Thursday, June 11, 2009

Iron City Brewing moving to Latrobe

Just heard that Iron City Brewing is going to be moving brewing operations to City Brewing's plant in Latrobe, the former Rolling Rock brewery. Canning ops had already moved to High Falls -- er, Genesee, in Rochester (it's so tough to keep up with these name changes), and now it appears all other brewing will be done at Latrobe.

What's all that mean? Well, for the beer itself, not much. That's a good brewery, good staff, they'll make IC taste like IC.

Outside the beer in the bottle, it gets a lot more ... complicated. For one thing, job losses: Latrobe is much more efficient and automated (which will, of course, make brewing and producing beer more efficient and cheaper, and probably more consistent, though the Lawrenceville plant does pretty well on that). For another, money: Iron City owes Pittsburgh a lot of it, still, and most of the debt structure depended on Iron City staying in their Lawrenceville plant. Are they going to skip town? (Probably not, because they're keeping their headquarters in Lawrenceville, but that's going to leave them with a ton of debt.)

But the big deal is...what the hell's Iron City when it's not made in Pittsburgh? It's not your hometown beer any more, is it? A reporter just asked me how I thought things would go for Iron City, and I asked him in return, have you seen much Stoney's lately? Deracinated (consider it a free Word-of-the-Day) beers just don't do well; Rolling Rock's another example that's too close to miss.

I'm not optimistic about this. Iron City's current management has not proved up to the admittedly big job of stopping the brand's slide. I don't know how they're going to convince people that they should buy Iron City again because now it's not made in the Iron City. A bigger job. At this point, it looks like they're planning to Kalmanovitz the brand into the graveyard.

The Pabst Miracle may be their only hope: any bicycle messengers need a new cheap beer?

24 comments:

santillom said...

Lew,

I would tend to disagree in that people from Pittsburgh and especially those who drink IC think of Latrobe as more of a close regional suburb. I base this purely on one fact alone...this is The Steelers Training camp, so Latrobe is widely known. Most people who drink IC are Blue Collar Men who identify with the Steelers and thus the Latrobe connection, so I don't feel this will have an impact at all. Rolling Rock on the other hand had a niche identity of a romantic locale. Once it moved to Jersey that was the end of its appeal so I think the two are different.

Lew Bryson said...

Mmmmmaybe. Didn't work for Stoney's.

21stCenturyCavePainter said...

Sam Adams brewery and main office are located in Cincinnati, Ohio if I am not mistaken, but they have branded themselves as a local Boston establishment. It can be done.

jp said...

No way Santillom, you take ICB out of Larryville, game over

Lew Bryson said...

Not to sound contrary, but Sam Adams is a very different situation. They've been contract brewing from the beginning and have been savvy marketers from the beginning, and the beer is not one that's essentially the same as heavily-advertised national mega-brands. (Not to mention the main office IS in Boston. They own a brewery in Cincinnati, but it's only capable of brewing a portion of their sales. The new brewery they have near Allentown, PA is being ramped up to handle all of it.) There's no real switch to make for Boston Beer.

Christian Schmidt said...

Disagree with Santillom and agree with Lew. Lew is spot on. The graveyards are littered with brands that were taken out of their domicile and ultimatley taken off life support systems.

The stoney's analogy is "it" to a tee, although IC might take a little longer to extinguish since Pittsburgh is much bigger than SMithton.

Another good example is my own Schmidts of Philadelphia, or National Bohemian in baltimore. Do you see schmidts in philadelphia, 20 years after the brewery closed? Not a drop. Do you see Natty boh in baltimore? Yes, some places. Is it a main player to the tune of half a million barrels a year? Puh-lease.

If younzers who root for the stillers and identify with blue collar drank it less and less when brewed in the city, you can be damned sure they'll drink it even less now that it is in latrobe.

this management turned out to be a real disappointment, and a lot of legacy, history and pride is lost as a result of that, a shrinking population in the burg, and younzer lethargy.

Gabby Podlucky and Louis Neuweiler said...

We would like to formally welcome JJ Wainwright and his Iron City brewery to the fold...

Lew Bryson said...

You know, Herr Schmidt, for a dead guy, you're pretty savvy. Thanks for a good addition to the discussion. The only place I see Schmidt's today is on the discount rack, and in very cheap bars. Damned shame.

Anonymous said...

Who can ever forget Phillys home town beer Red Bell Brewing and beer company,the stock issues are still hanging in the Lion Breweries Beer wall of shame,gone but never far from some pissed off investors days of Beer and Roses..

sam k said...

Iron City may have the most devoted fan base of any declining regional brewery, ever. Of the past three owners (over multiple decades), two of them, Alan Bond and Michael Carlow, spent hard time for the scams they executed at the helm of PBC, and Joe Picirilli ended his tenure with a whimper, owing everybody and their brother in a massive way.

Yet the brands still exist, and not in a particularly minor way, across western PA and beyond. It surprises me how many relatively far-flung distributors (200+ miles distant from the 'burgh) I see with IC Light on the shelves. These brands are survivors with a certainly smaller, yet no less loyal fan base.

Is Stoney's a fair comparison? Perhaps, but to compare the decline in market penetration of a million+ bbl brewery to one whose biggest year (1981) produced 120,000 bbl may not be the most accurate, though Jones had a lot of loyalty behind it, too. Stoney's now produces barely more than 10,000 bbl as a contract brewer.

I think that either way, ICB is screwed. There's no way they can stay in Pittsburgh. My last tour there a few years ago, a behind-the-scenes visit guided by the then-brewmaster, showed the plant to be not much more than a junkyard, surronuded by collapsing buildings. The infrastructure in Lawrenceville, sadly, is shot, run into the ground by greedy management, just like Gabby did with Jones.

