Joseph Schlitz Brewing Company

Joseph Schlitz Brewing Company

Industry	Alcoholic beverage
Founded	1849 (1849) Milwaukee, Wisconsin, U.S.
Founder	August Krug
Headquarters	Los Angeles, California
Key people	Joseph Schlitz
Products	Beer
Owner	Pabst Brewing Company
Website	www.schlitzbrewing.com

The Joseph Schlitz Brewing Company was an American brewery based in Milwaukee, Wisconsin, and once the largest producer of beer in the United States. Its namesake beer, Schlitz (pronunciation: /ˈʃlɪts/), was known as "The beer that made Milwaukee famous" and was advertised with the slogan "When you're out of Schlitz, you're out of beer".^[1] Schlitz first became the largest beer producer in the US in 1902 and enjoyed that status at several points during the first half of the twentieth century, exchanging the title with Anheuser-Busch multiple times during the 1950s.^[2]

The company was founded by August Krug in 1849 but acquired by Joseph Schlitz in 1858.^[3] Schlitz was bought by Stroh Brewery Company in 1982 and subsequently sold along with the rest of Stroh's assets to Pabst Brewing Company in 1999.^[4] Pabst now produces the recently relaunched "Schlitz Gusto" beer and Old Milwaukee.^[5]

On November 13, 2014, Pabst announced that it had completed its sale to Blue Ribbon Intermediate Holdings, LLC. Blue Ribbon is a partnership between American beer entrepreneur Eugene Kashper and TSG Consumer Partners, a San Francisco–based private equity firm.^[6] Prior reports suggested the price agreed upon was around $700 million.^[7]

History

Beginnings

In Milwaukee, Schlitz was hired as a bookkeeper in a tavern brewery owned by August Krug. In 1856, he took over management of the brewery following the death of Krug. Two years after Schlitz married Krug's widow, he changed the name of the brewery to the Jos. Schlitz Brewing Co.^[8] That same year Krug's 16-year-old nephew, August Uihlein, began employment at the brewery.^[9]

The often circulated story of Schlitz' proposed donation of thousands of barrels of beer to the Chicago population after the Great Chicago Fire of 1871 is simply a modern myth, pushed by later marketing campaigns.^[10] Schlitz' national expansion was based on new distribution points in Chicago and elsewhere, and the consequent use of the railway. From the late 1880s, Schlitz built dozens of tied houses in Chicago, most with a concrete relief of the company logo embedded in the brickwork; several of these buildings survive today, including Schuba's Tavern^[11] at the corner of Belmont and Southport. In 1873 Schlitz rejected a purchase offer from Tennessee brewer Bratton and Sons.

Schlitz died on May 7, 1875 while returning from a visit to Germany; his ship hit a rock near Land's End, Cornwall, and sank. Control of the corporation passed into the hands of the Uihlein brothers, nephews of founder August Krug. When Anna Maria Krug Schlitz died in 1887, the Uihleins acquired complete ownership of the firm.^[12]

Leader in the industry

Advertising on the Chicago River grain elevators

The company flourished through much of the 1900s, starting in 1902 when the production of one million barrels of beer surpassed Pabst's claim as the largest brewery in the United States. While Prohibition in the United States forced the suspension of alcoholic brewing, the company changed its name from Brewing Company to Beverage Company and adapted its slogan to "The drink that made Milwaukee Famous." After prohibition ended, Schlitz again became the world's top-selling brewery in 1934.^[4]

In 1953 Milwaukee brewery workers went on a 76-day strike. The strike greatly impacted Schlitz's production and allowed Anheuser-Busch to surpass Schlitz in the American beer market.^[13] The popularity of Schlitz's namesake beer, along with the introduction of value-priced Old Milwaukee, allowed Schlitz to regain the number one position. Schlitz and Anheuser-Busch would continue to compete for the top brewery in America for years.^[2] Schlitz remained the No. 2 brewery in America as late as 1976.^[14]

Decline in status and sale to Stroh

By 1967 the company's president and chairman was August Uihlein's grandson, Robert Uihlein, Jr.^[9] Faced with a desire to meet large volume demands while also cutting the cost of production, the brewing process for Schlitz's flagship Schlitz beer was changed in the early 1970s. The primary changes involved using corn syrup to replace some of the malted barley, adding a silica gel to prevent the product from forming a haze,^[9] using high-temperature fermentation instead of the traditional method, and also substituted less-expensive extracts rather than traditional ingredients.^[15] Schlitz also experimented with continuous fermentation,^[16] even designing and building a new brewery around the process in Baldwinsville, New York. The reformulated product resulted in a beer that not only lost much of the flavor and consistency of the traditional formula but spoiled more quickly, rapidly losing public appeal.

