D.G. Yuengling & Son beer is now rolling out in Missouri, Kansas and Oklahoma as part of the Pennsylvania brewery’s joint venture with Molson Coors for westward expansion.
The latest expansion started with draft in early February, with production sourced from Molson Coors’ brewery in Fort Worth, Texas. Packages of Traditional Lager, Light Lager 99, Golden Pilsner, and Flight are expected to reach off-premise retailers in early March.
The addition of the three Midwestern states follows Yuengling’s entry into Texas in August 2021. The decision to open three additional markets, while logical given the proximity to the Lone Star State, came amid consumer and retailer demand fueled by the brand’s presence in neighboring markets, Yuengling general manager Pat Pikunas told Brewbound.
“Our fans, particularly Missouri and Oklahoma, were very vocal about wanting us to expand there,” he said.
The opportunity for Yuengling in those states comes across all channels, with strong liquor and convenience stores in those states, as well as major grocery chains, Pikunas said. He named grocery retailers Dillons Food Stores (Kroger), Schnucks, Dierbergs, and Hy-Vee, as well as Walmart, QuikTrip and Total Wine as retailers expected to carry Yuengling in those states.
“For us, we’re looking for scale distribution across all channels,” he said, noting an emphasis on Traditional Lager and low-calorie light lager Flight. “The early on-premise launch allows us to build awareness and talk to consumers about what’s to come from our package launch.”
Even though Yuengling is partnered with Molson Coors on the western expansion, Pikunas said it is not a foregone conclusion that the company’s offerings will be distributed via the Molson Coors network. Although there are clear efficiencies with the network, Yuengling is doing its due diligence with wholesalers in those new markets. One example of the company going outside of the network is partnering with Breakthru Beverage, a strong wine and spirits house, in the greater St. Louis area.
“We just really clicked with them,” Pikunas said. “Because of the laws in Missouri, they’re in grocery; they’re in convenience; they’re strong on-premise; and we felt like it was just a great opportunity to partner with a company that’s really investing in their business and investing in their capabilities. It just has been a great fit.”
In the Kansas City metro, Yuengling is with Central States Beverage for both sides of the state line, although the distributor only carries Molson Coors products on the Missouri side. In Oklahoma, Yuengling has partnered with Capital Distributing, LDF Companies, Fisher 59, Hitchcock Distributing, Pope Distributing and Jett Distributing.
Yuengling’s westward expansion will take a pause following the addition of the three Midwestern states, Pikunas said. As the company gets up to speed in those markets, it will also focus on bettering its understanding of Molson Coors’ supply chain.
“We’re going to take a little bit of a pause after these three states and dig in and really look at what we’ve got to do to be a great partner and supplier with some scale and share for the long term,” he said.
Yuengling’s beer is sold in 22 states, primarily in the eastern half of the U.S. The Pottsville, Pennsylvania-headquartered brewery announced the partnership with Molson Coors to add western states in September 2020, starting in Texas. Pikunas admitted the Texas expansion has been challenging but he believes the company is in a position to grow in the Lone Star State this year.
“It’s such a huge light beer state, which is typically not a huge strength of ours,” Pikunas said. “We typically really focus on our flagship Lager, but the size of the light segment in Texas really dictates for us to put greater resources and attention behind our light beers.”
In Texas, Yuengling is leaning on Flight (95 calories, 4.2% ABV) and Light Lager 99 (99 calories, 4% ABV) as dual priorities, he said.
“You get through those first 16 months or so and things really do settle in after that,” he said. “So we didn’t see this massive peak like we’ve seen in other states, so we don’t have as big a hill to climb in terms of comps. So we feel pretty good about where we sit today and what our business looks like for calendar year 2023.”
Yuengling finished 2022 as the 10th largest beer category off-premise vendor, according to market research firm IRI. Dollar sales increased +1%, to more than $419.1 million, with the company holding a 0.94% share of category dollars. However, case sales for the year declined -4.2%.
Year-to-date through January 29, Yuengling’s off-premise sales declined -5.5%, while case sales declined -10.7%. Off-premise sales of Traditional Lager through January declined -3.3% with volume down 8.7%.