Monday, June 28, 2010

Pabst Deal Closes

News comes Friday that the Pabst deal is final. Connecticut investor C. Dean Metropoulos bought the company from the Kalmanovitz Charitable Foundation for an undisclosed price; the erstwhile chairman of Pabst, Lou Giraudo, would only say that the speculated price of about $250 million was incorrect. Metropoulos made no comment.  A Reuters story said that "The foundation listed its total assets as $62.3 million in its tax return for the year ending June 30, 2008." The story also noted that
"Sales of Pabst Blue Ribbon in food, drug and other retail outlets rose 33 percent to about $172.7 million in the 52 weeks ending April 18, The Wall Street Journal has reported, citing data from market research firm SymphonyIRI Group." 
So that's done. Now we'll see what the Pabst drinkers -- the reputed hipsters and bike messengers -- are going to do. I suspect they're going to keep drinking Pabst.

25 comments:

jb said...

why wouldn't they? It's not like they are keeping up on who owns what, they are just doing what their peers are doing, they are mimicking those who they want to be like. Not that that is a bad thing, it beats the miller lite sheep.

On the other hand if they were true hipsters wanting to stand out they would go one step furthur and drink lionshead, utica club, grain belt, or some other old-time beer that actually has a brewery and employs local people, that none of their peers are drinking.

That would be too much of a statement though I suppose.

Bill said...

The Foundation will have to disclose the purchase price when they file their Form 990 to the IRS (what nonprofits file to show they don't need to pay taxes), so eventually, what the new owner paid will become public information.

jp said...

seems to me 250 would be high for 172m. Does that number includ te iter legacy brands or just PBR?

Al Luccioni said...

From the reuters release
"Despite an anemic U.S. beer market that has been pressured by tough economic times and competition from wine and spirits companies, the low-cost Pabst Blue Ribbon has been rediscovered by thrifty, or broke, East Coast drinkers, who consider it exotic because of the beer's blue-collar, Midwest roots" If that was what they were after why not High Falls or PBC before Hickmann sold it out at least those where/are real breweries that did not give their retiree's the you know what

Lew Bryson said...

Indeed, Al. Although you could argue that millions did find Yuengling; a non-union shop, but one that has treated their employees more than fairly, from what I've heard and seen.

The Professor said...

It will be interesting to see what they do with the many legacy brands they now own (including some formerly well respected beers which Pabst managed to turn practically into generics). I wonder if they will be selling some of these brands off, (even if the value of the brands has probably become irrevocably tarnished by Pabst's shoddy handling of them)

Both jb's and our esteemed host's comment about the "hipsters" is right on. There are still a number of older regional brands making beer of the type that Pabst currently is (and in the case of Yuengling especially, doing it very well indeed).

There is a definite place for that kind of beer, but the hipsters are less concerned with the beer than by the label that wraps around it. It's really been that way for ages...I can remember the days of the Coors "mystique" 40 years ago when while it sold outside of it's then limited distribution area for 2 to 3 times it's regular price, yet in it's own backyard it was derided as "Colorado Kool Aid"; likewise with Rolling Rock...considering it's relative 'sameness' compared to other American lagers it was still pretty well regarded during my college days in NJ, yet in it's local area it was apparently quite often referred to by the college crowd as "weazel piss". The marketing by the major national brands was very effective indeed, because (with some exceptions) an attitude that seemed to prevail seemed to be "...if it's made locally, how good can it be?"

Maybe that's changing now to some extent with the explosion of some fine, quality oriented micros making the scene (along with a bunch of not so fine ones).
But it's still at least to some degree all about image, and savvy marketing to create and feed the image. The case of PBR, however, is fascinating and unusual in that Pabst didn't have to lift a finger to attain it's new found 'hipster' status.
Unless it was some sort of covert operation. LOL.

jb said...

Good post, prof. In my case, attending college in the mid to late 80's we had grown-up without local breweries, save for Schmidts which folded while we were in college. I was able to turn a lot of people on to pre-lager Yuengling for the mere fact that it WAS brewed locally, which was to us, a cool concept, unlike the generations before us who were seduced by madison avenue to turn on to michelob, bud, miller lite, etc.

