Last week, Molson Coors Beverage Company told its distributors that it had begun brewing some of its beers to stay fresher for longer. According to a memo first reported by Beer Business Daily, the Chicago firm “started packaging beers with the longer shelf life” under “diligent process controls” that were “years in the making” in order to give distributors “more flexibility in how [they] manage inventory and rotate beer at retail” and avoid placement-jeopardizing out-of-stocks.
This is esoteric stuff, but even the casual observer can grasp the potential boon it represents for MC and its wholesalers. Cans and bottles of Miller Lite and Miller High Life are slated to stay in code for 26 weeks, up from 18, a full 33 percent longer. That could translate into fewer visits to more accounts to stock bigger orders using less fuel. On the logistical battlefield of humping beer at scale, small process tweaks like this at the mothership can yield big results out in the trade.
Still, if recipe optimization is a potent weapon, it’s a double-edged sword. What normies may not grasp, but what industry insiders of a certain age absolutely do, is that even the smallest brewhouse adjustments poorly managed have the potential to bleed even the biggest beer brands to death. In the American brewing business, this is known as “the Schlitz mistake,” and buddy, it cuts sharper than any wholesaler’s utility knife.
Traditionally, there are only a few ways to achieve national success in the beer business. Simply brewing good beer isn’t really one of them. This is why trade types differentiate between “the liquid” and everything else when evaluating the expansion potential of this or that beer brand: Its marketing story, its distribution partners, and its sales strategy are simply more important to moving volume at scale than what the volume actually is. That’s not to say “the liquid” doesn’t matter, though. All the other stuff determines a beer brand’s ceiling, but the beer itself sets the floor. Myriad would-be brewing barons have learned this immutable law of lager the hard way, but nobody learned it harder, or more publicly, than the late Bob Uihlein, scion of Milwaukee’s Schlitz Brewing dynasty.
The story is set in the ‘70s, and its genre is horror. “The company goes into this pivotal decade with an urge to streamline the crap out of everything, and diversify, and somehow beat Anheuser-Busch in the beer game,” Maureen Ogle, historian and author of “Ambitious Brew,” told me last year in an episode of VinePair’s “Taplines” podcast. With A-B pulling away, the formerly sleepy Miller Brewing Company made newly formidable by Philip Morris’s virtually bottomless warchest, and the Securities and Exchange Commission sniffing around what would eventually become a massive payola lawsuit, Schlitz needed a miracle, and fast. Top-down recipe tweaks being much easier to implement than national improvements to business culture and infrastructure, the miracle Uihlein granted was a series of cost-cutting “optimizations” that tanked the once-proud Schlitz brand forever.
First, “the company introduced something it had been working on for 10 years called ‘accelerated batch fermentation,’” said Ogle. “The fermentation period had been 12 days; this cut it down to two days.” When word got out that Schlitz was selling “green” beer, sales took a hit. The death spiral tightened with subsequent Uihlein-ushered brewing modifications. Schlitz introduced a beer stabilizer called Chill-garde in 1976, but when it interacted with the brand’s foam stabilizer, Kelcoloid, it produced little flakes in the beer. Halfway through the year, the company finally removed the Kelcoloid, which fixed the flakes but made the product go flat unusually quickly. The eventual recall cost the company $1.4 million at the time, but the damage to its flagship brand may well have been orders of magnitude higher. Schlitz — the beer, and the eponymous brewing company, which had been neck-and-neck with A-B just a decade prior — never recovered.
