Plans for New $50 Million Brewery Announced

America's newest brewery will soon join America's oldest brewery.

The announcement was made official May 6th by Lieutenant Governor Mark S. Schweiker. The new $50 Million brewery will be located across Mill Creek Avenue near the Saint Clair Industrial Park.

The new brewery will triple Yuengling's current brewing capacity producing up to a million barrels annually. This will greatly complement operations at the Mahantongo Street plant. The new brewery is expected to create an estimated 100 jobs upon opening in late 2000.

State and local officials crowded the brewery's museum and gift shop to hear the expected press conference. Schweiker outlined a proposed state aid package making the planned expansion possible for Yuengling. The aid package included job-creation tax credits and elements in relation to tourism activity.

Executive Vice President David A. Casinelli was quoted Thursday morning "When Dick took over the brewery in 1985, many nay-sayers believed it was the beginning of the end of the Yuengling Brewery. Now the question is not how to keep it alive but how to fulfill the demands of the future."

To do this, owner Richard L. Yuengling Jr. has committed to building the new plant to meet new market objectives for the future.

"We're going to do this, and we're going to make it successful. We have the top wholesalers, and we really need you to get behind this program," Yuengling stated.

The historic brewery will produce an estimated 250,000 barrels annually with the start-up of the new location. This is less than half the quantity produced in 1997 by the plant. Yuengling commented, "It will be used more as a tourist attraction than a brewing facility. Tourism is a big piece of our marketing plan."

Yuengling announced an unusual request for his wholesalers, "What we're going to expect from you is to try to hold down the growth of these brands" he stated, "It's a hard thing to ask...but it will pay off in the end."

Yuengling has traditionally struggled with expansions and technological improvements at their historic location. According to vice president of operations, James L. Helmke, from 1990 to 1997, the company experienced a growth of 383 percent. Between 1990 and 1998, the brewery's capacity has grown from a staggering 160,000 to 600,000 barrels. The historic site however is close to reaching its limit in production. Helmke states, "We're not going to do anything to sacrifice the quality of our product."

A planning committee checked out options from doing nothing about rising production needs, to the decision to build a second brewery.

Helmke stated, "Analysts will tell you this is probably crazy but given the niche we're in, we don't think there is another option." He cited the rising number of breweries closing across America.

The following options were considered by the committee:

• Upon considering taking no action, the committee concluded that inaction would risk the future of Yuengling Brewery.
• Many breweries were interested in purchasing Yuengling, however experience showed that when larger breweries like Miller buy smaller breweries, the smaller brands usually die.
• Yuengling contemplated entering into a brewing agreement or acquiring an existing brewery. However, it was decided that Yuengling's future was centered on the core market.
• Expansion at the current plant was also considered.
• Another possible plan was contract brewing, Black and Tan for example is already produced at Stroh's Brewing located in Allentown. It was thought that further contracting other breweries would create a quick a quick increase in capacity. While expressing a concern over the flavor of the product, Helmke stated that with technical adjustments it could probably be done.

Loss of the Pottsville identity was a major concern for Yuengling, however.

Yuengling wanted to keep his small regional brewery image. Helmke stated, "This is the market we've chosen to pursue. Part of the secret of the success of this brand is that it's made in Pottsville, a small regional brewer."

Speaking of many micro breweries inability to take advantage of marketing potential, Helmke stated, "They've underestimated the desire of the public to have a regional brewery."

"Our priority is to be the best regional brewery," Casinelli stated.

Wholesalers are now encouraged to focus on Yuengling products other than lager, which is the fastest growing product. Lager draft production is up 63% over 1997. Othe factors such as non-returnable bottles, six packs of non-returnable and cans have increased respectively. The brewery however does not want to be known only for there best selling lager. The company does want to meet consumer demand as the new brewery goes under construction.

Casinelli states, "It was my opinion to agree with Dick that I would rather wait two years then take my flagship brand somewhere else. We feel it's in our best interest to protect the brand, and there's no better way to do it then to keep it in our own hands."

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