Pabst Brewing
By
Jim Attacap


The story of Pabst began in 1844 when German immigrant Jacob Best and his four sons
opened a brewery in Milwaukee.  One of Jacob's sons, Philip Best eventually was appointed to
head the brewery's main branch in Chicago.  It was there that Philip's daugher, Maria, met
steamship captain Frederick Pabst.  After their marrage in 1862, Frederick Pabst bought half
interest in the brewing company and shortly thereafter was named the company's president.

Pabst hired the best brewers of the day and brought them to the Milwaukee plant.   The quality
of their efforts was quicky seen.  In 1876, Pabst won both the highest awards for bottled beer
and a gold medal. In 1878 at a Paris World’s Fair, Pabst again won more medals. This led to
the creation of the famous "Blue Ribbon" label.

When Prohibition ended Pabst immediately began brewing, constantly selling out its entire
supply. In 1934, in an effort to expand production, Pabst opened a new brewery in Peoria
Heights, Illinois. In 1946, Pabst purchased the Hoffman Beverage Company in Newark, New
Jersey.  In April 1948, Pabst expanded toward the West with the purchase of the Los Angeles
Brewing Company.  Pabst beers were now brewed throughout the country, making it a true
national brand.

Advertising was an important key to Pabst’s strong market.   Thie first big national success
came in June 1940 with the slogan "Thirty-three fine brews blended into one great beer"  In
1943, Pabst started advertising on national radio networks.  In1950 Pabst became one of the
first breweries to enter the TV market by sponsoring boxing.  

Much of the company's success was due to  Fred Pabst, Federick's grandson.   However with
his retirement in 1954, sales started to slip.  Several unsuccessful ad campaigns such as
"Pabst Blue Ribbon Time" of 1956 and "Pabst Makes it perfect" of 1957 did little to help falling
sales. The introduction of 16-oz cans in November 1954 was not a success.

Finally Pabst ads hit advertising paydirt by proclaiming that Pabst Blue Ribbon was "The
Premium Beer at a Popular Price." This helped Pabst ride high in the 1960s booming beer
market.  By 1961, Pabst was smashing company sales records. Revenues hit $175 million, an
increase of 16 percent from the year before. Net income was averaging $5 million.  From 3.9
million barrels annually in 1958,  Pabst’s volume soared to 10.5 million barrels by 1970 and
then to its all-time high volume of 18 million barrels in 1977.  

Management however then made a fatal mistep by depending only on cash to finance
modernization and new facilities. This decision led to skyrocketing production costs while rivals
enjoyed cost reductions due to the installation of state of the art equipment.   Pabst built only
one new modern and efficient brewery during 1960-70s.

Now a weakened giant, Pabst's began to battle hostle takeovers from several investor groups.  
After years of stock turmoil, the board finally reached the decision to sell the brewery  to
California millionaire Paul Kalmanovitz  in 1985 for $63 million.   Kalmanovitz cut out all
advertising and terminated most of the management. His business strategy was to run a lean
ship. With almost no advertising budget, he was able to cut prices. He also removed quality
control. There was no consistency from one batch to another. Beer drinkers turned away from
from Pabst Blue Ribbon label.

In 1988 Lutz Issleib took over as Chairman and President of Pabst.  Under his leadership   
Pabst began a steady, though limited, rise back to the marketplace by buying famed but
defunct beer brands and contracting brewing them.   This year the company will produce close
to 11million barrels compared to 5.9 million barrels in 1990.   The company's flagship brand,
Pabst Blue Ribbon, has quietly become the hottest beer on the market with a unique
"underground" ad campaign.  Touted in national publications including the New York Times and
Advertising Age, PBR, continues it double digit sales increase.

Pabst now produces Olympia, Rainier. Falstaff, Ballantine, Lucky Lager, Pearl, Stroh's, Schlitz,
Schaefer, Schmidt, Old Style, Lone Star, Special Export. Pabst Blue Ribbon, Old Milwaukee,
Colt 45, Country Club Malt Liquor, Mc Sorley's, Blatz, Carling Black Label, Falstaff, Olympia,
Piels, National Bohemian, , St. Ides, and Schlitz Malt Liquor.   


Read more about Pabst at:
http://sixmile.clemson.edu/pbr.htm
http://www.washtimes.com/business/20040319-093918-3889r.htm
beernexus.com - SPECIAL REPORT
The Story of Pabst Brewing Company