Island Coastal Lager (copy)

Sullivan's Island-based beer brand Island Coastal Lager will be distributed to 20 states, up from five, under a new strategic partnership. Provided.

The frothy South Carolina surf is an apt metaphor for a startup beer brand with high hopes. 

A Charleston-area company that launched its first and only lager less than two years ago is on the verge of extending its distribution reach to 20 states from five under a deal with one of the nation's biggest craft beer companies. 

The Sullivan's Island-based owners of Island Coastal Lager announced their agreement with New Belgium Brewing about 10 day ago. Financial terms were not disclosed.

Starting this month, New Belgium will handle all brewing and distribution for the niche beer, which was founded by and is still controlled by Brandon Perry and Scott Hansen.

"It's a big upgrade across our platform" said Perry, who recently sold his financial technology business on Daniel Island.

The duo came up with Island Coastal a few years ago, inspired during a trip to Cuba to concoct an "easy drinking" beer that straddles the craft and mainstream categories and caters to the millennial market.

They tapped a brewery in Lakeland, Fla., to handle all of the production when the lager made its debut in South Carolina in October 2017.

"We had already said from the get-go that Brandon and I would have to find ... a larger company to support our efforts ... on the production capacity side, the quality assurance side, and the forecasting and logistics side," said Hansen, a 1994 graduate of The Citadel.

The brand captured some looks after an industry tracking service started compiling numbers on it and found it was the top-selling lager in South Carolina among a field of about 500 that were offered in a six-pack format.

"Which is a pretty big deal," Hansen said last week.

Distribution has been expanded to four more states — North Carolina, Georgia, Alabama and Florida. Last year, Carnival Cruise Lines began carrying the lager on its entire fleet of 26 pleasure ships. 

"All of that congealed at the same time," Hansen said.

By then, he and Perry were exploring ways to ramp up the business. They were in talks with two other brewers that they declined to identify when they heard from a Citadel graduate from the Beaufort area who is knowledgeable about the merger-and-acquisition side of the beer business.

"He made the connection with us to the CEO of New Belgium," Hansen said.

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They ended up striking a deal with the Fort Collins, Colo.-based craft giant, which churns out 15 year-round beers, including the well-known Fat Tire Amber Ale.

"New Belgium seemed to be the right fit for a variety of reasons, most importantly its ability to brew super-high-quality beer," Hansen said.

The company will produce draft kegs and package cans and eventually bottles of the American-style lager, initially in Fort Collins and later at its Asheville brewery. The plan is to "increase production exponentially," according to a written statement, but no numbers were disclosed. 

“Island Coastal Lager is at an exciting inflection point having created both a lifestyle brand and a high-quality product that more consumers are quickly embracing,” New Belgium CEO Steve Fechheimer said in prepared remarks. “We look forward to helping the Island team further by providing high quality beer and logistics services as ICL expands to the entire East Coast and west through Texas.”

Perry and Hansen are looking to staff a newly opened office on the Charleston peninsula and roll out new "brand extensions" over the next two years, including an 89-calorie version that hits shelves in June. The co-founders aren't exactly sure where the deal will take Island Coast.

"I would say we're in Chapter 2 of a very long book," Perry said.

Hansen called the New Belgium venture "the best platform ... for the brand to thrive and grow." 

"We don't want to short ourselves by ... determining what the end game is," he said. "We have some idea of what it is to have New Belgium as a strategic partner, how we'll be able to accelerate growth within the U.S. ... We're going to continue to do what we're doing, to develop products we feel are relevant to the millennial consumer."

Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott