Stroh Brewery Company


Stroh Brewery Company

The Stroh Brewery Company was a beer brewery located in Detroit, Michigan. In addition to their own Stroh's brand, they produced or bought the rights to several other brands including Schlitz, Augsburger, Erlanger (beer), Lone Star, Old Milwaukee, Red River, and Signature, as well as manufacturing Stroh's Ice Cream.

Company History

Establishment

The Stroh family began brewing beer in a family-owned inn during the 18th century in Kirn, Germany. In 1848, during the German Revolution, Bernhard Stroh, who had learned the brewing trade from his father, emigrated to the United States. Bernhard Stroh established his brewery in Detroit in 1850 when he was 28 and immediately started producing Bohemian-style beer, which had been developed at the municipal brewery of Pilsen, Bohemia, in 1840. In 1865 he purchased additional land and expanded his business. He adopted the Lion's Crest from the Kyrburg Castle in Germany and named his operation the Lion's Head Brewery. (The lion crest is still visible in its advertising and product labels).

Bernhard Stroh's original beer selling operation consisted of a basement brewing operation and was then sold door-to-door in a wheelbarrow.

Bernhard Stroh Jr. took charge of the brewery on the death of his father. He changed the brewery's name to the B. Stroh Brewing Company. With the introduction of pasteurization and refrigerated rail cars, Stroh was able to ship some of his beer as far as Florida and Massachusetts. In 1893 Stroh Bohemian Beer won a blue ribbon at the Columbian Exposition. The company's name was changed to The Stroh Brewery Company in 1902. In 1908 Bernhard Stroh's brother Julius Stroh took over the brewery. After a tour of famous European breweries, he introduced the European fire-brewing method in the Stroh brewery. Today, Stroh's is the only fire-brewed beer on the American market. Common in Europe before World War I, the fire-brewing process uses a direct flame rather than steam to heat beer-filled copper kettles. The company claims that the resulting higher temperatures bring out more of the beer's flavor.

Prohibition

During Prohibition, Julius Stroh operated the business under the name The Stroh Products Company, producing near beer (beer with its alcohol extracted), birch beer, soft drinks, malt products, ice cream, and ice. Though production of most of these items ceased when Prohibition ended in 1933, a special unit of the brewery continued to make Stroh's Ice Cream (this facility remained in Detroit until February 2007, when the operation was moved to Belvidere, Illinois, though the distribution facility in Detroit still remains). [ [http://www.detnews.com/apps/pbcs.dll/article?AID=/20070228/BIZ/702280402 Stroh's ice cream plant will close] , "Detroit News", February 28, 2007]

Growth and Expansion

Upon Julius Stroh's death in 1939, his son Gari Stroh assumed the presidency. Gari's brother John succeeded him in 1950 and became Stroh's chairman in 1967. Gari's son Peter, who had joined the company following his graduation from Princeton University in 1951, became president in 1968.

In 1964 the company made its first move toward expansion when it bought the Goebel Brewing Company, a rival across the street. The company had decided it could no longer compete as a local brewer and was about to move into the national scene. One reason was a costly statewide strike in 1958 that shut down Michigan beer production and allowed national brands to gain a foothold. When Peter Stroh took over the company in 1968, it still had not regained the market share lost in the strike 12 years previous.

Stroh ended a 40-year relationship with a local advertising agency for a large national agency and began targeting the larger national market. Led by creative director Murray Page, Stroh's came up with the slogan "The One Beer...", and by 1971, Stroh Brewery had moved from 15th to 13th place nationally. In 1972, it entered the top 10 for the first time. A year later it hit eighth place. Peter Stroh's willingness to depart from years of tradition enabled Stroh's to survive, but the changes were hard to swallow for many Stroh's employees. Stroh broke the company's tradition of family management and recruited managers from companies such as Proctor & Gamble and Pepsico. He also introduced a light beer, Stroh's Light.

