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Courtesy Quaker City Mercantile

Why this ‘ugly’ hard soda could be Philly’s hottest new drink

Hard soda is trending, but Steven Grasse doesn’t care. That’s not why his company, Quaker City Mercantile, just jumped into the hard soda market with new brand QC Malt — definitely not.

“We don’t really think about what’s on trend,” says the iconoclast founder of the Philly-based booze-and-ad house, the first of several trendiness disavowals he’ll make over the course of a half-hour interview.

“I make things that I like, and I just assume there are a lot of people out there like me.” He backs up his claim with a zinger: “My batting average is pretty darn good to date.”

True that. Since transitioning from classic ad agency into an outfit that specializes in all facets of alcohol brand production, from concept to manufacturing to branding to sales — nearly every product QCM has brought to market has been a hit. It started 17 years ago with Sailor Jerry rum, continued with Hendrick’s gin, moved on with Art in the Age spirits, diversified with the relaunch of ‘Gansett beer and got even more personal with Tamworth Distilling, the boozemaking facility QCM owns and operates in New Hampshire. It’s been one success after another.

QC Malt has a good chance of following the same trajectory.

Its packaging matches up well with the current zeitgeist, with the throwback typography and bold-color blockprint that’s basically the graphic design equivalent of Edison bulbs and exposed bricks in a hipster bar. Its current two flavors are unique, but friendly: Lemon Shrub is like extra-twangy lemonade (thanks to fruit vinegar in the mix), and Old Dutch is like a not-too-sweet version of Pennsylvania birch beer.

Plus, the fact remains: Hard soda is hot.

“My sales team has told me that of everything we’ve done in the past 10 years,” Grasse says, “this is the brand every bar is saying ‘yes’ to.”

Since the introduction of Not Your Father’s Root Beer in 2015, the hard soda market has exploded. It now makes up more than 1 percent of total sales of “beer-like” beverages, according to data company IRI — which is a lot, reflecting growth of more than 175 percent in a single year and making it the fastest growing-segment of the category. Everyone from MillerCoors (Henry’s Hard Soda) to AB InBev (Best Damn Root Beer) has gotten into the game.

The boom might be what prompted beverage giant Diageo to agree to partner with QCM — which it already used as a marketing agency — on an entirely new label. (Diageo owns and produces QC Malt; Quaker City Mercantile gets a royalty from all sales.) But it was also because the company trusted Grasse, for whom malt beverage was just a pet idea that he finally got a chance to put into action.

“We originally started working with Diageo when I got a call from the head creative there saying, ‘Can you fix Guinness for us.’” Grasse recounts. “Well, we’ve gone a long way towards fixing Guinness. So then they came to me and said, ‘What else you got?’”

The concept he presented, the one that had been bouncing around his neurons for years, went something like this: Let’s make a malt beverage that doesn’t try to hide behind a label like “hard soda,” but instead wears its malt heritage on its sleeve.

Why all the hiding? “Malt liquor” has had a negative connotation in this country for decades, as the term used to refer to the high-octane swill found inside brown-bag-covered 40-ouncers. Although taking about malt (the sprouted barley that gets fermented into beer) has come back into vogue somewhat with the craft brewing surge, marketers of beer alternatives have always avoided the word as much as possible.

This is not a new thing. Think back on brands like Zima, Mike’s Hard Lemonade, Smirnoff Ice or Bacardi Breezer. Yes, those are all malt beverages. No, you’ve probably never referred to them as such.

But malt is not something to be ashamed of, Grasse insists, even if your end product is not beer. He was inspired by the Francis Perot’s Sons Malting Company, which was founded as an adjunct to one of Philadelphia’s first breweries in 1683 and operated, in some way or another, all the way through 1970. Not only was it one of the longest-running businesses in the US, Grasse says, “it was really cool and interesting.”

The colonial era has always fascinated him; its influence shows up in Art in the Age spirits, too. Why? Because of family connections — his father’s ancestors arrived in Philly from Germany in 1708 — and also because it was “just before industrialization changed the world forever, and not for the better.”

The trick, he continues, “is to make it relevant and interesting. Too much history, making things too historically accurate, can be boring to the average person.”

From recipes to packaging, it took less than a week for the stylish tinkerers at Quaker City Mercantile to develop the brand. That’s partly because of unstructured, unconventional way the agency does things — “It’s like a stream of consciousness” — and partly because they knew what they were going for.

“We make our brands ugly on purpose,” Grasse says.

Though it’s brewed and canned at a Diageo facility in Memphis (Grasse declined to reveal production quantities), QC Malt is currently only available in Denver and Philadelphia. That targeting was also purposeful.

“QC Malt is one of the ugliest brands to ever be launched,” he says. “It’s fitting that it’s named after Philadelphia.”

Get your hands on some QC Malt at the double-location launch party, going down 6 to 10 p.m. on Thursday, Oct. 13 at Garage North & South.

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