Joseph Schlitz Brewing Company
|Fate||Assets sold to Pabst Brewing Company|
|Founded||1849 in Milwaukee, Wisconsin, United States|
|Headquarters||Los Angeles, California|
|Owner||Pabst Brewing Company|
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 ( //), 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". 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 20th century, exchanging the title with Anheuser-Busch multiple times during the 1950s.
The company was founded by August Krug in 1849, but acquired by Joseph Schlitz in 1858. 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. Pabst now produces the recently relaunched "Schlitz Gusto" beer and Old Milwaukee.
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. Prior reports suggested the price agreed upon was around $700 million.
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. In 1858, Schlitz married the widow, Anna Maria Krug, and then changed the name of the brewery to the Jos. Schlitz Brewing Co. in 1861, Krug's 16-year-old nephew, August Uihlein, began employment at the brewery.
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. 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 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 at sea (lost at sea, while traveling to Germany; his ship hit a rock near Land's End, Cornwall, and sank. management 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.
Leader in the industry
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 Schlitz Brewing Company to the Schlitz Beverage Company and changed its "famous" slogan to "The drink that made Milwaukee famous." After Prohibition ended, Schlitz again became the world's top-selling brewery in 1934.
In 1953, Milwaukee brewery workers went on a 76-day strike. The strike greatly impacted Schlitz's production, including all of Milwaukee's other breweries and allowed Anheuser-Busch to surpass Schlitz in the American beer market. 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 continued to compete for the top brewery in America for years. Schlitz remained the number-two brewery in America as late as 1976.
Decline in status and sale to Stroh
By 1967, the company's president and chairman was August Uihlein's grandson, Robert Uihlein, Jr. 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, using high-temperature fermentation instead of the traditional method, and also substituted less-expensive extracts rather than traditional ingredients. Schlitz also experimented with continuous fermentation, 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 also spoiled more quickly, rapidly losing public appeal.
In 1976, concern was growing 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, so would be considered nondisclosable. The agent reacted badly with a foam stabilizer that was used and Schlitz recalled 10 million bottles of beer, costing it $1.4 million.
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.
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 nonstandard brewery design, Baldwinsville is unique and capable of complex production, making it a key player in the 12 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. The Schlitz Brewhouse stood unused 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
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. 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. The first markets for relaunching included Chicago, Florida, Boston, Minneapolis-Saint Paul, and Schlitz's former headquarters, Milwaukee. 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.
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.
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.
- Schlitz: American-style lager
- Schlitz Light: Light lager
- Schlitz Dark: Dark version of the original lager
- Schlitz Malt Liquor: Malt liquor
- Schlitz Red Bull: Malt liquor
- Old Milwaukee: American-style lager
- Primo: American-style lager
- 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
- Yenne, Bill (2004). Great American Beers: Twelve Brands That Became Icons. MBI Publishing Company. p. 158. ISBN 0-7603-1789-5.
- Victor J. Tremblay and Carol Horton Tremblay, The United States Brewing Industry (Cambridge, MA: MIT Press 2005), 68
- "Going for the Gusto for over 150 years". Schlitz Brewing Company. Archived from the original on 2008-07-06.
- "Schlitz returns, drums up nostalgic drinkers". Gannett Co. Inc. 1 August 2008. Retrieved 2 October 2008.
- Our Portfolio Archived 2011-11-15 at the Wayback Machine. from the company's website
- DesChenes, Denise. "Pabst Brewing Company Completes Sale To Blue Ribbon Holdings". TSG Consumer Partners. TSG Consumer Partners. Archived from the original on 10 January 2016. Retrieved 5 June 2015.
- Wilmore, James. "Pabst Brewing Co sale finalised as Eugene Kashper, TSG take reins". Just-Drinks. Just-Drinks. Retrieved 5 June 2015.
- Gregg Smith. "Milwaukee history: IV". realbeer.com.
- Cornell, Martyn. How Milwaukee's Famous Beer Became Infamous: The Fall of Schlitz. 01/10/2010.
- Uwe Spiekermann, "Political Revolution, Emigration, and Establishing a Regional Player in Brewing: August Krug and Joseph Schlitz." In Immigrant Entrepreneurship: German-American Business Biographies, 1720 to the Present, vol. 2, edited by William J. Hausman and the German Historical Institute. Last modified September 19, 2016. http://www.immigrantentrepreneurship.org/entry.php?rec=279.
- Dictionary of Wisconsin History: August Uihlein from the Wisconsin Historical Society website
- "Joseph Schlitz Brewing Co. : A Chronological History 1933–1969". Sussex-Lisbon Area Historical Society, Inc. Archived from the original on 14 January 2011. Retrieved 15 May 2011.
- "Joseph Schlitz Brewing Co. : A Chronological History 1969–1982". Sussex-Lisbon Area Historical Society, Inc. Archived from the original on 1 November 2010. Retrieved 15 May 2011.
- Bamforth, Charlie. "Cool Stuff." Brewer's Guardian: Dec.-Jan. 2008 "Archived copy" (PDF). Archived from the original (PDF) on 2008-07-08. Retrieved 2010-01-25.
- Mosher, Randy. Tasting Beer: An Insider's Guide to the World's Greatest Drink. Storey Publishing, 2009. ISBN 1-60342-089-4
- Schlitz Park Archived 2011-07-21 at the Wayback Machine. from the website for Milwaukee and Milwaukee County, Wisconsin
- http://beeradvocate.com/news/1312036[permanent dead link]
- Schlitz, with original recipe, returning to Milwaukee, a June 19, 2008, article from The Business Journal of Milwaukee
- "Archived copy". Archived from the original on 2013-01-25. Retrieved 2013-05-03.
- Covert, James (20 September 2014). "Pabst not moving to Russia". New York Post.
- Official website
- Official website (Gusto)
- Collection of mid-twentieth century advertising featuring Schlitz beer from the TJS Labs Gallery of Graphic Design.