Yuengling Oktoberfest Coming in Bottles / 6-Packs for 2012

Pottsville, Pennsylvania-based D.G. Yuengling & Son, the  country’s oldest brewer, continues to thrive as other traditional U.S.  brewers struggle. Yuengling, which entered its 15th market last year  with expansion into Ohio, posted a 14% jump in volume to 2.5 million  barrels in 2011. Strong demand has prompted Yuengling to begin building a  new brew house at its Tampa brewery—a move which will add needed  capacity. Yuengling COO Dave Casinelli spoke recently with Shanken News  Daily about the company’s prospects for continued growth.

SND: After a strong 2011, how are Yuengling’s current sales trends?

Casinelli: Year to date, in markets excluding Ohio, our  business is nearly up by double-digits. Given the climate of the beer  business, that’s pretty darned spectacular. If you include Ohio, our  shipments year to date are up 30%. Right now, our market share in Ohio  is between 5% and 6%, but in some channels—such as chain stores—we have a  share in the double-digits. The only downside to the phenomenal rollout  in Ohio is that it has put a big bullseye on our back for the big  brewers. Meanwhile, we’re on fire in Florida  and helping drive a  rebound in the beer market there.

SND: What’s your growth projection for Yuengling in 2012?

Casinelli: We’ll definitely be up double-digits again this  year. The question is how big. We expect to break 2.8 million barrels.  There’s even an outside chance that we’ll get close to the  3-million-barrel mark this year. Lager was up right around 10% last  year. Light Lager is one of the fastest growing brands in the country.  In our chain data, year to date, it’s up about 160%. We expect to have a  big banner year with Light Lager this year, and for the first time,  it’s receiving its own advertising.

SND: What’s next? Are you looking at additional markets?

Casinelli: We’ve always got expansion in the back of our  minds, but for right now we’re trying to ensure that at our physical  plants we’re getting every drop of beer out as efficiently as we can. At  about 4 to 4.5 million barrels, we don’t have unlimited capacity. We  have major capital projects underway to increase our capacity. There’s  no market specifically on the drawing board in terms of expansion, but  we’re looking at those things. Obviously, for us to keep growing, at  some point in time, a capacity acquisition—buying or building—has to  come back into play.

SND: What’s new from Yuengling?

Casinelli: With the exception of Yuengling Oktoberfest  available in six-packs for the first time, there will be nothing new.  Everyone says that new product innovation and packaging mix drives the  industry, but that’s not our business model. We offer one of the fewest  SKU mixes in the industry. Whatever they teach you at Harvard Business  School, we do the opposite.