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Forever Yuengling.

America's oldest brewery holds firm to tradition

To step inside the Yuengling Brewery is to step back in time. The company's corporate workings are housed on the second floor of a vintage brick structure. Upon reaching the top of the stairs, one finds a large open room holding 15-20 paper-piled desks. There are no partitions here, nothing to separate the number-crunchers from the marketing experts. A newcomer might mistake this room for a 1940s insurance company or accounting firm, but the absence of green eyeshades dismisses the notion.

At the far end of the room a door to the only individual office beckons. Inside, a hulking, antique desk and an equally-old cabinet behind it are the first to greet a guest's eye. This could be the corporate digs of some New England textile mill owner, or the lair of a machine shop foreman at the turn-of-the-century. but it's not. This is 1992. And this is the office of Dick Yuengling, Jr., president of America's oldest brewery.

D.G. Yuengling and Sons, Inc., is one of a handful of small, old-guard regional breweries that once dotted the map from coast to coast. Like many companies today, the country's regional breweries are fighting tooth and nail just to stay afloat. But Yuengling's story is different.

In existence for over 160 years, Yuengling has seen many brewers come and go. The company has seen the meteoric rise of today's national brewers and the fall of most of its regional counterparts. Indeed, the Yuengling Brewery is a survivor, and one shouldn't be surprised if it continues on for another 160 years.

The brewery was founded by a young German immigrant, David Gottlob Yuengling, who arrived in Pottsville, PA, in 1829. A brewer by trade in his German homeland, Yuengling (spelled Jungling in German, meaning young brewer), did what came most naturally to him - he began brewing his own beer. Yuengling's first brewery, D. G. Yuengling's Eagle Brewery, began producing beer on the spot that now houses Pottsville's town hall.

Two years later, in 1831, the Eagle Brewery was destroyed by fire. Undeterred, however, Yuengling rebuilt his dream along a hillside on Mahantongo Street, overlooking the town center of Pottsville, and the brewery has remained there ever since. After the move, the brewery's name was shortened to the Yuengling Brewery, but the American Eagle remains a symbol of the brewery's long history.

Yuengling's hillside location was not chosen randomly. Like most breweries of that era, when refrigeration was still a dream of the future, tunnels were drugs into the mountain and used as naturally cool places for fermenting and aging the beer in large, oaken casks. Yuengling's hand-cut tunnels, which stretched for several hundred yards through solid rock, served those means perfectly.

In its early years, Yuengling found its customers in the towns and countries surrounding the plant. During that time and on into the 20 century, Yuengling brewed its beer on premise, but did not bottle it. Instead, the finished beer was put into large barrels and shipped, via horse-drawn wagon, to merchants who would then bottle and sell the beer to the general public.

When the bottling process finally arrived at Yuengling early in the 20th century, it was done completely by hand, utilizing a hose that looked much like today's garden variety. The primitive, yet effective hose-filler ran directly from the aging tanks through the brewery's maze of rafters and down into the bottling room. There, each bottle was filled, capped and crated.

At the onset of Prohibition, the Yuengling Brewery stayed afloat by brewing Yuengling Special, an alcohol-free brew. Although the brewery was producing only non-alcoholic beer, the federal government imposed a strict limit to the number of aging tanks a brewery could have. In keeping with the new law, a portion of Yuengling's caves were sealed off with bricks. When Prohibition ended, the caves remained closed. Indeed, the walls weren't removed until 1976, when workers found a virtual time capsule upon excavation. Today, the bottles and paperwork found are housed in Yuengling's on-premise museum.

Yuengling also ventured into the ice cream business during the "dry years." Housed in a building just across the street from the brewery, the company continued production of Yuengling ice cream right up through the mid-1980s.

Yuengling's ups and downs

Upon repeal of the Volstead Act and the end of Prohibition, many of the nation's small regionals began disappearing. But Yuengling continued on. The brewer did, however, experience some uphill climbs.

According to president Dick Yuengling, the question of brewery survival arose in the 1950s and '60s, when the brewery suffered from low production. In an effort to save the century-old plant, Yuengling's father and brother purchased the brewery from his grandfather. Upon assuming the reigns of command, "they took minimal salaries for themselves, if at all," Yuengling recalls, "and the workers accepted merely |survival' rates, in an effort to keep the brewery afloat.

"Today," the current president continues, "our workers are very well paid - those guys gave us the opportunity to survive during that time, and to be where we are today - we owe them. My dad and brother got us through, but you have to expect scares like that. In 162 years in the business, there's going to be peaks and valleys. That was a deep valley."

When Yuuengling - the family's 5th generation at the helm - stepped into the brewery's presidency 10 years ago, he did so with some innovative ideas for the company. As a marketer, not a brewer, Yuengling has made great strides in product proliferation. "I don't get involved in the brewing end of the business," e explains. "I know what I want to accomplish with our beers, but I've got an excellent masterbrewer - N. Ray Norbert. If there's something I want, I go to him, tell him, and he does it."

At this point, Yuengling brewery produces five beers - Yeungling Premium, Yuengling Premium Light, Lord Chesterfield Ale, Yuengling Porter, and its newest brew, Yuengling Amber Lager.

Brewing five beers is not easy, Yuengling admits. "It's really difficult to find the tanks to hold everything. You can't blend the porter with the lager. It's a huge juggling act, and that's what makes the whole story so great."

Yuengling only recently decided to launch the Amber "because we felt there wasn't an opportunity to introduce an amber lager successfully," he notes. "Now, the public's better awareness has let us."

