THE TEXAS BS a Journal of Free Voices Ejuly 7, 1978 500
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THE TEXAS BS A Journal of Free Voices EJuly 7, 1978 500 • Spoetzl: The little brewery that can • Coors: The only beer in the • Beer brands: You are what you drink Small beer: By Jim Hightower and Susan DeMarco Shiner, Austin Coming over a low, rolling hill in south-central Texas and curving into the valley toward Shiner on state highway 95, a traveler is greeted first by a weathered billboard touting Pearl beer; then, at town's edge a hundred yards down the road, The Texas stands a Lone Star sign in an even worse state of repair. One more bend into town and there between Old Brewery Road and OBSERVER Boggy Creek stands tidy Spoetzl Brewery, gleaming in the sun- The Texas Observer Publishing Co.. 1978 light, a white-brick testament to German-Czech sturdiness and Ronnie Dugger, Publisher pride. To a surprising degree, this contrast between the handsome Vol. 70, No. 13 July 7, 1978 little brewery and the faded billboards reflects the strength of the three beer companies. Pearl and Lone Star, long the big Incorporating the State Observer and the East Texas Demo- boys of Texas beer, almost wrecked themselves through mas- crat, which in turn incorporated the Austin Forum-Advocate. sive expansion programs, expensive advertising campaigns, and EDITOR Jim Hightower the pursuit of regional brewery status. Both have been forced to MANAGING EDITOR Lawrence Walsh merge with out-of-state companies in desperate efforts to keep ASSOCIATE EDITORS Linda Rocaw ich their labels on the market. In the conventional wisdom of indus- Eric Hartman try analysts, Pearl and Lone Star have scrambled to get bigger EDITOR AT LARGE Ronnie Dugger in an effort to survive, and if the two have any failings, the experts would say that they are not yet big enough. PRODUCTION MANAGERS: Susan Reid, Susan Lee, Beth Shiner, on the other hand, is an instructive throwback to the Epstein days of locally based beers. The sixth smallest brewery in the ASSISTANT EDITORS: Vicki Vaughan, Teresa Acosta, Bob country, with a productive capacity of a mere 60,000 barrels a Sindermann year (compared to Pearl's 1.7 million barrels and Lone Star's STAFF ASSISTANTS: Margaret Watson, Margot Beutler, Beverly 1.5 million), Spoetzl has quietly maintained its own pace of Palmer, Harris Worcester, Larry Zinn, Jamie Murphy, Karrie Key, growth and chosen to go its own way, and wisely. Spoetzl oper- Christy Hoppe, Lisa Spann, Matthew Lyon, Helen Jardine CONTRIBUTORS: Kaye Northcott, Jo Clifton, Dave McNeely, Don ates in the black and has survived to become the last indepen- Gardner, Warren Burnett, Paul Sweeney, Marshall Breger, Jack Hop- dent brewery in Texas and one of the last in the United States. per, Stanley Walker, Joe Frantz, Laura Eisenhour, Dan Hubig, Ben "We're not doing as well as we'd like to be," says Spoetzl sales Sargent, Berke Breathed, Eje Wray, Roy Hamric, Thomas D. Bleich, manager. L. J. "Speedy" Beal, "but when I look back and see Mark Stinson, Ave Bonar, Jeff Danziger, Lois Rankin, Maury Maverick Jr., Bruce Cory, John Henry Faulk, Chandler Davidson, Molly Ivins, beers like Pearl and Lone Star that were sitting up there number Ralph Yarborough, Laura Richardson, Tim Mahoney, John Spragens Jr., Sheila R. Taylor, Doug Harlan Shiner's copper brew kettle: 40,000 barrels a year BUSINESS STAFF: Cliff Olofson, Ricky Cruz A journal of free voices We will serve no group or party but will hew hard to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of humankind as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the ignoble in the human spirit. The editor has exclusive control over the editorial policies and con- tents of the Observer. None of the other people who are associated with the enterprise shares this responsibility with him. Writers are responsible for their own work, but not for anything they have not themselves written, and in publishing them the editor does not neces- sarily imply that he agrees with them because this is a journal of free voices. Published by Texas Observer Publishing Co., biweekly except for a three-week inter- val between issues twice a year, in January and July; 25 issues per year. Second-class postage paid at Austin. Texas. Publication no. 541300. Single copy (current or back issue) 50V prepaid. One year, $12; two years, $22; three years, $30. Foreign, except APO/FPO, $1 additional per year. Airmail, bulk orders, and group rates on request. Microfilmed by Microfilming Corporation of America, 21 Harristown