Aurora Beer-ealis:
Leinenkugel's finds success marketing the 'flavor of the Northwoods'
by Bryan N. Barnes
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| Leinie's brewery in Chippewa Falls, circa 1930s.
Photo courtesy of Leinenkugel’s Brewing Co. |
Most Wisconsinites know Jake, Dick and John Leinenkugel from their radio ads that champion Wisconsin’s brewing heritage and the great escape known as the “Northwoods.” The Leinenkugel brothers are the fifth generation of their family to work in and manage the Jacob Leinenkugel Brewing Co. of Chippewa Falls, something they emphasize in their advertisements. However, few Wisconsinites know that none of the brothers, together or separately, know how to brew beer. All three specialize in the business side of Leinenkugel’s, meaning they only know enough about the secrets of brewing to be dangerous.
“Our brewmaster in Chippewa Falls won’t let us touch anything in the brewery,” said Dick Leinenkugel during an interview. “I would like to see one of the sixth generation of Leinenkugels get involved in the operations side, the brewing side.”
The Leinenkugel
story
For
135 years, the Jacob Leinenkugel Brewing Co. has been making beer in Chippewa
Falls. Well, they had to bottle water during prohibition, but that was beyond
their control. Despite that temporary hiccup, Leinenkugel’s has become
a well-recognized Wisconsin business known for its carefully marketed “Northwoods”
reputation. Owned by Miller Brewing Co. in Milwaukee, Leinenkugel’s
has been able to use Miller to spread its unique craft beer beyond Wisconsin’s
borders.
“Leinie’s,” as the beer is known in taverns across the region, comes in 10 different varieties. Some, like the Oktoberfest and Berry Weiss, are seasonal beers produced in limited batches. Others, like the popular Red and Honey Weiss, are produced year-round. Because of their growing popularity among Midwestern beer lovers, Leinenkugel’s purchased the 10th Street Brewery in downtown Milwaukee in 1996 to expand their production capacity. In 1998, they also started a brewpub in the new ballpark of the Arizona Diamondbacks in Phoenix, tapping into the retail brewery market.
Today, Leinie’s beer reaches 28 states. In 2001, Leinenkugel’s shipped 345,000 barrels, or 4,753,410 cases, of their various brews, up 1.47 percent from the previous year. Compare this to Stevens Point Brewery, which produces roughly 50,000 barrels annually. These numbers place Leinenkugel’s third nationwide in the craft beer market according to the Milwaukee Journal Sentinel, sixth according to data from Beer Marketer Insights, a brewery trade publication. Yet, Leinenkugel’s is a small operation next to Miller Lite’s 16 million barrels for the same year because, ultimately, the craft beer market accounts for less than 3 percent of America’s total.
The Leinie's
secret to success
Leinenkugel’s
has aggressively squeezed this small potential market share for every last
drop of beer lovers’ attention. They claim to have 90,000 members of
the Leinie’s Lodge, the brewery’s fan club. And with the help
of advertising firms like Young & Rubicam in Chicago and, now, Jacobson
Rost in Sheboygan, Leinenkugel’s carefully built a brand identity linked
to their “up-nort’” location in Wisconsin. Leinenkugel’s
deployed a mix of radio and television ads in concert with clever promotional
campaigns. The three Leinenkugel brothers, President Jake, Vice President
Dick and Assistant Manager John, are familiar voices on Wisconsin radios,
with ads that embrace a down-home irreverence. The brothers also tour various
bars as promotions, giving out samples and hosting contests for mountain bikes
and canoe trips.
Dick Leinenkugel was on one such “crew drive” on the evening of Oct. 16 at Madison’s Stadium Bar, sitting just beyond the grounds of Camp Randall Stadium. Walking in decked-out in blue jeans, brown wing tips and a leather jacket with a large Leinie’s patch on the back, he strode up to the bar and shook hands with the bartender.
