Entrepreneurs at a young age, brothers John and Chris Trogner hung tight to the notion that should they slip up on their path to business success, they wouldn’t be bailed out by any grown-ups. That belief has served them well over the last 20 years as the Pennsylvania brothers have helped guide Tröegs Independent Brewing into a growing and well-respected craft beer competitor.
“The early years were difficult because it was just the two of us trying to do a lot of different things,” Chris recalls. “While we knew we had a good concept for brewing, we didn’t have a solid plan on how to get our beer out to our customers. John and I quickly learned that it takes two different mindsets to make it work.” Since the Hershey, Pennsylvania-based brewery’s early days, older brother John has focused on the day-to-day production and brewing operations while Chris has steered overall business aspects.
The partnership has been a successful one: Tröegs’ volume jumped 12% last year to 101,000 (31-gallon) barrels, while overall craft beer increased only 5%. Tröegs—a play on the family name and kroeg, the Flemish word for pub—distributes its brews in ten eastern states and Washington, D.C., using a mix of Anheuser-Busch InBev, MillerCoors, and specialty wholesalers. Owned entirely by the two brothers, Tröegs employs 235 workers.
Bringing It Back Home
The beer bug bit the brothers in the early ’90s when Chris was attending college in Colorado and witnessed the craft brewing explosion in the Rocky Mountain state. John joined him out west and landed a position at a Boulder brewpub. They soon hatched a plan to open their own brewery back home in central Pennsylvania, and in 1997, Tröegs Brewing opened its doors in Harrisburg. “Our sales expectations weren’t super-high when we began,” Chris concedes. “But we had good local and regional support for products made in the area, so that was a help.”
Indeed, Tröegs’ reputation for producing a range of innovative, quality brews soon spread and the company’s volume increased at a steady rate. In 2011, Tröegs moved into a gleaming, 90,000-square-foot brewery in nearby Hershey, enabling the company to expand distribution along the East Coast from North Carolina to Massachusetts, and as far west as Ohio. “We saw the potential that craft beer had and knew that we wanted to dedicate our lives to building a brewery and a sustainable business,” John says. “It’s been a pleasure to have the ability to brew so many interesting beers over the years.”
The Hershey facility provides visitors with a bird’s eye view of the inner workings of a brewery. The site features two brewhouses—one for daily production and a smaller one for “Scratch,” or research and development, brews. The main brewhouse is located in the middle of the brewery’s tasting room, and visitors can take a self-guided tour of the facility. “We feel that full transparency makes sense for our visitors,” Chris says. “When they come to the brewery, they can see everything—the tasting room, the brewhouse, the fermentation room, the quality control lab, the packaging space, and our wood-aging space.” Earlier this year, the company installed eight 1,000-barrel fermenters, bringing capacity to 200,000 barrels and providing Tröegs with more production flexibility.
Bevy Of Brews
That flexibility allows Tröegs to produce an array of beer styles. The Pennsylvania brewery sells 11 year-round brews, including the flagship Perpetual IPA and No.-2 volume label Tröegenator double bock. According to John, Perpetual IPA—which Tröegs began brewing after it moved to Hershey—grew at a double-digit rate last year and now accounts for 35% of the company’s volume. The Hop Cycle series of four seasonal brews represents the brewery’s third largest brand, while ten different beers, including the long-popular Mad Elf holiday ale, comprise its limited-release Once-a-Year series. “Mad Elf has opened up a lot of doors for us with retailers,” Chris says of the brew, which was first produced in 2001.
Beyond the volume brews, the Trogner brothers take great pride in their experimental and barrel-aged offerings. “We’ve been working hard to sell up our experimental series so we can stay on our toes and be more innovative from a brewing standpoint,” Chris says, pointing to the Scratch series of brews—which are usually available only in the tasting room and general store. He notes that many of those small-batch brews have proven so popular over the years that they’ve since been bumped up to seasonal or year-round status. Tröegs’ Splinter series, meanwhile, includes eight brews aged in Bourbon or wine barrels, all packaged in 12.7-ounce cork and cage bottles.
The brewery began canning some of its beers about four years ago, and, according to John, “consumer response has been awesome.” Chris adds that while cans account for only 15% of the company’s packaged beer sales, they’re growing at a faster rate than bottles. Six-packs of Tröegs brews generally range in price from $11-$12, while 12-packs are about $18.
As Tröegs has grown, so too has its marketing support and marketing team. “We do everything internally now,” Chris says. “We do all of our own creative, from design to social media, taking a 360-degrees approach” to ensure consistent messaging. The company—which now features the Brewers Association’s “Independent Craft” seal on its packaging—has run limited print ads in trade and lifestyle publications and is moving toward paid digital ads to further its reach. For the last 12 years the brewery has sponsored the “Art of Tröegs” contest, inviting consumers to create a piece of art in any format that’s inspired by the brand. On- and off-premise events, meanwhile, are frequent and run the gamut from in-house tastings to tap takeovers to beer dinners.
Retail Changes And Challenges
The brewery’s on- and off-premise sales are split 35%-65%, and, according to Chris, they’re seeing growth on both ends. Tröegs’ home market of Pennsylvania remains its most important, accounting for 60% of the brewery’s sales. Chris notes that while the state’s beer distributors are its largest retail customers, inroads made by grocery stores to sell beer in recent years have helped the brewery continue to grow. But he concedes that it’s getting increasingly difficult for brewers to maintain tap handles at many on-premise accounts as bar operators opt to constantly rotate draft offerings. “We brew a broad range of beer styles,” Chris says. “We hope that as bartenders are rotating, they’re rotating within Tröegs.”
The Trogner brothers advise that with so many beer options available to consumers today, retailers should be well educated about category offerings. “Be very aware of what you’re putting on the shelves,” John recommends. “Make sure you can vouch for every item.” Like many other craft brewers, Tröegs acts as a retailer via its tasting room, which has played a critical role in building the brewery’s reputation. “From a marketing standpoint, the tasting room has become a huge part of who we are,” Chris says. Still, he adds that Tröegs remains committed to the three-tier system. “Our tasting room couldn’t survive on its own,” he notes. “The brewery is the driver, and what we sell to retailers has always been our focus.”
At the brewery, tasting room, and snack bar, the Trogners aim to use locally grown and sourced ingredients whenever possible. “We have relationships with farms down the road that will grow herbs or vegetables that we can use in our food,” John says. “Our menu is driven by what’s coming out of the ground around us. It’s a very similar process to our Scratch beer production.” The snack bar menu ranges in price from $4 for small bites to $28 for a dozen oysters.
Slow And Steady
As John and Chris Trogner forge ahead, they can’t help but look back at how the craft beer business has changed since they first entered it more than 20 years ago. “Back then it took a lot of effort to get consumers to try your beer for the first time,” Chris remarks. “Today, they’re a lot more adventurous and a new brand is easier to launch than it used to be.” He adds, however, that the plethora of beers now available has made the business much more competitive. “There’s a lot of choice out there. The challenge for us going forward is how to continue to stay relevant and interesting for consumers buying our beer.” The brewer hints that the company will continue to experiment with nontraditional beer ingredients and styles in order to stay attractive to consumers.
Tröegs has no plans to expand into new markets this year. “We want to be a strong regional player,” John remarks. “We’re situated in a great area, close to a lot of major cities.” He says that although there are some gaps on the East Coast, the brewery will start to look at them next year and beyond. “Our sales strategy has always been slow and steady,” he says—just the way the grown-ups would want it to be.