Categorized under: Da Big Guys, Expansion

Leinenkugel’s national rollout nearly completed

I’m not sure how I feel about this. While AB was releasing craft styles beers into the market, Miller was putting some life back into Leinenkugel Brewing Company. What unsettles me about Leinenkugel, is that from the surface they appear to be a craft bewery – but not.

Within the past year, I’ve seen some smaller, local craft breweries lose shelf space to Leinenkugel. Unfortunately, this is a result of da big guys flexing their muscle over small mom and pop stores — along with making deals with national retail chains. It is what it is.

Anyways, I’ve had the sunset wheat. It was ok – but I don’t remember it much. Give it a try. Try a blind taste vs. a local craft selection? Tell us what you think.


Drink Craft Beer, You’ve Earned It!!

Leinie’s charts national craft beer rollout
by Rich Rovito

The Jacob Leinenkugel Brewing Co. is nearing completion of a national rollout of some of its craft beer brands while preparing to launch a new beer this fall.

The Chippewa Falls-based beer brewer, which began a phased national rollout of some of its brands two years ago, is completing the rollout in the Northwest and West.

“That’s your more prodigious craft beer areas — California, Oregon and Seattle,” said Jake Leinenkugel, president of the 141-year-old beer brewer, in an interview at his office in the Leinie Lodge, a museum and tour center next to the Chippewa Falls brewery.

With planned distribution of some brands in Hawaii later this year, it will leave Alaska as the only state without Leinenkugel beer.

The rollout began as an effort to capture additional market share for Milwaukee-based Miller Brewing Co., which served as Leinenkugel’s parent company for 20 years. The rollout is now expected to benefit MillerCoors LLC as the craft beer segment continues to grow, although not at the astronomical levels of the past few years, Leinenkugel said.

MillerCoors is the joint venture involving Miller and Coors Brewing Co., Golden, Colo., which launched in July.

Leinenkugel’s beers previously had been available only in the Upper Midwest until the launch of the national expansion. Leinenkugel entered each new market with its Sunset Wheat brand, followed by Honey Weiss, Berry Weiss and then its seasonal craft brews led by Summer Shandy.

“The last two years we’ve gotten our feet wet on what it means to be national, and that’s pretty big for guys that always thought local and regional,” Leinenkugel said.

Leinenkugel produces 12 brands, including Fireside Nut Brown Ale, a seasonal beer that will be available in November and December.

Projects in the works

Leinenkugel plans to “hibernate” its Big Butt brew and replace it with a beer created from an original 1888 Leinenkugel bock recipe that will be available beginning in January 2009.

“We are also working on a very big project right now for a very intriguing new style-beer for 2009 and that’s all I can say at this point,” Leinenkugel said.

Plans to go national with Leinenkugel developed after Miller’s top executives approached the brewer to see if it could develop a beer that could capitalize on the immense popularity of Blue Moon, a Belgian-style craft beer brewed, ironically, by Coors. It was at that time that Leinenkugel developed Sunset Wheat.

“It’s allowed us to go to the Miller distributor network on a national basis because they’d been pining for something that is authentic, original and real craft to put into its pipeline,” Leinenkugel said.

Under Miller’s ownership, Leinenkugel Brewing had a great deal of autonomy, something that the MillerCoors leadership has vowed will continue, he said.

“They give us the autonomy and flexibility to run our business smartly the way the Leinenkugels see that it should be run,” he said.

In a meeting with The Business Journal’s editorial board earlier this year, Tom Long, MillerCoors president and former chief executive officer of Miller Brewing Co., said he believed a national rollout of Leinenkugel would succeed.

“It looked like we could turn this into something more powerful and let people outside of Wisconsin and Leinie’s core states know about this great beer,” Long said. “And with personalities as powerful as Jake, Dick and John Leinenkugel, it seemed to me like it was Ben & Jerry’s (ice cream) all over again. All people had to do was get exposed to those characters and try the beers and they would like it and that’s really come true.”

Long admitted that Leinenkugel Brewing is faced with stiff competition in the craft beer market.

“That’s a real competitive area and there are a lot of great beers in that arena, but the Leinenkugel brewery can compete with any craft brewery in America,” he said.

Leinenkugel also credited his father, who is terminally ill with a brain tumor, for giving him a deep appreciation of beer brewing. Bill Leinenkugel served as company president from 1971 until he retired in 1987.

“Beer is fun. Beer is good. He’d tell us that every day,” Leinenkugel said of his dad. “He said you won’t get paid a lot, but at the end of the day you can walk out to the tap handle and pour yourself a product that has your name on it.”

Under Miller’s ownership, Jake Leinenkugel reported directly to Long. Since the launch of the joint venture, he has been reporting to Leo Kiely, CEO of MillerCoors.

“This allows me to basically educate Leo as to the strength and value of Leinenkugel’s within the MillerCoors portfolio,” Leinenkugel said. “This is a fabulous opportunity to keep Leinenkugel’s top of mind with the entire MillerCoors network.”

Leinenkugel Brewing has about 115 employees at its Chippewa Falls brewery and 10 at its North 10th Street brewery near downtown Milwaukee.

The Milwaukee brewery primarily produces Honey Weiss to supplement production at the Chippewa Falls facility.

“There’s still room for bigger opportunities for the 10th street brewery,” Leinenkugel said. “Who knows where the Coors and Blue Moon impact may help fill some things in there. MillerCoors also is interested in piloting some different kinds of beer there.”

The Leinenkugel breweries have been operating at close to capacity, which has required the MillerCoors brewery on Milwaukee’s west side to handle some production of Sunset Wheat.

Craft segment slowing

Craft brewing has experienced double-digit annual growth over the past five years, but growth in the segment slowed to about 6.5 percent in the first half of 2008, with restaurant and bar sales experiencing the biggest slowdown because of the soft economy, he said.

“I look at that as still being very healthy,” he said. “Leinenkugel’s will be in or above that figure for the year.”

Although the sale of the various Leinenkugel brews make up less than 1 percent of MillerCoors overall sales, Leinenkugel said he is convinced the brewer adds value to the joint venture.

“Each year we should continue to grow from a very small base, but add on additional muscle to MillerCoors in terms of having a very viable, neat, eclectic collection of fabulous, adventurous beers,” Leinenkugel said. “It gives credibility to MillerCoors.”

Founded: 1867
Based: Chippewa Falls
Parent company: MillerCoors LLC
President: Jake Leinenkugel
Employees: About 115 full-time and seasonal in Chippewa Falls; 10 at satellite brewery in Milwaukee
Annual revenue: Not disclosed
Beer brands: Sunset Wheat, Honey Weiss, Berry Weiss, Red, Creamy Dark, Original, Light and Special Ale (year-round); Summer Shandy, Oktoberfest, Fireside Nut Brown and Bock (seasonal)

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