Pabst Brewing Company, Milwaukee Wisconsin

Date added: July 21, 2016 Categories: Wisconsin Industrial Brewery

The brewery that would ultimately bear the Pabst name was founded by Jacob Best, Sr. in 1844. Having emigrated from Mettenheim, Germany, Best established the Best and Company brewery with his four sons at the subject location along 9th Street in between Chestnut Street and Prairieville Road (currently, Juneau Avenue and Winnebago Street, respectively). In addition to lager beer, the brewery originally produced ale, porter and whiskey. At the time of Jacob Best's retirement in 1853, Best and Company was the fourth largest brewery in Milwaukee selling over 2,500 barrels per year. Two of Jacob's sons, Jacob, Jr. and Phillip, inherited the business; however, their partnership dissolved in 1859 with Phillip retaining control of the brewery. He was later joined by his sons-in-law, Frederick Pabst and Emil Schandein, who ultimately bought him out in 1866.

Historical accounts indicate that the Pabst family immigrated to Milwaukee from Thuringia, Germany, in 1848 when Frederick Pabst was twelve years old. Eventually settling in Chicago, Frederick soon went to work as a cabin boy on the Goodrich Line of steamships operating on Lake Michigan. He worked his way through the ranks becoming a first mate and, ultimately, a captain in 1857. At this point in his life, a rapid succession of events would set the course for his future. In 1860, he met Maria Best, daughter of Phillip Best, and, two years later, they were married. Captain Frederick Pabst then left the steamship profession to join his father-in-law in the brewery in 1864. By 1866, Emil Schandein, Phillip Best's other son-in-law, entered the brewing business with Best and Pabst and, later that year Phillip Best retired, selling his interest in the brewery to Pabst and Schandein. In a period of two short years, Frederick Pabst had become initiated into and then leader of a brewery, which, in two more years, was the largest in Milwaukee. By 1874, it was the largest in the nation.

Following an economic downturn from 1857-1863 where Milwaukee beer sales were half of their previous highs, the period between 1864 and 1873 saw a significant expansion in beer production. During this time, national beer consumption increased 140%, while Milwaukee sales saw an even greater increase of over 200%. For Best and Company, this translated to production of under 5,000 barrels in 1864, to 37,108 in 1870, and to 114,162 by 1874. Nationally, increased consumption was attributed to such factors as: higher personal income among the working class; the resumption of significant amounts of German immigration following the Civil War; and the growing popularity of lager beer amongst the wider populace. While these trends no doubt benefited Pabst and Schandein, their success can also be attributed to an enthusiastic willingness to reinvest company profits into expanding their brewery and its markets.

Two significant events occurred early in the tenure of Pabst and Schandein - the acquisition of the Melms Brewery located on the south side of Milwaukee and the incorporation of Best and Company. Charles Melms operated a brewery that locally led all others in production during the early 1860s. Following his death in 1869, Best and Company purchased his brewery for $95,000, at a time when they were beginning to distance themselves from their Milwaukee rivals. This greatly increased their capacity and, in order to differentiate between their two breweries, the former Melms brewery was renamed the South Side Brewery, while the Best and Company brewery was referred to as their Empire Brewery. In May 1873, Best and Company incorporated as the Phillip Best Brewing Company with Pabst serving as president, Schandein as vice president, and Charles Best (son of Phillip's brother Charles) as secretary. Company stock was divided in the following manner: Pabst, 142 shares; Schandein, 132 shares; and Charles Best, 1 share. Additionally, 25 shares were held in trust for Henry Best, the only son of Phillip, available to him when he reached the age of twenty-one. These events were significant in that they enabled the continued expansion of the company under the clear leadership of Captain Frederick Pabst.

At the same time, the Phillip Best Brewing Company was utilizing national and international markets for acquiring its raw materials and selling its product. In addition to securing both barley and hops locally in Wisconsin, barley was purchased from California, Colorado, Canada, and Italy, while hops were imported from New York, Washington, California, and Germany. By 1865, Best beer was sold as far away as Mexico and subsequent reports indicate it was being exported to such places as San Francisco, New Mexico, Canada, and South America. Large shipments made by rail to Chicago were done with pageantry. This involved trains of 30-or-more keg-laden wagons decorated with flags, ribbons and steamers paraded through the city streets to the railroad depot. A particularly interesting newspaper article details an "experimental" shipment of twelve cases of Best beer to Melbourne, Australia, via New York in 1878. In order to assess how the beer withstood shipping, six cases were opened in Australia, while the other six were returned to New York. Of the latter six, three were ultimately sent back to Milwaukee with a letter detailing their voyage and the positive condition of the beer.

