Yuengling becomes top U.S. craft brewer

As a teenager stacking barrels after school at his family's brewery in Pottsville, Pa., Richard L. Yuengling Jr. was encouraged by plant workers to avoid a career in the family business. America's taste for national brands such as Budweiser, Coors, and Miller, they said, was going to put them all out of a job.

Undeterred, Yuengling bought D.G Yuengling & Son Inc. from his father in 1985, and built it into the maker of the country's best-selling craft beer brand. As the company's value soared in the last decade amid a surge in demand for craft brews, Yuengling became a billionaire.

"We stay nuts and bolts - we make beer," Yuengling, 69, said in an interview last month on the floor of his brewery in Pottsville, an old coal town 75 miles northwest of Philadelphia. "People pick up our products today because they are tasteful and they have character."

D.G Yuengling & Son sold more than 2.5 million barrels of beer last year, a 15 percent increase from 2010, according to the company. Its flagship offering, Yuengling Traditional Lager, a medium-body brew, was the best-selling superpremium beer and the fifteenth most-popular beer total in the U.S. in 2011, according to industry researcher Beverage Information Group. The lager and five other beer varietals helped Yuengling pass Boston Beer Co., maker of the Samuel Adams brands, as the largest U.S.-owned beer maker by volume sold in 2011.

Yuengling said the company had little debt and kept its marketing and distribution costs lower than most of its peers by having a smaller geographic footprint - its beers are available in only 14 U.S. states - and selling more draft beer, which has bigger profit margins and constitutes 30 percent of its business, three times the industry average, according to Yuengling.

Based on the company's stated 2012 production of 2.9 million barrels and the enterprise value-to-earnings before interest, taxes, depreciation, and amortization multiple of Boston Beer, closely held Yuengling is valued at $1.8 billion, according to data compiled by Bloomberg News. Enterprise value is defined as market capitalization plus debt minus cash.

"I know we're doing well," Yuengling said in his brewery's tasting room. "We can go to wherever we want to go to open new states, there's a lot of distributors want our brand."