Pabst Brewing Company has tapped Anheuser-Busch InBev (A-B) to help contract brew its beer, the company announced today.
The agreement gives Pabst “greater supply chain flexibility and improved efficiencies,” the San Antonio, Texas-based company said in a press release.
Pabst wrapped up a nearly two-decade production arrangement with Molson Coors last month. When that contract’s end was announced in late 2019, Pabst shared that it had penned a similar deal with contract producer City Brewing to brew its beer through 2040.
City will “continue to produce significant volumes” for Pabst under the supervision of Pabst master brewer and supply leader John Kimes, the company noted in the release.
“By entering into this agreement with Anheuser-Busch, Pabst will strengthen its supply chain, allowing us to better meet the needs of our valued retail and distributor customers and continue providing our iconic brands to customers in the U.S. and abroad,” Pabst CEO Paul Chibe said in the release. “With both City Brewing and Anheuser-Busch as contract brewing partners, Pabst will have even greater supply certainty and growth potential across our full portfolio of products.”
The first Pabst brand to flow through an A-B brewery will be the company’s Lone Star brand from A-B’s Houston plant in the first quarter of 2025 Brewbound has learned.
In addition to flagship Pabst Blue Ribbon, Pabst’s portfolio includes legacy lager brands Heileman’s Old Style, Stroh’s, National Bohemian, Rainier, Old Milwaukee and Stag, as well as flavored malt beverages Not Your Father’s Root Beer and Jack Daniel’s Country Cocktails.
A-B operates 11 other breweries across the country in addition to Houston: Baldwinsville, New York; Cartersville, Georgia; Columbus, Ohio; Fairfield, California; Fort Collins, Colorado; Jacksonville, Florida; Los Angeles, California; Merrimack, New Hampshire; Newark, New Jersey; St. Louis, Missouri; and Williamsburg, Virginia.
Pabst and A-B’s deal follows a report last month that City is weighing several options to improve its financial situation, including a potential bankruptcy filing.
According to a Bloomberg report, City is seeking a $50 million loan to “shore up the company’s cash reserves as it struggles with lower demand,” unnamed sources close to the situation told Bloomberg.
City is one of the largest contract brewers in the country and operates large production facilities in La Crosse, Wisconsin; Latrobe, Pennsylvania; Memphis, Tennessee; and Irwindale, California. In addition to Pabst, its clients include the Boston Beer Company and Mark Anthony Brands.
Pabst is the beer category’s ninth largest vendor by off-premise dollar sales in the most recent report from market research firm Circana. For the first 11 months of 2024, the company’s portfolio reached $524.4 million in sales at multi-outlet grocery, mass retail, club and convenience stores tracked by Circana.
Pabst’s dollar sales have declined -4.8% in the period compared to the prior year, and volume, measured in case sales, declined -4.4%. Circana data does not include on-premise sales.
In 2023, the company shipped 3.2 million barrels of beer, a +2.7% increase over 2022, according to data from the Brewers Association (BA).