“Hi. I’m Dick Leinenkugel and I’d like a Leinie’s Original,” he said, his voice sounding slightly artificial as if he were still on the radio. After insisting on a Leinie’s pint glass, he had another request for the bartender. “Leave about a quarter inch of foam on the top,” he added. “That’s the way we Leinenkugels drink our beer.”
The 45-year-old vice president of sales and marketing was there to help his distributors expand their market share with bars and other vendors by making the Leinenkugel’s presence known. Though they work together on radio commercials, all three brothers are rarely together for marketing drives. That duty usually falls on Dick.
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From left: Dick, John, and Jake Leinenkugel
record one of their well-known radio ads over a few beers. |
While the Leinenkugel brothers may not be able to brew, they have definitely cooked up a successful marketing strategy, with the help of their advertisers. Dick explained that by selling their history and location, they effectively reach their two target demographics. The first, which he calls the “loyalists,” range in age from 26 to 65 and grew up on Leinie’s as their one and only beer. Many loyalists prefer the more traditional Original and Northwoods lagers. The second target group, the “new recruits,” range in age from 21 to 26 and view Leinie’s as an escape to a more pure and relaxed world, perhaps based on experiences of visiting northern Wisconsin or of camping. The new recruits also tend to prefer the premium beers, maybe in an attempt to surpass their parents’ beer. Leinenkugel’s has been able to hang on to the loyalists, while their growth over the last 14 years has come primarily from the new recruits.
Part of this growth was the result of accessing the distribution networks of Miller, which purchased Leinenkugel’s in 1988. Many in the Chippewa Falls area worried Miller would change the brewery management or even move the company. However, Miller decided to leave Leinenkugel’s operations alone, instead focusing on improving the small brewer’s market range. Part of the plan was to encourage Leinenkugel’s to expand crew drives beyond Wisconsin.
However, under shifting market pressures, Miller soon found itself under the uncomfortable microscope of its owners, Phillip Morris Companies Inc. By late 2001 Miller sales had diminished 2 percent by volume in the last decade, and Phillip Morris was looking to dump the large brewer in a hurry, according to the Capital Times. They soon found a buyer in South African Breweries (SAB), which purchased Miller in July 2002. Today, Leinenkugel’s finds itself under the corporate umbrella of an international company it doesn’t really know.
“Actually, this is a great opportunity for Miller,” Dick Leinenkugel said. “Unlike Phillip Morris, who was distracted by stuff like cigarettes and food, SAB is focused on beer. They understand beer. They’re just like Leinenkugel’s in that respect.”
As for accessing SAB’s global distribution networks, it looks like Leinenkugel’s won’t be found in overseas taverns anytime soon.
“We’re a regional specialty beer,” Leinenkugel said. “We market our beer to each variety’s audience, not geographic location. That way, we don’t limit our beer to exclusively Wisconsin, but we’re not going global, either.”
Leinie's in the
future
Leinenkugel’s
plans on staying focused on the Midwest, using their two-pronged advertising
strategy in concert with their ongoing crew drives to better understand their
customers’ needs. That is, if the brothers can put off the sibling rivalry
long enough to follow the plan.
“We have to be 200 miles apart to make it work,” Leinenkugel said with a laugh. Yet, he is also quick to admit that each brother brings different and necessary talents to the table. Jake, in Chippewa Falls, excels at customer relations and motivating the troops; John, in Milwaukee, is skilled in the visual design so critical to advertising; and Dick, also in Milwaukee, is the business and logistics pro. Dick recalled his father, Bill Leinenkugel, telling his sons that their diversity was a bonus for the company, “‘If all of you thought alike, two of you wouldn’t be needed.’”
Despite this diversity of talents, the brothers still don’t know exactly how to make the beer that bears their name. What they do know, however, is how to grow a small Wisconsin brewery into a well-placed and connected marketing engine that Dick calls “a shining star in the Miller portfolio.”
