Tracking the winners: new tables from Office of R.S. Weinberg chart the rise and fall of U.S. brewers - Interview - Industry Overview

Modern Brewery Age, Nov 11, 2002

Robert S. Weinberg, principal of the Office of R.S. Weinberg, St. Louis, MO, has released a newset of tables designed to chart the rise and fall of American brewers during the period 1947-2001. At first glance, the charts may seem a bit arcane, but as Mr. Weinberg points out, they provide an interesting means of cross-referencing and tracking the performance of U.S. brewers.

Mr. Weinberg, what is the purpose of the R.S. Weinberg rank shift analysis?

This analysis allows you to track the interaction of U.S. brewers overtime. You can look at the changing line-up, and see what's been happening. This is quite useful, and it has some competitive value. This is a new way at looking at the dynamics of the industry. We can do this, because we have a very unique database, We have a consistent set of estimates for brewery production from 1947 to date.

How does this rank shift analysis matrix work?

We use the top 200 brewers as a cut-off point. If you are just looking between 1995 and 2001 (Table B) eight of the top ten brewers were still in the top ten six years later. Two that were in the 11-20 range moved up to the top ten. In the top 10, five of the people that were originally there are still there,. four from the category below crept up. One from the 31-40 got up to the 11-20. When you look at the really low brewers, you see that many came in as new listings, or they were originally "over 200."

What does this tell you?

In the low end, overtime, you tended to go down in rank. In the high end, you tended to move up, if you stayed on. These are things that I wanted to see. What I wanted to do is to see if I could capture the dynamic changes. If a brewer moved out of a position, I wondered who moved into that position.

Let me give you an example. We have a program that allows us to do a time series that examines what a brewer's barrel sales have to be to put that brewer among the 25 largest brewers. In the early period, you needed several hundred thousand barrels to be in the top 25. But today, you don't need much at all.

As an example, in 1947, the 25th largest brewer was Grain Belt. They produced 705,000 barrels. The amount of barrelage you needed to be in the top 25 actually grew each year, peaking in 1970, when Pittsburgh was 25th, with 1.1 million barrels. All of a sudden, it dropped off dramatically. In 1972, it was Blitz-Weinhard with 749,000. In 1974, it was Latrobe with 710,000. In 1975, it dropped to F.X. Matt with 480,000 barrels. In 1977, all you needed was 290,000 barrels, By 1988, you needed only 30,000 barrels. In 1996, Anchor was 25th with 108,000. Then it dropped back down, and in 2001, all you needed was 68,000 barrels to be the 25th largest brewer. That would have made you Massachusetts Bay.

This tells me an awful lot It allows me to make brash statements like the following. It is impossible for a declining brewer, after they have declined for 3-5 years, to ever turn around. Ever! Unless they expand geographically in a radical way, or unless they reposition their products in a radical way.

When Pabst was going to hell in the late 1950s, Jim Windham created Pabst, "the premium beer at popular prices." That turned them around. But, as popular price beers declined and premium came in, the same action that had saved them ended up killing them. Natural Light got nowhere as a premium, but as a popular-price brand, it had a new life. Miller High Life was going down as a premium, and turning it into a popular gave it a new life for awhile.

We track the data from 1947 onward (see table A, change in brewer rank since 1947) It shows us some interesting changes. Sam Adams did not exist in 1947, but was 5th by 2001, with 1,130,000 barrels. Latrobe was the 239th largest brewer in 1947, and had 1,100,000 barrels in 2001, ranking it 6th.

Going across the three columns (Table A) you can attach names to the numbers. You can find two players in the top ten that were on in both years, 1947 and 2001. These were Anheuser-Busch, which was 4th in 1947 and is now 1st; is and Pabst, which was 2nd in 1947 and is now 4th. You drop down, and you see there was one player in the 2130 that is now in the top ten. That one player is Miller, which was 21st, and is now 2nd. Continuing down, you see Genesee was 44th and is now 8th.

Of the brewers who were in the top 300 in 1947, only 17 were still in the top 300 in 2001. Of the ten that were on in 2001, 2 were in the top ten in 1947. Three were not on the list.

Seven of the 1947 top ten dropped off the list. Look at the 3rd column, and that shows the brewers that have dropped off the list-Schlitz, Ballantine, Schaefer, Rheingold, Blatz, and Duquesne. Falstaff was still in business, sort of, but above 200.

This allows you to take two points in time, and see who went from here to here; who went off and who went on. It's a compact way of doing it.

For the year 1995-2001 (Table B, Changes in Top 200 Brewer Rank Since 1995) We're only talking about a five-year period of time. Eight brewers that were on in the top ten list in 1995 were still on in 2001. Two moved up a bit, and two went off the list. The eight still on were A-B, Miller, Coors, Pabst, Latrobe, Yuengling, Genesee and Sierra Nevada. The two brewers that were off were Stroh Brewery Co. and G. Heileman.