In 1976, there was growing concern that the Food and Drug Administration would require all ingredients to be labeled on their bottles and cans. To prevent having to disclose the artificial additive of the silica gel, Uihlein switched to an agent called "Chill-garde" which would be filtered out at the end of production and therefore would be considered non-disclosable. The agent reacted badly with a foam stabilizer that was used and Schlitz recalled 10 million bottles of beer, costing it $1.4 million.^[9]

As part of its efforts to reverse the sales decline, Schlitz launched a disastrous 1977 television ad campaign created by Leo Burnett & Co. In each of the ads, a burly Schlitz drinker threatens an off-screen speaker (visually identified with the viewer) who wants him to switch to a rival beer. Audiences found the campaign menacing and the ad industry dubbed it "Drink Schlitz or I'll kill you." The company responded by pulling the campaign after 10 weeks and firing Burnett. The ultimate blow to the company was another crippling strike at the Milwaukee plant in 1981. About 700 production workers went on strike on June 1, 1981. Eventually, the company was acquired by Stroh Brewery Company of Detroit, Michigan.^[14]

The Baldwinsville brewery was purchased by Anheuser-Busch in 1981 to supplement production of the upcoming Budweiser Light – now Bud Light – release in 1982. Because of the non-standard brewery design, Baldwinsville is unique and capable of complex production, making it a key player in the twelve domestic Anheuser-Busch plants. What remained of the historic Schlitz Brewery complex in Milwaukee was transformed with Tax Increment Financing and other government support into a mixed-use development called Schlitz Park.^[17] The Schlitz Brewhouse stood disused after the sale to Stroh, until it was demolished in 2013.

Further hurt by the rise of high-volume light beers such as Miller Lite and Bud Light, a direction Schlitz did not aggressively pursue – although James Coburn appeared in commercials for the short-lived "Schlitz Light" – the popularity of its namesake beer declined significantly following the sale to Stroh. The once strong Schlitz brand was relegated to cheap beer or "bargain brand" status and became increasingly difficult to find in bars and restaurants.

Pabst acquisition and revival

A Schlitz Sunshine Vitamin Beer can in the Wisconsin Historical Museum

In 1999 Pabst Brewing Company gained control of the Schlitz brand with its acquisition of the Stroh Brewery Company.^[5]

During the reformulating period of the early 1970s, the original Schlitz beer formula was lost and never included in any of the subsequent sales of the company.^[4] Through research of documents and interviews with former Schlitz brewmasters and taste-testers, Pabst was able to reconstruct the 1960s classic formula. The new Schlitz beer, along with a new television advertising campaign, was officially introduced in 2008.^[18] The first markets for relaunching included Chicago, Florida, Boston, Minneapolis-Saint Paul and Schlitz's former headquarters, Milwaukee.^[19] The 1960s classic "gusto" version of Schlitz currently enjoys an almost nationwide distribution in the United States. The classic 1960s theme was also reflected when 1968 Playboy magazine playmate Cynthia Myers became a spokeswoman for Schlitz beer in 2009.^[20]

Pabst Brewing Company, now headquartered in Los Angeles, continues to produce Schlitz beer, Old Milwaukee, and four Schlitz malt liquors—Schlitz Red Bull, Schlitz Bull Ice, Schlitz High Gravity, and Schlitz Malt Liquor.^[5]

In 2014, Pabst Brewing Company was purchased by American entrepreneur Eugene Kashper and TSG Consumer Partners. The deal included the Schlitz brand, as well as Pabst Blue Ribbon, Old Milwaukee, and Colt 45.^[21][22]

Products

• Schlitz: American-style lager
• Schlitz Light: Light lager
• Schlitz Malt Liquor: Malt liquor
• Schlitz Red Bull: Malt liquor
• Old Milwaukee: American-style lager
• Primo: American-style lager

See also

• Union Refrigerator Transit Line, a private refrigerator car line established by Schlitz in 1895
• Schlitz Playhouse of Stars and Pulitzer Prize Playhouse, sponsored television series
• "What's Made Milwaukee Famous (Has Made a Loser Out of Me)", a 1968 song

References

External links

• Official website
• Official website (Gusto)
• Radio jingle (mp3) and advertising images