Interview with John Lennon, CEO of Pyramid

Modern Brewery Age,  August 29, 2005  

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John Lennon has been the most peripatetic of beer executives. Many will remember him from his time at Wisdom Import Co. From there he went on to work for Guinness in the Caribbean and for InBev as head of Beck's North America. For a brief period in the 1990s, he also headed up Rhino Chasers, the now defunct craft brand. He has returned to the craft beer segment as CEO of Pyramid Ale Breweries. Our interview follows:

How are things progressing at Pyramid?

We are real pleased with the progress the brand is making. I've been here a year now, and we've decided to really focus on what I think is a core competency of the company, which is our portfolio of unfiltered wheat beers. Pyramid has been making unfiltered wheat beers for 20 years. Our hefe-weizen has been doing very well, so we have decided to focus our efforts against that core portfolio. We were fortunate to win the gold medal at the Great American Beer Festival last year, so we are capitalizing on that in some of our marketing activity-putting the gold medal on the package and things like that. But we really wanted to make a statement about what we are all about, so we've just rolled out new packaging. We are doing something unusual, in that we are showing photographs of the product on the package. We have to show consumers what dramatically differentiates our product from the competition.

Widmer certainly made hefe-weizen their stock-in-trade early on ...

Pyramid lays claim to producing the first year-round wheat beer, a filtered wheat beer. Widmer lays claim to producing hefe-weizen right around the same time. Pyramid came out with a hefe-weizen about a year later. So both companies were involved early with wheat beers.

Do you see wheat beer as a growth category in the craft segment?

Yes, definitely. We've been purchasing Neilsen data, and we're now purchasing IRI as well. If you look at Neilsen data in the craft category, there are three large product style sectors. The largest is amber, the next is pale ale, and the third is hefe-weizen. And the fourth is IPA. And hefe-weizen is the fastest-growing of the three largest categories. So we're seeing growth in hefe. What we see now is a declining beer industry, with some growth in imports and a lot of growth in craft. As we go forward, brands like ours will be driving that growth, together with brands like Widmer and Fat Tire.

You mention beer's decline. Why is that happening in your view?

The spirits industry has done a very good job of marketing itself in the last couple of years. I have a daughter who is entering minimum drinking age, and she and her friends grew up on Coca-Cola at dinner. I think this is a sweet-tooth generation, with a fondness for sweet-flavored drinks. Cosmopolitans and Apple-tinis are very appealing to this generation.

There is also another piece to it. I heard this somewhere, and it made sense. There's this idea of "have it your way." This young generation can order a mixed drink the way they want it, and spirits drives that. At the recent Beer Institute meeting, Norman Adami of Miller made the point that the large brewers were not doing a good job of differentiating themselves. If I look at craft, the real growth in craft is probably because it works with that trend. Craft is "have it your way." There are so many different flavor offerings and product styles within craft.

Hefe-weizen is a style that may not be as familiar to Americans ...

I come from Connecticut, where consumer knowledge of hefe-weizen is fairly low, but when I came here to the Northwest, I found a high level of consciousness. Pyramid and Widmer have been making hefe-weizens for many years now. So it's a well-established style here. And I had to convince the team here, that where I come from, in Connecticut, although this style may have been around for 120 years, not too many people are familiar with it. As far as most Americans outside the Pacific Northwest are concerned, it is a new style of beer. But that is not a bad thing, because that makes it something new and different. It's cloudy, it's unfiltered, it's very refreshing and very drinkable. We're experiencing good growth in the Northwest, but a lot of our growth is coming in California and the Southwest.

St. Arnold in Texas just changed the name of the their wheat beer from Weizen to "Texas Wheat." In their view, the term "weizen" was too unfamiliar ...

We just started in Texas, and we seem to be doing quite well. We've opened some draught accounts. Weizen, of course, means "wheat" in German, and "hefe" means yeast. So hefe-weizen is unfiltered, with the yeast is suspended in the product, and this gives it a very aromatic, refreshing aspect. We have just launched an amber weizen, an amber, unfiltered wheat beer. We want an offering for people who like amber, who would like to try a wheat beer style of amber. Weizen beers really loan themselves to lots of different flavors. We have a product we've just renamed. It was Pyramid Apricot Ale. We think it was the best-selling fruit beer in America, and it's our number two SKU. We've renamed it Apricot Weizen, since it is a wheat beer. There has been no change in the formulation, but we renamed it to focus on the core line. If you go around the country, you'll find a lot of interesting wheat beers. I've had blueberry weizen, watermelon weizen, any of a number of flavors. It's a style that loans itself to various flavor components, so it is exciting that way.