News |

MILWAUKEE LOSES `BEER CAPITAL` TITLE AS BREWERIES SHUT OFF TAP

For more than a century the beer barons of Milwaukee brewed the golden liquid that won blue ribbons, put a little gusto into life and made Milwaukee famous.

At one time, the city had dozens of breweries run by powerful family dynasties headed by men named Uihlein, Pabst or Miller. They provided jobs for thousands of families and paid the bills for festive civic affairs. Their families all but became the aristocracy of the largely Teutonic city.

Now, though, the tap is running at a trickle in the city once touted as the beer capital of the world.

Sprawling Jos. Schlitz Brewing Co., once run by the Uihleins, is shuttered. Miller Brewing Co. is part of the Phillip Morris conglomerate. Blatz exists only as a label. Pabst Brewing Co. has been sold.

Only Miller and Pabst still operate breweries in Milwaukee, and Pabst could be gone in a year or two. Once one of the top breweries in the nation, Pabst was sold recently to Paul Kalmanovitz, an 80-year-old California investor, for more than $60 million. There is speculation he may close the century-old Milwaukee plant.

As late as 1981, Milwaukee had the greatest brewing capacity in the world. After the Schlitz shutdown, it fell to No. 2 behind Golden, Colo., where Coors is made.

One theory about the demise of the Milwaukee brewing industry is advanced by August Uihlein Pabst, the great grandson of one of the first beer barons, Capt. Fred Pabst. His mother was a Uihlein.

”The kids didn`t have the love for the business the old man did,” said Pabst, 51, who was with Pabst from 1966 until two years ago. ”They probably weren`t as smart either, so a lot of them wanted out.”

He cites the decision of the Uihlein family to sell Schlitz to Stroh Brewery Co. of Detroit.

”The irony is that when Schlitz decided to sell, it was doing everything right,” Pabst said. ”Its sales operation was in good shape. Its sales were rising, and they had solved the problem with their quality control.

”And then the family members decided they wanted out. It was tragic.”

John Collopy Jr., an analyst for Robert W. Baird & Co., agrees in part, but says ”there are a lot of factors.”

Industry growth has slowed, he says, and those in the key drinking age of 18 to 35 aren`t drinking as much beer.

”And except for Schlitz, the families got out of decision-making in the beer industry in Milwaukee a long time ago,” Collopy said. ”The big fellows also have a lot more money to spend on advertising.”

The ”beer wars” that left Milwaukee brewing among the walking wounded have been fought the last three decades in corporate board rooms and the courts with such weapons as slick television ads, marketing campaigns and flanking moves to locations with less costly work forces.

Winning so far is the nation`s No. 1 brewer, Anheuser-Busch Co. of St. Louis. Backed by the deep pockets and marketing expertise of Phillip Morris, Miller has climbed to No. 2 but is stalled. Anheuser-Busch and Miller control 50 percent of the beer market.

The dark horse is G. Heileman Brewing Co. of La Crosse, which could have moved from fourth to third but was unsuccessful in attempts to acquire Schlitz and then Pabst.

Once a small Mississippi River brewer, Heileman has expanded rapidly using a plan of buying smaller companies, then moving its established brands into their marketing channels.

In the 1950s, Schlitz and Anheuser-Busch battled for No. 1. Schlitz, using the catchy ”Beer that made Milwaukee famous” slogan, expanded rapidly. Then, there was a change in its brewing formula that some said resulted in an uneven flavor. The brewing process was restored, but sales continued flat, and changes in advertising campaigns failed to halt the decline.

Just four years ago, Jos. Schlitz Brewing Co., begun in 1849 as a three-barrel operation in the basement of a Milwaukee restaurant, was shut down after its purchase by Stroh. The purchase moved Stroh to No. 3.

If Milwaukee is not in fact the nation`s Beer City any more, its brewers can claim many innovations, from being the first to offer ”premium beers” to taking the lead in the development of the beer can in the late 1930s.

It was Schlitz that gave Milwaukee its beer reputation by rushing shipments to Chicago in 1871 after the Great Fire. When economic conditions after World War II were ripe for national breweries splitting into regional production centers, Milwaukee brewers led the way.

More recently, it was a Milwaukee brewer, Miller, that took the old idea of a diet beer, redesigned it and used sophisticated marketing techniques to make low-calorie beer the fastest growing segment of the industry.

Still, for Milwaukeans there is a daily reminder of the city`s ranking these days in the beer industry.

On one of the city`s tallest buildings in the downtown, there is a huge, revolving electronic beer sign. It used to proclaim ”Schlitz” to passersby. Now, it reads ”Budweiser.”