Yuengling cites the growth and acceptance of microbrewed products' sales. to his own products as a boon "Micros created a new niche in the beer market," Dick explains. "People are drinking less, but are looking for more benefits from what they do drink. A lot of our success has been through the growth of our specialty items - our ale, porter and amber. Microbreweries helped create the awareness for these specialties - products we've already had."

Brewing fraternity

Although Yuengling finds little or no time during the day to catch up on what other regional and microbreweries are up to, he knows they're out there. "I feel a little distant from [them], but that certainly doesn't mean I don't support them," he reports. "If I can help someone else who's in a jam. I'll do my best to do it. The other day, the Indianapolis Brewing Co. called with filter trouble. I don't know why they chose to call me, but I think I helped them out right over the phone.

"We're not in competition we each other, and I don't ever want to feel that way," Yuengling points out, noting "the regional and microbrewers would never put each other out of business."

That help only goes so far, however, as Yuengling has had to turn away countless requests to use his facilities on a contract brewing basis. "Not a week goes by that someone doesn't ask me about contract brewing for them," Yuengling says. "We don't do it because we just don't have the tank or labeling capacities. Also, I don't feel like buying parts for someone else's packages."

Product appeal

For some brewers, fear of brand cannabalism often drives marketing strategies and brand placement in the market. For Yuengling and the new Amber Lager, however, that has not happened, and the president is pleased with the launch of the product. "In the marketplace," Yuengling says, "our brands don't really compete against each other. Although I feared it might happen, I haven't seen that the Amber has cannibalized the Premium's sales to any great extent.

"I didnt' think we'd gain any new drinkers," Yuengling continues, "but we did. We will sell 20,000 barrels of the Amber this year."

The Amber, as well as the rest of Yuengling's product line, have enjoyed wide wholesale and consumer appeal throughout the Keystone State, according to Yuengling, and that is what has pushed Yuengling's numbers. "We enjoy fantastic local support, and we're doing exceptionally well in all of eastern Pennsylvania.

"Any other regional brewer would drool over our wholesaler network," he relates,

"It's a marriage between us - they depend on us to supply the beer, and we have to depend on their advertising and sales ability to sell the product. quite apparently," Yuengling says, "it works."

Yuengling products are also popping up in other regions, Dick reports. "We do a fair job of distributing our products outside of Pennsylvania," he states. "We can't supply our wholesalers with a lot of beer, but our wholesalers with a lot of beer, but enough. We've established markets all along the eastern seaboard."

Bucking the trend of many US. brewers, Yuengling says his brewery "until not introduce a non-alcohol product in the near future. I don't think there's a place for it in our brewery for one thing," Dick says. "Also, our wholesalers wouldn't be enthusiastic. There's just not a big enough market for us to take part in it."

Toughing it out

As more and more regional beer makers close their doors for the last time, the nation's national brewers may be to blame, Yuengling believes. "The recent buying out of the regional brewers is a shame, and its due mainly to the |big three' - bud, Miller and Coors," he says. "A lot of the shutdowns and buyouts were no faults of the brewers - they simply got steam-rolled by the bigger guys." Nonetheless, with continued local support, Yuengling believes his products can tough it out alongside products from the nation's "big three."

"I don't think we're a target of the the big guys, but we just get stampeded by them," Yuenglings states. "Still, there care seven out of 20 of the country's bigger breweries in the state of Pennsylvania, and we still sell the beer.

"Our brewery currently has an annual capacity of 160,000 barrels, but that will increase to 5 new fermentation installation of 5 new fermentation tanks," Yuengling says. "We wouldn't be adding on if our sales weren't good," noting that his brewery produced over 150,000 barrels last year.

UP until 11 years ago all Yuengling beers were produced in a copper brewhouse. At that time it became necessary to replace the original vessels with stainless steel units that are in place today.

One thing that has not changed with the times is the stained-glass window that watches over the brewhouse. The window, which has been in place for 110 years, was originally installed to allow natural filtered light into the room, but would not create an uncomfortable glare off of the copper kettles below.

According to Dick Yuengling, most of the brewery's filling and labeling machines are relatively new. "We have two Krones labelers that were bought in 1986 and '88. A Crown filler and capper was bought new 11 or 12 year ago, and have a year-old Meyer can filler. It's expensive machinery," Yuengling admits, "but they get hummin' pretty well, and we depend on it. We fill over 500 barrels a shift." With such state-of-the-art equipment, Yuengling can fill 4,000 to 6,000 cases per day, depending upon bottle size, the president says.

Staying the course

In a brewing industry where nothing seems to be set in stone, Dick Yuengling's business sense should keep his company around for some time to come. And what of a 6th generation Yuengling? Dick has four daughters to whom he can pass on the legacy. Jennifer Yuengling, 20, currently attends Bucknell University and works at the brewery during summer breaks. "She's talented and smart. I'd be glad to have her here."

Until such a time, Yuengling sticks to a philosophy that has helped steer his brewery through both bad times and good. "We're a small regional brewery, family-owned. We can get our capacity up to 200,000 barrels, but because of where we're located - on the side of a hill - we have no place to go.

"At 200,000 barrels," Yuengling concludes, "we can operate very profitably. As long as we can pay our employees well, that's good enough for me."
COPYRIGHT 1992 Business Journals, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:1991 Statistical Study: Issues & Trends; D.G. Yuengling and Sons Inc.
Author:Schutz, Glenn W.
Publication:Modern Brewery Age
Date:Mar 16, 1992
Previous Article:Fighting the good fight.
Next Article:Broadening the consumer base.

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