Ambitious Brew: The Story of American Beer (36 page)

From Greenwich Village to Hibbing, Minnesota, from Chicago to Denver and beyond, kids flocked to coffee shops to hear guitar-strumming folk singers. On the radio, shoo-bop and doowop gave way to youthful angst in the form of “The Sound of Silence” and “Eve of Destruction.” At Drop City in southern Colorado, one of hundreds of experiments in communal living, the inhabitants built geodesic domes out of scrap material and new lives out of their imaginations, and believed that “anything was possible . . . ”

Brewers tried to make sense of this potentially lucrative segment. The editors of
Brewers Digest
bombarded beermakers with articles that explored drugs, young people’s sense of alienation, and the sociology of pot smoking. One series examined teenagers’ passions for fads and tattoos and the relationship between existentialism and drugs. But a Chicago advertising executive spoke for many when he admitted that the new crop of young people “are a puzzle to us and we are a puzzle to them.” They have “their own ideas” and “won’t accept as fact the values and symbols of their elders.” Surveys showed that they were also none too keen on beer. A full 40 percent of young people quizzed in one market analysis described beer as “unpleasant or bitter,” and most females preferred hard liquor to beer.

And some of them simply preferred pot. The manager of a discothèque in Miami told a reporter for the
New York Times
that marijuana “spell[ed] disaster to the liquor trade. If they ever legalize it, the liquor business is dead.” Parts of the business, anyway. A store owner in Boston said that he’d “been selling a lot more wine since the drug thing started.” “It used to always be beer that the kids wanted,” he mused. No more. “Beer drinking is very bourgeois,” explained one student, “but wine is ideal for sipping while you smoke pot.” Out in Colorado, a beer distributor reported that beer consumption had plunged at bars near the university campus in Boulder.

At West End Brewing, the Matt family fought back. Since the end of the war, the Matts had stayed low to the ground, sticking with their Utica Club brand and the familiar environs of upstate New York and northern Pennsylvania. During the 1950s, they lured consumers with a series of captivating television commercials based on talking beer steins Schultz and Dooley and their friends Farmer Mugee and the lovely Bubbles La Brew. The decision to keep it simple enabled the Matts to sell about 600,000 barrels a year, about one-tenth of what poured out of Anheuser Busch or Schlitz, but enough to pay the bills and keep the doors open.

But in the spring of 1968, as long-haired kids wearing flowers in their hair marched against the war, the Matts launched a new advertising campaign centered on an imaginary discothèque called the Utica Club (“where it really swings”). The series of TV commercials served up a screwball mixture of the hip and hilarious and allowed the Matts to poke fun at themselves and at brewing’s stodgy reputation.

The campaign’s centerpiece opened with flashing lights and a go-go girl dancing to “The Utica Club Natural Carbonation Beer Drinking Song,” played by the Natural Carbonation Band. The camera panned to the club’s entrance, where a gorilla showed his membership card to a doorman and slid down a chute to the dance floor. Over the next forty-five seconds, the gorilla chased and captured a hunter; Rip Van Winkle and Ichabod Crane showed up; brewery salesmen showed off their dance moves; and boxer Rocky Graziano stumbled into the scene in his role as a baffled representative from the older side of the generation gap. “Utica Club is where it really swings,” announced the voice-over. “You never know what might happen or who might show up at the Utica Club.”

Inventive, funny, and surprisingly hip for an otherwise old-line, establishment brewery, the ads spoke directly to the same young adults who, as children, reveled in the antics of Schultz and Dooley, and pushed company sales to new heights. But the Matts weren’t taking any chances. They wooed the next generation down the line with another venture, a Victorian-theme tour center, complete with a Gay ’90s bar, a collection of nineteenth-century mechanical music machines, and a Utica Club trolley that hauled visitors around the grounds. The brewery sat in the foothills of the Adirondack Mountains, prime resort territory, and the Matts’ free tour focused on families and fun in a manner that echoed the delights of beer gardens of a century earlier. Kids loved the music machines, the root beer, and the going-away gift, an easy-to-assemble cardboard replica of the brewery and trolley.

