THE GIST
With help from Molson Coors Beverage Company, D.G. Yuengling & Son, Inc. has delivered big sales in Texas that the companies believe is the start of reshaping the beer landscape in the Lone Star State.
Since debuting in Texas on Aug. 23, Yuengling’s Traditional Lager, Flight, Light Lager, and Golden Pilsner have collectively netted $12 million in Texas chain retail stores over the five weeks of available data from market research company IRI.
The combined portfolio was the sixth best-selling family of beers in the state, outselling direct competitor Shiner by nearly $3 million during this period.
Yuengling’s sales weren’t far from the $13.1 million Truly Hard Seltzer earned in those stores during the same period and almost three times what Houston-based, Anheuser Busch InBev-owned Karbach Brewing earned during that time.
The company also estimates its flagship Yuengling Lager is currently on tap at about 4,000 bars and restaurants in the state.
It's a blue-ribbon start for Yuengling, which entered Texas through a partnership with Molson Coors that provides additional production and distribution for the Pennsylvania brewery. If the trend lines continue, it’s an early vote of confidence that both companies will try to replicate in the 24 additional states in which Yuengling plans to expand distribution.
WHY IT MATTERS
Yuengling did nothing short of meet expectations for its launch, and if you want to set a baseline for success here's a key one: That $3 million lead the company had over Shiner is because its Traditional Lager brand outsold Texas' flagship craft beer, Shiner Bock, by that amount. It’s a big splash that distributors and retailers will notice.
Some of Yuengling’s success comes from its brand affinity, aided by drinkers who’ve moved to Texas and are familiar with the brewery or who know the brand because of family inside Yuengling’s distribution zone on the East Coast. “Yuengling is like a much smoother Shiner Bock,” a Houston resident named Buddy Brooks—who drank the beer when he lived in New Jersey—told the Houston Chronicle in August. But recent transplants to Texas aren’t generally coming from the East Coast; data from the Texas Realtors’ 2021 Texas Relocation Report shows the top states with residents moving to Texas in 2019 span the southern half of the country, from California to Florida.
That means that despite its impressive start, Yuengling will need to build more recognition from the ground up in the Lone Star State. Pat Pikunas, general manager of The Yuengling Company (the Molson Coors-Yuengling partnership), says the goal will require marketing, in-store sampling, and emphasis on the brand’s story. The company plans to “lean in heavily” to Yuengling being America’s oldest brewery, and one that’s still run by the same family.
He believes that history is where Yuengling can pull away from the competition; Light Lagers such as Bud Light or Miller Lite and Mexican imports like Pacifico or Modelo don’t have the same American legacy in Texas. Those competing imports, though, are mostly juggernauts: Since its launch in Texas chain retail, Yuengling has earned 18% of the $66.9 million the Modelo Especial family has in the same stores, and just 26% of the $45.7 million the Corona family has.
Light Lagers could prove more vulnerable:
The $1.2 million Yuengling Light Lager has sold in Texas is about even with the $1.1 million Shiner Light Blonde netted in the same five-week period, and isn’t far from $1.8 million accumulated by Lone Star Light.
Though Yuengling Light makes up just 10% of sales for the Yuengling portfolio in grocery stores and other chain retail, the company believes that beer and Yuengling Flight—a 95-calorie, premium Light Lager—will be the bellwether for the overall brewery’s success in Texas.
These promising returns happened even as Yuengling is still in the process of securing refrigerated shelf placements in most Texas stores, traditionally considered the prime location that leads to the highest-volume sales.
Pikunas says Yuengling’s launch in Texas was hampered by its timing between spring and fall, the two periods when grocery stores and other retailers traditionally add or remove alcoholic beverages from their shelves in a process known as “resets.” Because Yuengling debuted in Texas after spring resets, retailers didn’t have space to slot it into their refrigerated coolers and mostly placed it on warm shelves going into beer’s critical summer sales period.
Today, Yuengling is still fighting for cooler space.
“Especially in a state like Texas where it’ll be 93 [degrees] here later this week, you really need your beer cold,” Pikunas says.
Introducing Yuengling—a brand that, until now, was sold only in 22 states along the East Coast—to more rural and border areas of Texas has also taken effort.
“We have a pretty stark [geographic] cutoff. South of San Antonio, even Houston, we’re literally trying to introduce Yuengling and tell people it’s not a Chinese beer,” Pikunas says. “The story for us long term in Texas in terms of success will be: How do we sell our light beers?”
That question has huge implications: Texas is equal in size to the combined last eight markets where Yuengling expanded distribution. If Texas provides a successful blueprint, Yuengling’s upcoming 23 expansion states should prove to be lesser challenges.
Words by Kate Bernot