The shipment to Australia consisted of Best's "Export" brand, which along with its "Bohemian," "Bavarian," "Select," and "Standard" varieties, comprised the Phillip Best Brewing Company's line of beers by the 1880s. The characteristics of these beers were: "Export," medium amber colored; "Bohemian," a pale beer with a strong hop flavor; "Bavarian," heavy and dark in color; "Standard," pale amber colored and milder tasting; and "Select," amber colored and consisting of the best Bohemian hops. In addition to their desirability, the "Bohemian," "Bavarian," and "Export" varieties were recommended for their "pleasant tonic and nourishing qualities." Of the five, "Select" became the most notable. Marketed as a first-class lager to be consumed in the best establishments, and distinguished by a blue silk ribbon tied to each bottle, the brand was the precursor of Pabst's trademark "Blue Ribbon" beer.

In 1875, the Phillip Best Brewing Company established a bottling facility at its South Side Brewery; however, within a year, its operation was turned over to the firm Stamm and Meyer. By the 1880s, bottling would also be performed at some of the company's branch offices. Although bottled beer represented the future of beer packaging and sales, its early incarnation was problematic. Prior to the widespread implementation of pasteurization, beer could become contaminated with bacteria during the bottling process and spoil. Additionally, bottling was labor intensive, requiring the following steps: filling the bottle by hand using a hose; inserting a cork; wiring the cork in place; hand-gluing and applying the label; and wrapping tinfoil around the neck of the bottle. Bottled beer, therefore, amounted to a small amount of Best's sales throughout the 1880s and into the early 1890s.

Operating two breweries was a mixed blessing for the Phillip Best Brewing Company. When a fire in 1879 at the Empire Brewery destroyed the malt house, elevators and office, it proved beneficial as production could proceed at the South Side Brewery. Ultimately, however, staffing and managing duplicate facilities proved burdensome and, in 1886, all brewing operations were transferred back to the Empire Brewery. For the short term, the South Side Brewery would continue to be used for malting and bottling purposes. Three years later, another defining moment occurred when the Phillip Best Brewing Company was renamed the Pabst Brewing Company on March 18, 1889. Coming a year after the death of company vice-president Emil Schandein, the name change was a tribute to Captain Pabst and his leadership of a brewing company that continued to grow at a staggering rate.

Following its production of 114,162 barrels in 1874, brewery output grew to 272,477 barrels in 1880; 500,216 in 1888; and, in 1892, the Pabst Brewing Company became the first brewery in the United States to produce over one million barrels of beer in a single year with the production of 1,052,584 barrels. That same year, the company further solidified their position by purchasing the equipment and assets of the Falk, Jung and Borchert Brewing Company, which had recently suffered two debilitating fires at their Milwaukee brewery. The Pabst Brewing Company was now the largest lager brewery in the world and, while national beer sales had increased an impressive 250% between 1872-1893, Pabst sales increased 1,000% over the same period. To produce and package this amount of beer required equally staggering amounts of raw ingredients and materials. By 1890, the Pabst Brewing Company annually used 1,250,000 bushels of malt, 2,500,000 pounds of rice, and 1,000,000 pounds of hops. For bottling purposes, 22,000,000 corks were used, as were 220,000 yards of blue ribbon for their "Select" beer.

The 1879 fire, closure of the South Side Brewery, and tremendous increase in production led to significant expansion of the subject brewery. This resulted in the core nineteenth-century buildings found within the complex including: the main office (1880/92); brew house (ca. 1882/92); malt house (1882/1901); bottling house (1889/ca. 1910/11); boiler house (1890/1909); and engine, mill and refrigeration machines building (1891). It also comprised buildings that have since been razed such as the hop house and stables formerly located on the north side of Juneau Avenue in between 10th and 11th streets. Construction was also spurred by the need to house new machinery - ice machines, barley steep tanks, bottling equipment - introduced to the brewery in the late nineteenth century. During this expansion, considerable attention was paid to both the outward and interior appearance of the complex as brewery tours led by uniformed guides were offered daily. Visitors could average 250 per day and during conventions often numbered in the thousands. Captain Pabst also hosted important dignitaries at the brewery including President Grover Cleveland in 1887.

Product promotion through advertising and participation in fairs and expositions aided this prosperity. Early promotional efforts focused less on periodical advertising and more on what the company categorized as "signs and views" and "special" advertising. The former included signs and images given to retailers, while the latter involved distribution of items such as calendars, matchboxes and other souvenirs displaying the Pabst name. From 1891-1893, Pabst average annual advertising budget was approximately $135,000; $55,000 of which constituted "signs and views" and $41,000 was for "special" advertising. Periodical advertising increased significantly with a national campaign for "Blue Ribbon" beer in 1903. From this endeavor came the widely recognized image consisting of two "Blue Ribbon" bottles on a table with a glass of beer and a plate of oysters on the half shell. By 1907, Pabst advertising expenditures exclusive of "signs and views" had increased to over $300,000.

