Boston Beer Co in Pennsylvania

[ratman03]

Is the Boston Beer signs deal to buy brewery story in the headlines section referring to the Latrobe brewery?

[jesskidden]

Originally posted by ratman03
Is the Boston Beer signs deal to buy brewery story in the headlines section referring to the Latrobe brewery? .

No, it's the old Schaefer>Stroh>Pabst>Diageo(Smirnoff) facility in Eastern PA., near Allentown on Rt 22/I-78, built in the early 1970's. But, according to the article linked below, the deal with City to brew Sam Adams in Latrobe (and possibly buy into the brewery) is not dead. (The construction of a Boston-area new brewery, tho', is dead if the deal with Diageo goes through.)

http://charlotte.bizjournals.com/milwaukee/stories/2007/07/30/daily49.html

[newportstorm]

Sad for SE Massachusetts. Though the deal was a longshot, many jobs would've been created in Boston Beer Company's home state. Financially, it makes sense for BBC to buy instead of build, but I'm sure many Bay Staters won't be happy with this decision.

[jesskidden]

Originally posted by newportstorm
Sad for SE Massachusetts. Though the deal was a longshot, many jobs would've been created in Boston Beer Company's home state. Financially, it makes sense for BBC to buy instead of build, but I'm sure many Bay Staters won't be happy with this decision.


The financial factor is almost shocking (even with the excess capacity the macro brewing industry had a few years ago with the closing of all those Stroh and Heileman plants during the past decade or so)- Schaefer spent $49 Million on that brewery in the early 70's (Stroh put some bucks into the place to convert it to "fire-brewing") and BBC is paying $55 M- try finding a house that's selling for 113% of it's 1972 price. And, then consider the current increase in copper and stainless steel prices.

So, since Koch has spent the last 20 years telling people that the location of a brewery isn't important-

" "If a beer is good," he points out, "it doesn't matter where it's made. People drink the beer, not the label. When we started brewing here in Boston, our sales didn't go up appreciably. To me, that's a tribute to the intelligence of our drinkers. Only an idiot would drink a beer just because it's local, and I can't build a business for my children by selling beer to idiots.

"The way I see it," Koch observes, "local brewing could be just a fad, and if it's a fad, my kids won't have anything. Beer can't just be local, it has to be fresh and good. Unfortunately," he says, "just because a beer is brewed locally doesn't guarantee freshness - I think Miller and Budweiser are fresher than most micros on the shelves."


http://findarticles.com/p/articles/mi_m3469/is_n37_v41/ai_8889924

... I guess he won't have to change his "party line" on that one. And he is getting *closer* to Boston- Cincinnati>Latrobe>Allentown.

One does wonder if he's ever sorry that he named the company "Boston" in the first place...

[newportstorm]

Idiots? While I wouldn't drink a beer "just because it's local", I certainly would support my local brewery given the choice of their Amber/IPA/Porter/etc. over one from another region, assuming flavor was a wash.

Jim Koch is about "brands" not locale. Always has been. I remember the flack he took from some brewers when BBC had the Oregon Ales line of beer - not made in Oregon. Quite sad Jim can't understand having local pride in something made in your own town/state/region by people you might personally know.

Jim stated something in that article about micros upholding the marketing they pitch to consumers. Guess Jim forgot that point when he released the "Beer Drinker's Bill of Rights" a few years back - a laughable marketing campaign containing many "rights" that contradicted some of Jim's own Samuel Adams beers.

Look, I've no problem with the man building a business for his children to inherit, but namecalling and spin doctoring aren't the way to do it.

Or is it?

[steveh]

Originally posted by newportstorm
...assuming flavor was a wash.

And that's really what he's saying there. There are so many in Chicago (and those wanting to try, once they get here) who are saying Old Style is the only Chicago beer to drink. First off -- Old Style never was a Chicago beer, it was from far western Wisconsin. Secondly, it's now owned by a big conglomo who decided it may be a good idea to move its HQ (or at least a P.O. box) to the Chicago area for appearances (the Old Style radio campaign is "Think Local, Drink Local -- uh, yeah). Lastly, and the bottom line to it all -- the beer is still swill.

Koch is correct, to some point - if not a little course, it's the beer in the glass, not where it's made. But yes, a local that's brewing good beer is just all that more better.

And Jess, there only ever was one Heileman "plant" -- as least with that particular exclusivity.

S.

