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Dick Yuengling talks craft beer, Donald Trump and family ownership

Dick Yuengling - (Photo / Amy Spangler)

At an old D.G. Yuengling & Son warehouse in Pottsville, a 15-year-old Dick Yuengling was tasked with stamping over the number eight on cartons of Yuengling’s porter-style beer after the Schuylkill County brewery shifted to 7-ounce bottles.

Six decades later, the 73-year-old owner of America’s oldest brewery still remembers that first job. He had to stamp almost 6,000 cartons of beer, earning a penny per case.

A 7-ounce porter bottle is one of many items on display in the company’s gift shop and museum, across the street from the family brewery, built in 1831.

Yuengling recounted the story in the back of the museum as he pondered the company’s future.

His grandchildren — he has nine — would be the seventh generation of Yuenglings in the business. He hopes they come to enjoy it and learn it like his four adult daughters, who are all active in the business. Early signs are encouraging. This past summer, his 14-year-old grandson got a chance to help build pallets of beer in the warehouse for shipment to wholesalers.

“I wanted to see what he was like and he loved it,” Yuengling said.

Yuengling, who still gets in around 5 a.m. every day, still loves it, too. He remains involved in daily decisions and takes care of any problems.

Amy Spangler

He said he just likes to “keep the flow going, keep things moving.”That includes tasks like making sure the gift shop has fresh beer on tap. It’s not uncommon for him to return in the evening to make sure delivery-truck drivers are getting in and out quickly. Occasionally, he will jump on a forklift.

But he also knows how to hire good people — namely the brewers, a job he’s never held himself — and stay out of their way.

“My children will have their challenges when their time comes,” he said. “Their time is coming pretty quickly. I just want to make sure they understand why I’ve done things and why I haven’t done things, and that they don’t get delusions of grandeur.”

Yuengling sat down with the Business Journal to talk about the craft beer industry, why he is still fighting to keep the company growing and what he is hoping to see under President-elect Donald Trump. Yuengling endorsed Trump before the election, which led to boycotts by some people opposed to a Trump presidency.

Q: You’ve seen a lot of changes over the last 30-plus years. What’s been the biggest change in the beer industry in just the last five?

A: The craft segment is growing tremendously and good for them. There’s an opportunity for the consumer to sample other brands beside Bud, Miller and Coors, who control 85 percent of the American beer industry. It gives the consumer options.

It’s helped us and hindered us in other ways. A lot of bars are just simply putting all (small) craft beers on, and they are not for everybody. It’s kind of hurt us a little bit, but we got through Prohibition. We’ll get through this.

About Dick Yuengling

Lives: Pottsville
Favorite hobby: Golfing
Favorite place to visit: Fort Lauderdale, Fla.
Other beers in his fridge besides Yuengling: None, he said, unless a visitor slips one in.

There is so much available to the consumer today and Yuengling has even added seasonal beer styles in recent years. Do you need to add brands to build awareness of your company, even with your long history?

Yeah, we do. I didn’t want to do it. They are not difficult to make, but they are difficult to make with consistency.

It’s so diluted out there with all these different seasonal beers that a lot of retailers are backing off on whose beer they handle and how much of it. If you do it right and the consumer does sample it, they like it, maybe they buy your lager brand or your light lager brand.

You credit Jim Koch of the Boston Beer Co. (maker of Samuel Adams) as the guy that changed the beer business for craft brewers. Why don’t you make 60 styles of beer like him?

I don’t want to do that. It depletes your efficiencies in a brewery by having too many different products. We’re very lean. We run with only a few SKUs — 6-, 12- and 24-packs.

But isn’t it worth dusting off old family beer recipes so consumers align more with your history?

We’ve kicked it around and we haven’t done it. I don’t know that we’re big enough to do it and do it successfully. We already make seven year-round beers and three seasonals. I don’t want to make 60. The retailers are flooded with seasonals and new brands out in the market.

Do you face distribution challenges, even at your size?

We face it because Anheuser-Busch doesn’t want us in their network.

We just went into Louisiana. We’ve added capacity to the brewery. Now we’re looking to either sell more in our core markets, which is Pennsylvania and surrounding states up and down the East Coast. We have the opportunity to grow because so many wholesalers want our brands. (But) we don’t have to do anything. Financially, we’re fine. We don’t have to be all over the country.

