Food Tycoon Buys Pabst Blue Ribbon: Is a Facelift on the Way?

Pabst Blue Ribbon, better known as "PBR" to its loyal drinkers, may be on the fast-track to animage update. The super-cheap beer, which gained its "Blue Ribbon" status at the World's Columbian Exhibition in 1893, was previously owned by the Kalmanovitz Charitable Foundation. However, a law stating that charitable companies cannot own for-profit companies placed the Pabst Brewing Company -- and its extensive holdings -- on the selling block. Numerous companies took a shot on Pabst, but the $250 million winning bid came from C. Dean Metropoulos, a Greenwich Connecticut-based investor who is renowned for his ability to reinvigorate tired food companies and brands like Chef Boyardee and Duncan Hines.

Metropoulos made his bones in the 1990's working alongside Hicks, Muse, Tate & Furst, a Dallas-based private equity firm. Together, the team built International Home Foods, a conglomerate with a diverse slate of brands, including Chef Boyardee, Bumble Bee, Pam and Gulden's. After building IHF through a combination of clever marketing, strategic expansions and improved efficiency, they sold it to ConAgra in 2000 for $2.9 billion.

They followed up on that success with Pinnacle Food, whose holdings include Log Cabin, Birds Eye and Vlasic pickles. In 2007, they sold that company to Blackstone for $2.2 billion. Afterwards, Metropoulos bragged that his work with famous brands has generated a 44% return for him and his partners.

Son Could Play Vital Role in PBR's Makeover

The money man's secret weapons are his sons, Evan, 29 and Daren, 26. In the case of Chef Boyardee, the teen-aged Metropouloses pushed their father into a relationship with WWF, Vince McMahon's wrestling empire, that ultimately led to endorsements from the Rock, Stone Cold Steve Austin and other prominent wrestlers. Years later, Evan -- who became known as "The Youngest Tycoon" -- heard an episode of the Howard Stern show in which the famous radio host declared his love for Bumble Bee tuna. Before long, the teenager was in Stern's office, pitching the brand. Not only did Stern support Bumble Bee, but he also became interested in the Metropoulos boys, featuring them on his show.

As Evan got older, his pop culture touchstones changed, leading to marketing moves that targeted older audiences. In the mid-1990's, he met Jennifer Aniston's cousin while on vacation in Greece and learned that the Friends star was preparing for Picture Perfect, a movie in which she later starred with Kevin Bacon. In the script, Aniston's character was working on an advertising campaign for an unnamed product. Evan pulled some strings and, when the movie came out, the product was Gulden's mustard, a property that the Metropouloses owned.

Evan and Daren's biggest coup -- and the one which may have the most relevance for PBR -- was probably Perrier Jouet champagne. The Metropoulos boys pushed their friends in the music industry to adopt the brand and feature it in their videos. By donating a few cases to Snoop Dogg and Limp Bizkit, they turned a lesser-known champagne into the preferred tipple of much of the young urban market.

A Second Life Among Urban Hipsters

Given that Evan Metropoulos is now 29, he's probably quaffed more than his fair share of PBR. He and his brother are expected to be brought on board to help in the brand's renaissance, but this may be a tricky sell.While the beer is popular among urban hipsters who appreciate its supposed authenticity and budget price, for beer consumers who prefer flavor to irony, PBR is better known as the kind of watery, foul-tasting brew that attracts stewbums and people who just don't know any better.

PBR was once one of America's most popular beers, hitting its apex in 1977 with sales of 18 million barrels per year. But, in the midst of the 1980's beer boom, which introduced better-tasting imports and smaller domestic brews, it began a steady decline. Sales bottomed out at an anemic 1 million barrels in 2001.

That same year, Pabst stopped producing its own beer, choosing instead to subcontract the actual brewing business to a competitor, MillerCoors LLC. Today, Pabst is essentially a marketing company for 32 separate brands of beer, most of which are bottom-shelf swill staples like Schaefer, Colt 45, Old Milwaukee, Schlitz and Olympia.

It looked like Pabst was on its way to oblivion when a funny thing happened: In 2002, PBR's sales began creeping higher. Young urban hipsters adopted the brew, refreshed by its lack of marketing, if not its repugnant flavor. As the brand's sales continued to grow, Pabst's marketers responded by adopting a hands-off strategy, assuming that the company's lack of traditional endorsements and tie-ins were part of its cachet. The strategy paid off, and the brand continued to steadily grow.

With the Metropouloses at the helm, it seems likely that Pabst will begin pursuing a more aggressive marketing stance. Admittedly, this could backfire if fickle hipsters decide that PBR is no longer "authentic." But, if the past is any indication, the Metropouloses will find a way to tap -- and exploit -- the huge keg of outsider cred that Pabst has cultivated.