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KC's Boulevard Brewing makes inroads in St. Louis

Friday, February 5, 2010 | 11:54 a.m. CST; updated 1:44 p.m. CST, Friday, February 5, 2010
This July 14, 2008, photo shows a worker moving a load of beer inside Boulevard Brewing of Kansas City. In the year since InBev, a Belgian-based brewing company, bought Anheuser-Busch, Boulevard has not only gained bragging rights as Missouri's largest home-based brewery but has seen its grocery sales increase 26 percent in the St. Louis market.

KANSAS CITY — It's still a tiny bubble to the king of beers, but Boulevard Brewing of Kansas City attributes a surge in St. Louis sales to local frothing over foreign ownership.

In the year since InBev, a Belgian-based brewing company, bought Anheuser-Busch, Boulevard has not only gained bragging rights as Missouri's largest home-based brewery but has seen its grocery sales increase 26 percent in the St. Louis market.

Boulevard also has become welcome in bars and restaurants in metropolitan St. Louis that never poured its product before.

"You can't lay off (hundreds of) people in a city and expect people to still support you like the local benevolent dictator," said John McDonald, Boulevard's president.

In a statement, Dave Peacock, president of Anheuser-Busch, said his firm was not ceding any ground: "We never take any beer sale for granted, and we work to win over new consumers every day."

Boulevard is not the only brewer benefiting.

Grocery sales of Schlafly, a much smaller St. Louis brewer of what the industry calls craft beer, have jumped 38.2 percent since the Belgians came to town.

But it's reluctant to boast.

"I totally understand why the folks from Boulevard are saying this," said Dan Kopman, co-founder of Schlafly. "It's a different experience for them coming to St. Louis.

"It's not their neighbors who lost a job. They see it as an opportunity."

So much so that Boulevard also has begun sponsoring St. Louis area charities and other fundraising events.

The Kansas City brewer scored a coup recently when it became a sponsor for the commissioning of the USS Missouri, a new attack submarine. The last Navy vessel bearing the state's name was the battleship that hosted the surrender of Japan in 1945.

Observers say the Boulevard sponsorship never would have happened when the Busch family owned A-B.

"On magnitude a thousand times bigger than we do in Kansas City, they supported groups in St. Louis with beer and checks," said Bob Sullivan, marketing director at Boulevard.

But now, he says, A-B is more often saying no: "The USS Missouri is a prime example."

Dave Griffith, a spokesman for the Jefferson City group organizing the commissioning event set for July 31 in Groton, Conn., confirmed that Boulevard and A-B were both approached.

"Boulevard beer just stepped up immediately without hesitation," he said. "They wanted to be included. Because Boulevard stepped up first, that ended the discussion for the committee."

From May 1 to July 31, Boulevard will donate $1 for every barrel it sells in Missouri to help the sub commissioning.

It's also tossing in a 12-pack of its new Pilsner beer for every crew member — 134 sailors in all. The Pilsner 12-pack boxes will feature a silhouette of the submarine and a plug of support.

Sullivan estimated up to $30,000 could be raised, about 10 percent of the total being sought by the nonprofit commissioning committee.

And it's no coincidence that Boulevard, which built its reputation brewing ales such as pale ale and wheat, got into the Pilsner business last summer. It began selling the new product in St. Louis in November. Budweiser and its A-B brethren are Pilsner-style beers.

Schlafly's Kopman shakes his head at Boulevard's impertinence.

"I applaud them for having the guts to do this, but it'll be interesting to watch," he said.

He added that Schlafly also had seen an upswing in charity requests since InBev arrived, so much so his company hired a new manager to handle the increase.

A-B's Peacock stressed that his firm continued to be a major financial supporter of St. Louis institutions and groups.

"In St. Louis and other communities, our commitment to charitable giving continues. We support organizations large and small, including United Way, Toys for Tots, the American Red Cross, St. Patrick's Center and many more, both nationally and in the state of Missouri."

Among the recent large donations were $3 million to St. Louis University, $2.5 million to the University of Missouri-St. Louis and $1 million each to Fontbonne University, Harris-Stowe State University and Missouri University of Science & Technology in Rolla.

Although Boulevard and Schlafly are enjoying double-digit sale increases, it's still a drop in the barrel to Anheuser-Busch, which has dominated St. Louis for decades with more than a 70 percent market share.

The maker of Budweiser, Michelob and all their light brothers sold 2.3 million cases of beer in metro St. Louis supermarkets last year, a 3 percent drop from 2008.

To put that in perspective, even with their newfound growth, Boulevard sold 22,125 cases in St. Louis last year and Schlafly sold 76,148 cases.

However, both Boulevard, which brewed 140,000 barrels last year, and Schlafly, which brewed 30,000 barrels, think the InBev purchase will lead to a permanent market shift.

Sullivan said Carlos Brito, the Brazilian executive running A-B InBev, was more interested in increasing the company's profitability than its market share.

"The biggest difference in perspective is that the Busch family, even with a 50 percent share of the U.S. beer business, their goal was 60 percent," he said. "Everything they did for marketing and sales was in terms of gaining market share. All Carlos Brito is interested in is the money.

"As a global company, they could care less about a 70 percent share in St. Louis. It's not much to lose 1 percent, 2 percent or 3 percent. That volume left on the table, however, is a tremendous amount of volume for little guys like us."

Before the InBev purchase, Kopman remembers the days when many St. Louis bars and restaurants wouldn't even consider pouring Schlafly.

"It was a joke in south St. Louis County that if you walked into a bar and asked what do they serve, they'd say, 'We have it all — but just Anheuser-Busch beers,' " he said. "That has changed for us.

"Folks are asking for the local beer, and they're putting Schlafly up there. There are consumers that would drink nothing but A-B, and now they ask for us."

Pepe Vantreece runs two Growlers pubs in the St. Louis area, each with 131 beers on the menu.

"People are drinking more of the other brands than the A-B stuff," he said. "I think there are a lot of loyal people who were displeased with the changeover, being not owned by a St. Louis company.

"I've seen a big increase in Boulevard sales."


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