drinkers appreciate a great glass of beer at their favorite bar or restaurant. Our hope was to enable as many people as possible to enjoy a glass, if not a full bottle, in as many places as possible, up to and including Valentine's Day. With the rush to try it immediately after its release, we are as sad (and surprised) as many of you to see it evaporating so quickly.

Why not make more? Some people have characterized the limited nature of Chocolate Ale as being pre-planned, or suggested that we purposely limited supply to increase demand. This is categorically false. Last fall we began another in a series of expansions of our fermentation capacity, and we have the hardhats to prove it. Initiating this project meant removing six 105-barrel tanks to make way for eight 300-barrel tanks, which will, when complete, allow us to make substantially more beer. But in the midst of this project, we were forced to cut production of many of our other beers in order to make any Chocolate Ale at all. The 20,000 gallons we produced – 3.7 times as much as we made in 2011 – was absolutely the maximum we could make at the point in time that we made it. This spring, when the expansion project is completed, we'll be able to breathe a little easier and increase production until… well… who knows?

Who are those master marketers? While we would love to take all the credit we've received for being savvy marketers, we don’t deserve it. Weeks before the release of the beer, our phones began ringing with inquiries from the local media. As with all media inquiries, we provided access to our key personnel, if they were available, but intentionally tried to downplay the release and delay any reporting. But the media is tough to control – the resulting stories about Chocolate Ale were influenced by last year’s surprising demand and the anticipated demand for this year, not by anything the brewery initiated. Prior to the release, we posted updates about the beer on our social media outlets as we normally do for any upcoming release. That was it—the least expensive, least strategic marketing plan ever conceived.

What is so special about Chocolate Ale? The media attention—sometimes referred to as hype—created a mystique for this beer that few brewers, let alone businesses, are privileged to witness. Normally our Smokestack Seasonal or even Limited Release beers appeal to a relatively small but growing group of beer drinkers on the lookout for special or unique offerings. None of our other beers have ever received the attention that has been showered on Chocolate Ale, or have captured the imagination of so many people. We like to think it is because our talented brewmaster collaborated with the equally talented Christopher Elbow, a Kansas City icon and highly respected chocolatier, on a remarkable new beer. A more likely answer, and one we may have underestimated: Kansas Citians really love products made in Kansas City.

Timing also plays a role in the response to Chocolate Ale, appearing as it does just before Valentine's Day. Releasing it as our Spring Seasonal in late January/early February was a decision based simply on the style and the occasion. For consumers unfamiliar with craft brewers propensity to produce seasonal, special, or limited releases, there are many examples of other high-demand, smaller batch beers that are worth noting. These beers also create quite a stir for their brewers, sometimes resulting in special one-day-only events, lottery systems, and strict bottle limits that serve to further heighten interest and demand. To our knowledge, however, few of these beers have received the amount of attention and city-wide interest that we've seen with Chocolate Ale.

Thank you for reading. We apologize to our loyal fans who were not able to find Chocolate Ale, and we promise to learn as much as we can from this experience. To everyone who has taken the time and energy to write, we sincerely appreciate your comments and suggestions. While it saddens us to think that misinformation and misunderstanding over Chocolate Ale might lead some folks to stop purchasing our beers altogether, we take heart from the many loyal Boulevard drinkers who have expressed their support. Your comments are deeply appreciated by the 100 hardworking and dedicated employees who do their best, day in and day out, to make Kansas City proud.