During this same period, the brewery was accumulating awards for its beer through its participation in fairs and expositions. By 1884, the Phillip Best Brewing Company had won gold medals at the Centennial Exposition in Philadelphia and World's Fair in Paris, and first prize at the Southern Exposition in Atlanta. A year later, it was awarded first prize for its export bottled beer at the World's Exposition in New Orleans. Probably the most notable of all its competitive achievements was when the brewery won the highest award for beer at the 1893 World's Columbian Exposition in Chicago where it narrowly beat Anheuser-Busch. By serving as another means of promotion, participation in fairs and expositions, and the awards won, increased product recognition.

Although promotion was an important component of Pabst's success, sales increases relied on an extensive distribution network, as well as the effective placement of beer in retail outlets. Pabst utilized three primary means of distribution: company-owned branch houses, wholesale agents, and traveling sales representatives. Of the three, a capable wholesale agent was most favorable, as the company simply sold its beer to the agent who was then responsible for selling it to retailers. This contrasted with branch houses where Pabst needed to supply the necessary buildings, horses and wagons for operation, in addition to employing a manager and personnel to locally market its beer. Although branches did allow for more company control, they entailed greater expense and lacked the incentive for personal profit. Therefore, as long as the wholesaler was maximizing his local market, he was preferable to a branch house as demonstrated by the fact that, in 1895, Pabst had approximately 600 local agents in comparison to less than fifty branch houses. Traveling sales representatives, from either the brewery or closest branch, covered those areas lacking a branch house or wholesale agent and were comparatively few in number. By the early twentieth century, the general character of Pabst's distribution network consisted of wholesale agents in smaller cities, while branch houses served larger ones including Chicago, New York, Kansas City, St. Paul, Cleveland and Washington, to name a few.

The ultimate goal of distribution was the placement of beer in retail outlets and, at a time when keg beer comprised the overwhelming majority of sales, competition amongst the brewing companies was significant. Since most saloons carried only one or two brands, brewers felt pressured to offer enticements in the form of discounts or loans to saloon owners who stocked their beer. By the mid-1880s, this unpopular arrangement led the larger brewing companies to begin buying or building their own outlets. Pabst embraced this trend and, between 1887-1893, it spent $1,400,000 on real estate and $300,000 for improvements. At its peak in 1910, the value of Pabst non-brewery real estate was $6,677,000 comprising 428 retail outlets in 187 cities. Pabst, however, approached the establishment of retail outlets somewhat differently than its competitors. Whereas a company like Schlitz acquired a greater number of saloons, Pabst focused on creating prominent establishments in prime locations. The company pursued this policy believing that if the public equated its beer with quality and prestige, then independent retailers would be induced to carry Pabst as a symbol of their own high standing. As a result, Pabst once owned nine first-class hotels or restaurants in cities such as Chicago, Minneapolis, and San Francisco. In New York, the ornately decorated Pabst Harlem opened in 1900 as the largest restaurant in America and cost the company $300,000 to complete. Although their policy did not completely obviate the need to construct modest saloons or offer enticements to independent owners, it did distinguish Pabst from its leading competitors.

The Pabst Brewing Company was also benefiting from the increased use of science and technological innovation in its brewing process. In 1886, the brewery became one of the first to include a trained chemist on its staff. Shortly thereafter, Pabst adopted the use of pure yeast culture and a laboratory and yeast cultivating plant were added. During the 1880s, Pabst had the good fortune of hiring J. Fred Theurer and Richard Birkholz as brewery superintendent and mechanical engineer, respectively. These men invented or refined numerous mechanical devices and processes that significantly improved beer production. Among their innovative devices were barley washers, improved filters, hop extractors, bottle-soaking tanks, barrel stave machines and keg-rinsing machines. Most notably though, they introduced two significant changes to the brewing process: direct carbonation and the pipeline system.

The former, largely attributed to the work of Theurer and Pabst brewery chemist Dr. Paul Fischer, involves the collection, purification and reintroduction of carbon dioxide to beer. Prior to direct carbonation, beer was carbonated through a process called kraeusening where a small amount of fresh, actively fermenting beer was added to aged beer. The undesirable effect of this process was a cloudy final product due to the presence of yeast particles in the fresh beer. Direct carbonation eliminated kraeusening by collecting, cleaning and reintroducing the carbon dioxide released during primary fermentation to the beer, which now appeared clear and sparkling.