By 1978, Stroh's served 17 states when it produced 6.4 million barrels of beer. By this time, the original Detroit facility was 66 years old and had a capacity of seven million barrels annually. As it became difficult to make efficient shipments to new markets in the East, the company recognized that it required a new brewery. The F&M Schaefer Brewing Company had fallen victim to the Miller beer wars and Stroh's took over all of Schaefer's stock. In 1981, the combined breweries ranked seventh in beer sales. In addition, Stroh was able to take advantage of Schaefer's distributors in the northeastern part of the country. The acquisition also brought Stroh three new brands: Schaefer and Piels beers, and Schaefer's Cream Ale. The company now had a volume of over convert|40000000|oilbbl|m3 and 400 distributors in 28 states, Washington D.C., Puerto Rico, and other Caribbean islands. In 1982 Stroh bid for 67 percent of the Schlitz Brewing Company. By spring of that year, Stroh had purchased the entire company, making Stroh's the third largest brewery in America. During the takeover, Schlitz fought a fierce battle in the courts trying to remain independent. Schlitz finally accepted the takeover when Stroh raised its offer from an initial $16 per share to $17, and the U.S. Justice Department approved the acquisition once Stroh agreed to sell either Schlitz's Memphis or Winston-Salem breweries. By 1988 annual sales reached $1.5 billion. They became the United States' third largest beer brewer when they bought G. Heileman Brewing Company in 1996.

Turnaround and Decline

But changing tastes and lifestyles began to eat into the company's success. Heavy debt, over $500 million the brewer took on to finance its acquisition of Schlitz, drained Stroh's ability to compete. Declining sales and severe financial problems conspired to put an end to a long brewing tradition. Cutbacks and layoffs failed to halt the bleeding. Peter Stroh, chairman of the company his family had founded a century-and-half before, negotiated a deal to sell most of his beer operations to Coors Brewing Company. According to industry analysts, acquisitions made by Stroh's in the fiercely competitive beer industry ultimately made it weak. But the deal with Coors fell through. and in 1987 redeveloped its former headquarters into Brewery Park, a modern office complex. Stroh's attempts in the mid- and late 1980s to diversify into other beverages—such as White Mountain Cooler, a fruit-flavored drink with 5 percent alcohol, and Sundance sparkling-water fruit drinks—met with little success. Stroh's sold its Stroh's Ice Cream operation to Dean Foods Company in 1988.

Stroh then implemented a three-pronged strategy to revitalize the company: developing new products, brewing beer under contract for other brewers, and expanding overseas. The new product area was critical because the explosion in beer brand and types of beer in the 1990s undermined the market share for all established brands. Stroh's strategy when seeking to enter the market for a new type of beer was to extend one or more of its existing brands. In the increasingly popular non-alcoholic beer segment, for example, Old Milwaukee Non-Alcoholic was introduced in 1991, while Stroh's Non Alcoholic debuted in 1993. Old Milwaukee NA quickly became one of the top three selling non-alcoholic brews. In the ice beer category, Stroh launched Old Milwaukee Ice, Schlitz Ice, Schlitz Ice Light, Bull Ice, and Schaefer Ice, all in 1994. Another hot category in the early and mid-1990s was the packaged draft beer; Stroh made its presence felt in this category as well with Stroh's Draft Light, Old Milwaukee Genuine Draft, and Schlitz Genuine Draft.

Another important new product area was specialty beer, the hottest beer category of the 1990s and led by the hundreds of microbreweries that arose to craft them, not by the industry leaders. Stroh and the other leaders, however, were not shut out of this category; in some cases they purchased all or part of microbreweries, in others they formed units to produce specialty beers. Stroh did both. It purchased the Augsburger brand in 1989 and over the next several years developed and introduced both specialty and seasonal brews under the Augsburger name. In 1994, Stroh launched Red River Valley Select Red Lager, a regional premium specialty beer produced by a division of the company's St. Paul, Minnesota, brewery called Northern Plains Brewing Company. Two years later, Red River Honey Brown Ale was introduced.