A similar scenario played out a thousand miles west at Jacob Leinenkugel Brewing in Chippewa Falls, Wisconsin. Like West End, Leinenkugel sat in the heart of a forested lake district that offered vacationers plenty of fishing and swimming, canoeing and camping. The region drew people from Wisconsin, northern Illinois and Chicago, and Minneapolis-St. Paul. The family capitalized on that seasonal influx by offering brewery tours twice a day, conducted by young women dressed in Indian maiden outfits complete with a headband out of which sprouted a ten-inch feather. (Bill Leinenkugel’s daughter agreed to the costume but drew the line at the feather, which she deemed too ridiculous to bear, an example, apparently, of a young person refusing the symbols of her elders.) Every visitor who signed the guestbook received a Christmas card from Bill Casper, the company’s president and grandson of founder Jacob Leinenkugel.

This was building for the future, small-brewery-style, and a smart move for a tiny operation surrounded by hungry predators. It helped that rural Wisconsinites remained loyal to local brewers, and that the area was so isolated and relatively unpopulated that the big brewers ignored it. The brewery always made a profit, but the pressure to do so was, as Bill Leinenkugel later recalled, “horrible”; neither he nor any of the other Leinenkugels enjoyed much more than a modest lifestyle. They invested most of their profits in two areas: first, modern machinery, because too many small brewers stuck with outdated or poorly maintained equipment from which, inevitably, flowed bad beer; and second, a well-trained brewmaster, who, as per an unwritten Leinenkugel law, came from outside the family. (If the brewmaster was an uncle or brother, Bill Leinenkugel explained, no one would want to tell him his beer had gone bad.)

T
HE
M
ATT AND
Leinenkugel families were safe for the time being, protected by their small size and rural locations relatively distant from the kingdoms of the giants. Not so the mid-sized beermakers who wrestled each other for a spot in the top tier, or tiny outfits whose only crime was proximity to a kingpin. Fred Haviland made short work of much of Schlitz’s Wisconsin competition when he unleashed the revamped version of Old Milwaukee. He spent $2 million on advertising in just five counties, which worked out to between $200 and $300 a barrel, and then deployed the dreaded “price promotion,” slashing the price per case from $2.59 to $1.85. Dealers who bought thousand-case lots got an even better deal. “Now no brewery can match that,” complained Roy Kumm of Heileman. “It was absolutely unmerciful.” He and twenty other Wisconsin beermakers convened in emergency session, but they could not stop the juggernaut. “I think,” he said in 1966, “there are only three of them left that were in that room.” The rest had gone bust. Kumm helped himself to a few of the fallen, closing the breweries and keeping the distributors’ contracts. The giants left him no choice. It was the only way he could gain access to wholesalers’ trucks.

In 1958, 211 beermakers operated 252 plants and the four largest owned only 18 percent of the market. By 1967, 124 brewing companies operated 153 plants and the top four accounted for about one-third of all sales. Anheuser-Busch reigned as the undisputed leader, selling eighteen million barrels of beer in 1968. Number-two Schlitz lagged by a full two million, and number three Pabst, with just under eleven million, was no longer in the race. Nor for that matter were the rest of the top ten. Falstaff might boast that it was the fourth-largest brewer in the United States, but its six million barrels placed it firmly in the category of also-ran.

As for Miller Brewing? Fewer than five million barrels and the number-eight spot. Not good enough for J. Peter Grace, who was fed up with beer. His investment in Miller Brewing had not paid off. Financial frustration was complicated by the constant irritation of thorn-in-the-side Buddy John, who held 46 percent of the company’s stock and meddled in Miller affairs every chance he could. On a Sunday evening in June 1969, Grace sat in the bar at the Ritz Hotel in Paris and phoned Joseph Cullman III, chairman and chief executive officer of Philip Morris, a multibillion-dollar conglomerate with one fist clenched around cigarettes and the remaining hand rummaging through adhesives, packaging, chewing gum, and razor blades. Two days later, Philip Morris owned Miller Brewing.

Any sensible person might be excused for assuming that here lay brewing’s future: beer as a cog in the wheel of a giant corporate conglomerate. But a few months later, a young man from Iowa bought a brewery in California. The acquisition went unnoticed by anyone in brewing, but he, not the Philip Morris purchase, signified the industry’s future.

CHAPTER SEVEN

Make Mine Small, Pure, Real, and Lite

T
HE INTRICACIES
of brewing circa 1969—IBM computers and market segments, vanishing breweries and predatory pricing—were lost on Fritz Maytag. He was too preoccupied with trying to save his own brewery, a two-bit, ramshackle affair in downtown San Francisco where he was making Anchor beer.

