Three Choices for the Third Path of BeerAugust 20, 2012 By: Lew Bryson
Craft beer is the hot ticket right now, surging at double-digit growth. But…it’s still only 5% of sales, and it’s a lot of work and space and money to stock enough variety to keep the aficionados happy. Meanwhile, the major lights and imports — Bud Light, Corona, Coors Light, Amstel — are still what most people drink, and you can pack a lot of them in, but…there’s an air of humdrum to them: the same beers we’ve seen for years. How to make a choice for your coldbox: flip a coin?
Better get a three-sided coin. There’s a great third choice: the retro-chic appeal of regional beers. Every area used to have their own beer — Falstaff, Rheingold, Hamms, Olympia, Pearl, Dixie, Grain Belt — and while most of them are gone, the ones that are still around can be a potent punch for your profits, if you pick a winner.
These older brands offer the customer an authenticity and a story — a true story! — without the feeling that they’re being sold the same mass-market can o’ suds everyone else is drinking, and at the same time they’re not as smack-in-the-face as some of the more assertive craft beers. They offer the drinkability of a mainstream beer — with just a bit more flavor — along with the badge weight of a craft: a third path.
Take Yuengling, for example. They’re America’s oldest brewery, and until about 25 years ago, the Pottsville, Pennsylvania-based outfit looked like they were headed for the scrap heap as sales dwindled under pressure from the majors. Then Dick Yuengling Jr. — still the sole owner of this 183-year-old family business — had an idea for a new beer, their first in years: Traditional Lager.
“I saw the crafts starting to grow, and that was inspiring,” Yuengling recalls. “I thought an amber-colored, tasteful beer might work in our eastern PA market.” It turned out much bigger than he dreamed.
The full-calorie amber beer, with a hint of caramel sweetness, along with a smart, street-hustling promotion campaign, turned the brewery around. They saw 400% growth in the 1990s, added new breweries in Pennsylvania and Florida, and added a Yuengling Light Lager that’s poised to start blowing open a new niche. It’s no flash in the pan, either. Last year’s sales — in only 14 states! — were over 2.5 million barrels, and sales are up 36.5% over this time last year.
Why do people love Yuengling so much? It’s different, it’s reasonably priced, and it’s simply good beer, for sure. But the authenticity has a big effect. “There’s a lot of respect, especially over the last couple years, given what’s happened to the three majors,” Yuengling says, noting how the biggest American brewers are now foreign-owned. “We stood the test of time, we’re American-owned, family owned, and for those who care about that kind of thing, it has a positive impact.”
Every Drop is Brewed in Shiner
There’s a great appeal to Dick Yuengling’s family story, but let’s be honest: being from Pennsylvania doesn’t spark much interest. That’s where Shiner Bock has an edge: being from Texas always has a cowboy cachet to it. And as every bottle, every bit of packaging tells you: every drop of Shiner is brewed in Shiner…the town of Shiner, Texas, that is. The brewery is actually named Spoetzel, after founder Kosmos Spoetzel, a Czech brewer who settled there and started making beer about 103 years ago, another true and authentic story.
The old Shiner brewery was a bit ramshackle, and they were just getting by — like Yuengling — when they got lucky. “In the 70s, Shiner Bock became popular with University of Texas students and the large music community there,” explains Charlie Paulette, the brewery’s chief sales and marketing officer. “It was largely because they were looking for something different. They liked the fact that it was an authentic brand that marched to its own beat. It turns out that attitude is appreciated far beyond Austin as well.”
Indeed it is: the little beer from Shiner is now available in 40 states, with strong sales in California and Chicago. “We recently launched in New Jersey,” Paulette says, “and have been very pleased with how well we’ve been received there.”
Shiner Bock is the flagship, but Shiner has taken a two-track approach: they also have a more craft-like line of seasonals that attract the attention of beer critics. “We realize that it’s important to meet the needs of beer consumers who have grown more discerning and adventurous,” Paulette says. “Plus, we love to make beer, so stretching and experimenting with different styles is a lot of fun.” The seasonals include a beer smoked with mesquite, and a holiday beer using regionally-grown peaches and pecans, which Paulette calls “maintaining a certain Shiner-centricity.”
Yuengling and Shiner may have been near closing, but Rhode Island brewery Narragansett actually did. Entrepreneur Mark Hellendrung decided to bring it back, and unlike a number of other such attempts — Rheingold, National Premium, Pickwick — Narragansett has so far been a solid success; sales are up 35% over last year, ‘Gansett signs are popping up all over New England, and their smart social media campaign is energizing impromptu brand ambassadors.
Why did things work for this brand? “What’s fueling our success is a hardcore appreciation for authenticity,” Hellendrung says, “and a commitment to adhering to that and not going outside the bounds. Some of the other brands tried too hard to be cool; we lived up to what we were, and people liked it, and it kind of became cool. “Some of that included getting the last Narragansett brewmaster to help with formulation, and using as much of the old 60s-style look of the original beer as possible.
Like Shiner, Narragansett has a twin-track thing going, with the mainstream Lager fulfilling 90% of sales, and a seasonal set of more craft-oriented beers — Bock, Porter, Summer Ale, Oktoberfest — to widen the appeal. It’s all real, says Hellendrung. “Before all these craft brewers, there was craft beer, and it was driven by the regional brewers. We had the porter that went back to 1916, the bock goes back to 1933. Then Anheuser-Busch crushed them, and created a vacuum.”
Doesn’t the twin-track approach split their attention? “It absolutely divides our focus!” Hellendrung says, and laughs. “All the excitement is about the crafts, but when you sit down with Mr. Retailer, you have to remind them that 85% of our sales and 90% of the market overall is still drinkable lager. When I’m talking to my sales guys, I don’t even talk about the crafts, just to balance that seesaw.”
Still, for all these brands, the Yuengling Lager, the Shiner Bock, and the Narragansett Lager, their edge is the 100% authentic stories they have. Mark Hellendrung sums it up nicely with this story of talking to a bartender after a promotion that was largely rained out. But the bartender was enthusiastic, and told Hellendrung why “This is great,” he said, “I want to talk to and engage my customers, that’s the job. If you put Bud on, what have I got to say they don’t already know from years of ads? But you put Narragansett on, and I’ve got all kinds of stuff to talk about, the history, the comeback, the regionality. It’s story-telling, it’s fun, it’s customer engagement.”
Try the third path. It’s about authentic customer engagement with an array of beers that aren’t intimidating, and aren’t the same old, same old, either.