Road, Glen Rock, N.J. 07452. Editorial and Business Offices: 600 West 7th Street, Austin, Texas 78701 MICSOODVf (512) 477-0746 2 JULY 7, 1978 What makes Spoetzl run? one in the state of Texas not too long ago and they had to sell state's long-gone brands.) Today, the national firms of Schlitz, out, and when you talk about breweries in the great beer belt Coors, Busch and Miller sell 83 percent of the beer Texans country of Wisconsin and Pennsylvania and how many of those drink. That is 3 percent more of the market than they controlled shut down while were still surviving, I think that we've got to just a year ago (Obs., April 22, 1977), and it was Busch and be doing something right." Miller that made the big gains—Pearl and Lone Star both lost ground to the nationals. Hunkered down in a storm It cannot really be claimed that Shiner even has a share of the Small brewers do not enjoy a friendly business environment. national beer market, and with sales of about 40,000 barrels last For the past several years, the beer industry has been undergo- year, it brewed only three-tenths of a percent of the 11.7 ing what economists euphemistically call a "shakeout"—the na- million barrels of beer that Texans quaffed in 1977 (27 gallons tional beers have been killing off the locals, then the regionals, per man, woman and child). To those used to the popular notion and now some of the smaller-volume nationals. The economic that smallness means failure, it's hard to see in these figures any concentration has proceeded with rare speed—in 1960, there reason to cite Spoetzl Brewery as a modern business success, were 170 beer companies in the U.S.; the number is down to 46 yet that's just what it is. Behind all the quaintness of "The now, and falling. In fact, just five brewers control most of the Littlest Brewery" are some sensible entrepreneurs who have a beer market today—Anheuser-Busch, Miller (owned by Philip strong survival instinct and no intention of operating Spoetzl as Morris), Schlitz, Pabst and Coors account for 72 percent of all some kind of museum piece. U.S. beer sales, up from 45 percent of the market just ten years ago. One of the leading analysts of the industry, Emanuel "We've got a family brewery here, we all believe in the Goldman of Bernstein & Co., says Busch and Miller are headed product, and we ain't going to give up." toward a two-firm shared monopoly, thanks chiefly to the dev- —John Hybner, Shiner brew- astating effect their massive advertising power has on compet- master and stockholder itors. In testimony before the U.S. Senate judiciary committee this May, University of Wisconsin economist and antitrust ex- The Shiner story started back in 1909 when German and pert Willard Mueller also predicted the emergence of a Czechoslovakian farmers and businessmen in Lavaca County Busch-Miller monopoly "in which price competition is replaced worked up such a thirst for a taste of the homeland that they by escalating promotional competition and ultimately higher formed their own beer-making cooperative—the Shiner Brew- prices; an environment in which survival and success is dictated ery Association. Though those who took part turned out to be by market power, not efficiency; [and] the demise of most re- better beer drinkers than brewers, they didn't fold—instead gional brewers and the weakening of some major brewers as they came across one Kosmos Spoetzl, an honest-to-God Ger- effective competitors. - man brewmaster then working in San Antonio. They talked The climate in Texas is not a bit more hospitable to the Spoetzl into running their operation, and in 1915 sold the brew- smalls. (Gulf, Mitchell, Superior, Time, Galveston, Valley, ery to him. It was a good choice. Sabinas, Southern, Dallas and Champion are just a few of the Photos by Keith Dannemiller Sales manager Speedy Beal The brewery in 1910, and today The hospitality room: free beer THE TEXAS OBSERVER 3 Even Prohibition, which took effect in growth and Shiner is a healthy enterprise makes today is for a draft account it has 1918 and knocked some well-established today as a consequence. "I had gone to a with some Pizza Hut outlets in Texas.) breweries for a loop, didn't faze Spoetzl. brewers' meeting and was shocked when Fundamentally, though, the small He turned out "near beer," sold ice, and the speaker said there would only be brewery's way of doing business remains (according to local tales) was not beyond about ten breweries left by 1985," the same. Shiner may not be. to your making up a late-night batch of the real Speedy Beal recalls.