Last fall the bankrupt Pittsburgh Brewing got a new Plan of Reorganization confirmed which included new investors, a settlement with creditors, a new CEO and a new name: Iron City Brewing. The new boss, Tim Hickman, today outlines his four-prong plan to increase revenues this year by a staggering 35%, certainly an audacious goal. Perhaps their biggest hurdle is that the perception of the brewery, as a direct result of the bankruptcy, has diminished and many locals assume the quality of the beer has likewise decreased. This despite the fact that the brewery was founded in 1861, making it one of the oldest breweries in America still operating today (#1 is another Pennsylvania favorite, Yuengling, which was founded in 1829).
To combat these problems, Here’s the four things Hickman hopes to accomplish:
- Upgrade the facility on Liberty Avenue to assure consistent production.
- Stop competing with beer-producing giants.
- Saturate the bar scene.
- Redesign packaging and labels.
With a modernized brewery, “Iron City expects to produce more than 233,000 barrels of beer in 2008. Last year, the brewery turned out about 172,000 barrels. The 2008 projection would be the most beer brewed at Iron City since 2004.” Sales VP Tony Ferraro has made the sensible observation that they can’t really complete on price with the bigger breweries and will be looking at themselves as a regional brewery. As a result, they’ll raise their prices slightly in line with a reasonable mark-up and will promote the beer as local, tying themselves to Pittsburgh’s 250th birthday celebration, which takes place this year. They’re also finally replacing their Hoff-Stevens kegs with new Sankey’s in an effort to get more tap handles in local bars and restaurants.
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They’ll also be redesigning their packaging and labels, although apparently the iron city logo is off-limits. A new slogan will also be introduced. “The official beer of the Pittsburgh Nation.” And apparently some locals agree. A pair of Pittsburgh natives have set up Drink Iron City, “a blog about supporting the Iron City [Brewing] Company.”
Currently, Iron City Beer has a 6% market share in the greater Pittsburgh area and the plan is to shoot for 10% over the next few years. As Hickman puts it. “We’ll get there,” he said. “We have a quality product here, and we have consumer loyalty behind our brands.” My friend and colleague, Julie Bradford, who is the editor of All About Beer magazine, agreed and is quoted in a Pittsburgh Tribune-Review article. |
She said she approved of every step Iron City is taking, and even praised Hickman for raising prices.
“In fact, it’s a smart idea to raise prices,” she said. “That raises perceived value.”
Bradford also agreed that Iron City should concentrate on local loyalty, “because that’s what Iron City has going for them.”
The old Pittsburgh Brewery during better times.