POTTSVILLE - With a major expansion project at its Mill Creek brewery now complete, D.G. Yuengling & Son Inc. has extended its reach to Ohio in a major way.
"Now, America's Oldest Brewery is distributing its products in 14 states and the District of Columbia," David A. Casinelli, Yuengling's chief operating officer, said last week.
Aiming to find new customers in a market where beer connoisseurs are looking for something new, Casinelli said Yuengling has also recently launched a new set of television ads and is planning to increase hours at its Mill Creek brewery, near its home base of Pottsville, from 24 hours five days a week to 24/7.
"All of our existing markets are continuing to grow, and our new ads are also part of our ongoing commitment to not only attract new customers but to properly build and develop our brands in our key selling markets," Casinelli said.
Yuengling became available for sale in Cleveland, Columbus and most of Ohio on Oct. 3, and will arrive in Dayton on Nov. 14, Casinelli said.
Big hit in Ohio
The Buckeye State debut was a hit, according to many sources.
One distributor in north central Ohio said demand on Yuengling's first day was overwhelming.
"It was the best (sales) day we have ever had, and I'm talking better than any holiday," Mike Berry, manager of Mansfield Distributing Co., told the Mansfield News Journal. "We sold 7,500 cases of Yuengling alone."
Berry told the newspaper he hired a couple of new employees to help deliver and market Yuengling.
Paul Gatza, director of the Brewers Association, said he was surprised Yuengling hadn't moved into Ohio sooner.
"Each company makes their own decisions about what their footprint should be. But I will say, for a company that sells as much beer as Yuengling, to be in so few states is rather different than the way a lot of companies approach the market. Every other company their size is in all 50 states, and even some brewers that are much smaller are in all 50 states," Gatza said.
Fourth in volume
In 2010, Yuengling ranked fourth in the top 50 overall U.S. brewing companies by beer sales volume. That's the most current ranking by the Brewers Association at www.brewersassociation.org.
The top three brewing companies were: Anheuser-Busch, St. Louis, Mo.; Miller Coors Brewing Co., Chicago, Ill.; and Pabst Brewing Co., Woodridge, Ill.
Yuengling has been in business since 1829 and is now led by the company's fifth-generation president, Dick Yuengling.
Ohio had been the only state adjacent to Pennsylvania not to carry the beer on store shelves. Now, it's the 14th state distributing Yuengling, according to Casinelli.
"Yuengling's approach seems to be they want to go deeper into every other market ... before they take on other states," Gatza said.
"Paul did a very good job of summarizing our business model," Casinelli responded. "It seems to be one that others don't understand, and he's right - it's quite different from a lot of other brewer business models. Most of the smaller brewers at times are forced to open geography as a strategy because they need the sales volume and cash flow. They invest quite a bit on their facilities and then are under pressure to pay for it.
"We have always maintained a very disciplined approach to our growth and expansion," he continued. "It's much tougher because we force ourselves to focus on organic markets each year to grow market share, rather than just keep expanding and taking the easy route to new volume. It's very easy to go out there and know we have roughly 37 states that don't sell our products and that would be a sure path to short-term growth. But we've always maintained we are in it for the long haul. In my 21 years with Dick, I can share that he never once came to me and the sales staff and pressured us to open markets for quick gains and easy volume."
Casinelli said that, across the U.S., many small brewers are pulling out of a lot of markets and trying to go back and focus their selling on local markets "because the mass distribution model isn't working," he said. "Maybe the 'Yuengling' way wasn't odd after all."
Riding a trend
Yuengling established its first brewery in 1829 at 401 N. Centre St. When a fire destroyed the facility in 1830, Yuengling constructed a new brewery in 1831 at 501 Mahantongo St.
In April 1999, Yuengling purchased a brewery in Tampa, Fla., and started brewing there that summer.
In 2000, Yuengling established the Yuengling Beer Co. at Mill Creek and started production there in September 2001. In 2010, Yuengling made an effort to increase production at Mill Creek by adding two buildings, an addition to the existing fermenting cellar and a new storage cellar containing additional fermenting and storage tanks.
Yuengling produces 5,500 barrels daily at Mill Creek, 2,000 barrels at its Mahantongo Street brewery and 4,000 barrels in Tampa. One barrel equals 31 gallons, Casinelli said.
"Yuengling has certainly grown as a company in the last decade and a half," Gatza said.
According to the Brewers Association, Yuengling is categorized as a "regional brewery."
300 employees
Overall, Yuengling has an estimated 300 employees, Casinelli said.
While beer sales in the U.S. were reportedly down 1 percent in 2010, the number of breweries, including microbreweries, operating in the country in 2010 totaled 1,753, the highest total since the late 1800s, according to the Brewers Association.
A recent trend in the beer industry, a demand for variety and the rise of microbreweries, is something which will help Yuengling, Gatza said.
"The American beer drinker is looking for what's new and what's different. In 2007, we really started seeing sales from microbreweries grow. Then in 2008, we started to see large brewery sales decline," Gatza said.
"The smaller breweries that are very connected to their communities are doing extremely well right now, and the market share is changing. It's going from the larger breweries to the smaller ones. So your larger companies like Anheuser-Busch and Miller Coors are losing shares to smaller companies. At a time when you'd think these larger companies should get bigger because they have advantages, like marketing and very attentive wholesalers, you'd think they'd be taking shares from the smaller guys. But the opposite is true," Gatza said.
TV ads
While Yuengling is known as "America's Oldest Brewery," Casinelli said that doesn't mean it's the most well-known beverage.
"You'd be surprised. We're only in a 14-state footprint. The farther you go away from the brewery in Pottsville, down into the mid-Atlantic states, you'll find Yuengling isn't a household name. So we have to introduce ourselves as a company and introduce our brands," Casinelli said.
In an effort to reach new customers, Yuengling recently rolled out a new media campaign that includes radio and television ads for its Lager and Light Lager.
"We do primarily two campaigns on TV per year. It starts in the spring and they usually accompany televised sporting events. In the summer, we back off TV and run very heavy radio campaigns. Then we'll hit TV very hard in the fall, with ads wrapped around football," Casinelli said.
Yuengling filmed its recent 30-second and 15-second commercials in summer 2010 in Baltimore.
"Our two Light Lager spots, 'Simple Test' and 'Black Sheep,' were filmed at a bar named Long Beach. It was selected for its great lighting and wood bar top to enhance our up-close images of our product," Casinelli said.
"Our Lager spot, called 'Croquet,' was filmed at a private family home near a lake. The setting was selected to feel like a summer vacation destination where young adults would spend time together," Casinelli said.
Our final Lager spot, called 'Drive In,' was filmed at Bengies Drive-In Theatre in Middle River, Md. Bengie's is still open for business, but was the perfect location for the spot, which features a scene where a group of people have set up camp for the evening to watch a movie on the big screen and share some Lager," Casinelli said.