History has proven that in the beer industry, when a brand begins to die, it will eventually end up in the grave yard with little chance of revitalization. The list of dead brands in this category is long, and could take up this entire post. However, the list of brands that almost died, but did in fact revive themselves, is very short. One such beer is Pabst Blue Ribbon, with perhaps the number one story of a near-death beer returning to life.
Along with PBR, the Pabst portfolio consists of by-gone labels including: Schlitz, Rainer, Old Style, St. Ides, Stroh’s, Schmidt’s, Pearl, Blitz, Olympia and Lone Star to mention a few. Many of the Pabst brands are referred to as legacy brands. Outside of PBR, only a few of these brands are showing growth. Lone Star and Rainer, in recent years have found their footing again and are showing signs of progress by focusing on their regional roots: Lone Star in south Texas and Rainer in the northwest.
Small Town Brewing and Pabst joined together several years ago enabling Pabst to leverage its marketing and distribution system to aid the growth of the hot new product, Not Your Father’s Root Beer. Pabst staffed up, adding a number of field sales people across the country, which added potency behind the NYFRB and other Small Town brands.
In today’s market, when the launch of a new product has a dramatic upturn, the downward curve is typically just as dramatic, often resulting in a typical bell curve shape. Accelerated growth leads to accelerated death. In NYFRB’s case, it appears there was a great deal of sampling (consumer trial), but little to no repeat sales. 2017 numbers indicate a -60% decline for NYFRB. In response to this brand’s decline, Pabst laid off 70+ people this month.
NYFRB is still a very viable brand, at least going into 2018, but it is almost certain, giving current trending, that the consumer will see NYFRB’s shelf space reduced along with losses in on-premise distribution. The elimination of that magnitude of staff will certainly have a negative effect.
The question is: how do the Pabst wholesalers view this situation? It is safe to say that the NYFRB wholesalers sensed that this product had a shorter life span and thus leveraged that belief by maximizing profits and minimizing market spending. They did not miss the chance to make as much on this product as possible, and since this brand is still somewhat viable, Pabst expected wholesalers to continue to do the same.
NYFRB might have legs to survive and be a profitable brand going forward for wholesalers, but one wonders what would have happened had Pabst not staffed up to that level and focused on their legacy brands? It is possible that many of the recently laid off employees had only joined Pabst as NYFRB took off, and that many may have given up jobs at other beer companies?
Pabst, in spite of going from an independent and top five brewery, to several different owners over the years, has beaten the odds and survived. Pabst’s portfolio is composed of mostly unknown names to the millennial generation, which could be an advantage to Pabst in the years to come. NYFRB may not survive.
Success is survival…