If the specter of “the Schlitz mistake” (as the journalist Dan Baum coined the company’s compounding green/flakey/flat fiascoes in “Citizen Coors,” his 2001 history of the Uihleins’ Colorado brewing-dynasty counterparts) wasn’t haunting the research and development team at MC as they worked on the extend-o-matic versions of Millers Lite and High Life, it should’ve been. Don’t get me wrong, the business conditions at that contemporary conglomerate, and the technical prowess of its brewhouses and staff, overshadow those of Schlitz in the ‘70s. I should note here that poor (rich) Bob Uihlein didn’t Schlitz the bed all by himself. He was pressured by the rest of his clan. “The 468 Uihleins who held the shares, man, they want[ed] their dividends,” said Ogle. As contemporaneous reporting shows, the family, which owned some 75 percent of the company, was willing to forfeit its long-term viability to get those sweet returns. As a publicly traded company, MC is sensitive to shareholder demands, of course, but unlike wealthy relatives accustomed to passive income 50 years ago, institutional investors today have neither the interest nor the opportunity to meddle with a macrobrewer’s brewing processes at such a granular level.
More importantly, though, while Schlitz’s death spiral is often remembered as one mistake, it was actually half a dozen. As I’ve outlined above, the process tweaks destroyed the liquid, which busted through the brand’s “floor” and ultimately did it in. But the firm also started ripping down the ceiling around itself, too. Schlitz underinvested in marketing at a time when A-B and Phillip Morris-backed Miller began overinvesting in it. After Bob Uihlein died in 1976, an inexperienced management triumvirate took over and pressured an also-inexperienced marketing team to ditch the brand’s classic “Go for the Gusto” ads for the “Drink Schlitz or I’ll Kill You” campaign, which was as disastrous then as it is hilarious now. And instead of quickly admitting wrongdoing in the SEC payola case (and a pair of concurrent federal grand-jury cases in two states, and an Internal Revenue Service probe…), the company fought protracted battles in court that cost it focus and resources when it could little afford either. MC has screwed up plenty — its Leinenkugel’s snub is some shady shandy, man — but its C-suite has discipline and its marketing team is the best in Big Beer right now, full stop. It’s making these shelf-life adjustments to packaged Miller Lite and High Life (and kegged Coors Light and Coors Banquet, by the way, bringing all of its half-barrels’ viability to 13 weeks or more) from a fundamentally different corporate position.
Then again, not everything about the present age works in MC’s favor. The lightning-fast, peer-to-peer media ecosystem presents a challenge to the modern macrobrewer that its erstwhile predecessor never had to face. In 1976, it took half a calendar year before reports of its flakey flagship finally mounted to the point that the company had to issue a recall. In 2022, when Reddit and TikTok users started reporting a certain snot-like consistency of canned Coors Light and Keystone Light — the result, it would turn out, of a Pediococcus infection at MC’s Ohio plant — the complaints racked up millions of views on the platforms in the two weeks before the brewer recalled the brands. It’s true that MC’s brewing acumen, corporate culture, and liquids themselves are all better than Schlitz’s in the ‘70s. But the stakes on mistakes are much higher, too.
🤯 Hop-ocalypse Now
Seasoned observers of beer’s middle tier know that its heaviest hitter, Reyes Beverage Group, plays for keeps. If the folks at Republic National Distributing Company didn’t, they do now: Earlier this week, the Brown-Forman Corporation announced plans to ditch the country’s second-largest wine and spirits distributor (among the country’s 25 largest privately held companies) for the country’s largest beer wholesaler (and sixth-largest privately owned company) in California. For those of you keeping track at home, that’s two in two months: Tito’s signaled its own Golden State exit from RNDC in January. The flailing firm’s chief executive, Nick Mehall, signaled his own earlier this week. Sheesh.
📈 Ups…
After a rollercoaster few years, Boston Beer Company told investors that in 2025 it really is focused on “doing fewer things better”… ABI beat earnings estimates for the fourth quarter, showing a continued comeback in the U.S. (albeit driven mostly by price, not volume)… Maryland lawmakers are once again taking a shot at beer grocery sales, and hope a convenience surcharge might advance this session’s bill…
📉 …and downs
The Teamsters Local 1192 in Cincinnati is striking BBC, alleging the stalled contract negotiations are a result of the firm’s bad-faith bargaining… The Celsius-Alani Nu deal could portend a future distribution shuffle, putting the latter’s ABI-aligned wholesalers in a tough spot…
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