Local Men Uncap A National Brew

September 22, 2003
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GRAND RAPIDS — There’s this group of guys in town who are getting ready to roll out a new beer.

But don’t get the idea that it’s a local or regional microbrew.

No, the trio — Michael F. Lipscomb, Robert B. Weaver and Michael L. Ferguson — are planning to go nationwide with a product called Sechs Light Beer.

Their goal is to capture 1 percent of the nation’s $40 billion beer-drinking market by 2010 to 2012.

That’s sales of 15 million cases annually.

Lipscomb, the president and CEO of Walton Sechs Beer Co., said he and his colleagues are serious about the venture, which, so far, they have kept below what might be called the marketing radar screen.

“We started testing our beer in Michigan in January,” he said. “We haven’t had a formal marketing plan in place because we wanted to get an idea of how it would do just letting people interact with it without a strong corporate message.

“We just wanted to listen to consumers first. So we made it available to a cross section in Ann Arbor and Kalamazoo and then here in Grand Rapids for about four full months.”

The Byron Center resident said he and the other principals of Walton Sechs have induced distributors to retail the beer in bars, restaurants, restaurants with bars and chain stores.

The three men also have spent a great deal of time visiting some of the establishments where Sechs is retailed to chat with people about it.

“This is fun,” Lipscomb said, “but you make some sacrifices. Sometimes it seems like the only thing I’m doing when I’m not sleeping is working. I don’t get to see much of my boys right now.” He and his wife, Jennifer, have four sons, ages four through 16.

The product he and his colleagues are hawking — currently available only in bottles — is being produced by contract using excess capacity at City Brewery in La Crosse, Wis. As they reach wider markets, they plan to use contract production elsewhere.

“Contract brewing is very, very common in the beer industry,” Lipscomb said. “Trucking liquids over long distances is very expensive, and there’s a lot of excess brewing capacity available.”

So far, sales have been strictly in Michigan.

“We wanted to test it in Michigan,” Lipscomb said, “because companies do a lot of test marketing here, though they almost never launch a product in this state.

“But we get the feeling if we can make it in Michigan, we can make it anywhere. So we’re going to start the roll-out in the Detroit area.”

He told the Business Journal he and his colleagues are pleased at how well Michigan beer drinkers have reacted to Sechs beer.

He described the brew as appealing to a special segment of the market: people who like imports but welcome the lower domestic price, and people who want a light beer but with a sturdier flavor than the other major domestic lights.

“Right now,” he said, “we have this niche all to ourselves.”

He said the principals of Walton Sechs also are pleased that the product, together with its non-traditional packaging — a label highlighted by a gold swash — have produced several offers to buy the company.

He explained Walton Sechs is coming off the starting blocks slowly and intends to keep moving that way for some time.

“If you plan to roll out nationally from scratch,” he said wryly, “you need some really serious cash.” He said brands such as Zima and Michelob Ultra each spent about $40 million in their rollout promotions.

“And do you remember Malternative?” he asked.

“In three months, they did a $60 million promotion: magazines, radio, TV — the works. And they were off the market in six months.”

So far, he said, Walton Sechs has spent about $1 million, and a group of investors is ready with more funding.

“We triage funded this thing,” he said. “We don’t believe in taking on more money than you need.”

First came a marketing study, then the design work for the packaging, plus the Web site, www.sechsbeer.com, complete with a catalog offering of Sechs label tee shirts, baseball caps, winter caps and other attire.

Lipscomb said the marketing research indicated that the best prospect for a national market was a premium light beer aimed at the under-30 crowd.

He explained that light beer comprises 50 percent of North American beer sales, while microbrews — nearly all full-bodied beers — together comprise less than 4 percent of the market.

“What we realized was that by and large, this demographic wants to have a good, decent beer,” Lipscomb said. “Sechs is a little more full-flavored, with fewer calories and fewer carbs.

“In flavor, we’re pretty close to Labatt,” he added.

The group chose the German word for “six” as the beer’s name because Americans pronounce it “sex,” a word lending itself to risqué chat — not to mention advertising — believed fashionable among the age 21 to 27 demographic that is the brew’s target.

The carton in which Sechs beer comes employs double entendre, urging buyers to “Have Sechs responsibly.”

And who is Walton of Walton Sechs Beer Co.? The firm’s Web site identifies him as a “philosopher and beer company guy.” Right now he’s just a name with potential

Who knows what Walton Sechs might turn out to be like in a regional or national marketing campaign by next year? At the very least, he presumably will urge the nation’s TV viewers to have Sechs.     

Lipscomb said a second round of funding will be forthcoming as Walton Sechs moves toward an intermediate regional goal of having its beer be distributed next year in the major markets of Michigan, Indiana and Ohio.

The plan is for complete penetration of the upper Midwest within four years.

“Being privately funded,” Lipscomb said, “we really do have some flexibility. We could mark time in the upper Midwest. That’s an option. But there’s a risk factor in holding back with a brand like this because it has such a national appeal.”    

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