They say you can’t teach an old dog new tricks, but they never really say what comes after that for the old dog. Probably nothing good, right? People like tricks!
This little idiomatic quandary has vexed your humble Hop Take columnist for some time now due to the simple fact that some of the beer industry’s oldest breweries are getting very long in the tooth indeed, and the United States’ ever-changing beverage-alcohol landscape is increasingly predicated on new tricks. I’m not really talking about your Anheuser-Busch InBevs and your Molson Coors and your Pabsts, all of which own old beer brands but have long since morphed into big agglomerated portfolio management firms. And I’m not talking about the likes of Sierra Nevada Brewing Company (founded 1981), Boston Beer Company (1984), or New Belgium Brewery (1991). Those breweries are old by craft beer standards, sure, but not by, like, U.S. history standards. No, for the purposes of this column, I want to focus on the really old dogs of the American beer business, three in particular:
- D. G. Yuengling & Son, the country’s oldest standing brewery, opened in 1829 in Pottsville, Pa.
- August Schell Brewing Company, 1860, New Ulm, Minn.
- Anchor Brewing, 1896, San Francisco.
Let’s call this aged little cohort “American heritage breweries.” That’s a loose term with no official definition, mind you, but I wanted to talk about this trio because they’ve all been brewing continuously since the 19th century, their businesses are focused on making their own brands of traditional beer rather than contract-brewing or line-extending into hard seltzer (et al.), and they’re all top-50 American breweries by volume, according to the Brewers Association’s 2021 figures, the most recent available.
For our purposes, the differences between these breweries are just as revealing as their similarities. As of 2021, Yuengling was the seventh-largest brewery in the country; Schell was 39th; Anchor, 47th. The latter brewery changed hands a couple times in the 20th century before being acquired by Japanese brewing conglomerate Sapporo in 2019; the other two remain family-owned. None of them have the market penetration of a macrobrewer, but their distribution footprints range: Anchor is distributed in 49 states, Yuengling, 24 and climbing, and Schell around a dozen. Schell and Anchor are union breweries; Yuengling busted its union in 2007. And so on.
What can this triptych tell us about life as an old-dog brewery in 2023? I put the question to historian and column confrère Maureen Ogle. The author of four books, including 2006’s American beer industry history “Ambitious Brew,” she’s currently hard at work on a forthcoming history of the August Schell Brewing Co. If anybody can put the significance of American heritage breweries into contemporary context, it’s Maureen.
In the early aughts, “much was made of heritage breweries … because the Brewers Association was seeking endless ways to sell what was then still called craft beer,” she tells Hop Take. Back then, people understood the term to encompass breweries that existed before 1978 (when then-President Jimmy Carter signed a bill that loosened federal restrictions on homebrewing), were still brewing beer, and weren’t Anheuser-Busch, Miller, or Coors. Venerable old breweries like Yuengling, Schell, and Anchor brought a sense of historicity to the table. Their Americana “gravitas” lent the then-fledgling industry legitimacy as it fought macrobrewers for shelf space and tried to temper its guys-in-a-garage image with more established, wholesome institutions, Ogle says. “But frankly, it doesn’t mean diddly now.”
Your mileage may vary, but available data suggest that multigenerational, non-macrobreweries have indeed had a tough go pitching themselves to drinkers over the past half-dozen years. Anchor and Schell shed ~16 and ~30 percent in respective production volume from 2017 to 2021, according to self-reported estimates published in the BA’s “New Brewer” magazine. Yuengling’s IRI-tracked off-premise retail sales volumes have declined some 10 percent in the same period despite the firm’s splashy 2021 entry to Texas (the country’s second-largest beer market), which was the opening move in the nearly national expansion strategy it cooked up with Molson Coors. Heritage or not, broader footprints do not always make for better sales, particularly in crowded markets. “If I were a brewer, I wouldn’t want to be expanding into the next block right now,” jokes Ogle.
(As Good Beer Hunting’s Kate Bernot pointed out in a recent report on the Pottsville firm’s westward push, those data don’t account for Yuengling’s considerable draft sales, but they indicate tough sledding directionally, especially given how slow draft volumes overall have been to recover from the devastating wallop they took at the outset of the pandemic.)
Some of this performance can be chalked up to the overall beer category’s struggles over the past few years, as drinkers have traded up to spirits and spirits-based canned cocktails, over to malt- and sugar-based hard seltzers, and into “beyond beer” offerings like hard kombucha. That shift has been tricky to navigate for American heritage breweries, whose brand identities and value propositions largely hinge on their consistent, classical portfolios. The time-honored approach is at odds with the contemporary marketplace filled with drinkers thirsty for a steady stream of new flavors.
The craft brewing industry inadvertently helped to usher in this expectation with its emphasis on rotating taps, seasonal releases, and overwhelming SKU proliferation over the course of the past decade. “There really isn’t anybody anymore just saying ‘beer is a wonderful thing,’” says Ogle, contrasting the present moment with American craft brewing’s evangelical heyday of the aughts, when producers and customers alike were igniting the national thirst for traditional techniques and ingredients. “Instead, it’s, ‘Oh, here’s beer that’s got flavor,’ and ‘here’s this hard seltzer,’ and ‘here’s this thing that’s not really a beer, but it’s sort of a beer.’” Regular full-flavored beer — what we call B.O.L.A.s ‘round these parts, for Boring Old Lagers and Ales — “doesn’t have as much of a spokesperson anymore” at the national level, Ogle argues. That’s bad news for the American heritage brands for which B.O.L.A.s used to pay the bills.
