Strange brew: Sanders chocolate beer
Detroit’s beloved 136-year-old candymaker is branching into adult treats: chocolate beer and wine.
Sanders is planning a massive holiday rollout later this month for its 1-year-old Chocolate Stout and is in talks with an unidentified California vineyard to create a dessert wine based on its iconic chocolate flavors.
Both adult beverages will help the brand gain national exposure, said Brian Jefferson, chairman of Clinton Township-based MCM Holding Co., the group that owns Sanders and another local confectioner, Morley Brands LLC.
The candymaker is tapping into a growing beverage trend.
“Craft beer is becoming more popular as consumers look for local, authentic, handcrafted foods and beverages with passionate food artisans and entrepreneurs behind them,” said Louise Kramer, a spokeswoman for the National Association for the Specialty Food Trade. Furthermore, “chocolate is hugely popular with consumers of specialty foods.”
Sanders Chocolate Stout, developed last year with the Detroit Brewing Co., combines Sanders chocolate with the brewer’s Pub Classic Smooth Cream Stout for a chocolate finish, Jefferson said.
“We were skeptical at first,” he said of the brewer’s proposal to collaborate. “We weren’t going to make a decision until we tasted it. We weren’t selling our brand just to sell our brand and put a few pennies in our pocket. It had to be really good.”
Retailers sold out quickly of the first production run of 6,000 cases last year. Sanders is manufacturing at least six times as many cases of the beer this year, to be carried by merchants including Meijer, Hiller’s Markets, Whole Foods, Hollywood Markets, Nino Salvaggio and Holiday Market.
Some could argue it’s strange for a homegrown confectioner woven into the childhoods of generations of Michiganians to produce spirits, but “from a marketing standpoint, it’s just brilliant,” said Jim Hiller, owner of eight Hiller’s Markets in southeastern Michigan.
“Given Sanders’ cachet in the chocolate market, you’d be crazy not to do it,” Hiller said.
Hiller ordered five times as many cases of the beer as he received last year and expects them to sell out again this year, especially since chocolate beer and wine are becoming more popular at holiday parties, he said.
But the foray into alcohol still is “an unusual brand extension” and a “very unlikely combination,” said University of Detroit-Mercy marketing professor Mike Bernacchi.
“Sanders’ legacy brand name means the company has a greater responsibility to uphold its reputation and to make sure it’s a superior product,” he said.
Grand Rapids-based Meijer plans to install high-visibility end-cap displays of the Sanders beer at each of its 101 Michigan stores by Dec. 1, said Doug Bylski, Meijer’s senior buyer of beer and spirits.
The partnership between two Detroit companies and the rising popularity of chocolate stout made Sanders Chocolate Stout a good fit for the superstore, he said.
“In the craft beer segment, people like to experiment,” Bylski said. “It’s the thrill of, ‘What am I going to have this weekend?’”
Stout beer drinkers snapped up cases last year because “the chocolate overtones you get aren’t way in your face,” he added. “They connect well together.”
The craft beer segment is growing nationally, and Michigan is among the top tier of microbrewers, according to Bylski. The Brewer Association ranked Michigan No. 14 in 2010 for the number of breweries per capita.
Meijer’s Michigan stores carry more varieties of craft beer than its stores in Illinois, Indiana, Ohio and Kentucky, he added.
But Sanders Chocolate Stout won’t be carried in Sanders stores because the company has no liquor license, Jefferson said. The brand’s target audience is over 21 years old, he said, since the premium chocolate costs $20 per pound.
Sanders, which traces it roots to a rented Detroit storefront in 1875, has seven stores in Metro Detroit, including a downtown Birmingham site opened two weeks ago.
The private company has seen double-digit growth since MCM Holding Co. acquired it in 2001 with sales expected to near $20 million this year.
The partnership with Detroit Brewing Co. is a recipe for success, said Mark Lantz, a brand consultant in Birmingham.
“Both represent ‘craft’ brands that create more individualized productsagainst a backdrop of huge global conglomerates with mass market products,” Lantz said, “and it’s likely to have little appeal to the kids but a lot of appeal to the kid inside the adult beer drinker.”
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