[newportstorm]

Originally posted by steveh
There are so many in Chicago (and those wanting to try, once they get here) who are saying Old Style is the only Chicago beer to drink. First off -- Old Style never was a Chicago beer, it was from far western Wisconsin. Secondly, it's now owned by a big conglomo who decided it may be a good idea to move its HQ (or at least a P.O. box) to the Chicago area for appearances (the Old Style radio campaign is "Think Local, Drink Local -- uh, yeah). Lastly, and the bottom line to it all -- the beer is still swill.


Same in RI with Narragansett. None of their beer (save for small draft-only batches of their Porter) is brewed in RI. It's all brewed in NY (High Falls Brewing Co.) or CT (Cottrell Brewing Co.). Yet, the 'Gansett comeback is in full swing and doing well with older RIers who remember the brand fondly and newer beer drinkers caught up in the "retro is cool" wave.

I bought in, briefly, until their sixers started moving past $6-7.

[jesskidden]

Originally posted by steveh

And Jess, there only ever was one Heileman "plant" -- as least with that particular exclusivity.



I was referred to Heileman the corporation (not the beer itself) that owned breweries all over the country (tho' they never really bothered to try to crack the Northeast market)- Seattle (Rainier), St. Paul (Schmidt), Baltimore (Carling/National), Kentucky (Weidemann), a couple in Illinois, eventually Blitz-Weinhard in Portland & a Pabst plant in Pabst, Georgia (in a strange deal where they bought Pabst, kept some breweries and beers and spun off "New" Pabst)are the ones I can recall off hand, and a handful of others (even Pittsburgh/Iron City for a short time after Heileman was bought by Bond).

Many of the breweries, of course, continued to be better known under their "old" name, but they were all part of The House of Heileman (as their promo material read).

Can't quite recall which were still open or which beers they brewed where, when they sold out to Stroh in the mid-90's.

[steveh]

Yeah, that was a big conglomo that bought Heileman then sold to Stroh's -- I believe they owned Heileman less than a year. But it wasn't the original Old Style people, and I believe the corporation wasn't titled Heileman -- have to look into it.

S.

[jesskidden]

Originally posted by steveh
Yeah, that was a big conglomo that bought Heileman then sold to Stroh's -- I believe they owned Heileman less than a year. But it wasn't the original Old Style people, and I believe the corporation wasn't titled Heileman -- have to look into it.

S.

Don't really know what you mean by "original Old Style" people- Heileman for many years in the 70's and 80's was run by Russ Cleary and it was under him that they bought Rainier, Carling/National, Blitz-Weinhard, etc.


A big Australian corporation called Bond bought Heileman and then went bankrupt (they closed some breweries, spun off a few, too, IIRC, like the ones in St. Paul and one of the Illinois one) but the company was always called "Heileman", even when it was owned by an investment firm at the end of it's life, as this Brewers Digest article shows, when Stroh bought the remains of the company-

http://findarticles.com/p/articles/mi_m3469/is_n10_v47/ai_18191918

[steveh]

Yep. Here's another link:
http://en.wikipedia.org/wiki/Heileman_Brewing_Company

Bond was the company I was thinking about that sold out to Pabst (really the big conglomo that had purchased the Pabst name and was HQed in Texas).

What I was referring to as the "original" Heileman was, as you pointed out, the only brewery with the name -- and only brewing Old Style and Special Export up to the early 80s.

S.

Edit: This is another good link, showing the conglomo mess created in the wake of Bond too, but there's no mention of Bond in the Old Style chapter: http://en.wikipedia.org/wiki/Old_Style_Beer#Old_Style

[jesskidden]

Originally posted by steveh

Bond was the company I was thinking about that sold out to Pabst (really the big conglomo that had purchased the Pabst name and was HQed in Texas).




No, Bond was an Australian firm.
http://www.australianbeers.com/history/bond.htm

The outfit that bought Pabst, was the S&P Corporation, which became known as the Kalmanovitz Charitable Trust after the death of it's head, Paul Kalmanovitz. He also owned General, Falstaff and Pearl (all of which were folded into Pabst eventually).

(Just don't ask me how I can remember all this, but have to ask my wife the names of her neices and nephews when we go down the shore to visit the in-laws...<g>).

[MeridianFC]

Who's on first?

[steveh]

Originally posted by jesskidden
No, Bond was an Australian firm.

