Articles Comments

The Beer Circle » Anheuser-Busch, Books » Bitter Brew – Book Review

Bitter Brew – Book Review

 

bitterbrewOccasionally  we at The Beer Circle put down our beers and pursue other activities but often those, too, are centered around beer. I have just read “Bitter Brew” by William Knoedelseder. It is billed as a book about “the rise and fall of Anheuser-Busch and America’s Kings of Beer.”  There are already many reviews that deal with the book in its entirety but I will concentrate more on the items in the book that deal with the development of the American beer industry itself, the steps that helped turn the Budweiser brand into a global farce force, and the missteps that brought an end to the house of Busch.

 

The Beginning

Adolphus Busch arrived in America in 1857 at the age of 18 and quickly made his way to St. Louis, where about a quarter of its residents were German-born. In 1857, St. Louis had thirty to forty breweries, producing more than 60,000 barrels a year. In 1859, he bought into a brewery supply company, which was renamed Wattenberg, Busch & Company. One of the customers, Eberhard Anheuser,  had just come into control of the Bavarian Brewery. Adolphus soon married Anheuser’s daughter and, after the Civil War, went to work at the brewery. He was a brewing visionary. He was the first to pasteurize his beer and, coupled with rail-side ice houses that he built, he was able to distribute more widely. The ice houses eventually morphed into the modern distribution network using refrigerated trucks.

Up until the the transition to August IV, all the Buschs started at the lowest rung in the brewery so that they could learn how beer was made and what it took to lead the company while also caring for the workers.

Prohibition

In 1914, there were more than 1300 US breweries. Only 164 survived to celebrate the repeal. What could a brewery do during Prohibition to keep itself going? Here you start to see the business genius behind the early Busch leaders. August Busch, son of Adolphus, first had positioned the company as important to the war effort against the Germans in World War I. Anti-German sentiment in the US at the time was immense and effects of Prohibition, while not yet law, was hitting the industry hard. Anheuser-Busch survived by making products that were spin-offs of its brewing business: rail cars, refrigerators, ice cream, malt syrup, and baker’s yeast. The last two were the most successful, perhaps because they were integral in the illegal home brewing of beer.

As part of the New Deal, Franklin Delano Roosevelt wanted to repeal the Eighteenth Amendment. Full repeal wouldn’t come for eight months but only nine days after his inauguration he asked Congress to modify the Volstead Act, to set the maximum legal alcohol content at 3.2% rather than the 0.5% it had been set it. Basically, it was an end-around until Prohibition was fully repealed. If you grew up in areas where 3.2 beer existed, this is why.

Another interesting item that I discovered in this book was that the repeal also included the creation of the Federal Alcohol Control Administration, which established rules that included prohibiting breweries from owning retail establishments. This morphed into the three tier distribution system that we know today.

Building Growth and Competition

While craft beer drinkers today laugh when the words “Budweiser” and “quality” are used together it was a different word between the repeal of Prohibition and the middle 1980s. Beer drinkers only knew and liked the taste of the German style lagers and beer was an “everyman’s drink.” In fact, workers at the brewery were entitled to 25 free beers a day. From the beginning, Anheuser-Busch used rice in their beers since it was produced locally around St. Louis. The Beechwood aging was used to smooth the beer instead of adding other non-natural items. However, it took longer to produce a barrel of beer and the company would do nothing to shorten the process. August Busch: “Somebody is going to suggest that we can sell more Budweiser and make more money if we produce it faster. This we will never do.” Other breweries, including the then number two producer, Schlitz, used artificial ingredients to get the beer to market faster. Post World War II, a contamination / quality issue due to the use of the non-natural ingredients forced a national recall of Schlitz beer due and directly lead to its downfall.

Everything that the company did was geared to getting the Budweiser name out there in the best possible manner: employees purchased enough war bonds to buy two B-17 Flying Fortress bombers in WWII, charitable donations, the creation of a wild-life park around the family’s compound for the public to view. The Busch’s were also fanatical about the continued quality of beer. In 1944, Gussie, August’s son, ordered the destruction of a million dollar’s worth of product because of over-fermentation rather than sell it. Stories abound between the 40s and 80s of the Busch family traveling around, stopping into local stores, and checking the “Best By” dates. Hell hath no fury if a Busch found an expired beer.

And the Wheels fall off…

Hubris did as much to lead to the company’s eventual sale to InBev as mis-management. August IV, the last of the Buschs to lead Anheuser-Busch, had drug and alcohol addictions and, combined with his failure to listen to his management team lead, first, to the stagnation in the company’s growth and, later, to the company’s collapse. He refused to purchase InBev when he had the chance, over-ruling recommendations, because he wanted to concentrate on the US market. However, while A-B was releasing reactionary products that failed, Bud Dry, for example, and entered new markets, Eagle Snacks & a cruise line, that also failed, the brewing world evolved and the world-wide brewing behemoths quickly overpowered and out-positioned A-B, leading to the sale to InBev in 2008.

Out of the Ashes

In July 2010, Billy Busch, brother of August IV, launched the William K. Busch Brewing Company using the millions that he made from the sale of A-B stock in InBev. He pledged that his company would operate like in the old days: civic-minded and responsible. “My family was in the beer business for 150 years and was an employer in the city and a supporter of the community for all that time, and now we are not involved, and that didn’t seem right.” The first products, Karftig and Kartfig Light, both brewed in adherence to the German Purity Law of 1516, Reinheitsgebot, went on sale in October, 2011

My Thoughts

Overall I found the book a very interesting read. Before picking up the book I didn’t realize all that the Busch family did to revolutionize the beer industry in America. The early Buschs were business visionaries and their example can fit in any business-book reading list. I don’t believe that it is worth buying but definitely check out your local library. Please let us know your thoughts.

 

Last updated by at .

Written by Bob Pack

Simply put, Bob is a beer lover. He goes out of his way to try new beers whenever he can find them. The love of trying new beers had resulted in a beer label collection of over 1400. When it comes down to it, Bob is a hop head. He loves IPAs (including double and black). Stouts are a close second. His tweet reviews on @nova_beer are simple and approachable. Let him know what you think. Find Bob Pack on Google Plus

Filed under: Anheuser-Busch, Books · Tags: , , ,

Leave a Reply

*