Pabst Brewing Company

Pabst to Resume Brewing in Milwaukee

After a 20-year hiatus, the Pabst Brewing Company will brew beer in Milwaukee. The brewery, with an initial capacity of 4,000 barrels, will be located in the former Pabst brewing complex, in the basement of what used to be a bar and restaurant for brewery employees.

According to the Milwaukee Journal-Sentinel, the beer selection will include “historical beers such as Andeker and Old Tankard; traditional beers such as Dunkelweiss; and contemporary beers such as a Northeast IPA.” Of course, Pabst Blue Ribbon will be on tap as well.

The Pabst Milwaukee Brewery, which is scheduled to open next month, will eventually be part of a beer tourism district. The Pabst complex alone is already home to another brewery, a beer-themed hotel and restaurant, and a beer hall. The Jacob Leinenkugel Brewing Company is planning an expansion of its Milwaukee facility, and the Milwaukee Bucks NBA team is considering adding a brewpub to its arena.

Pabst’s Unusual Business Model

Pabst Brewing Company has 2 percent of the American beer market, which puts it in a class with Boston Beer Company and D.G. Yuengling & Son. But under Eugene Kashper, Pabst’s busimess model is much different than that of Boston Beer and Yuengling.

Jason Notte of Forbes magazine, who recently interviewed Kashper, writes that Pabst’s CEO is “also digging into corners of the beer industry where the competition hadn’t tread and using its strengths in marketing, production and scale to take on the big brewers on a much smaller budget”.

Kashper told Notte that his portfolio was “kind of in a sweet spot between big beer and craft” because his legacy brands not only have a following, but also own a library of recipes for craft-like beers that he can sell for less than the going price of craft. Kashper’s success stories include Stroh’s Bohemian, Old Style Oktoberfest, and Rainier Mountain Ale, all of which have strong regional ties.

In addition, Pabst has entered into partnerships with craft and import brewers to enable it to penetrate those segments of the market. Those partnerships emphasize the strength of Pabst’s distribution and grassroots marketing, which Kashper hopes will give it a fighting chance against brewing giants Anheuser-Busch and MillerCoors.

Craft Brewing’s Growing Pains

In the last couple of months, MarketWatch.com’s Jason Notte has seen disquieting trends in the craft beer industry:

  • Craft Brew Alliance’s Redhook brand announced layoffs at its Woodinville, Washington, brewery. The Woodinville plant is contract-brewing for Pabst Brewing Company, but the Pabst business accounts for only 30 percent of its capacity.
  • Stone Brewing Company, headed by fiercely independent CEO Greg Koch, admitted that it had received $90 million in private equity financing and would lend the Stone name to a hotel. It, too, is cutting jobs.
  • And homebrew supply retailer Northern Brewer has agreed to be acquired by than Anheuser-Busch InBev.
  • Notte doesn’t think these developments mean the craft beer bubble has burst. He writes:

    “If anything, it all begrudgingly recognizes that the players in all tiers of the beer industry have found themselves in the same predicament: Running a business in an environment where constant growth isn’t a given and where big decisions are often followed by unintended fallout.”

    The Significance of Snoop Dogg v. Pabst

    The legal battle between rapper Snoop Dogg and Pabst Brewing Company might sound like tabloid material, but the case is putting the spotlight on financing deals that have become increasingly common in the craft beer industry.

    Snoop Dogg contends that his agreement to promote Colt .45 contained a “phantom equity” clause: if Colt .45 were sold, he’d become a 10-percent owner of the brand. Pabst, which owns Colt .45 and numerous other brands, was sold last year. Pabst’s new owners told the judge that the sale changed “control” of Colt .45, but not its ownership—which was, and still is, Pabst. The case will be tried before a jury this fall.

    Marketwatch.com’s Jason Notte urges would-be buyers of craft breweries to do their homework or else face the possibility of a similar lawsuit. He points out that a number of craft breweries, some of them worth hundreds of millions of dollars, have legal obligations to meet in the event of a sale. For example, employees own a substantial number of shares of New Belgium Brewing Company, whose estimated valuation well over $1 billion. If New Belgium is ever sold, its employees are in line for a big payday.

    At least New Belgium’s ownership structure is straightforward. That isn’t the case of some other craft breweries, which are part of larger holding companies, controlled by private equity funds, or both. If those breweries have outstanding agreements like the Snoop Dogg contract, there are tricky questions as to what transactions would trigger the obligation to pay—and who actually has to write the check—after a sale occurs.

