Boston Beer pouring millions into Lehigh Valley
Most beer drinkers know that Pennsylvania is home to Yuengling, the largest American-owned beer-maker.
But what they might not know is that Yuengling competitor Boston Beer makes most of its beer right here in the Lehigh Valley.
The Boston-based maker of Samuel Adams produces two-thirds of all its beer — or roughly 5,000 barrels per day — at its facility in the Breinigsville section of Upper Macungie Township, and the company is investing millions of dollars to expand the brewery’s capacity, founder and CEO Jim Koch said.
“It’s central to the success of our company and we are committed to that brewery,” he said Thursday. “We are continuing to invest millions and millions to upgrade it and expand capacity.”
Koch was in the Lehigh Valley for the taping of “Business Matters,” a weekly business and public affairs show on WFMZ, Channel 69. His segment will air at 8 p.m. Feb. 13.
So far, Boston Beer has spent tens of millions of dollars upgrading the former FM Schaefer Brewery along Interstate 78 west of Route 100. In 2008, Boston Beer bought the 850,000-square-foot red-brick brewery for $55 million from Diageo PLC, a British company that had produced the flavored malt drink Smirnoff Ice at the site since 2001.
Boston Beer also owns breweries in Boston and Cincinnati.
Spokeswoman Michelle Diamandis said the company projects spending roughly $50 million for capital expenses this year.
“We do not disclose the details, but much of the amount will be spent at the Pennsylvania brewery,” she said.
Since the Schaefer acquisition, Boston Beer has added more beer-making equipment and staff to meet demand in the burgeoning craft beers segment.
Boston Beer’s Breinigsville facility employs 260, up from 220 workers when the plant was purchased from Diageo. The company did not comment on its future hiring plans.
Koch said Boston Beer will need more beer-making equipment as it adds beers, and the Breinigsville plant will add keg lines this year.
“We continue to invest in the plant when we see opportunities to upgrade a process, and we are continually adding new beers and they have special equipment that we need,” Koch said.
Craft beer producers, a segment that includes Boston Beer and brewers such as Weyerbacher Brewing Co., Fegley’s Brew Works and Victory Brewing Co., are defined as those with 6 million barrels or fewer sold per year. Weyerbacher and Fegley’s also recently added equipment and workers to keep pace with demand.
Craft beers have grown in popularity in recent years as younger drinkers seek alternatives to mass-produced beers such as Budweiser and Coors.
“It’s about flavors and local and small, and it’s a hot button for consumers right now, and it’s kind of feeding itself now and the momentum continues to grow,” said Eric Shepard, executive editor of Beer Marketer’s Insights in Suffern, N.Y.
Craft brewery sales were up 15 percent in the first half of 2011, according to the Colorado-based Brewers Association, a trade group for craft brewers.
The number of craft brewers also has grown. In November 2011, there were 1,927 craft breweries nationally, up from 1,753 in 2010, according to the Brewers Association, a brewery trade group.
Boston Beer has been battling for the title of largest American beer-maker with Pottsville-based Yuengling after a series of mergers in 2008 erased domestic ownership at beer behemothsAnheuser-Buschand Miller Coors.
Yuengling sold 2.5 million barrels of beer in 2011, up 17 percent from the previous year, according to Beer Marketer’s Insights. Boston Beer sold 2.4 million barrels in 2011, the magazine estimated.
Koch said the “largest American brewer” label lost some of its luster when foreign owners scooped up the country’s largest brand names.
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