display | more...

Schlitz started out in Milwaukee in the 1850s as the pub brew for tavern owner August Krug. At this point, no beer had any national presence, since there was no way to preserve the beer for wide distribution. Krug died, Joseph Schlitz came in, married Krug's widow and took over the operation.

Schlitz worked off of Krug's success' and began building a large local beer brewer. At the same time, a number of events took place which allowed for the build-up of big national breweries (centered around Milwaukee and St. Louis). Milwaukee, with its large German immigrant population, is known for being one of the largest brewing cities in the world (it was the starting place for Miller, Schlitz and Pabst) and in 1871, it was given an opportunity to expand thanks in part to the Great Chicago Fire. As a result, most of the breweries in Chicago were destroyed. Schlitz and the other Milwaukee brewers used this to move in and set up shop a short distance from their home base by distributing their beer to the people of Chicago through taverns which they began buying up. This gave them regional power and distribution of their beer.

Within a few years, the innovation of pasteurization allowed beer to be preserved for much longer amounts of time and Schlitz capitalized on it. They began distributing their beer throughout the country and set up a distribution network by buying local breweries throughout the country. Assisted by the pasteurization process the use of glass bottles became prevalent which allowed people to drink beer outside of the bar/tavern setting and helped increase sales of the burgeoning beer market. Over time, Schlitz became a very successful company, with not only a large market share in the beer market, but also control over various local real estate and banking.

For the next thirty years, Schlitz, as well as Anheuser-Busch and Miller, began building a wider distribution network. This was all brought to a halt in 1919 with the advent of prohibition. Schlitz (now under ownership of the √úhlein family), believed that prohibition would not last for long, and did not sell its brewing facilities. It kept afloat through land speculation, a lumber company it owned and various other business. It tried, like many beer companies, to use its bottling and brewing plants, to create chocolate and soda, but this failed miserably.

However, they survived prohibition and, the second prohibition was repealed in 1933, Schlitz was back on the markets and, for a number of years, it was the largest brewer in the United States. But in 1953, a strike of all Milwaukee brewing employees allowed Anheuser-Busch to take over the top spot as the number one selling brewery in the U.S.

Over the next 15 years, Schlitz and Budweiser battled it out for the most popular beer in the country until Schlitz made a fatal and famous mistake. They determined that in order to beat out A-H, they would have to lower the costs in production and modify their beer to be more palatable (read: lighter) to the average American. They saved money on each barrel of beer, but the change in beer made for shittier beer. Finally, as they were losing their market share, and Miller was beginning to surpass them in sales, the big moment came. In 1976, they were forced to destroy millions of bottles and cans of beer because they had skimped too much on their filtration system. As a result, this enormous batch of beer was "hazy" in appearance (some said it looked like something was floating their beer). It was only sediment from the yeast (which in some beers, like hefeweizen, is now a hip thing), but the damage had been done.

Miller quickly overtook Schlitz in the market as did Pabst. The final blow occurred in 1981 when another strike occurred. In 1982, Schlitz shut down and its assets were sold to Stroh's, who, in turn, went out of business. Recently, Schlitz and Schlitz Lite have appeared (at least here in Chicago) in bars and stores. They are being brewed by Pabst (although Pabst has recently had it's own troubles. They no longer brew their own beer. Instead, they contract it out).

So Schlitz, the largest beer brewer in the world, managed to destroy itself through over-expansion (they had breweries all over the world by the time they shut down) and screwing with the quality of their beer to undercut the competition. Their history has always sounded vaguely similar to the downfall of Pan-Am.

Some Sources: http://www.antiqibles.com/ (great description of the history of Schlitz)