D.G. Yuengling & Son made headlines in January when it was announced it had passed Boston Beer Company as the largest American-owned brewery. The buzz centered on estimates from trade publication Beer Marketer’s Insights which pegged Yuengling shipments at 2.5 million barrels in 2010 to Boston Beer’s 2.4 million.
At the time, Beer Marketer's Insights emphasized their numbers were just estimates and that the publicly traded Boston Beer had yet to report. Privately owned Yuengling does not report its financials.
Yesterday, Boston Beer, the maker of Sam Adams, released its fourth-quarter results and as it turns out, it's a tie at the top! Boston Beer also came in at 2.5 million barrels, an increase of 9 percent over 2010.
Yuengling, which already bills itself as "America’s oldest brewery," will now have to share the title of "largest American brewer," but it might just be a question of how long it takes until it claims the top spot for itself.
According to Beer Marketing Insight estimates, Yuengling achieved 16.9 percent growth in 2010, based largely on its expansion into Ohio. The Buckeye state is only the 14th in which Yuengling is distributed, with the others situated in the East and Southeast. A full year of sales in Ohio will push Yuengling volume even higher and there is always the possibility of further geographic expansion.
But how can a brewer with such limited distribution challenge a well-known brewer with a nationwide presence like Boston Beer? Price.
Yuengling marketing manager Lou Romano recently explained the company’s strategy to TheDrinkNation.com.
"Yuengling has always followed a pricing strategy on par with premium domestic beer brands (i.e. Bud, Miller, Coors), while Boston Beer has led the charge in the craft category," said Romano. "We compete with premium domestics, which have the largest volume of beer drinkers as a whole."
Yuengling’s growth is all the more remarkable given the general decline in the beer market as a whole. Beer Marketing Insights estimates that total beer shipments fell by 1.4 percent in 2011.
At 2.5 million barrels a year, that's enough to position Yuengling and Boston Beer at number eight on the Beer Marketer's Insights list of largest U.S. brewers. The list, which is topped by global giant Anheuser Busch-InBev does contain other breweries with American ties. Pabst Brewing Co., owned by Chicago-area businessman C. Dean Metropoulos ranks fifth, but Pabst doesn’t brew its own beer, outsourcing it instead. North American Brewing, owned by private-equity fund KPS Capital Partners, brews such brands as Magic Hat and Genesee but receives a boost in its volume from the imported brand Labatt’s.
That leaves Yuengling and Boston Beer sharing the distinction of being the largest American-owned brewer — they'll have to wait at least another year before they have a shot at claiming the crown all for themselves.
— Tom Rotunno, CNBC.com
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