I had the same situation you describe with coors with corona. It's reputation was made for it by the time I tried it per a recommendation by a friend. Immediately I did not get it, with or without the lime, and saw the bar had yuengling half and half on tap, a rarity in the 80's. By the end of the night my buddy and the other corona drinkers were drinking this more exotic, less understood "dark" beer from 7oz glasses rather than the higher priced corona. Not bad for some 19 year olds.

Rolling Rock always was nothing more than a bud-wanna be with the rice and the diminished use of hops as the decades wore on. I dont know anyone who took it seriously in PA.

Al Luccioni said...

well I think you nailed it right there Lew Yeungling is a non-union shop but that does not mean they walked away from their pledge just to squeeze some more out on the back of their former employees like Pabst did

Anonymous said...

Hey Al
What is the difference from what Pabst did to their employees and what every wholesaler in the country is doing to their employees,ride them like horses and when they get to be a certain age and they are limping around and their backs and legs hurt so bad they cannot get out of bed,they made pabst what it is today..
Pabst is being brewed by Millercoors now and if the new owners did not get a commiment from the Miller Lite sheep who brew it with quality and control,unlike the unnamed brewery in up state Penna the deal would not have happened.
Their legacy brands Colt45,COQUI and a few cheaper malts out their did not just go away,their market share was taken from the likes of most any brewer that makes cheap malt beer and distributes in every shit hole deli and take out store in the inner cities..

Lew Bryson said...

Wow, someone's got a real axe to grind. If you sharpen edges like you write, you must have about 2.8 fingers left.

Mike said...

Professor: You are painting the locals with a broad stroke. Having grown up, attended college and continue to live near Latrobe to this day, I never heard the term "Weasel Piss" to describe Rolling Rock locally(not in the 80's anyways).

RR was the preferred brand for us during college back in the early 80's. We considerd it an honor drinking a locally made brew and actually did like the taste. When RR sold out in 85' to Sundar and then to Labatts 2 yrs later, it just never tasted the same after that. "Weasel Piss" may be an apt description of it now.

sam k said...

Interesting that a few years back, when that unnamed upstate PA brewery was brewing Pabst under contract in 16 oz. returnables, during a meeting of the Master Brewers Assn. of the Americas Philadelphia Chapter at said brewery, the old-timers in the crowd said that the Pabst brewed there was closer to the Milwaukee-brewed product that from any other brewery since they began outsourcing production.

jb said...

Hey anon, can you name ONE of the brewers that makes "cheap malt beer and sells it in delis in the inner cities?" I'm curious who else is taking market share but the big boys: pabst and bud and miller.

"...market share was taken from the likes of most any brewer that makes cheap malt beer and distributes in every shit hole deli and take out store in the inner cities"

Mike, i spoke to the RR brewer and he said the recipe was changed continually from 1970 to adjust to the "taste of the consumer" and readily admitted that meant more rice and less hops, that they were mirroring budweiser. Maybe when you had it it was good, I give PA brewers as big a benefit of a doubt as possible but RR never did it for me, but then again, neither did budweiser.

Anonymous said...

Hey JB
Just to name a few who sold out to the big boys and who knows who is brewing it for some of them.
Henry Weinhard,G Heileman,Mckenzie river,who brews steel reserve and sparks,sold to Miller recently,small venture capitol people like Don Vultaggio and John Ferolito who had their hands in Mid night dragon fame,who also discovered a small brand at the time called Arizona ice tea..
Pardon the term shit hole deli in the inner cities but these are the people drinking this liquid crack..

But it is not nice to fool mother nature,and you dont do it without paying a price,malt liquior ia an artifical beer style.Its unnatural for a fermented malt beverage to have this much alcohol,and the conquences should not be wholly surprising.Just read the newspapers,you have a quick ride to intoxication,that seems to bring out the worst in everyone,even people who object to it.Greed whom might that be the beer barons maybe,despair and destruction on one side,lies and posturing on the other...

jb said...

Wow, you must have been a part of the woman's christian temperance movement in another life.

By your logic barleywine and imperial stout are the unnatural ruins of our society as we know them... not to mention whisky, gin, vodka and thunderbird all of which have considerably higher alcohol content than malt liquor.

And just for the record, G. Heilman WAS a big boy... they were the 3rd largest brewing corporation not too long ago and Mckenzie River never "brewed" steel reserve, they are a beverage marketing firm that contracted with miller. As for Midnight dragon, i never heard of it.

Al Luccioni said...

