Bartender Elizabeth Lessner stands next to a Pabst Blue Ribbon logo at Betty’s Food and Spirits in Columbus, Ohio. (AP Photo/Terry Gilliam)
Dow Jones Newswires | Investor C. Dean Metropoulos made a fortune building well-known
consumer brands, including Bumble Bee Tuna and Vlasic Pickles. Now, he is looking to wash them down with a Pabst Blue Ribbon.
Metropoulos, a 64-year-old executive known for invigorating brands, has reached an agreement to buy Woodridge-based Pabst Brewing Co. from the charitable foundation that owns the company for about $250 million, according to people familiar with the matter.
Although little known outside of food circles, he earned a fortune managing brands such as Chef Boyardee, Duncan Hines and Ghirardelli Chocolates.
With Pabst, Metropoulos is showing his deal-making skills.
About 15 other private-equity firms, including Morgan Stanley’s private-equity arm, had considered a bid, said people familiar with the matter. The purchase is in its final stages and has the financial backing of General Electric Co.’s lending arm, the people said.
Pabst Brewing is the country’s fifth-largest beer supplier, according to industry newsletter Beer Marketers Insights Inc., accounting for 2.7 percent of industry volume last year. Pabst’s blue-collar roots have made the brand — known among beer cognoscenti as PBR — a beer of choice for a generation of irony-loving hipsters from Portland, Ore., to Manhattan’s Lower East Side.
The company also owns such time-worn labels as Schlitz, Old Style, Lone Star and Colt 45.
Pabst operates as a virtual brewer, owning the brand names of products, which are brewed under contract with beer giant MillerCoors LLC. Pabst has gained renown for its off-beat promotions, such as female arm-wrestling competitions and eco-conscious fashion shows, but remains a bit player compared with Anheuser-Busch InBev NV and MillerCoors, the joint venture of SABMiller PLC and Molson Coors Brewing Co.. Those brewers together control about 79 percent of the U.S. market.
Dollar sales of Pabst Blue Ribbon in food, drug and other retail outlets rose 33 percent, to about $172.7 million in the 52 weeks ending April 18, according to market-research firm SymphonyIRI Group. The figures exclude sales at Wal-Mart Stores Inc. and some other retailers.
Metropoulos has had a string of successes since starting Stella Foods Inc., a Vermont-based cheese company, in 1981. He sold that business a dozen years later for $375 million to an investor group led by Texas billionaire Robert Bass.
Metropoulos then did a series of deals with Dallas private-equity firm Hicks Muse Tate & Furst Inc., in which he managed several food companies.
During the 1990s, he and Hicks Muse built International Home Foods, the parent of such brands as Chef Boyardee and Bumble Bee Tuna, during the 1990s and sold it in 2000 to ConAgra Inc. for $2.9 billion.
Earlier this decade he helped build Pinnacle Foods, the owner of brands including Vlasic pickles and Hungry Man frozen dinners.
He led that company under a series of owners before selling it to Blackstone Group (BX) in 2007 for $2.2 billion.
Metropoulos’s two sons, Evan, 29 years old, and Daren, 26, are expected to play key roles at Pabst, said people familiar with the matter.
Pabst has been owned for about a decade by California-based Kalmanovitz Charitable Foundation, named for the late brewery magnate Paul Kalmanovitz. Kalmanovitz died in 1987, two years after buying Pabst.
The Internal Revenue Service had ordered the trust to sell Pabst under a federal law barring charities from owning for-profit businesses for more than five years.
After the company didn’t sell by a 2005 deadline, the IRS granted a five-year extension that expired this year, according to people familiar with the company.
So, big deal, he bought some brands. Maybe he can resurrect Billy Carter and thus have someone to buy one.
One of the best lines in a movie was in Blue Velvet:
“Heineken?! F— that s—! Pabst Blue Ribbon!”
I assume he’s buying it ironically?
PBR rocks! A 6-pack of ice cold 16oz cans sounds good right about now.
Tracy, your comment made me almost spit out glass of water. Very true!
PBR is so under-appreciated. It is a very good light, summertime beer.
This guy specializes in reviving old brand names and he is getting a treasure trove of them here. Just don’t mess with my PBR! My guess is that this won’t be a Woodridge based company anymore. They really should open a headquarters office in Milwaukee, even if it is just a maildrop. Best of luck with the new company, we all need to support a real American beer brand.
Oh great – now they’ll probably jack the price up! Shiner used to be a good cheap local beer until they followed the Corona lead and got trendy and jacked the price up on it.
Old Style and Lone Star – two of my other favorite “value” beers. I try Schlitz every decade of so to see if it tastes any better, but it never does.
PBR is legitimately decent for cheap beer. It tastes better than Budweiser or Bug Light, or any of the typical Miller products. It’s also better than some popular pricier stuff…Heineken for example (that stuff is a de facto red flag for a beer newbie).
It’s funny though that the very hipsters who embraced PBR before for its novelty now disdain it for its popularity. Tools…
“beer cognoscenti”…..if I knew what a “cognoscenti” was, I would not be drinking PBR……
i can guarantee you that it was not novelty which drew portland’s hipsters to pbr, but it’s incredibly low price. budweiser tastes like poo and 2/3 of the price is marketing. pabst is the last of the american-owned macrobrews, and with well-paid union brewing jobs to boot.
Jason–you did read this part of the article, didn’t you: “Pabst operates as a virtual brewer, owning the brand names of products, which are brewed under contract with beer giant MillerCoors LLC.” A little later, MillerCoors is identified as “the joint venture of SABMiller PLC and Molson Coors Brewing Co.” So I’m not sure where you get the “last of the american-owned macrobrews” comment from–yeah, the brand name is owned by an American investment company (which doesn’t actually make any beer), but the beer itself is brewed by a South African/Canadian combine. On the other hand, I think Miller’s breweries are still unionized. Not sure about Coors and Molson, though…
For “real American beer,” there are many micro-breweries in and around Chicago that can use your support. Sure, they may not be as cheap as mainstream beers, but they are supporting the locally economy. Blue Velvet is awesome. Traci’s comment is great.
Pabst and most of the popular beers of the past were bought up and destroyed by Paul Kalmanovitz. After ruining them he turned Pabst into a charity.
Beer consumption in general are driven by advertising costs. People are driven by attractive people drinking it in an environment that consumers envision themselves in. Dance clubs,outdoors,watching sports,in a fancy house with a fancy pool,surrounded by beautiful women or men. Try a micro-brew or an unfamiliar label off the self at your local store. Broaden your horizons. A Pabst, Schlitz or a Hamm’s in the summer actually tastes pretty good while in the heat. Try a Weiss with a slice of lemon or try a Pabst with a slice of lemon. It’s equal to if not better than a Corona served the same. Diversify your tastes and not let the advertisers dictate what your taste should be or what is in vogue today. Remember throughout the decades it was Pabst,Hamms,Old Style,
Budweiser,Coors, Miller Lite…NOW?
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