The international market provided growth opportunities for Stroh that were very limited in the stagnant, hyper-competitive U.S. market. In 1986 Stroh International, Inc. was created to begin to tap into these markets. Canada, India, Japan, Mexico, and Russia were the main targets of Stroh's overseas push. From 1992 through 1995, Stroh's international sales grew each year at rates exceeding 50 percent. In 1994, the company entered into a licensing agreement with Rajastan Breweries, Ltd. (located outside Delhi) to produce, distribute, and market Stroh's and Stroh's Super Strong beers in India. The following year, an agreement was reached with Sapporo Breweries Ltd. of Tokyo whereby Sapporo began distributing Stroh's beer nationwide in Japan. By 1995, exports comprised more than 10 percent of overall Stroh sales.

In early 1995, William Henry assumed Peter Stroh's CEO position to become the first non-Stroh family member to hold that position for the company. The following year Stroh finally landed a long-sought-after target when it acquired Heileman for about $290 million. The Heileman purchase brought more than 30 brands to the Stroh family, many of which Heileman had itself acquired since its founding in LaCrosse, Wisconsin in 1858. Among the more important brands were Colt 45 malt liquor, which when combined with Schlitz Malt Liquor, gave Stroh more than half of the malt liquor market. [ [http://www.fundinguniverse.com/company-histories/The-Stroh-Brewery-Company-Company-History.html The Stroh Brewery Company] , Funding Universe, March 14, 2007]

Stroh neared the turn of the century in a much stronger position than it had entered the 1990s, but by the end of the decade, Stroh would finally give in to the pressures of the larger brewers and be acquired.

Acquisition

The end finally came on February 8, 1999, when word came down from Stroh headquarters that the 149 year-old brewer was selling its labels to the Pabst Brewing Company and Miller Brewing Company. John Stroh III, now company president and chief executive, said of the decision to sell: "Emotionally, it was an extremely difficult one to make, knowing that it would impact our loyal employees, and recognizing that it would mean the end of our family's centuries old brewing tradition that had become, in essence, an important part of our identity. [Zacharias, Patricia & Vivian B. Baulch, [http://info.detnews.com/history/story/index.cfm?id=80&category=life Detroiters and their beers] , "Detroit News", December 29, 1998]

After its disolution in 2000, some Stroh brands were discontinued, while others were purchased by other breweries. The Pabst Brewing Company acquired the most Stroh/Heilman brands. They currently produce Colt 45 malt liquor, Lone Star, Schaefer, Schlitz, Schmidt's, Old Milwaukee, Old Style, Stroh's, and St. Ides. The Miller Brewing Company got Mickey's Malt Liquor and Henry Weinhard's. Most other Stroh/Heileman brands disappeared after 2000. [ [http://www.beercollections.com/Breweries/Michigan/Stroh_Brewery.htm Stroh Brewery] , Beer Collections, 2000]

Advertising

Commercials

Stroh's had some memorable TV commercials as well.

:*One featured a youthful-looking fellow asking for a Stroh's Beer at a bar, with the bartender asking him for identification (the age was not mentioned, due to the minimum legal age for drinking at the time being 18 in Michigan and Ohio and 21 elsewhere). The purchaser willingly furnished an ID, with the bartender serving him a Stroh's Beer with the greeting "Happy Birthday!". The bar patrons all applauded as the customer thanked him.

:*Another featured a man confronting his son with great emotion. "Son, answer me. Do you drink beer?" To which the son tearfully replied, "Yes, dad, I drink beer. I'm thirty-four years old!" The father put his arm around the younger man and asked to be reassured that the beer was Stroh's.