The impetus for the pipe line system came from an internal revenue law where brewery taxes were collected through canceled tax stamps applied to every barrel of beer. This regulation was incongruous with the advent of bottling as it required the inefficient process of filling barrels solely for the purpose of affixing a tax stamp, then the barrels would be emptied and the beer bottled. Through the direct lobbying of Captain Pabst, this law was changed in June 1890. Theurer and Birkholz then designed - and the brewery was the first to install - a system where beer was piped directly to the bottling house and collected in receiving tanks. Government locks on tank inlet and outlet pipes guaranteed the collection of tax revenue. The brewery then used carbon dioxide pressure to force the beer to filling machines where it was bottled. As a result of these innovations, Pabst was able to produce a beer with greater consistency in taste and appearance, while increasing the efficiency and output of the brewery.

The dramatic growth that characterized Pabst Brewing Company operations for most of the late nineteenth century gave way to a period that author Thomas Cochran described as "profitable stability" by the turn of the century that would last until Prohibition. Although Pabst firmly remained an industry leader, its production was surpassed by Anheuser-Busch in the late 1890s and Schlitz in 1902. Other factors moderating growth at this time were: increases in wholesale prices; regional losses due to local prohibition; and smaller brewer inroads in the area of bottled beer, which was previously dominated by the larger national breweries. Changes in company management were also occurring. Ernst Borchert and Frank Falk, former part owners of the Falk, Jung & Borchert Brewing Company, entered the brewery as vice-president and treasurer, respectively. Captain Pabst became less involved in the daily operation of the business and his sons, Gustav and Fred, Jr., assumed greater roles. When Captain Pabst died on January 1, 1904, at the age of 67, brewery leadership was transferred to Gustav Pabst as president and, shortly thereafter, Fred Pabst resigned his position as vice-president in order to devote time to his agricultural pursuits.

Prohibition necessitated a drastic change in brewery production and further restructured the organization and management of the company. In December 1920, two corporations were established from the Pabst Brewing Company: the Pabst Corporation and the Pabst Realty Company. The former actively carried on the mission of production and marketing, while the latter managed the saloon, restaurant and other outside real estate of the company. Approximately a year after this restructuring, Gustav Pabst resigned as president of the Pabst Corporation to head the realty company. The presidency of the operating company was assumed by Fred Pabst, who actively rejoined the business and faced the unenviable task of leading the brewery through Prohibition. During these years various substitute ventures were attempted ranging from the brewery-related - production of non-alcoholic beer, tonics and malt syrups - to wholly different enterprises - manufacturing pipe connections, cheese processing and bottling water. Although these met with varying degrees of success, they did not represent a change in the character of the company, which was biding time before it could again produce beer. In fact, all these ventures used only a portion of the brewery's capacity and, as a result, the rental of unused building space became the most consistent and reliable source of income for Pabst during Prohibition.

By 1932, support for Prohibition was waning and Pabst began making preparations to resume brewing beer. At the same time, it was approached by the Premier Malt Products Company of Peoria, Illinois with a proposal to merge their companies. Premier was a leading producer of malt syrup with a nationwide market. As such, its active distribution network of sales personnel and branch houses represented the type of distribution system that Pabst needed to reacquire after many years of Prohibition. The merger was executed on October 28, 1932 and resulted in a new entity named the Premier-Pabst Corporation; however, in December 1938, the business name reverted back to the Pabst Brewing Company.

Following Prohibition, the national brewing industry consisted of fewer breweries with the larger brewing companies possessing a greater share of the market. Although this resulted in increased competition, Pabst was able to resume its position among the industry leaders. In addition to its original brewery in Milwaukee and auxiliary plant in Peoria, Pabst acquired another production facility with its purchase of the Hoffinan Beverage Company in Newark, New Jersey on December 18, 1945. Advancements in the science and technology of brewing along with the practice of blending beer from multiple batches ensured the uniformity of the product from each facility. By 1946, Pabst had temporarily regained its position as the largest national brewer producing over three million barrels of beer annually with the subject property continuing to serve as its principal brewery.

After a downturn in the 1950s, Pabst regained its position among industry leaders ranking third in national production for most of the next two decades and, at its peak, brewing 17.1 million barrels of beer in 1976. At this point, the company began to lose market share and was plagued by ineffective management, inconsistent marketing strategies and the threat of takeover from outside interests. In 1982, Pabst had to enter into an unfavorable merger-divestiture plan with the Heileman and Olympia brewing companies where it lost some of its more valuable assets. Three years later, the Pabst Brewing Company was sold and, in 1996, the subject brewery was closed. Pabst beer is currently brewed under contract by the Miller Brewing Company at their facilities.