We’re in 19 states now.

Are you planning five or 10 years out at this point in your career?

I don’t look 10 years out. You don’t know what’s going to happen in the next two years, let alone in 10. The beer volume is down nationally. The three big national brands have lost 24 million barrels over the last 7 years. That’s a lot of beer.

At No. 4 in the country, Yuengling gets lumped in with the big three brands. How do you feel about being called a national brand?

Yes, we do get lumped into that. We don’t like it but that’s the perception. It took us 187 years to get to this point. Give us some credit.

Probably when we went over the 2 million barrel mark the craft brewers and restaurants put us in that category. They say “you’re a national brand now.” It is what it is and you fight through it.

What do you like most about coming to work these days?

We’re running the game of efficiencies. In order for us to compete with the national brands, we don’t have the buying power that they have, so we have to operate as efficiently as possible and get as many cases of beer out of here in a day as we possibly can. And we do that.

Also, I went through the dark days when your Reading Brewery and all your coal-region breweries were going out of business. And I don’t forget that.

It may not always be this way, so I fight to keep us ahead, try to keep growing.

The three national brands are all now internationally owned. Their beers are made in the U.S.

That’s an issue because there are different tax rates throughout the world. That’s why a lot of companies are moving overseas.

To stop it, you have to give (U.S. businesses) a reasonable tax rate so they can reinvest. I wouldn’t do that. We’re America’s oldest brewery and it’s not going to be internationally owned.

Amy Spangler

You supported Donald Trump. How much confidence do you have that he will level the playing field and reduce taxes and cut regulations? How would you reinvest if business conditions improved?

We’re just hoping that President-elect Trump does what he said and he reduces regulation and taxes on U.S. businesses. That’s why he was elected. I think he will keep businesses in the U.S.

Nobody has invested as much as we have in brewing since I bought the company. I built a brewery, bought one and increased jobs. We had 40 or 50 people when I bought it. Now we have about 360. I am investing in the business in spite of the (business climate).

There were 70 breweries in the U.S. back then. Today there are 5,000. That’s fine because all or most are U.S. brands, except for the major companies.

So no regrets in making that endorsement before the election? You faced some boycotts.

I’m 73. I’ve been around since 1958. I’m going to speak my mind.

I don’t think it impacted us a whole lot. Some of the letters were disgusting and phone calls to people in our office. We got a lot of vulgar messages. But at the same time, there were those that favored Trump who said “I don’t drink your beer, but I’m going to start.”

Defining craft breweries

The Brewers Association, a Colorado-based trade group for the beer industry, defines craft breweries as those with annual production of 6 million barrels of beer or less.

D.G. Yuengling & Son and the Boston Beer Co., maker of Samuel Adams, are the two largest craft beer makers in the country, according to the association’s 2016 rankings, based on 2015 production levels. Tröegs Brewing Co. in Derry Township was No. 45.

Other than taxes and regulations, what are concerns you have about this industry?

We have to get the (materials) pricing that the major breweries have to compete with them. That’s our biggest problem.

Right now, the glass, can and packaging companies have treated us OK. But you never know when one of the major breweries is going to buy one of those companies and shut us out. That’s what scares me more than anything. They are already buying craft brewers.

Why not make acquisitions?

I don’t want to do that. Our breweries aren’t big enough to do that. We don’t have the capacity. I would rather fill it up with our current brands and hope we can survive that way.

We could come up with different products if we wanted to. We don’t have to buy anybody out. That’s not what we’re about.

You left the business in the 1970s and later came back to buy it. Do you still think about that 11-year period?

It was tough because it really wasn’t what I wanted to do. It was the only thing I knew. All I knew was beer.

But I learned a lot and met people. I met the guy who started moving our brand into the Philadelphia market. I give him all the credit in the world for getting us on the right track to do what we’ve done. (That was) Tony Casinelli. His son, David, is working for us. It gave me an opportunity to meet people outside of Pottsville. I met a lot of wholesalers, a lot of whom are our wholesalers today.

Have you set a timeline for yourself on working?

I don’t think I’m going to make 100. I can barely get through a round of golf anymore.

I haven’t gained a pound in 20 years. I try to keep myself in good shape, eat good food and drink enough beer to keep me happy.

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