Frederick Louis Maytag III—Fritz to family and friends—ended up in California via Iowa, where he was born in 1938, and Massachusetts, where he attended prep school at Deerfield Academy. Maytag enjoyed the challenge of Deerfield, but he disliked the East Coast’s narrow roads and even narrower people. He preferred California, where his sister attended Stanford. The kids there “wore Levis to class and there were girls everywhere,” just what he wanted and needed after the all-male confines of Deerfield. In 1955, he enrolled at Stanford.

Tall, lanky Maytag fell in love with northern California and especially San Francisco’s North Beach neighborhood, as yet untainted by tourists and commercialism. He also fell in love with all things Japanese, and in the fall of 1960 he entered Stanford’s graduate program in Japanese language.

Most of his classroom colleagues had grown up speaking and reading Japanese or came to graduate work armed with years of study, and Maytag’s effort to catch up resembled a hike through quicksand. For the better part of three years he waged a herculean effort to learn the language and culture. But weeks and months of the day-in, day-out assault finally collided with exhaustion and the sense that he was trudging along the wrong road. One morning in February 1964, he drove to the campus but could not get out of the car. He turned the wheel and headed away from town. He drove for hours. Then he dropped out of graduate school and moved to San Francisco.

The city’s bohemian/hippie scene—the drugs, the dances, the music—had intensified while Maytag had been occupied with Japanese. In June of 1964, Ken Kesey and the Merry Pranksters piled into their painted bus and set off on a cross-country acid trip. Maytag watched, amused but uninterested. “I would no more have gotten on an acid bus,” he said later, voice dripping with derision, “than the man in the moon.”

He pondered, instead, the notion of investing his considerable wealth (courtesy of the washing machine company founded by his great-grandfather) in social missions in underdeveloped countries. Maytag needed to do something—that much he knew, because Iowa Maytags were not the kind of people who frittered their time in loafing and daydreaming. One day while riding the cable car, he noticed a passenger wearing a jacket and tie and carrying a rolled blueprint under his arm. Maytag later recalled staring at the man’s bundle and thinking, “I wish I had a blueprint.” A blueprint or a plan or something.

The “something” landed in his lap a few months later, in August 1965. Days before he was due to depart on a trip to Mexico, Maytag strolled into the Old Spaghetti Factory, a North Beach institution and one of his regular haunts. Fred Kuh, the café’s owner, told him that the Steam Beer Brewing Company, a dilapidated shop a few blocks away on Eighth Street, was about to shut its doors.

Most San Franciscans would have been surprised to learn that Steam Beer, maker of Anchor, was about to close—but only because they assumed the place had gone under years earlier. The brewery, which dated to 1896, had closed briefly in the summer of 1959 before it was rescued by an unlikely duo—Lawrence Steese, a laid-back, pipe-smoking dreamer, and Bill Buck, a member of a wealthy Marin County family—who, between them, knew next to nothing about brewing. They hobbled along, making inconsistent and often foul beer that almost no one but Kuh wanted to buy. In 1964, Buck threw in his brewer’s apron (figuratively speaking; it’s unlikely he owned one or had even been near the brewvat) and sold his 51 percent share to two advertising men who believed that Steam Beer Brewing and Anchor needed only a walloping good ad campaign to point the company toward profit. Experience soon persuaded them otherwise. By the summer of 1965 they’d had enough of the brewery, its antediluvian equipment, and the headaches of trying to sell a truly terrible beer.

This was bad news for Fred Kuh. Anchor beer was the beacon that had lured him to San Francisco. On a visit to California in the early 1950s, Kuh had fallen in love with the city, with North Beach, and with Anchor and the notion of local beer. By the late 1960s, Kuh was one of the few tavern proprietors willing to foist it on a mostly reluctant citizenry.

Now the brewery was in danger of closing. Kuh tagged Maytag as a possible savior. He’d gotten to know Maytag over the years; he knew he had an independent income and that he was a bit of a romantic. Perhaps—who knows—Kuh sensed that Maytag longed for direction and purpose and that Anchor might light the way.

In any case, the next day Maytag, who rarely drank Anchor and recognized it for the sour brew that it was, trekked the mile and a half from his apartment to the brewery. He walked around, talked to Steese, and confirmed that, indeed, the admen wanted out. He visited his lawyer, and then, one hundred years after another young man bought a share of a brewery in St. Louis (and about the same time that thirty-four people died in the Watts riots in Los Angeles and the Jefferson Airplane debuted at a San Francisco nightclub), Fritz Maytag purchased 51 percent of Steam Beer Brewing.