- Molson Coors Beverage and D.G. Yuengling & Son formed a joint venture that would expand the reach of America’s oldest brewery to millions more drinkers in 25 states outside its mostly East Coast distribution territory, the companies said in a statement. Yuengling beers are expected to be sold in new markets in the second half of 2021. The brewer currently sells its products in 22 states.
- Under terms of the deal, Yuengling beers will be brewed and packaged in select Molson Coors’ breweries with Yuengling's supervision. Yuengling will retain the rights to its brands and trademarks and remain a family-owned business. The companies did not disclose the finances of the partnership.
- Molson Coors has spent much of the last year bulking up its nonalcoholic beverage offerings, but the deal with Yuengling shows the beer giant still sees alcohol as a key part of its business going forward.
In a statement announcing the new joint venture, Gavin Hattersley, president and CEO at Molson Coors, offered up an anecdote that provides insight as to why the beer giant was interested in partnering with Yuengling. Consumers in the western U.S. "have smuggled Yuengling across state lines in the trunk of their car" to get access to the popular East Coast beer, he said.
That suggests there is untapped opportunity for Yuengling, the nation's sixth-largest brewery, across nearly half of the country. “Our new partnership is a huge growth opportunity for Yuengling. It’s a huge growth opportunity for Molson Coors," Hattersley said.
The Wall Street Journal reported Yuengling’s U.S. sales were about $1.6 billion in 2019, or 1.5% of the U.S. beer market, citing data from Euromonitor International. Its market share has remained fairly flat since 2014.
Yuengling has innovated and worked on new brews to expand its consumer base, including a low-carb offering and the creation of a Chocolate Porter with Hershey. But Yuengling, a 191-year-old brewer, thought it had more room for expansion in other parts of the U.S. beyond its East Coast roots with its signature beers like Yuengling Traditional Lager and Black & Tan. Molson Coors, with its nationwide brewing network and relationship with retailers, offered the Pennsylvania company a quick and less costly way to do that.
Molson Coors is likely hoping to benefit from consumers looking for a new beer that despite its age has a craft-like appeal. It's a far cry from the recent shift at Molson Coors where the maker of Miller Lite and Blue Moon has promoted itself as a beverage maker rather than simply a brewer of beer. Just last week, it rolled out nonalcoholic products it plans to introduce this fall, including a full-flavored seltzer with added probiotics and a plant-based diet soda.
While the push into other areas is a sound move for growth as consumers move away from classic beers to spirits, craft brews, Mexican imports and other ready-to-drink beverages, beer remains at the core of what it does and what is is known for. Molson Coors knows the beer space as well as anybody and adding Yuengling to the mix could be a way to bring growth to the beleaguered segment.