I wasn't talking about Bond there, I was talking about "Pabst," which really wasn't Pabst any more.

S.

[steveh]

Originally posted by MeridianFC
Who's on first?

Yeah, the meat of the matter is that "local" don't mean diddly.

S.

[jesskidden]

Originally posted by MeridianFC
Who's on first?

One good thing about trying to remember all the mergers and buyouts in the brewing industry (and you got to remember them, 'cause the internet is full of mis-information, so you can't trust Google- even the New York Times reprints articles like how Heileman purchased Schlitz in the early 80's, neglecting to mention that the Anti-Trust Fed Regulators knocked it down, so it never happened) is that after you think you get it straight and post it, the first impulse is to say, "I gotta have a beer!"

And, so, I just opened a Victory Hop Devil....ah, makes it all worthwhile...

[jesskidden]

Originally posted by steveh
Yeah, the meat of the matter is that "local" don't mean diddly.

S.

Well, it's a global industry now, dominated by multi-nationals, so a "local" beer refers to one brewed in the very same hemisphere that you're drinking it in! Maybe even on the same *continent*! Wow. When the wind blows right , maybe you can even smell the brewery [or maybe that's just the recycling bin underneath the window...].

[Mill Rat]

There are a few very good arguments in favor of a brewer with an expanding market brewing in more than one location.

First, beer that's been driven around in a truck for a week is never going to be better than has stayed more local. It is at great risk of being far worse for the experience.

Second, trucking beer around is expensive. By weight, beer is pretty darn cheap:

One case of beer ~ 2 gallons, 2 gallons is about 16 pounds, packaging adds another 4 pounds. 20 pounds per case, best "case" scenario.

100 cases weighs 2000 pounds. Lets say it's craft brew, so a case is 40 bucks, so a ton of beer costs $4000.

A fairly inexpensive car costs $20k, and weighs 2 tons. That's $10k per ton. Delivery (shipping) charges can add several hundred dollars to the delivered cost of a car.

So it's going to cost a lot to truck beer long distances. So trucking the beer a long way is going to add quite a bit to the cost of the beer that has nothing at all to with the quality of the product.

Third, all that trucking around dumps more greenhouse gases into the atmosphere.

As long as a brewer is able to maintain product quality at the satellite breweries, I'm all in favor of it.

[jesskidden]

In this case, however, the shipping costs don't really factor into this decision, since, if anything, BBC's brewing sites are even more concentrated in the Northeast-Mid-West than before- Cincinnati, Rochester (High Falls), Latrobe (City), Allentown. (BBC's contract with City's WI facility seems to be mostly for their Twisted Tea line.)

One of BBC's upcoming problems is that their contract with Miller, which brews SA in NC, is about to end. Miller picked up the contract when Stroh went under and Pabst and Miller divided up those brands and, in a side deal, Miller took over the Pabst-owned Washington brewery in Tumwater (former Olympia plant) that brewed SA for the West Coast.

When Miller closed that brewery a couple of years later they tried to get out of the BBC contract and BBC was forced to go to court to make Miller fulfill it, and Miller now picks up the extra shipping charges TO the West Coast from NC.

"Additionally, Miller is obligated to assume the cost of incremental freight to the areas previously supplied by the Tumwater Brewery and the Stroh Brewery in Allentown, Pennsylvania for that production from the Eden Brewery."

http://sec.edgar-online.com/2004/03/11/0000950135-04-001217/Section2.asp

So, if anything, BBC will now have they added cost of shipping their beer to their west coast markets from their breweries and contractors' breweries in the Northeast.

[unholyinferno]

Does this mean that Sam Adams will no longer be brewed here in Boston? I think Boston Beer Works is near Fenway Park. Are they leaving?

[jesskidden]

Originally posted by unholyinferno
Does this mean that Sam Adams will no longer be brewed here in Boston? I think Boston Beer Works is near Fenway Park. Are they leaving?

Boston Beer Works is a separate, unrelated company. And it seems to have dropped the "Boston" in it's corporate name (maybe because they now have several other brewpubs), even tho' BBC lost a lawsuit against the Boston Beer Works company in the 90's.

http://www.beerworks.net/#

http://www.ca1.uscourts.gov/cgi-bin/getopn.pl?OPINION=93-1290.01A


Boston Beer Company's (brewers of Samuel Adams beers) headquarters is in Jamaica Plains, MA in the former Haffenreffer Brewery, and they also have a small brewery there (10,000 bbl capacity when built) which is almost exclusively draught for the local market and for pilot brews, etc. The purchase of the Lehigh Valley plant in PA will have no effect on that brewery, tho' plans for a proposed large brewery in MA are apparently dead if the deal goes through.

