For breweries that have previously invested heavily in production infrastructure, a slowdown in beer demand can create an uncomfortable question: What else can those assets do? For Abita, the answer hasn’t been to simply wait for craft beer to rebound. The Louisiana brewery has been working to make its existing facilities more flexible, allowing it to produce beer while also creating, packaging and supporting other types of beverages.
President Troy Ashley described the approach during a recent BREWER Podcast as an offensive strategy rather than a defensive response to a difficult beer market.
“Craft beer has been challenged,” Ashley said in April. “We need to diversify and optimize our own facilities and we have an opportunity to do that.”
That thought is important for brewery owners considering a similar move no matter what sort of size you may be. Diversification doesn’t necessarily begin with deciding which trendy beverage category to enter. It can begin by taking a hard look at what a brewery already owns, what it can produce and where its capabilities aren’t being fully utilized.
Abita’s recent investments have included more than $6 million in production and packaging infrastructure, increasing capacity by 40% and giving the company more flexibility across formats and categories. That investment has helped establish the Abita Beverage Group as a platform that includes beer, spirits, non-alcoholic beverages and contract manufacturing.
Now, it’s not necessary to spend millions on new equipment. It’s to understand what constraint is actually limiting the business.
A brewery may have fermentation capacity but lack the packaging equipment to efficiently serve another market. It may have a capable production team but inconsistent utilization throughout the year. Or it may have the ability to make a beverage but lack the sales relationships to get it into the market.
In other words, capacity isn’t simply the number of barrels a brewery can make.
“We’ve got some excess capacity and we’re trying to optimize what we can do,” Ashley told BREWER. “We’ve worked with some contract customers for a long time and we want to continue to work with them and find new ones as well. And so there’s lots of room for us to grow and as well as grow our own brands.”
That creates multiple ways for a brewery to put existing infrastructure to work. A brewery can manufacture for another brand, develop its own adjacent products or use a combination of both to improve utilization. Ashley said Abita’s capabilities now extend well beyond traditional beer production.
“Our bread and butter is beer,” he said. “That’s where we’ve done that forever. It’s what we’re best at.”
But he added that the company has developed expertise in neutral malt base production, blending and other processes that can support ready-to-drink beverages, non-alcoholic products, sodas and functional beverages. That doesn’t mean every category makes sense for every brewery. In fact, Ashley’s comments suggest the opposite.
Abita has chosen areas where its existing capabilities provide an advantage rather than trying to chase every emerging beverage category. Ashley specifically pointed to RTDs and non-alcoholic beverages as areas of interest while saying the company isn’t currently entering the THC space.
“We’re focusing on the things that we know we can perform at this time,” he said. Diversification can sound attractive because it creates additional revenue opportunities, but adding a new category also introduces new formulation requirements, packaging needs, sales strategies, regulatory considerations and operational complexity.
The strategic question, then, isn’t simply whether a category is growing. It’s whether a brewery has a credible reason to participate in it.
Abita’s launch of Upbeat Vodka Cocktails illustrates that approach. Rather than immediately pushing the new brand into every market available to it, the company is starting in markets where it already has relationships and recognition.
“We’re being careful about the launch,” Ashley said this spring. “We’re not just going far and wide.”
For an established brewery, that existing infrastructure can be one of its biggest advantages over a startup entering the same category. A brewery may already have distributor relationships, retail contacts, production knowledge, quality systems, logistics and a consumer base that can provide an initial audience. Ashley noted that getting shelf space isn’t as easy as it once was, making those relationships particularly valuable.
“You’re not a startup, so you do give yourself that leg up a little bit because you already have those relationships built,” he said.
That also explains why diversification doesn’t have to mean abandoning beer. A brewery’s established brands can provide the financial and organizational foundation from which new products are developed.
Abita continues to view beer as the core business while using other categories and contract production to broaden how its facilities generate value. The company has also continued to develop its existing beer portfolio, including brands such as Purple Haze and its Gator series.
The same principle can apply on a much smaller scale.
A brewery producing 5,000 barrels isn’t going to replicate the infrastructure or sales reach of Abita. But it can ask the same questions: Which equipment sits idle? Which packaging formats could open another channel? Could existing tanks support a contract customer? Is there a non-alcoholic product that fits the brewery’s process? Could an existing distributor relationship support another product? Is there a production capability that another beverage company needs but doesn’t have?
Those questions shift the conversation from “What beverage should we make?” to “What business problems can our brewery already solve?”
That can also open the door to partnerships that don’t fit the traditional brewery model.
Ashley said Abita is willing to consider relationships with companies that might prefer to focus on sales and marketing rather than manufacturing.
“Running a brewery, there’s a lot of headache sometimes running a manufacturing facility,” he said. “There’s logistics and all the things, so there’s a lot of opportunities there and synergies that could be gained with us and someone else potentially.”
That creates a different way to view contract manufacturing. It isn’t necessarily just a way to fill an empty tank. Done strategically, it can turn production expertise, packaging equipment and operational infrastructure into a service that has value independent of the brewery’s own brands.
Ashley said Abita is keeping its options open, including potential investments, acquisitions and other relationships.
“Big or small, we’re willing to look at all those options,” he said.
Not every brewery should become a beverage conglomerate. It’s that capital investments should create flexibility whenever possible, and that existing assets should be evaluated for more than their original purpose. Abita’s strategy starts with a simple reality: The company has infrastructure, people and expertise that don’t have to be limited to producing beer. The opportunity is figuring out how many ways those assets can generate value without compromising the core business.
“We’re not going to try to repeat doing the same things and hope for a different outcome,” Ashley said. “We’re trying to be offensive about it.”
For anyone considering what comes next, that may be the more useful question: not what can be added to the brewery, but what the brewery already has that could be used differently.
