Web Analytics Made Easy -

Brew family: Yuengling, the next generation

Now that Yuengling is the biggest-selling beer brand in Pennsylvania, Florida, Ohio, and five smaller states, and fifth-generation owner Richard "Dick" Yuengling is on Forbes' list of billionaires, it's getting harder to remember that in the mid-1980s his was still a small-town brewery in the fabled but faded ex-coal-and-iron center of Pottsville, selling a few hundred kegs a day.

"I was told, when I was 19 or 20, that the brewery would fail and I should go somewhere else," Yuengling recalled, smiling. That's what most Pennsylvania breweries had done by then, crushed by national competition and Super Bowl marketing budgets.

"But we had a good brewmaster, good products, and I was never afraid to work and put the hours in," Yuengling says. "If you have that going for you and you believe in your company, and yourself, and what you're doing, and a lot of luck, you can make it work."

Only it wasn't quite that linear: Yuengling, now 73, left the company at age 30 after his father declined to update the works fast enough to suit him. He bought a beer distributorship, and cultivated the agents who convinced Pennsylvania college students to drink rival brands -- Pabst, or Rolling Rock.

In the early 1980s, when his father was old and sick, and "nobody else in the family wanted it," he finally stepped back in, Dick Yuengling told the crowd at St. Joseph's University's annual family-business seminar last week. "I bought it from his estate in 1985."

Three years later he convinced a Pittsburgh distributor to take on Yuengling lager and Black and Tan half-porter: "Before that, nobody wanted us." But now it was time: "Craft beers were just starting."

Soon, Yuengling had a problem the reverse of his dad's. "He came to all of us and said, 'We're really oversold. We can't meet the demand for our products. Are any of you interested in coming back to work in the family business?' " recalls daughter Jennifer.

If he was going to invest in a new plant, Dick Yuengling wanted to be sure there was going to be a next generation to hand the brewery to.

Jennifer says she jumped at the chance. She packed off to a beermaking course in Chicago, spent the next year back in Pottsville learning beer from fermentation to invoicing, and has been running Yuengling operations ever since.

Her sister Wendy took a longer road, a little more like Dick's own. "I wish I'd known how monumental that conversation would be," she told the crowd, laughing.

A sophomore in college when her father sounded her and her sisters, Wendy finished college and headed for a marketing and advertising career in New Jersey, then in Baltimore -- until the day her boss slapped an Inc. Magazine article on her desk, about how her dad was trying to figure out how to transition Yuengling to the next generation.

"So I joined the company in 2004," as an outside sales agent, she says. She now oversees HR, IT, finance, and stays close to sales and marketing, back in Pottsville. "We're a very small company. Anyone who is part of a family, business, you wear all hats, and touch everything."

Accountant Bill Jones vouched for that. Another Pottsville native, he says his father advised him "to be overqualified" if he intended to work in depressed Schuylkill County. He got his MBA and his CPA, took over his family advisory firm's Yuengling account and was on hand to be Dick Yuengling's counselor and sounding board through the growth years.

The big decision, Dick says, was to build that second Pottsville brewery -- and then turn around a former Stroh's plant in Tampa to expand Southern sales.

The Yuenglings don't pretend to be a small-batch brewer. "They have a new flavor every month," Wendy marveled. But with Pennsylvania easing rules that once made 12-packs, for example, hard to market, Yuengling's has joined the trend to seasonal brews: "We tried a bock beer. An Oktoberfest. A summer beer. Most recently an India Pale Lager," she said, supplementing the seven steady year-round brands. "We like to keep it simple and efficient."

Why keep innovating; why not cash out? "We've been approached by companies that would love to have us in their portfolio," Dick said. "But with respect to the four generations before me and the rest of my family that made the commitment to keep it running when I'm gone, we're not for sale. It's a family business.

"Everything isn't about money. It's not like we're corporate America and have to be listed on the New York stock exchange and have to make a profit the next quarter. Our game is all about longevity. Not to make a number on the stock market."

"It wouldn't be fair to the previous generations that worked so hard, to just so easily or frivolously sell out," Jennifer said. "Our name is on the label. That's what we come to work each day for. It's our name that's out there."

"The best time to do transition is while the value is still doing well," said Jones. "Recapitalize, [issue)]some non-voting [ownership] shares, and get them down into the hands" of the next generation.

Dick says Yuengling has done that through his tenure, adding that the family sees inheritance taxes (and promises by some Democratic politicians to raise them) as an existential threat: "The transition of a family business [to a next generation] is hard enough without the government fighting you."

Dick said close advisers such as Jones had been vital as neutral parties able to keep family members negotiating through changes in responsibility and control. "It's not always easy to figure that with a parent," Wendy said.

"Have one or two people you can balance key ideas off," said Jennifer. "Confidants you can be trustful with, to bounce ideas off."

"I agree," Wendy said. "We've put a lot of resources over the last couple of years into building out the organization. Like my Dad said, you have to be passionate about what you are doing.

"As far as fear of risks or failure, you have to know you're going to be pushing yourself outside your comfort zone just about every week. You can't be afraid of failing. 'Because you won't know unless you try it."

"Hire people smarter than you," suggested Jones. "That can help you with your business view."

Dick called it "a joy" that four of his daughters eventually joined the company at least part-time.

Being female, instead of making it tougher, was an asset early on, Wendy said: "When you are trying to sell beer to retailers, you can get a lot accomplished as a female."

More women, these days, are brewery owners and brewers. "It's great to see. But you go in and do your job every day without regard to being a female or a male," Wendy added. "To me it's neutral," Jennifer said.

Mary Nicoletti, the St. Joseph's family-business program coordinator, asked how the Yuenglings prepare younger family members.

"We kind of wing it," Dick said. "I'm not a good director. I let them find their owner way. 'Where is the company lacking?' They work it out. Rather than directing somebody to something they might not like doing."

A big step was inviting the sisters to all key meetings, Jones added, instead of "just feeding them tidbits."

But the Yuengling daughters said they are working with professionals to develop a welcome-to-the-company system for their children. "We're trying to find that balance between exposing them to the family business and pressuring them," Jennifer said. "When you have nine potential heirs you need to map out a plan. "Twenty years ago it was a totally different company. Now we have three plants and [sales in] 20 states. We figured it out. But there are definitely challenges with that. Our children will enter the business a little differently, in terms of giving them a path," she added.

"There's such a sense of pride to carrying this family business to the seventh generation that I'm sure somebody will step up," Wendy said.

There aren't any Yuengling in-laws in the business, so far, Dick said. "I'd be glad" if he found one with the "talent and interests."