The status of D.G. Yuengling & Son as a “craft brewer” via the embattled Brewers Association definition of that term has always been a complicated subject, but today it only becomes that much more complicated. The 191-year-old company just announced it was forming a brand new “joint venture” with brewing giant Molson Coors, which will somehow operate independently of BOTH companies in order to brew and distribute Yuengling beers outside of the original brewery’s current, 22-state distribution footprint.
The first thought here would likely be either “So Yuengling sold some ownership stake to Molson Coors?”, or “So Molson Coors is going to be contract brewing for Yuengling?” Instead, it seems that neither is really accurate. Rather, “a new entity” (Molson Coors stops short of calling it a new company) has been created, with an as-yet-unnamed leader, which will be “governed by a six-member board of directors evenly split between Yuengling and Molson Coors family members and executives, with Yuengling holding the chairmanship. Yuengling will retain the rights to its brands and trademarks and remain a family-owned business. Its existing 191-year-old company will operate separately from its joint venture with Molson Coors.”
At the same time, the new “entity” will concern itself with the brewing of Yuengling beers (such as the flagship Yuengling Traditional Lager) at Molson Coors facilities, “under Yuengling brewers’ supervision,” for distribution “into new markets largely in the western half of the United States.” Currently, Yuengling is sold in 22 U.S. states, but is still the largest overall American craft brewer via the BA definition—a testament to just how much Yuengling beer its fans drink, considering that a competitor such as Boston Beer Co. has its beer in all 50 states. The rollout into new states is described as “measured and methodical,” suggesting that Yuengling Traditional Lager won’t just appear in a bunch of new states overnight.
“We are excited to launch this partnership with the team at Molson Coors,” said Wendy Yuengling, sixth-generation family member and chief administrative officer. “Like Yuengling, Molson Coors has an established commitment to quality and rich history of family brewing excellence. This partnership is a great opportunity for us to grow our distribution footprint for the long-term, while continuing to support our existing markets and the communities in which we operate.”
The joint venture raises a whole new slate of questions when it comes to the Brewers Association and the “craft brewer” definition in particular. Can the trade organization possibly consider beer brewed in Molson Coor facilities as “craft,” even with the most generous interpretation of the definition? Does the “joint venture” count as a degree of ownership in the overall company, even if separate, given that it has the Yuengling name on it? As we’ve often argued in this situation, we’ll simply make the case that the words possess little remaining value, as the industry has developed too many shades of grey for “craft brewer” to mean anything.
At least Yuengling fans living on the West Coast will likely be happy about the news … until the inevitable claim that Yuengling Traditional Lager brewed in Molson Coors facilities “just doesn’t taste the same,” that is.
It’s not yet clear what the first new markets will be for Yuengling, but it will be interesting to see how the beer is received, coming from this odd new partnership.