If you ask experts like FaB Wisconsin’s Shelley Jurewicz, Wisconsin’s food and beverage industry is growing.
Still, Jurewicz admits that while the trajectory of the industry is strong, she says different pockets of the industry are more challenged. One of those pockets includes some of the state’s leading beverage companies, including a few of Wisconsin’s leading beer and soda producers, who attested to some of the industry’s struggles at the Milwaukee Business Journal’s Food and Beverage Roundtable event Oct. 4 at Brewer’s Hill restaurant supply store Fein Brothers.
“It’s been a challenging year overall for us; it’s been a challenging year in the industry,” said Jim Kanter, MillerCoors’ Wisconsin general manager. “I think we’re seeing a lot of continued change with macro trends going on that started a few years ago. We’ve made some adjustments.”
Kanter was joined on the panel by fellow Milwaukee beer industry leaders Russ Klisch, co-founder and president of Lakefront Brewery, and Jeff Hamilton, president of Sprecher Brewery. Klisch and Hamilton expressed lukewarm feelings about the recent performance of their industry.
“The craft industry is not seeing the huge growth that we’re used to seeing,” Klisch said. “We’re about flat.”
Klisch stressed the importance of continuing to innovate in order to “play where the puck is going to be going.”
Hamilton concurred, calling business “OK,” and added that Sprecher’s crossover into the craft soda industry usually keeps it diverse enough to succeed.
“Carbonated soft drinks has its own issues right now, along with craft beer and regular beer in general,” Hamilton said. “We feel pretty fortunate to be doing OK in a bunch of bad environment industries that we’re playing in.”
Hamilton agreed that future innovation will “put us back in a bit more growth than we’ve seen the last couple of years.”
Another difficulty Hamilton sees on the soda side of Sprecher is what he called the “war on sugar.” While he said Sprecher is less affected by anti-sugar health trends than Pepsi or Coca-Cola, Sprecher is doing things differently to respond to new consumers.
“If you were to talk to most people under 35 years old and ask them if their kids drink soda, they would probably tell you, ‘no, and they never will,'” Hamilton said. “So we’re facing a new environment there as well.”
That health trend appears to be having an opposite effect on the food side of the Wisconsin industry. Tom Danneker, CEO of Klement’s Sausage Co. in Milwaukee, said his company posted double-digit growth in the past year, buoyed by a “protein snacking trend.”
“Sometimes it’s better to be lucky than good,” he said. “We make some great protein snacks. I wish I could take credit and say we’re incredibly smart and we saw this huge trend, but we just make a great product that fits a trend and we’re executing like heck to keep up with it.”
Despite the company’s success, Danneker said the bratwurst category — what he called the “anchor of growth for many, many years” — is declining.
“Like any business, you’ve got to understand where the market’s going and adapt accordingly,” he said. “We make close to 500 sausage items. If we don’t have something in there that’s fitting a trend and meeting demand, we’re in trouble.”
Kim Wall, president and owner of Baensch Food Products Co., Milwaukee, said her company has also benefited from health trends, such as the ketogenic diet, which prioritizes fatty foods like herring. She also embraced removing preservatives from all of Baensch’s offerings, another trend she said boosted business.
“We’re just really tracking those millennials,” she said. “I think I made the right move.”
Danneker described the disparity between some parts of the industry “like a tale of two cities.”
“You definitely need to manage those areas where you’re going to be up a little bit and you have to allocate resources as much as possible to those areas where you can make some incremental margin,” he said. “We’re growing, but the bottom line is a battle every day, and my guess is that’s true for everybody in this room.”