Yuengling’s Success Defies Convention 
By MARJ CHARLIER
Staff  Reporter  of THE WALL STREET JOURNAL
POTTSVILLE, Pa. 
Don't tell Dick Yuengling that the only way to gain market share in the flat beer market is to expand sales  territory, advertise like crazy and slash prices. He has done exactly the opposite at D.G. Yuengling & Sons, the nation's oldest brewery, and his sales have skyrocketed.
      Mr. Yuengling, the fifth generation of his family to run the 164-year-old brewery, now has trouble making enough beer to satisfy rising demand. "We were considered a cheap coal-region beer in the 1980s," Mr. 'Yuengling says. "We've changed that overnight."
      Like a handful of other old regional breweries, Yuengling, which for decades operated in relative obscurity out of this old coal mining town, is enjoying a resurgence.  The reasons include a rise in regional pride, the growing popularity of microbrews and, a slight slippage in the popularity of the top national brands.  But unlike most of the other surviving regional breweries, Yuengling has enjoyed a revival without selling out to a big brewer, brewing beers under contract for companies like Boston Co (Which makes Samuel Adams brand, or lowering its prices. "To this day, it's the only brand of beer with no rebate or coupon in our market says Anthony Casinelli, sales manager for L&M Beverages Co., the Philadelphia distributor for Yuengling.

to the family business after his father fell ill, it looked like Yuengling was headed for the same fate. The brewery's beers were being discounted to retain market share – even Success Defies Convention Yuengling 's switch to the new label at right has helped the regional brewer to increase sales.
The company's venerable porter, a dark beer, was selling at a discount to its regular price.  But sales still were slipping, and the beer was being kept alive by rural Pennsylvania drinkers, who consumed upward of 90% of the product.
      Not wanting to be the Yuengling who presided over the end of the family brewing business, Mr. Yuengling, now 50 years old, invested all of the company's earnings in updating the brewery and adding  new equipment, Noting the success of light beers and such new. Fuller-flavored brands as Anchor Steam, brewed by Anchor Steam Brewing Co., and Samuel Adams, he asked his brewmaster to add similar brews to the company's traditional line of beer, ale and porter. Later, he added Black and Tan, a mixture of regular beer and porter.  But even with the new beers, the company lacked the right image to survive. Mr. Yuengling's distributors told him. They urged him to hire a marketing person, David Casinelli. Mr. Casinelli, the 33‑year‑old son of  the sales manager at L&M in Philadelphia, persuaded his new boss to hire, professionals to design new labels. The labels were given an artsy, nostalgic look, and Mr. Casinelli fashioned the company's promotions to focus on the brewery's place in Pennsylvania history and regional pride, "I don't even want to know-how much it cost," says Mr. Yuengling three years later. "But David, made me do things that, built a new image for our brands.

Raising Prices
      Using the new look. without altering the, original formulas for Yuengling's beers Mr. Casinelli was able to switch the brand to more aggressive wholesalers throughout Yuengling's eastern seaboard territory. And he promoted another new marketing 'strategy: He raised the price to above‑premium levels and pushed it at high-end on-premise accounts in such places as Philadelphia's Historic District and Penn's Landing area, which gained the beer more cachet.
He succeeded in gaining tap handles up and down the waterfront nightclubs at Penn’s Landing. such as the Chart House, Rock Lobster and‑Eli's Pier 34, and in hotels like the Society Hill Sheraton. "I convinced them there's a cross‑marketing idea here," Mr. Casinelli says.. "Let's get some of that I hometown I pride back."
      For example, he worked with a concessionaire at the Philadelphia airport to build displays that promoted the historical' attractions of Philadelphia along with the historical significance of the nation's oldest brewery.

Cutting Back Ads
      Mr. Yuengling also got lucky. taking over in, the midst of the microbrewery craze, in which some beer drinkers are searching for alternatives to the same old national brands. Suddenly. the beer that had been kept alive by Pottsville loyalists and aging drinkers around the state became cool to young drinkers, too. it is all Steve Kluska. 22 years old, of south Philadelphia drinks now. "My friend got me into this at a Grateful Dead concert." he says, holding up his Yuengling lager at Eli's Pier 34 one recent evening. "He's traveled to Ireland and says this blows away anything he tried over there."
      As sales climbed to 230,000 barrels this, year from 127,000 barrels in 1986 the brewery couldn't make enough, beer to keep it on local shelves.  The shortage prompted Mr. Yuengling to cut back his print and broadcast advertising to about $2 a barrel from about $3. "You can't fuel the fire when we can't get them beer anyway," he says.
      That didn't solve his public relations problem with hometown fans, however. Signs at local Schuylkill County beer distributors (where beer is sold to the public in Pennsylvania) blamed the shortages on exports of beer outside the traditional local market, including New York. Irate bartenders and distributors called local newspapers to complain. "It was a little hairy," says Diane Adams, the county sales representative for the brewery, who had to face the angry customers. "People were up in arms."
      Rather than lose the local market, Mr. Yuengling quit shipping beer to distributors in Maine, Massachusetts, Rhode Island and parts of other states to try to meet the demand in Pennsylvania. He is now selling beer only in Pennsylvania, New Jersey, Baltimore, Washington and some parts of West Virginia. He also kept the beer at its original, lower price in its home county. Thus, Yuengling drinkers in Pottsville can get a Yuengling brew at. Ken's Place in the Mount Carbon neighborhood for 40 cents, compared with $2.50 at Eli's on Penn's Landing.
      Working within the confines of the brewer's hillside location here, Mr. Yuengling is trying to solve his supply problem by building storage and finishing tanks that will add another 50,000 barrels to capacity. But he is proceeding cautiously, remembering the 1950s, when finances were so tight at the brewery that revenue barely covered the payroll checks. "I still remember the bad days," he says. "I don't want to get in a position of having a capacity of 500,060 barrels [a year] and selling only 200,000."

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