    Which brings us back to Snoop Dogg. Notte observes, “Snoop’s case against Pabst could set a precedent for how breweries in those umbrella portfolios are treated, and how they can treat their employees, investors and contractors, in the future.”

    Hello From Detroit!

    For the first time in 31 years, Stroh’s beer will be brewed in Detroit. Pabst Brewing Company, which acquired the Stroh’s trademark and recipes, has contracted with Brew Detroit to make Stroh’s Bohemian-Style Beer. It’s a pilsner, based on a Stroh’s recipe from the 1880s. The beer will be released beginning August 22. At least initially, it will be distributed only in Michigan, which accounts for 25 percent of Stroh’s sales nationwide.

    And if you’re in Detroit to try Stroh’s, Draft magazine has a rundown on the city’s top places to enjoy beer. Brew Detroit and several other breweries are on the list, along with a number of beer bars—including one, still under construction, that is made from shipping containers.

    The Friday Mash (New Albion Edition)

    On this day in 1579, Sir Francis Drake claimed a land he called Nova Albion (better known as modern-day California) for England. Nearly four centuries later, Jack McAuliffe opened New Albion Brewing Company in Sonoma, California. That started America’s craft beer revolution.

    And now…The Mash!

    We begin in Detroit, where Stroh’s Beer was last brewed more than 30 years ago. Pabst Brewing Company, which owns the Stroh’s brand name and original recipe, has made a deal with Brew Detroit to revive the “European-style pilsner” with 5.5 percent alcohol by volume.

    A new Colorado law will allow grocery stores to sell full-strength beer, along with wine and spirits. However, grocery chains are upset that it will take 20 years for the law to take full effect.

    With summer looming, Gawker’s Alan Henry offers a tip for travelers staying in cheap hotels. Those old-school air conditioners that sound like jet engines are great for chilling beer in a hurry.

    Japanese ballparks don’t have peanuts or Cracker Jack, but they do have biiru no uriko aka beer girls. These young women, who carry 30-pound kegs, work for beer companies, not ball clubs.

    Breakthrough or April Fool’s joke? Karmarama, a London firm, has designed glassware for MolsonCoors’s beer called Cobra. It calls the glass “the biggest innovation in pouring since gravity”.

    During the 1950s the U.S. government studied the effects of an atomic bomb blast. It found that beer a quarter mile from Ground Zero was “a tad radioactive”, but “well within the permissible limits of emergency use.”

    Finally, Special Ed’s Brewery in California learned a lesson in branding. The public objected loudly to its use of slogans such as “Ride the Short Bus to Special Beer” to promote a new beer, and labeling a beer ” ‘tard tested, ‘tard approved”.

    Pabst Brewing’s New Direction

    In 2014, businessman Eugene Kashper and two other investors bought the Pabst Brewing Company for $700 million. Under the previous owners, Pabst was a virtual brewery; it contract-brewed all of its beer—Pabst and a variety of other “legacy brands”–at MolsonCoors facilities and marketed those brands using nostalgia rather than advertising.

    Kahsper aims to take Pabst in a different direction. It will open a microbrewery and tasting room at the site of the former Pabst brewing complex in Milwaukee. The company will also revive more of the 77 brands that it owns. It will also delve into its collection of beer recipes and bring back classic beers, some of which were last brewed before World War II.

    Pabst recently made news by acquiring Small Town Brewery, whose Not Your Father’s Root Beer was the industry’s surprise success story of 2015. The product helped raise Pabst’s overall sales in 2015 by 20 percent and pushed its market share up by a percentage point, even as sales of Pabst Blue Ribbon Beer itself fell off.

    The Friday Mash (Jam Session Edition)

    On this day in 1956, The Million Dollar Quartet—Elvis Presley, Jerry Lee Lewis, Carl Perkins, and Johnny Cash—got together at Sun Studio in Memphis. Years later, tracks from of this impromptu jam session were released as albums in the UK and, later, in the U.S.

    And now…The Mash! 

    We begin in London, Ontario, where Lewis Kent has become the first Beer Miler competitor to turn pro. The 22-year-old University of Western Ontario student signed a deal with Brooks, a shoe company.