Moving the brand to Latrobe will buy it time, and be thankful for that. It could continue to sputter along for another decade or so there, which would be impossible in the city.

By the way, what do you think one of the biggest underdeveloped pieces of property in Pittsburgh would be worth? More than the once-stately dump that occupies it right now, I'll bet.

I'm convinced there's a sinister strategy in place here, though I'm not sure what it is, nor who will eventually get the cash.

And Lew, regarding the continually confusing name changes, High Falls mother ship is North American Breweries now, and it's impossible to find a "Schmidt's" anywhere. It all became simply "Schmidt" when Heileman combined the Philly and midwest-brewed brands years ago.

Also, I was under the impression that City in Latrobe had been shuttered a while back when Sam went to Fogelsville. Is this a reincarnation of yet another dead brewery?

Gabby and Louis: JJ never had anything to do with Iron City, except for his reincarnation there years back. Iron City was started by Fraunheim and Hoevler.

P.S. Lew, thanks for the Word-of-the-Day!

Koehlers said...

So this leaves Straub as the only PA regional left in Western PA, a once proud home of numerous regionals that survived Prohibition, World Wars and industry consolidation...

How has Straub failed to gain any appreciable market share seeing the downfall of Stoney's, Rolling Rock, and Iron City? With their new management, I give them five more years tops... Good thing we still have Yuengling.

The former media office of Dubois brewing said...

Koehlers--

Frankly I think Straub is maxed out. They are a small brewery, and family run, and from what I hear dont desire to run more shifts to increase capacity. They are solid and consistent with their production.

We tried the same thing, but folded anyway.

Anonymous said...

has Penn found a home yet? Perhaps that can move in or is there operation too small?

Koehlers said...

"Frankly I think Straub is maxed out. They are a small brewery, and family run, and from what I hear dont desire to run more shifts to increase capacity. They are solid and consistent with their production."

Things are not always as they appear... Anyone who knows that brewery can sense an unwanted change in the air.

sam k said...

Straub has, indeed, become maxxed out, though only after penetrating SWPA very effectively after the demise of Jones. The two largest Jones distributors signed with Straub once Stoney's became a contract brew, and they have done well with the brand, leading to a record 42,000+ bbl being brewed in 2008.

The newest challenge to Straub may be their own success. By early July, Straub cans brewed in Rochester will hit the shelves, priced $2 per case lower than St. Marys-brewed NR bottles. Will this increase the brand's penetration, or cannibalize production in their own hometown? Time will tell.

sam k said...

And Koehlers, yes, there is uncertain change afoot in St. Marys, but in my conversations with people from the top to the bottom there, the feelings are mixed, and hard to sort out at this point. There are negative feelings for sure, but positive vibes as well. I'm not sure myself yet, but am willing to give them the benefit of the doubt for now and hope for the best.

My fingers are crossed, for sure, but I'm not holding my breath.

-- Randy said...

If loyalty was a big factor for sales,then Lone Star and Nattie Bo would be history.

sam k said...

Sorry to take up this much space, but I keep reading the thread and seeing things that nedd to be addressed.

Straub's inability to produce any more beer in St. Marys is not an issue of adding shifts. They are landlocked in the city of St. Marys and have utilized every square inch of interior space available to them.

It's a tankage issue now. They have no more room for new fermenting or lagering tanks, so an existing tank must be empty before they can fill it with new product. They have no brewery space available for additional beer, hence their interest in contract-brewing cans, which should give them more flexibility, barring the pricing issue I mentioned above.

Marc said...

I personally have gone back and forth on my thinking of Iron City's production moving to Latrobe. I personally grew up in Altoona, and have drank IC, Rolling Rock, and Straub in the past because it was a Western PA beer. While attending Penn State I consumed much Rolling Rock, whether it was in pony bottles at the Skeller or $35 kegs from Bellfonte. Now with Rolling Rock being brewed in NJ I will never touch another green bottle again. However, I will still consume a ice cold Iron City in the future since it will still be brewed in Western PA. BUT, I could see a considerable drop in there sales, because of many angry Pittsburgh residents, which could lead to the demise of the brand. I guess we will all have to wait and see.

sam k said...

We sold a lot of $35 RR kegs in Bellefonte! A slow weekend would mean we sold less than 100. They were $33 to the bars...get it?

Marc said...

If I am not mistaken my last year at Penn State you stopped selling Rolling Rock kegs, or maybe the price increased. I just remember switching over to IC, because it was the least expensive. (Please note that I did not use the word CHEAP)

Anonymous said...

Sad to see Iron City/Pittsburgh Brewing Co. shut. It seems once these brewers go contract they slowly wilt away. When I was a Pitt in the 90s IC Light was still everywhere (This was right before Michael Carlow's house of cards collapsed)but these days I dont think most people 40 and under will touch IC Light. When you look at the decline in Jones, Pittsburgh Brewing Co and even Rolling Rock it is staggering over the last 10 years. When you start to lose 10-20% of your market each year in 4 0r 5 years there isnt much left, certainly no money to advertise or build the brand back up. I assume Stoney's will follow the IC products (cans and nonreturnables).

One of the post said Jones was down to 10,000 barrels. Your book had them at 45,000 bbls in 1999. Last time I visisted the folks in Smithton they referred to Straub as "big".

Anonymous said...

Late to the party I admit but the Natty comparisons are the most relevant in terms of moving ahead. If you've spent any time in Baltimore in the past few years, the brand has been marketed heavily and while I can't comment on current bbl production, the under 40 crowd is all over it.

Anonymous said...

A big plus in my book for IC moving to Latrobe is that the municipal water is not fluoridated there. We're always trying to find non-fluoridated beers re: the toxicity. -JW