Wednesday, November 14, 2007

Revisionist Marketing - Schlitz Brewing Company

I was just writing a paper and looking up some relevant examples for quality management. I was interested to find in a textbook the story of Schlitz Brewing Company. Turns out that in the 1970s the brilliant management of the company decided they could cut costs and make lots of money. So they added lots of corn syrup instead of malt, warmed up their fermentations, and basically decreased the brewing turn around time by 50%.

Great, right? They could make way higher returns on sales and assets than anybody else in the market. One problem: nobody except the hardcore alcoholics that wanted the cheapest beer possible regardless of flavour would buy the stuff. Sales fell 40% by 1980, the stock crashed from $69 to $5 and the 100 year old brewery was eventually sold off. You can find this and more info at this Wikipedia article.

You can still buy Schlitz beer from Pabst Brewing Company, presumably with a better brewing process. So I went to their site just to see what it said. I found this statement in the marketing-speak:
Schlitz is one of the undiscovered gems of American beer and today, young adult consumers are embracing the brew because it has stayed true to itself and hasn't "sold out".
Hm... if I read my history accurately back there, Schlitz is the ultimate definition of "selling out"; they tried to make money by not respecting their customers enough to think they would buy an inferior product.

Anyway, its not that important, it just reinforces my already strong belief that most marketing we get these days doesn't respect our intelligence. Plus I haven't posted in awhile...

Cheers

6 comments:

Mike Verdone said...

People who drink Pabst are usually drinking it because it's retardedly cheap, so Schlitz is a good fit for the company. I've heard Pabst has good flavour for a cheap beer but I haven't tried.

The Shark Guys said...

Pabst has an ironic, 'This is so terrible, but I realize it's terrible and I'm drinking it anyway', hipster cache...which admittedly, ain't much...

Anonymous said...

Whatever happened to the beer in the 70's, the brew they sell today is great. It's the best bargain in brewing. I once had a 12 pack that was appently fresh from the brewery and it was superb.
If those corporate geniouses in Milwaukee would wake up and promote its history and do double blind tests in real pubs; they'd find that it could have a great future. Just don't kill it with a premium price; cost matters to most people.

Anonymous said...

Actually the ORIGINAL recipe for Schlitz is being produced again. They just released it in Chicago and is supposed to be available all over by next year.

headlessbob said...

It seems like its making a comeback. For some reason I have a feeling I read something about it being available in Canada too (or soon?).

In any case, it seems to be marketed as a premium brand today. I haven't tried it, so I can't comment on that. I thought it important, though, to mention that that they screwed things up pretty bad in the 70s; before that Schlitz had a great brewing tradition and was of historical importance to the development of the brewing industry in America.

A good case study for brewers though: don't ship green beer out the door to drop your profit margin!

Anonymous said...

I found some Schlitz in Sister Bay Wisconsin and tried it. It was very good and I hope to find it available in Iowa soon.