Strategic Alliances
A few of the regionals have hitched their fortunes to larger beverage companies. “We didn’t just have a good year, we had a really good decade,” says Gary Hudman, brand manager for the Spoetzl Brewery of Shiner, TX. Spoetzl has been owned since 1989 by the San Antonio-based Gambrinus Co., which imports the Mexican lager Corona for the eastern half of the United States. Although Yuengling may have a female owner in its future, Spoetzl was in fact owned by a woman between 1950 and 1966: “Miss Celie” Spoetzl, daughter of the original brewmaster Kosmos Spoetzl. Shiner beer, in those days, never got farther than 75 miles from the brewery. Today, Shiner beers show up regularly at Tex-Mex restaurants in 21 states, and its Shiner Bock is the best-selling bock beer in the United States.
The hometown brewery you thought had folded may actually be operating under a new name. Cold Spring Brewing Co. in Cold Springs, MN, for example, became Gluek Brewing Co. after California businessman John Lenore purchased the failing business in 1997. (Gluek, pronounced “glick,” is German for “luck” and the name of an old Midwestern brand.) “In Cold Spring’s later years, they didn’t take care of the sanitation department, and put out some bad beers,” explains sales manager David Clayton. Production was up 270% last year, he reports, largely as a result of doing private labels for major chain stores. Gluek markets a variety of craft beers under the Aspen Meadows and Eureka lines, and makes one product that may be unique: Gluek Honey Amber Non-Alcoholic Beer.
Toughing it Out
The craft brewing revolution hasn’t brought prosperity to everyone. The Jones Brewing Co. in Smithton, PA has twice declared chapter 11 bankruptcy and its Web site hasn’t been updated since 1997. Those aren’t good portents. However, when I called in late June, this western Pennsylvania company was still brewing its Stoney’s, Esquire and other brands and had landed a new contract to produce Nittany Ale…a golden ale targeted at Penn State fans.
Stoney’s may not have the cult following of Yuengling, but this 94-year-old brewery does have a definite claim to fame: actress Shirley Jones is the granddaughter of founder William “Stoney” Jones.
If you’ve got troubles, you might want to talk to Jon Reynolds and Randy Smith of the City Brewery in La Crosse, WI. Their facility used to be the headquarters of the Heileman empire, and passed to Stroh when Heileman called it quits. After Stroh ceased to exist, a group of local investors came to the brewery’s rescue. They got a huge, high-tech plant capable of turning out 5 million barrels a year, with one of the largest mash tuns in the business and a high-speed packaging line that can fill 1,700 cans per minute. What they didn’t get were the old Heileman brands like Old Style and Mickey’s Malt Liquor, which were ceded to Pabst.
As a result, the City Brewery has had to start from scratch. They’ve been marketing a variety of American lager styles under the City and La Crosse lines, as well as a City Slicker Malt Liquor. City Cream Ale is a more recent release, and the owners are looking into ethanol production as a way to exploit all that unused capacity. “We had a very difficult year in 2000,” admits Reynolds. “Two key investors didn’t put their shares in. We ran out of packaging halfway through the year and lost most of our contract brands. Our 62 union employees worked for nothing for six months. They saved the business.”
Things are looking up. The City Brewery has acquired some new investors (including Hornell Brewing Co., marketer of such brands as Arizona Iced Tea and Mississippi Mud), and has lined up a contract to produce Smirnoff Ice for the Midwest and West Coast.
Beer purists might turn up their noses at clear malt beverages and spiked fruit drinks, but these products have been a boon to more than one regional. Dick Tschanz, beer production manager for the Joseph Huber Brewing Co. in Monroe, WI, admits that Hooper’s Hooch accounts for nearly 40 percent of production. But Huber continues to brew its Berghoff line, recently adding two new labels, Berghoff Classic Pilsner and Berghoff Pale Ale.
Tschanz sees distributor consolidation as the greatest threat to the survival of regional breweries. “Conglomerates are swallowing up the smaller ones. Miller and Anheuser-Busch want their distributors to be brand-exclusive. They want separate warehouses, sales personnel, trucks.” It may be Huber’s good luck that it’s owned by a large Midwestern distributor, General Beverage Companies.
Huber is the country’s second oldest brewery, founded in 1845. Unti1 recently, however, there were no tours. “This facility was never designed to accommodate the public, with its wrought-iron stairs, overhead cross-pipes and narrow passageways and cellars,” explains Tschanz. The hospitality room and gift shop have received a major overhaul, however, and since July visitors have been welcome. “Inquiries for tours have been overwhelming,” says Schanz.
The ‘Eternal Tap’
With the industry changing day by day, regional breweries have tried to hold unto some of the old traditions. The Straub Brewing Co. in St. Mary’s, PA, for example, still maintains the “eternal tap”—a spigot jutting out of the wall, mounted over an ornamental barrelhead. Twice a day, from 10 to 11 a.m. and 4 to 5 p.m., visitors and townsfolk can stroll in and help themselves to two glasses of beer gratis.
But you don’t stay in business by being quaint. As isolated as Straub is in bucolic northwest Pennsylvania, the brewery has undergone an intensive modernization program. “Three years ago, we replaced the fermentation tanks and put in a new bottling plant,” says company president Dan Straub. Three years before that, in 1995, the brewery cut up its antique copper brewkettle for scrap metal and replaced it with a stainless steel model. But they did save the door, date-stamped 1901, as a souvenir.
Straub’s output has increased moderately, from about 29,000 barrels ten years ago to 36,000 barrels in 2000. Family members used to joke that they liked hunting and fishing too well to grow the business much further. “Now, it’s golf and women,” laughs Dan, who hastily adds, “Just kidding!”
Straub brews a clean-tasting American lager and a light beer. The company used to contract-brew an amber lager called Pymatuning Dam, but “that was more bother than it was worth.” This year, Straub and a fellow regional brewer, Pittsburgh Brewing Co., have begun to experiment with plastic bottles.
Dan Straub might be speaking for all of America’s old-time regional breweries when he says, “We’re fortunate to be where we’re at, and we count every day a blessing. It’s a tribute to anyone to still be in business.”
