During the summers of 1969 and 1970, AB brewery workers decided to go on strike. The AB distributor in Dallas, Ben E. Keith, ran out of beer, and the Coors wholesaler, Willowbrook, was forced to allocate Coors to the retail trade. The AB strike was nationwide, however, at the time; Coors was only in 10 states and half of Texas. The retailer received 10% of what Coors had sold the previous summer. The market was out of Budweiser and had 90% less Coors.
SH Lynch, the Schlitz wholesaler, along with the brewery, located in Longview, Texas, took advantage of the strike by flooding the market with Schlitz. Prior to the strike, the number one selling beer in Texas was Pearl. After the strike, it was Schlitz, and remained that way throughout the 1970s into the early 1980s. Lynch had been a longtime distributor and his grandson had spent summers delivering beer off beer trucks. The distributorship was soon one of the largest in the US and became the number one market for Schlitz Malt Liquor.
Shortly after the strikes ended, the market returned to normal and Lynch’s grandson, who had graduated from college, left for New York to pursue a career in the advertising industry. He enjoyed his work at major advertising agencies in NYC during the 1970s, however, the family distributorship had come on hard times and the grandson was called home to oversee the operation.
The self-destruction of Schlitz resulted in the sale of the company to Stroh. Within a couple of years, SH Lynch was sold to Willowbrook as the grandson had lost all faith in the ownership of Stroh to be a viable and major supplier. It was sold while the company still had some value. Many other Schlitz houses did the same.
Forbes, the business magazine, recently (July 21), chronicled the story of the demise of Peter Stroh’s company, Stroh Brewing Co. in an article entitled, “How To Blow $9 Billion: The Fallen Stroh Family.” The number “$9 billion” is based on the company’s worth today according to the S&P 500. The fortune today is gone. Stroh had bought not only Schlitz, but first Schaefer, and later, G. Heileman Brewing Co. This drove the company hundreds of millions into debt which could not be serviced by declining brands.
Stroh finally gave up, and sold to Pabst and Miller. While the article addresses in detail the death of the brewery, it does not tell the story of the millions lost by Stroh/Schlitz wholesalers or hundreds of jobs lost and the negative impact on the lives of employees. The brands that SH Lynch had purchased by Willowbrook also died, however, Lynch did have some great imports including Femsa and Heineken. Even Willowbrook sold out to Andrews some years later.
The money made through the sale of Lynch was used to buy into the clothing industry. In his new operation, the grandson erected pictures of the beer operation down the hallways. Some memories never die.
The Forbes article compares what happened to Stroh with Coors and Yuengling, neither of which took on debt, by highlighting the success of the two companies. The wholesalers of those brands continue to thrive today by providing great jobs for their employees, unlike the Stroh houses. Forbes does not address the real tragedy of the decisions made by Stroh, that of the thousands of employees affected by these decisions. The Stroh story is a sad reminder of what Bill Parcells once said: “Success is never final, but failure is.”
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