QUICK SUMMARY
Lagunitas has transformed its innovation approach over the past two years by becoming truly consumer-centric, ensuring every new product addresses a specific consumer need while aligning with their business strategy. The company categorizes innovations as either “big bets” (within their core beer expertise) or “future bets” (stretch products that may take up to 10 years to fully develop in market), with both undergoing rigorous testing while maintaining the brand’s authentic craft beer ethos. Despite being owned by Heineken, Lagunitas maintains its distinctive brand identity by focusing on quality products, understanding different consumer demand moments, and exploring growth areas like non-alcoholic beverages while staying true to their craft brewing roots.
KEY QUOTES
- “This whole shift to consumer centricity means a few different things… every innovation that we put into our innovation pipeline has to have a consumer need or a consumer intention that it’s answering, and that consumer need or intention also has to align with our business strategy.”
- “We’ve really transformed how we do our innovation product process to make sure it’s consumer centric, we’re meeting a need, and that those future bets have a little bit longer in market to seed and grow, and we can iterate as we go along.”
- “For us, the biggest thing is quality… We want people to know that if you pick up any product from Lagunitas, you’re not gonna waste your money. It’s gonna be the best of the best.”
FULL SESSION SUMMARY
Transforming the Innovation Approach
Heather from Lagunitas explained how the company has revolutionized its innovation process over the past two years. Rather than chasing category trends or competitors, they’ve become genuinely consumer-centric. Every innovation must address a specific consumer need or intention while aligning with their business strategy. The company has opened innovation ideation to employees across the organization, but all ideas must clearly articulate the consumer need they’re addressing to move forward in development.
Lagunitas categorizes innovations into two types: “big bets” (products within their core beer expertise) and “future bets” (stretch products that might move into new spaces like non-alcoholic beverages). While both undergo rigorous testing, future bets are given more time in market—up to 10 years—to develop and prove themselves. This approach acknowledges that many successful brands take time to gain traction, citing competitor Athletic Brewing as an example of a brand that was in market for years before becoming ubiquitous.
Consumer Insights Driving Product Development
Consumer research revealed that many people don’t consider hazy IPAs as “craft” because they’re easier to drink, juicier, and less bitter than traditional craft beers. This insight helped Lagunitas develop products like Hazy Maximus (a high ABV option at 9%) and a 5% ABV Hazy IPA that meets the growing demand for easier-drinking options.
The company conducts extensive testing both internally and with consumers. For their Hazy IPA, they tested the liquid three or four times at different ABV levels before landing on 5.5%, which provided the best taste profile. They also use their taproom as an initial testing ground, with successful taproom offerings sometimes becoming commercial products, as happened with “Gangsters Delight” which eventually became Hazy Maximus.
To ensure products will succeed beyond their taproom fans, Lagunitas conducts in-home tests across legally permissible states and uses platforms like Suzy to test concepts and branding. They also perform competitive testing to ensure their products stand out in the marketplace.
Balancing Brand Heritage with Innovation
Maintaining Lagunitas’ authentic brand identity while pushing innovation boundaries has been a deliberate process. After the Heineken acquisition and COVID disruptions, the company took nearly a year and a half off from marketing to reassess their brand strategy. This included reversing a failed packaging rebrand that featured a puppy (which didn’t resonate with their core 45-year-old tattooed consumers) and ensuring all innovations align with their established brand pillars.
Rather than targeting very young drinkers, Lagunitas focuses on the 30-39 age demographic. They maintain brand authenticity through callbacks to company lore, as with their “Uncensored” fruit punch product, which references a past incident where they had to rename a beer called “Chronic” to “Censored” due to cannabis references.
Meeting Different Consumer Demand Moments
Lagunitas thinks about consumers holistically rather than segmenting them by product. They focus on “demand moments”—different occasions when consumers might reach for different types of beverages. High ABV beers like Maximus are positioned as “sipping beers” for relaxing at home, while lower ABV options and non-alcoholic offerings serve different occasions.
The company is particularly excited about the non-alcoholic space, which is one of the few growing segments in the alcohol category. They’re investing in expanding their NA portfolio, including their Hoppy Refresher product and Hi-Fi (cannabis-infused) offerings, recognizing that consumers are increasingly “zebra drinking”—alternating between alcoholic and non-alcoholic beverages.
Quality as a Differentiator
In a crowded marketplace where many companies are launching innovations hoping something will stick, Lagunitas sees quality as their key differentiator. They emphasize that every product bearing their name must deliver exceptional taste and value, whether it’s a traditional IPA or their Uncensored fruit punch, which is designed to taste sweet but not overly so like many flavored malt beverages.
Future Innovation Directions
Looking ahead, Lagunitas is particularly excited about advancements in non-alcoholic brewing technology, including new yeasts and natural additives that create authentic mouthfeel in NA products. They’re also exploring functional benefits in response to consumer requests, particularly adding electrolytes to beverages. While they’ve tested products with ingredients like ashwagandha in the past, they’re careful to ensure any functional additions align with their brand strategy and meet genuine consumer needs.
KEY TAKEAWAYS
- Consumer-Centric Innovation: Every new product must address a specific consumer need while aligning with business strategy, moving away from simply chasing category trends or competitors.
- Strategic Patience: Categorizing innovations as “big bets” or “future bets” allows promising but experimental products up to 10 years to develop in market, with continuous iteration based on consumer feedback.
- Quality as Differentiation: In a crowded marketplace with many rushed innovations, Lagunitas focuses on ensuring every product delivers exceptional quality and taste, maintaining consumer trust across their expanding portfolio.
Delivery on Event Focus:
Aligning Innovation with Business Strategy
This session directly addresses the conference focus of aligning innovation with business strategy by showcasing how Lagunitas ensures every innovation aligns with their core business pillars while meeting consumer needs. Their approach demonstrates how consumer insights can drive strategic innovation decisions rather than simply chasing trends, resulting in products that both extend the brand and contribute to business growth.
Delivery on Event Theme:
Harvesting Innovation & Sowing the Seeds of Future Growth
The session embodies the “harvesting innovation and sowing seeds of future growth” theme through Lagunitas’ dual approach of “big bets” (harvesting from their core expertise) and “future bets” (sowing seeds for long-term growth). Their willingness to give innovative products up to 10 years to develop in market shows a commitment to nurturing innovation for sustainable future growth rather than expecting immediate returns.
Action Items for Innovation Experts and Corporate Changemakers
- Implement Consumer-Centric Filters: Create clear criteria requiring all innovation ideas to address specific consumer needs while aligning with business strategy.
- Develop a Two-Track Innovation System: Separate innovations into core business extensions and experimental ventures with different timelines and success metrics.
- Leverage Existing Assets for Testing: Use company facilities (like Lagunitas’ taproom) as real-world testing grounds before wider market launches.
- Invest in Quality as Differentiation: In crowded categories, prioritize exceptional product quality over speed to market or trend-chasing.
- Think in “Demand Moments”: Consider how consumers move between different usage occasions rather than segmenting them by product type.
- Allow Appropriate Time for Market Development: Create innovation frameworks that give promising but experimental products sufficient time to find their audience rather than expecting immediate success.