Book Review: Bitter Brew, The Rise and Fall of Anheuser-Busch and America’s Kings of Beer

BitterBrewHarper Business (2012), 416 pages

Paperback $17.99, eBook edition $7.99

In a Nutshell – It took four generations of the Busch family dynasty to make Budweiser “The King of Beers” and only one to squander its fortune.

Who’s it for? – History buffs, beer geeks, anyone involved in a family business.

Quote from author – “Each sunrise in America ushers in new opportunities to those who keep their chins up … who never lose that lusty courage and willingness that made ours the most envied nation on earth.” – William Knoedelsede

It’s rare for a family business to move to a third generation of ownership. So it’s remarkable that the Busch family survived four generations of transition growing Budweiser beer into one of the most recognizable brands in American history.

In “Bitter Brew,” author William Knoedelsede dug deep with his research and interviews, piecing together a Busch family story full of overindulgence, scandal and intrigue. “Bitter Brew” proves to be more about family egos and extravagance than a business guidebook. Yet many of the lessons learned will be useful to the growing number of baby boomers who are considering passing their companies on to their heirs.

Anheuser-Busch’s roots began when German immigrant Adolphus Busch settled in St Louis in 1857. Adolphus brought with him to America a recipe used by a Monks in a German village named “Budweiser,” which became the lager that would become the world’s most popular beer. He married into the wealthy Anheuser family, merging his and his wife’s companies into one  – Anheuser-Busch.

Adolphus was an innovator, realizing that pasteurized beer could be shipped long distances. Under his guidance, Anheuser-Busch built its own railroad based and regional distribution system. When it was time for Adolphus to retire, he trained and groomed his son Augusta to take over the business.

Anheuser-Busch continued growing until 1920 when Prohibition brought death to hundreds of large and small of U.S. breweries. The exception was Anheuser-Busch, which saved enough wealth to wait out the storm. When Anheuser-Busch backed President Franklin Roosevelt effectively ended Prohibition in 1933, Augusta Busch and his second-born son Gussie celebrated the company’s position as the brewery best prepared to service the pent up demand.

What followed through the 1930s-60s was the huge commercial success of the Budweiser brand. While taking on nationally leading companies like Schlitz and Pabst, Anheuser-Busch stayed true to its long held Budweiser recipe. Gussie Busch was next in line, building new breweries to further increase the company’s market share.

What Gussie Busch did not see, however, was the impact of tobacco giant Phillip Morris purchasing lightly regarded Miller Brewing in 1969. Gussie’s son and Anheuser-Busch fast climber August Busch III recognized that Miller had advertising power and that there was a cultural shift moving beer drinkers from the bar to the family room at home. At age 38, August III accumulated enough respect and leverage inside Anheuser-Busch to actually fire his own father.

Under August III’s leadership, Anheuser-Busch responded to Miller by introducing new products that attracted high consuming beer drinkers in their 2os, and innovative TV commercials, moving away from its traditional “This Bud for You” mantra .

August Busch III’s flaw was his belief that his son August IV was capable of running one of the world’s largest corporations. August IV had a checkered past – being involved in a car crash that killed his female passenger, alcohol-fueled brushes with the law and rampant drug abuse. Somehow August III turned a blind eye to August IV, and placed him on the Anheuser-Busch fast track to company president.

As large scale foreign investors were buying up breweries in the early 2000s, Anheuser-Busch found many of its own customers were jumping ship to the growing craft beer sector. The changing landscape and the inept skills of now President August IV proved to be too much and the company was eventually bought by foreign firm InBev in 2008.

 

 

 

 

Chris Wendel is an author and business consultant as well as a commercial lender with Northern Initiatives, a community development financial institution based in Marquette. Wendel lives and works in Traverse City and can be reached at cwendel@northerninitiatives.org.

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