History of the Brewing Industry in Milwaukee Pabst Brewing Company, Milwaukee Wisconsin

The history of the brewing industry in Milwaukee predates the incorporation of the city. In 1840, Richard Owens and two other Welshmen established a brewery and distillery close to Lake Michigan on Huron (now Clybourn) Street. Their Milwaukee Brewery (later renamed Lake Brewery) produced both ale and distilled whiskey. A year later, German immigrant Herman Reutelshofer began his brewery, which, instead of ale, produced the lager beer that would come to be identified with the City of Milwaukee.

The settlement of Milwaukee coincided with a significant wave of Irish and German migration to the United States in the mid-nineteenth century. Having generally better finances than their Irish counterparts, many of these German immigrants were able to travel to the frontier of the upper Midwest once they arrived in their new country. As a result, Milwaukee's German-born population more than doubled during the 1850s and, by 1860, these immigrants and their children represented a majority within the city population. This large German community provided a ready market and skilled workforce for the lager breweries that would thrive in Milwaukee.

Included in this German population were entrepreneurs, who followed the example of Owens and Reutelshofer and, by 1856, twenty-six breweries operated within the city. The output of these early breweries satisfied local demand and amounted to no more than a few hundred barrels of beer per year. Catering to local tastes, almost all of the production was lager beer as demonstrated in 1866 when only 3,600 barrels of ale were brewed in comparison to 68,000 barrels of lager.

As the nineteenth century progressed, the brewing industry in Milwaukee was characterized by a reduction in the number of breweries while, at the same time, production and valuation increased dramatically. From twenty-six breweries in 1856, the number decreased to eighteen in 1876 and nine in 1885, however, the number of barrels produced increased from 58,666 in 1865, to 279,286 in 1875, and to 1,117,256 in 1885. Similarly, the value of production increased from $310,130 in 1859, to $706,070 in 1869, and $4,625,543 in 1879.

The influences that stimulated this increase in output were numerous. Among them, the Civil War tax on hard liquors and the 1871 Great Chicago Fire are cited as early contributors. The tax, and resulting increase in the price of a stiff drink, provided economic incentive to convert whiskey drinkers into beer enthusiasts. Similarly, the fire that destroyed much of Chicago (and most of it breweries) gave Milwaukee's brewers the opportunity to meet the needs of a large market located only ninety miles to the south. The Chicago blaze may also have further motivated the Milwaukee breweries to search for export markets for their beer. Although the city was already shipping its product outside Wisconsin as early as 1852, the amount of exported beer had increased to approximately half of total production just twenty years later. This put Milwaukee ahead of New York, Philadelphia and St. Louis in this regard.

Additional factors that supported the establishment of the brewing industry in Milwaukee included the availability of natural resources, the ingenuity of its leading brewers and the growth of the city itself. The region surrounding Milwaukee contained an abundant amount of fresh water and, due to its cold winters, a reliable supply of ice. Prior to the advent of artificial refrigeration, ice and the ability to store beer in naturally cool underground cellars was crucial to lager production. The area was also timber rich, which, coupled with a population that included skilled coopers, produced the barrels and casks necessary for brewing. Lastly, Wisconsin agriculture supplied the basic ingredients of brewing; namely, barley and hops, during the early years of Milwaukee's brewing history. Although its hops production peaked during the late 1860s, Wisconsin ranked third in the amount of barley grown in the United States behind California and Minnesota as late as 1901.

Milwaukee's leading brewers capitalized on these favorable conditions. In addition to readily adopting many of the mechanical and scientific advancements discussed in the previous section, they were excellent marketers and promoters of their beer. Valentine Blatz was one of the first Milwaukee brewers to market his namesake beer nationally, setting up distribution centers in Chicago, New York, Boston, New Orleans, Memphis, Charleston, and Savannah. In addition to their Chicago office, which was established during the 1850s, Captain Frederick Pabst built company offices in Kansas City, Peoria, St. Paul, and Ashland, Wisconsin, in the early 1880s and was selling his beer in thirty-five states by 1888. Seizing on the growing popularity of their lager beer, the brewers created advertising slogans in the late nineteenth century such as: "Schlitz, the Beer that Made Milwaukee Famous" and "Milwaukee Beer Is Famous - Pabst Has Made It So." These slogans further solidified Milwaukee's growing image as a capital of beer production. At the same time, other industrial interests within Milwaukee, including milling, tanning, meatpacking, and iron-manufacturing concerns were also thriving. An adequate transportation system was vital to all of these industries and the breweries benefited from Milwaukee's harbor and well-established network of railroads.