:*Still another classic 70s spot featured a xylophonist performing in a lounge before a crowd of customers. The musician was playing the classic Stroh's "From One Beer Lover To Another" jingle using beer-filled glasses for bells, with each glass filled to a different capacity to get a different note. As he finished the song he struck the final glass with his mallet and cracked it; the glass was empty. The audience reacted in stunned silence, the musician recoiled in embarrassment, and a nearby customer (with a rather satisfied look on his face) coyly looked away in feigned innocence.

:*From the late 70s, a man apparently dying of thirst was crawling on his hands and knees through an unidentified desert when he came upon a campsite. He asked the camper if he had any Stroh's beer. The camper said no, but when he offered the thirsty man a drink of cold water instead, he turned it down, saying he really had a thirst for some Stroh's. As the man (back on his feet) walked away from the campsite the camper said to himself, "There goes a real beer lover".

:*Another late 70s classic featured two men adrift in a raft lost at sea. The first man is despairing of being rescued, but the second man comforts him saying they have plenty of food and, of course, a still-cold case of Stroh's, which quickly changes the first man's mood. Later, when a helicopter arrives to rescue them, the first man says to the second "Don't pay any attention to them; maybe they'll go away."

:*Continuing the tradition, a late 70s gem started with a mid-Western farmer and his wife quietly eating dinner in front of a window in their kitchen. Suddenly, a powerful bluish beam of light appears out in the field accompanied by a low-pitched humming noise. The kitchen door is then flung open as the beam invades their kitchen, questing fitfully around the room, opening every drawer and cupboard that it touches. Finally it lands on the refrigerator, the humming sound increases and all the Stroh's beer in the fridge is sucked out the door in the beam. The door slams shut, the light is seen receding in the field and the humming dissipates. After a moment looking out the window, the wife says, "All that way for a Stroh's," and after a laconic pause the farmer says, "Don't surprise me none."

:*In the 80s, Stroh's was known for its amusing "Alex the Dog" commercials, where Alex would fetch a Stroh's from the refrigerator for its owner. One commercial ended with Alex lapping a liquid after pouring two glasses of Stroh's, with his owner yelling "Alex, you'd better be drinking your water!". There was a reference to "Alex from Stroh's" in the 1989 hit single "Funky Cold Medina" by rapper Tone Loc.

The company then turned to the "From One Beer Lover to Another" campaign that had science fiction and phantasmagorical themes. The brewery won two awards for its "Beer Lover" ads. In 1985 Stroh moved to the good times-good friends-good beer theme popular in the beer industry. Its slogan was "Stroh's Is Spoken Here." The company felt the theme was more relevant to the all-American beer drinker and showed more confidence in the beer, rather than being merely entertaining.

ponsorships

In the 1980s the company also turned to corporate sponsorship to gain needed national publicity. Stroh was a sponsor of the 1982 World's Fair in Knoxville, Tennessee, an event that strengthened Stroh's new national standing considerably. For many years Stroh had received little television exposure because of an agreement between the major networks and Anheuser-Busch and Miller Brewing Company which allowed the two top brewers exclusive advertising rights. Stroh fought the agreement and in 1983 was allotted advertising time on ABC's Monday Night Baseball, on two NBC boxing events, and on other popular U.S. television sports shows. Confronted with nearly prohibitive network costs, the company began "The Stroh Circle of Sports" on cable television and independent stations. The program featured live events with reporting and analysis. For increased publicity opportunities, Stroh also turned to such sports as hockey—which had been overlooked by Anheuser and Miller—and sponsored broadcasts of National Hockey League games on the USA cable network. The company also sponsored the 1984 United States Grand Prix, an event considered an important boost for Stroh's international name recognition. "High Rollers", a contest for amateur bowlers, was also developed and sponsored by the company. Stroh's most popular non-sports promotion during this period was the "Schlitz Rocks America" concert series. It also sponsored NASCAR driver Mark Martin in the Winston Cup Series during the 1988 and 1989 season.

Alcohol Content/Nutritional Value

References

External links


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