    Good news for Star Trek fans. Shmaltz Brewery is releasing the latest beer in the officially-licensed Vulcan Ale series. It’s a red session IPA called The Genesis Effect, and unlike Romulan Ale, it’s legal.

    Stung by feminists’ reaction to Bud Light’s #UpForWhatever ad campaign, Anheuser-Busch InBev plans to air woman-friendly spots for its beer during next year’s Super Bowl.

    George Washington loved his beer—porter, in particular, and occasionally brewed his own. A notebook Washington kept while he was a 25-year-old officer in the Virginia militia contains a recipe for “small beer”.

    Journalist Dina Mishev got over her aversion to beer, at least for the time being, after hitting the Bend Ale Trail. The Trail has 16 breweries, all within walking or biking distance from one another.

    In Milwaukee, Pabst Brewing Company’s 126-year-old bottling plant is being converted into apartments for college students. Unfortunately, the amenities won’t include free Blue Ribbon.

    Finally, Dogfish Head Brewery claims the distinction of having brewed the hoppiest beer on record. Hoo Lawd, an India pale ale, checks in at 658 International Bittering Units. Most IPAs fall in the 40-60 IBU range.

    The Friday Mash (Liberator Edition)

    On this day in 1783, Simon Bolivar, “The Liberator,” was born. Bolivar was instrumental role in making Bolivia, Colombia, Ecuador, Peru, and Venezuela independent of Spanish rule. Toast him with a glass of Polar beer, “The People’s Beer” of Venezuela.

    And now….The Mash! 

    We begin in Milwaukee, where Pabst Brewing Company is returning to its original location. Pabst’s owner, Eugene Kashper, says the brewery will new small-batch beers, based on Pabst’s archived recipes, while staying true to its roots.

    A new Indiana law classifies retirement communities as homes, so they no longer need a liquor license to serve alcohol to residents. One problem not likely to occur: underage drinking.

    Mark your calendars. Next year’s Beer Bloggers & Writers Conference will be held at the Tampa Marriott Waterside Hotel & Marina. The dates are July 8-10.

    Jackie Speier, a congresswoman from California, announced on her Facebook page that she’s introduced legislation that would allow the U.S. Postal Service to ship alcoholic beverages.

    The clever folks at Printsome.com have designed beer labels to match the personalities of Facebook, Google, Nike, and 14 other highly recognizable corporations.

    Yes, you can get an India pale ale—along with a host of other craft beers—in India. The subcontinent’s first brewpub, Doolally in the city of Pune, opened its doors in 2009. A slew of others have followed.

    Finally, the Buffalo Wild Wings in Tacoma displays a bottle of Corona with a lime slice underneath an American flag. An unidentified woman ordered the Corona and placed it in front of an adjoining seat in honor of her brother, who was killed while on duty in Iraq.

    The Friday Mash (Baseball Hall of Fame Edition)

    On this day in 1939, the Baseball Hall of Fame opened in Cooperstown, New York. Currently, 310 people are enshrined in the Hall. They will be joined this summer by Craig Biggio, Randy Johnson, Pedro Martínez, and John Smoltz.

    And now…The Mash!

    We begin in Bavaria, where President Obama and German Chancellor Angela Merkel rankled traditionalists by drinking non-alcoholic weissbier during the G-7 conference of world leaders.

    Collaborative brewing has taken off in the past few years. One notable collaboration is the one between San Diego’s Green Flash Brewing Company and Belgium’s St. Feuillien.

    Snoop Dogg has filed a breach of contract suit against Pabst Brewing Company. He contends that the brewery’s sale of Colt .45 triggered a clause entitling him to part of the purchase price.

    You’ll have to wait to buy a bottle of Founders Breakfast Stout in New Hampshire. Citing the state’s underage-drinking problem, Governor Maggie Hassan vetoed legislation that would allow children to be depicted on beer labels.

    Tech Times has assembled a list of 13 beer apps for Android and IoS that are generally rated at the top of their category:

    Hard cider sales have skyrocketed in Central Europe, the home of the world’s heartiest beer drinkers. Global brands like Heineken and SABMiller are trying to cash in on the trend.

    Finally, Josh Noel of the Chicago Tribune hosted a panel of beer experts headlined by Randy Mosher at the famed Map Room to discuss the state of craft brewing. There are more than 60 breweries in Chicagoland.

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