[unholyinferno]

Hopefully the PA deal won't go through.

[jesskidden]

Originally posted by unholyinferno
Hopefully the PA deal won't go through.

Ah, an "IMBY" attitude- that's cool. Most companies have to fight the "NIMBY" impulse, but then many of those companies are nuclear power plants, garbage sorting facilities, prisons or slaughterhouses not breweries. (Altho' breweries run into NIMBY a lot, too- Flying Fish dropped plans for a new brewery because of such a reaction.)

Seems I recall figures that suggested the MA brewery was going to cost BBC $200 million and had a proposed capacity smaller than the PA plant they hope to pick up for around a quarter of that price- $55 million.

Hard to argue with a financial deal like that and Koch has always been a good businessman (if not always concerned with loyalty to the town who's name he took for his corporation).

Ah, give Jim a break- think of all the money he's spending sending out all those ugly free beer glasses (you bet I faxed in my license for mine!)- no wonder he can't afford a new brewery.

[unholyinferno]

Do you know if Beer Works in Boston gives tours of their brewery? I'd love to know how beer is brewed and try some samples of their beer.

[jesskidden]

Originally posted by unholyinferno
Do you know if Beer Works in Boston gives tours of their brewery? I'd love to know how beer is brewed and try some samples of their beer.

Boston Beer *Works* is a chain of brewpubs, and, as such, will gladly sell you their beers and usually have small "samplers" with a variety of brews. "Tours" as such don't usually take place at brewpubs- check the website linked above.

Boston Beer *Company* (Sam Adams) tour info here:

http://www.samueladams.com/ne_events.aspx

Wait a sec- you're not associated with one of breweries and just pulling my leg, are you?

[jesskidden]

Originally posted by jesskidden


Seems I recall figures that suggested the MA brewery was going to cost BBC $200 million and had a proposed capacity smaller than the PA plant they hope to pick up for around a quarter of that price- $55 million.

Hard to argue with a financial deal----

Well, maybe it is. Looks like the place wasn't well maintained as a "malternative non-brewery":

"...As previously reported, the Company has entered into a Contract of Sale to purchase from Diageo North America a brewery located in Lehigh Valley, Pennsylvania for $55 million. The Company currently believes, based on information available to it, that restarting the brewhouse and completing other necessary upgrades to the brewery may cost between $30 million and $75 million, but, until the Company completes its evaluation of the brewery and its potential during the due diligence period, it will not be possible to estimate precisely the total cost of any required renovation and upgrades or the operating and financial statement impact to the Company....

http://biz.yahoo.com/prnews/070807/netu120.html?.v=10

And the old Schoenling plant isn't doing much better:

"The Company has been experiencing some issues at the brewery it owns in Cincinnati due, at least in part, to the extended twenty-four hours a day, seven days a week production. These issues have added costs, produced service levels below the Company's expectations, presented challenges for maintaining the facility to the Company's quality standards, and in some cases has required the Company to hold or destroy product which did not meet these standards."

[ratman03]

Originally posted by newportstorm
Yet, the 'Gansett comeback is in full swing and doing well with older RIers who remember the brand fondly and newer beer drinkers caught up in the "retro is cool" wave.

I bought in, briefly, until their sixers started moving past $6-7.

'Gansett is the new PBR then...

[ratman03]

Originally posted by steveh


Koch is correct, to some point - if not a little course, it's the beer in the glass, not where it's made. But yes, a local that's brewing good beer is just all that more better.

S.

By the way, did anyone notice the article date was 1990? That's a looooong time ago in both chronological time and industry time. I think that Koch would sound different if he were giving the same interview today. He took a shot at Harpoon (the paddle logo), something that probably wouldn't happen now that both are far more established; competitors tend to do that at the onset of a market opportunity.

I agree it would have been better if BBC brought it back home to Freetown, but these are business decisions with big implications at the level they are at.

[newportstorm]

Originally posted by ratman03
'Gansett is the new PBR then...

It's not a horrible beer. When sixers of tall boys were $3.99, I'd keep some around regularly for guests, BBQ days, etc. Now that some locales want $6+ (nearly $8 for the bock), I pass.