Lululemon Athletica inc. (NASDAQ:LULU) is best known for its yoga-inspired apparel, but the company's latest product isn't one that yogis are likely to slap on their backs for their next vinyasa class.
In a surprising move, Lululemon is releasing a beer called Curiosity Lager, a limited-edition brew that will be served at the SeaWheeze Sunset Festival and Half Marathon, an event Lululemon puts on every August in its hometown of Vancouver, as well as in liquor stores across Canada. Only 88,000 cans will be produced, and Stanley Park Brewing Company describes the lager as having hints of lemon-drop and Chinook hops.
For those of you scratching your head at why an exercise apparel company would get into something as antithetical to working out as beer, there's a simple answer: men.
Lululemon has risen to prominence by catering to women, but the company is now planting its growth flag in menswear, as its women's segment seems to be reaching maturity. In Lululemon's most recent quarter, its men's segment delivered comparable sales growth of 19%, and the company has also begun opening its first men's-only stores. The retailer unveiled the first of such locations in Manhattan's SoHo neighborhood last holiday season.
The Lululemon men's Twitter page touted the new brew, saying, "Beer: it's the new yoga pant." Doug Devin, Stanley Park Brewing's marketing director, said Luluemon was "interested in talking to a more male beer-drinking crowd."
In fact, Lululemon didn't even invent this trend, as some breweries have begun offering yoga classes with a free beer afterwards.
No stranger to controversy
While the move is likely to delight some active beer drinkers, the announcement also got a snarky response from some corners of the media. Women's blog Jezebel responded "LMAO," while the New York Post questioned whether we "really need a Lululemon beer." Still, the decision isn't surprising for a company trying to expand beyond its core in women's fitness and unafraid to take risks. The retailer has expanded to clothes more appropriate for everyday use, with its &Go line, and now it's looking to stretch its brand once again.
The company has long been a lighting rod for controversy. Best known for selling yoga pants in the $100 range, it's often viewed as elitist and obnoxious, and it's been accused of commercializing an ancient spiritual practice out of corporate greed.
In the past, specific incidents that have rubbed people the wrong way have included references to John Galt, the protagonist from Ayn Rand's novel Atlas Shrugged, and, more recently, founder Chip Wilson's off-color remarks about women's bodies.
But Lululemon's unique approach has inspired legions of loyal customers who love the technical quality of the clothes and the aspirational nature of the brand.
Curiosity Lager is another extension of this strategy. With a limited run of 88,000 cans, the beer partnership is more of a marketing event than a business strategy, but it's a smart move for a company trying build a connection with young, successful, athletic men. As Lululemon has learned in the past, the haters are gonna hate. To be successful, the company only needs to resonate with its customers.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Lululemon Athletica. The Motley Fool owns shares of Lululemon Athletica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.