Although these factors made Milwaukee fertile ground for the brewing industry, the incredible expansion and increased production of its breweries throughout the later nineteenth and early twentieth centuries could not simply be attributed to advantageous circumstances. Milwaukee beer gained a reputation for superior quality and it soon had wider appeal beyond German immigrant communities. By 1890, the value of the city's brewing industry exceeded all its other industries and, five years later, the city claimed three of the nation's seven largest breweries: Blatz, Pabst and Schlitz.

A brief discussion regarding these two other nationally-prominent Milwaukee brewing companies; namely, the Val Blatz Brewing Company and the Joseph Schlitz Brewing Company, further elucidates the city's brewing history and provides additional context for the development of the Pabst Brewing Company. Like Pabst, they trace their origins to the 1840s and were founded by men other than their brand name principals. Valentine Blatz, a son of a brewer and native of Bavaria, immigrated to Milwaukee and found employment in the City Brewery, which had been founded by John Braun in 1846. By 1851, Blatz had amassed enough capital to open his own brewery adjacent to his former employer. Soon thereafter, Braun died and Blatz married his widow, thus uniting the breweries. As production increased from a few hundred barrels to 125,000 barrels in 1880, Blatz became the third largest brewer in Milwaukee, following Pabst (then the Phillip Best Brewing Company) and Schlitz. During the 1940s and 1950s, the Val Blatz Brewing Company was brewing over a million barrels of beer annually. Among the early brewers, Valentine Blatz is credited as being one of the first to recognize the advantages of selling beer to a wider national market.

The rise of the Joseph Schlitz Brewing Company is similar to that of Blatz. In 1849, August Krug opened his brewery and, a few years later, hired Joseph Schlitz, who was originally from Mayence, Germany, as his bookkeeper. Following Krug's death in 1856, Schlitz purchased the brewery and, like Valentine Blatz, married his widow. Production at the Schlitz Brewing Company increased rapidly from 4,400 barrels in 1865, to 49,623 in 1873, and to over 400,000 by 1889. During this period, Schlitz was second in sales to Pabst, which it ultimately passed in 1902 and, by 1943, the company was brewing over three million barrels annually. The Joseph Schlitz Brewing Company is credited as the first American brewery to use pure yeast culture in its brewing process and, like Pabst, it invested heavily in saloons, restaurants and other outlets in order to aggressively market and sell its beer. Neither the Schlitz nor Blatz breweries remain in production.

Through the remainder of the nineteenth century and into the early twentieth century, Milwaukee brewers continued to be leaders in their industry, until Prohibition brought beer production to a halt. Although brewing had fallen from its 1890 high to rank fourth in value - behind machinery manufacturing, meat-packing, and tanning - amongst the city's industries by 1918, Milwaukee breweries still accounted for $35 million in annual output. They also employed 6,540 individuals; not including those coopers, bottle makers, or approximately 2,000 city saloonkeepers, who relied indirectly on the breweries for their livelihood. During Prohibition, the breweries manufactured beer related products - near beer, malt tonics, malt syrups - and non-beer items, such as soda water (Blatz), chocolate bars (Schlitz), and cheese (Pabst). With repeal, most of Milwaukee's breweries resumed making beer. By 1940, the total value of their production was $40 million and the industry was ranked among the ten largest in the city. Ultimately though, the national brewing industry trends of consolidations, expanding markets, and increased competitiveness found in the later twentieth century would generally negatively affect Milwaukee's largest brewers. Blatz could not keep up with these trends and its brewery closed in 1959. Schlitz remained an industry leader into the 1970s before changes in its brewing process, failed international ventures, and an employee strike led to its acquisition by Detroit-based Stroh's and the closure of its Milwaukee brewery in the early 1980s. The Miller Brewing Company was the only brewer to benefit from this atmosphere. In 1969, Philip Morris acquired it and, having gamed the marketing resources of its parent, it posted record profits.