Lone Star Brewing Co., like so many other regional breweries during the late 1940s thru the late 1960s, rode a successful business model by being regional. Sound familiar? Of course, regional breweries also had a built-in price advantage during these years.
By the late 1960s, the regionals were under attack by AB, Schlitz, Coors (were sold), and the soon upcoming Miller Lite. A number of regionals sat back and did little or nothing to advance their business, thereby sealing their fate. Lone Star, in recognizing these industry trends, however, moved quickly to remain relevant. Lone Star not only closed their Oklahoma City Brewery, but brought in new and highly experienced leadership from national breweries including Schlitz, Hamm’s, and Miller. These executives replaced closed-minded officials who had been running the brewery since the end of World War II and brought in more forward-thinking management.
Lone Star tied into the then youth movement of the boomers thru the Texas Red Neck Rock music genre led by Willie Nelson and others. This marketing platform changed how the young LDA people perceived Lone Star. The brand quickly grew and remained relevant in Texas until many years after Lone Star sold when the brand’s owners decided to walk away from the Texas music scene as well.
This year there a number of major breweries have announced layoffs and/or restructuring of their companies. Not surprisingly to those of us in the industry as these breweries’ brands/products have slowed or gone negative. The question is: Now where do these breweries go? Should they conduct business as usual or go in a totally different direction?
Pabst Brewing Co., who had major layoffs earlier this year in lieu of how Small Town Brewing’s Not Your Father’s Root Beer sales turned south, has taken a different direction. Pabst, similar to Lone Star’s experience many years ago, is undergoing a transformation versus an extensive reduction in force.
Pabst is taking bold moves in the method they not only go to market but how they reposition PBR by pricing their 12-ounce packages at 85% of the domestic premiums. Pabst is also looking at their sales team and building it to mirror the current/future demographics the United States.
The Pabst plan is not only transformational but bold, similar to Lone Star’s strategy. The success of Pabst’s plan is dependent on, first, the leaderships’ ability to execute, and secondly, the Pabst wholesalers’ ability to get behind the tactic at this level. Wholesalers know that the industry needs more success stories like Pabst as this proves to be beneficial for the entire industry. Wholesalers, retailers, and consumers all win when Pabst is successful.
PBR indexes higher than any other domestic, with craft consumers in the neighborhood of 12 xs for craft drinkers. This puts Pabst in a unique position. Such aforementioned businesses changes could, however, put Pabst’s current position in jeopardy. Only time will tell.
Winning takes talent; to repeat, takes character.
Editor’s note: I regret to inform you of the recent passing of Pat McEntee. Pat, who had previously worked with AB, Coors, Gambrinus, Tiger, and Warsteiner was not only a close friend but an outstanding professional in the beer industry. He will be missed.