It’s not necessarily out of stubbornness that these firms don’t diversify their offerings, either! Breweries of a certain age are hemmed in not just by their ability to innovate, but by the idealized version of their brands that exists in customers’ heads. That can be a powerful obstacle to progress, whether or not those customers actually buy the brands any more. Just look at the backlash Anchor incurred in 2021 when it rolled out a rebrand of its iconic logo and labels! The brewery took so much heat it felt the need to issue a pleading statement just three days after it was unveiled. “After years of struggling to turn the tide, we were faced with a very challenging decision: make a bold stand to preserve our recipes and legacy or allow Anchor to be forgotten,” it read in part. (Do you hear echoes of New Belgium’s recent Fat Tire rebrand brouhaha? I do!) Drinkers want American heritage breweries to remain unchanged, but what they want to drink constantly changes. That’s a contradiction in terms, and the elder statesmen of full-flavored beer in the U.S. are stuck in the middle.
There are other factors pulling against the Yuenglings, Schells, and Anchors of the American brewing pantheon (those few that are left). Ogle points to the 2012 schism between American heritage breweries and the BA — in which the org put Yuengling and Schell on a “domestic non-craft breweries” list populated with Molson Coors- and Anheuser-Busch InBev-owned brands, sparking infighting — as a moment that threw older producers out of sync with younger ones. “They were so insulted,” she recalls. Anchor has its own classification issue to contend with: Since being bought by Sapporo, it has gone to great lengths to reaffirm its role as “San Francisco’s beer” and tout its craft brewing bona fides.
There’s also the matter of which beer brand’s heritage is authentic, and which is for show. Pabst Blue Ribbon’s turn-of-the-century popularity with musicians and artists (and the run-of-the-mill hipsters who followed them into cheap neighborhoods with beer money) triggered a wave of copycats as industry players big and small tried to revitalize defunct regional beer brands. “After PBR, somebody tried to bring back Schlitz, and Schaefer. … Their websites would say dates like, ‘Oh, since 1854’ when the people involved with the brand [in the aughts] had no idea” about its history, says Ogle. The trend continues today with brands like Hamm’s (brewed by Molson Coors) and National Bohemian (Pabst). Add in retro-styled faux-stalgia lagers from younger breweries, and throwback cans from the long-since-scaled likes of Budweiser and Coors Banquet, and you’ve got some very muddy water for brands that are actually still produced by their original owners and in their original breweries.
It’s also important to remember that breweries half as old as their American heritage predecessors are getting on in years themselves. Sierra Nevada Brewing Company is turning 42 this year, which sounds pretty damn old unless you know that Fritz Maytag bought Anchor Brewing Company — a turning point most consider the beginning of the craft brewing movement — 16 years before Sierra Nevada opened. And that was still 69 years after the elder firm was founded. The sheer length of American heritage breweries’ lifetimes doesn’t always come across to casual drinkers.
All that and more makes for a tough road ahead for American heritage breweries. It’s not that customers don’t care that Yuengling is the oldest brewery in the country, or Schell’s beer has been brewed on the same ridge in New Ulm overlooking the Cottonwood River since a year before the Civil War. I think these histories matter! But that’s the answer to the wrong question. The right question is whether American heritage breweries matter enough to resonate to drinkers strolling through a beer aisle to hold their own against the latest and greatest. Sadly, I’m not confident that they do now, nor that they will in the future. They say getting old is a bitch; they don’t say what comes after that.
🤯 Hop-ocalypse Now
Bud Light has been the best-selling beer in the United States since the late ‘80s, when it took the mantle from its full-calorie namesake, Budweiser. But the light-blue behemoth has been playing defense for years, buffeted on multiple fronts by disparate forces including the emergence of the craft beer category; drinkers’ new preferences for hard seltzer, “beyond beer” beverages, and spirits-based stuff; and the remarkable durability of Mexican imports. The latter has become an existential threat to Bud Light’s reign, with Modelo Especial now poised to overtake Anheuser-Busch InBev’s flagship as the No. 1 overall spot in dollar sales thanks to a multi-year heater that shows no sign of slowing. Constellation Brands — Modelo’s parent company in the U.S. — smells blood in the water. “This is real, it is attainable, and it is going to happen,” Constellation beer president Jim Sabia told wholesalers earlier this month, as reported by Brewbound. “The old world is dying, and the new world struggles to be born: now is the time of Modelo.” (All right he didn’t say that second bit. But he should have!)
📈 Ups…
More craft breweries are embracing non-alcoholic hop water as an add-on product to hedge against Dry January and capture new revenue… New Belgium’s Voodoo Ranger Fruit Force IPA, launched this January, is already a top-30 brand in IRI chain/convenience scans… NBB is also rolling out a “hard juice” and toying with the idea of a Voodoo Ranger hard tea… This summer Guinness will open its second U.S. taproom, in Chicago… Nevada lawmakers push bill to allow craft breweries limited self-distribution… Corona hard seltzer is indeed beer, federal jury decides…
📉 …and downs
Two more craft breweries faced rightwing harassment (and worse) this past week over drag events; this is going to keep happening… One of those breweries also unfortunately had its money in Silicon Valley Bank, what are the odds?… Yuengling’s brief time in Texas has yielded mixed results, and its recent push into the Midwest faces stiff segment-wide headwinds… Oh cool, not only did the U.S. spirits industry overtake beer in dollars sold domestically last year, but it also broke its sales record for exports, too!… Oregon lawmakers yet again put forth a bill to raise beer and cider taxes by $31 per barrel… The board of Bang Energy’s bankrupt parent co. ousted controversial CEO Jack Owoc last week… Beer prices continue to outpace inflation, per latest CPI…
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