Michigan Beer

I recently finished reading a book about sex discrimination at the University of Michigan in the 1970s. The same day, a news item about craft brewing in Michigan appeared in my Google alerts. You can read that here.

Stroh’s was Michigan’s largest brewer. Here are some excerpt’s from Brewing Battles about that brewery.

Detroit had thirty-three breweries in 1890. Stroh’s was the most famous and long lived; the owners were descendants of Germans who had been brewing since 1775. By selling ice cream as well as beer it existed as an independent brewery until 1999.[1]

One of the most significant transactions which indicated that brewing was moving firmly away from its nineteenth century heritage occurred on June 10 1982, when the Stroh Brewing Company of Detroit purchased Schlitz. Stroh’s, a long established regional brewery based in Detroit vaulted itself into the first tier of the industry by acquiring Schlitz, one of the country’s largest brewers. Donald Shea, a vice-president of the USBA at the time of this acquisition, assessed the deal and its implication for the industry as “constant concentration within the industry, and as that happened, more and more larger breweries were building up their own shops.”[2]

Competition in the industry continued unabated even while brewing organizations sought reductions in taxes and campaigned against various neo-temperance initiatives. In 1996, Stroh’s continued its ascent into the top tier by purchasing Heileman Brewing. Heileman had made a run at achieving top tier status in the 1980s, but the Justice Department had halted its program of aggressive acquisitions. Russell Cleary, the son-in-law of Ray Kumm and his successor, spearheaded the expansion of the company. Stalled, the company became vulnerable; 1987 Alan Bond, an Australian investor, purchased the nation’s fourth largest brewer. In 1992, Bond went to jail for fraud in connection with a deal to save an Australian bank.[3]

In the 1980s Heileman brewed many different brands of beer including Old Style, its original product, Lone Star, Schmidt, and Carling Black Label. The company was responsible for forty percent of all the new brands in the decade.[4]

In 1991, Heileman developed yet another new product, Power Master, which was a malt liquor with 5.9 percent alcohol; most malt liquors contained 5.5 percent, regular beer 3.5 percent. African-Americans and Hispanics were the core market for malt liquors. Heileman’s marketing featured a young black man. The tagline was “bold, not harsh.” African-American political and community leaders objected to the beer and its marketing. Eventually BATF intervened and prohibited the company from marketing Power Master. The agency felt the name was a subtle attempt to convey the strength of the beer to the public.[5] Heileman’s marketing struggles indicated how far the brewing industry had come from the self-regulation policies that they had pursued from the 1930s on.

The USBA had always stressed restraint in marketing. The Nebraska plan that brewers developed during Repeal was the cornerstone of their approach. Increased competition in the industry and the diminished influence of the USBA led individual brewers to be bolder in their advertising. The specter of Prohibition had diminished.

In 1996, Stroh’s, planning to buy Heileman, was the country’s fourth largest brewer. Coors, in third place, had 10.1 percent of the market. Stroh’s and Heileman’s combined market share would be a little over nine percent. Stroh Brewing Company had been in existence for 149 years; in 1999 the company sold its brands to Miller and Pabst. Pabst got Schlitz. This sale marked the completion of forty years of consolidation of the brewing industry. The dismantling of Stroh, which employed 2,800 people, gave Miller and Anheuser–Busch seventy per cent of the market.[6]

 

[1] William H. Mulligan, “Stroh Brewing Company,” in Blocker et al., Encyclopedia, 598-600; Downard, Dictionary, 56-57, 185-186.

[2] “Shakeout in the Brewing Industry”; Shea interview, 2005.

[3] “Heileman’s Aggressive Style,” New York Times, August 15, 1979, D1; “Alan Bond Gets Jail in Australia,” New York Times, May 30, 1992, 35; Bob Skilnick, “Heileman, G., Brewing Company,” in Blocker et. al, Encyclopedia, 292-293.

[4] Philip E. Ross, “Bid for Heileman Spurs Stock,” New York Times, September 5, 1987, 31.

[5] Anthony Ramirez, “U.S. Is Challenging New Heileman Label,” New York Times, June 21, 1991, D15; “The Threat of Power Master,” New York Times, July 1, 1991, A12; “Heileman Told It Can’t Use the Power Master Name,” New York Times, July 2, 1991, D6; Kurt Eichenwald, “U.S. Rescinds Approval of A Malt Liquor,” New York Times, July 4, 1991, D3.

[6] Robyn Meredith, “Stroh to Buy Heileman in Big Brewery Deal,” New York Times, Match 1, 1996, D2; “Last call: Detroit-based Stroh Brewery will sell beer brands to Pabst, Miller,” Minneapolis Star Tribune, February 9, 1999, 3D http://www.elibrary.com/education (accessed January 23, 2001).

© Copyright, Amy Mittelman 2021