Point Beverage sale part of brand strategy

Brewery has changed hands several times over decades

The sale of Stevens Point Beverage Co. in Stevens Point to a Milwaukee-based real estate developer is part of the brand-management strategy of the seller, and only the latest chapter in the long story of the brewery’s history.
The sale by Chicago-based Barton Beers, according to Barton’s brewery manager Jim Ryan, was prompted by a desire to focus more exclusively on the fast-growing import business. Point beers were the only domestically manufactured products in Barton Beer’s lineup.
Barton Beers typically refers to itself as a distributor of imported beers. Its parent company, Barton Brands, is in turn owned by Constellation Brands, Inc., a major producer and marketer of alcoholic beverage brands in North America and the United Kingdom.

Long history
The Stevens Point brewery was founded in 1857 by Frank Wahle and George Ruder. In 1859, Ruder left the company to found a brewery in Wausau. Andrew and Jacob Lutz bought the brewery from Wahle in 1867. Lutz ran the company for 30 years until it was sold to Gustav Kuenzel who in 1901 renamed it Gustav Kuenzel Brewing Co. The following year, he renamed the brewery again – this time as the more familiar Stevens Point Brewing Co. Ludwig Korfmann purchased controlling interest in 1924 and reorganized the company under its current name — Stevens Point Beverage Co., to reflect the company’s strategy for making it during the depression, specifically producing near beer and soda. After decades of distribution in Wisconsin, the beers were marketed for the first time in Minneapolis/St. Paul in 1990 and metro Chicago in 1991.
In 1992, the brewery was purchased by Barton Beers from Felix and Ken Shibilski, who by that time owned a majority of the stock.
Point Beer was unique in Barton’s product offering as it was the only domestic brand among a product line that includes Modelo, Tsingtao, Peroni, Double Diamond, Pacifico, St. Pauli Girl, Tetley’s English Ale and Negra Modelo. In fact, Barton Beers has traditionally marketed itself as a beer importer and distributor, and Point is the only brewery the company has actually owned.

Getting in front of trend
According to Ryan, Barton Beers had purchased Point Beverage to take advantage of an increasing demand for specialty and craft-brewed beer.
Gary Luther, president of the Milwaukee-based Museum of Beer and Brewing, described the difference between mass-produced and craft-brewed beers.
"A large brewery will have the same biochemical process, but might have a different bill of materials and equipment than a craft brewer," Luther said. "A large brewer might tend to use more pale malts because they are not looking for a darker beer. But a craft brewer might use caramel malts, dark malts, because they want a more unique product."
"You could consider them craft beers," Luther said of the Point beers. "I would say any beer that falls out of the mainstream of the Budweiser, Bud Light, Miller, Miller Light, Coors — getting into smaller volume, getting into specialty areas, could be a craft beer."
Luther said the term was difficult to define because the word "craft" actually refers to the historical craft of brewing.
"Being a brewmaster is a craft – a trade," Luther said. "It is a very old trade."
Ryan indicated that to Barton Beers, the color of money was more important than the color of malt when it came to an interest in craft-brewed beers.
"The growth of the specialty craft beer was extremely visible," Ryan said. "It was gaining a lot of attention. With Stevens Point Beverage being headquartered in our backyard and the brewery having a long and storied history, it seemed like a logical move."
But in the years that followed, imported brands far outstripped domestic products in terms of sales growth.
Ryan said that while sales growth of the Point beer products had been in the low double digits or high single digits consistently since 1992, that growth could not compare to what the company was seeing with its imported products.
"Our core business is imported beer brands," Ryan said. "I think what had the impact on our decision was the tremendous success we are having with our core business. Our import business has doubled over the last five years and our business with Corona has increased probably 70%. The import segment has grown dramatically, and the Barton Beer group has outperformed the industry as a whole. We felt we needed to focus our resources on that end of the business."
Point was also conspicuous in the Barton Beer line in that Stevens Point Beverage was the only brewery owned directly by Barton – although Barton Brands does own some wineries and distillery operations. Owning the manufacturing facility did present some opportunities, Ryan said.
"We can probably get to market faster with new product when we control the flow from start to finish," Ryan said.

New beers market-driven
Barton used the flexibility that comes with direct brand ownership to add products to the Point line – products positioned to capitalize on the trend toward microbrewed beers.
"New products were market-driven," Ryan said. "We felt we had such high awareness of the Point Special brand – which is still the flagship brand, but from that brand we were able to expand the portfolio and add several line extensions. We didn’t pioneer that – that’s what was going on in that industry at the time and our brands needed to capitalize on it."
The existing product line consisted of Point Special and Point Bock. Point Classic Amber was added in 1994, Point Pale Ale was launched in 1995 and a Maple Wheat brew was released in 1996. The brewery started producing a light beer in 1997.
But actively managing a product line rather than distributing it takes significant resources, according to Ryan.
"That is one of the reasons we made the decision to divest," Ryan said. "Our core business is the imported beer brands, and that is where we need our focus."
Ryan said that when the opportunity came to sell, it fit with their strategy, but there was no deliberate attempt to offload the Point product line.
"We were not actively looking for a buyer for the brewery," Ryan said. "We entertained some discussions a couple years ago, but we have operated as business as usual. The buyer was really the one that sought us out."

Distribution should remain unchanged
While Barton will no longer be involved in distribution of Point beers, the network of wholesalers should remain the same, according to Ryan.
"I do not anticipate changes, but that obviously is a decision for the new ownership group," Ryan said, adding that Point is distributed through 50-plus wholesalers in Wisconsin, Minnesota and Illinois.
According to the Milwaukee Museum of Beer and Brewing’s Luther, it is in fact possible for a small brewer to do well on its own without the benefit of large brewery ownership or a major distributor.
Luther cited Randy Sprecher and his Sprecher Brewing Co. as an example of a strong regional brand with strong distribution.
"They have gone out of their way, moved away from their niche, and are pretty well distributed," Luther said. "It helps to have a large brewer, but it is not necessarily a must-do. If you look at Pete’s Wicked Ale or Boston Brewing, they find their way to get their beer around. On the other hand, while Miller has Leinenkugel, which is doing well, it also had Shipyard Brewery out east and Salisbury out in Texas – and those breweries still didn’t quite make it."

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