*hit hole delis, liquid crack ? anon your biases are really showing. Do you get your panties in such a bunch when beer geeks (read white middle/upper class types) quaff "extreme" beers that far surpass abv of Malt liquors out there .

Charles Stegmaier said...

Sir Anonymous,

I must concur, your words ring true as my own failed business plan was to market our Stallion XII malt liquor towards the downtrodden inner-city youth of our fair city of Wilkes-Barre. Unfortunately they were not nearly as receptive as I had hoped and my brand and our brewery failed in 1974, selling out to those Smulowitz's across town and their Lion brewery.

If only those poor downtrodden urban-types with little disposable income would have brought forth their open wallets, my own brewery may still be flourishing! Curse them, but my Stallion XII shall rise again!

Russ said...

I have to agree with jb; not sure how we went from brewery consolidation to the evils of malt liquor, but drunks are gonna get drunk with or without the help of Big Beer and malt liquor is certainly preferable to, say, drinking Sterno.

On a side note, two local brewpubs currently have malt liquors on tap or in the works. Flossmoor Station is currently having a contest to name theirs and Rock Bottom Warrenville actually made a malt liquor with popcorn. I sampled the test batch from Flossmoor and it wasn't too bad. I think there's something honorable about trying to reclaim a style with a less-than-glorious past.

Anonymous said...

OK..Pabst has a rep as a hipster beer. But....As a man who is 52 years old, Pabst has a different meaning to me. It's the beer I swiped at a family reunion. It's the beer we swiped at the sports gathering when nobody was looking. I can tell you....it's not the beer it once was. But sometimes I have some just because. So maybe, just maybe some old dudes are buying it to relive those days. I know better beer exists, HELL I MAKE BETTER. But, my late grandfather drank Pabst with me and I hope it is always available. Nobody would ever say I'm a hipster, I'm too old and dull.

Anonymous said...

You cannot put Barleywine and imperialstout in the same statement as malt liquor,cannot think outside any upscale craft bar in the city or anywhere else you will find any intangible signs like a mute defendent left behind at the scene of the crime.Empty and broken containers,unconscious drinkers,driew spew,public urination and defection,the aftermath or an alchol- fueled violence,fatal accidents, none of these deliver on the promise of the malt liquor label.

One can well imagine the frustration and rage of those who live with the consequences and seek a better life,a better place to live.No i do not blame the people who live in that situation.

Few would suggest that girlie posters of naked women and lords of hip hop are ideal fare for the children who go into the shit hole single serve deli for a popsicle,and the brewers and store owners who go back to their surburban life styles should not be high fiving over the level to which their marketing has sunk...

sam k said...

HUH??

Lew Bryson said...

Classic "Anonymous."

S E A N said...

Right now Pabst Blue Ribbon prices are the cheapest I've seen in years. I paid $8.99 for a case and have bought 16 ounce tall boys for PBR in bars for $1.50 & $2 recently. Maybe the new owners will bring back expansion of the PBR brand to include, 'ICE', Light, and Genuine Draft styles. I think the brand is is finding a niche as a budget beer that is accepted by beer drinkers.
I am more curious of what 'mothballed' label under Pabst ownership will get a second look by the new owners. Schaefer, Pearl, Olympia, Falstaff, Schmidt(s), Black Label, National Bohemian, Schlitz, Old Style, Strohs, are just some of the labels with a long history that owned by Pabst today. I forsee at least one of these brands being revived to become the 'next PBR'.

glann kernanahan said...

mothbolled? Most of the brands you listed are still for sale. It's up to the consumer to resist Madison Ave and buy them instead of bud/miller lite.

Gary Gillman said...

Lew, do you think this may afford a chance for the revival of Ballantine IPA? Maybe the new owner will have some people look at the brand name inventory and history with a fresh eye and some new directions may result.

In terms of older labels to revive or re-launch, I'd pick that one because small as the IPA was, it has great symbolism in light of craft beer developments of the last 30 years. This would create good sales potential, I think. And, I'd re-focus on Schaefer. I have a very clear memory of Schaefer circa-1971. It was malty-tasting and with a notably hoppy edge.

I believe that restoring the specs of 40-60 years ago (or more) for the best of the pre-craft beer era offers owners of storied old brand names real opportunities. Some excellent beers would result, but not in a way to mimic typical modern craft beers. And, this could be run side-by-side with keeping the PBR-type products going, as you said, that won't stop soon.

Gary