By Ray Downs
By Lindsay Toler
By Bill Conroy
By Lindsay Toler
By Lindsay Toler
By Lindsay Toler
By Jessica Lussenhop
By Ray Downs
Beer man Marc Reutter woke up one morning and felt a pain in his back. Figuring maybe he had tweaked it throwing freight at a Shop 'n Save or duking it out with a rival sales rep for precious shelf space, Reutter headed to the doc's office for a formal diagnosis.
When the doctor concluded that Reutter's back pain was caused mainly by stress, he naturally asked Pabst Brewing Company's South Central division manager whether he'd undergone any tectonic shifts in his life lately. Shaking his head, Reutter offered his doc this curt, well-rehearsed rationale:
"You ever try to sell PBR in St. Louis?"
Nowhere in America does a hometown brewery -- in this case, America's largest -- have such a statistical vise grip on local beer consumption as Anheuser-Busch has in St. Louis. Whereas Miller Brewing is lucky to carve out a 50 percent market share in its hometown of Milwaukee, A-B manages 70 percent of the St. Louis area market without having to resort to shameless gimmickry or price-slashing.
"A-B behaves like a monopoly does," says the St. Louis Brewery's Dan Kopman, who cooks up the Schlafly brand. "The pricing here is higher than in other markets -- because it can be. They don't have to drop prices to grow market share."
"They [A-B] probably spill more beer than we sell," says Reutter.
That said, thanks to a combination of factors -- chief among them an attitudinal migration toward working-class chic among twentysomething hipsters that's steadily infiltrating watering holes nationwide -- subpremium "anti-brands" such as Pabst Blue Ribbon and Miller High Life are enjoying an underground comeback of sorts.
"Kids will drink what their grandpas drank, but not their dads," says Patrick Sullivan of Miller Brewing's St. Louis office, echoing a common refrain among local lager cognoscenti. "You're saying one thing when you drink a Heineken; you're saying something completely different when you drink a Pabst or a High Life."
Simply put, consumption of highfalutin brew is so yesterday in the urban core, whereas being down with the working stiff is decidedly of the moment. Welcome to the dirt-beer revolution.
An apt cross-genre comparison for the beer industry's newfound nostalgic appeal can be found in the sneaker company Puma. Like Pabst, Puma went through a decade in the late twentieth century during which it was virtually irrelevant, having lost all sense of its ability to target the serious athletic consumer. So Puma decided to play small ball, focusing exclusively on fashion and getting its hallmark panther on the feet of urban hipsters, skateboarders, musicians and edgy celebrities.
Like Puma, Pabst has found that it's good to be the little guy -- hipsters like the underdog.
"I think it's more of a trendsetter indie person that's looking for something that's not the mainstream," says Catherine Stellin of Youth Intelligence, a New York-based firm that monitors trends among young adults. "I think that people drinking it were never really comfortable with PBR before. I think it's an homage to the working-class guy that's newly appreciated following September 11.
"There's something about PBR -- they don't do marketing, they don't do advertising -- it's more grassroots. There's definitely a move toward independent things -- indie rock & roll, indie hip-hop. It's a reaction against everything being beautifully packaged, the bubblegum pop."
Despite A-B's undisputed dominance, St. Louis is not immune to this trend. After traipsing through a bevy of the city's drinking dens with the broad-shouldered six-foot-seven Reutter, one senses that PBR's comeback is, at minimum, a notable youth-culture phenomenon -- even if it doesn't result in a rocket launch of market growth for the 159-year-old brewery's flagship brand.
Numbers alone don't tell the story. Nationally, the collective market share of Pabst's 42 brands wallows in the low single digits when pitted against the Big Three of A-B, Miller and Coors, which account for roughly 80 percent of all beer sales in the United States -- with A-B alone accounting for nearly half. But even A-B's St. Louis sales figures confirm the popularity of bargain-basement dirt beers -- its Busch brand outsells the flagship Budweiser brand in supermarkets.
Although Pabst doesn't post anything near the Big Three's numbers, its best-known brand, PBR, has experienced a considerable sales surge by its own modest standards, posting double-digit percentage gains in supermarkets. More important, PBR occupies a square on the cerebral chessboards of hepcat city dwellers by way of shoe-leather marketing and cheap, expertly targeted partnerships with the likes of KDHX (88.1 FM) -- all of which has led to a noticeable spike in popularity in haunts such as Bob Putnam's Way Out Club.
"Oh my God, yeah," says Putnam when asked whether he's seen a surge in Pabst consumption at his establishment and at other bars around the city. "One of the big things is that the big breweries went after sporting events. Miller was sponsoring concerts. Pabst has primarily focused in on music clubs. On KDHX, they run a calendar of events that's underwritten by Pabst. Rockabilly people have really jumped on the bandwagon. They [PBR] have really gone after the music market.
"I also think it has to do with the economy. Since September 11, lower-priced beers have picked up in sales. Busch is way up. Budweiser at my place has kind of gone down. Places you wouldn't think about -- like the Delmar [Restaurant & Lounge] -- have Pabst on draft."
Although success in scruffier hotspots such as Frederick's Music Lounge, CBGB's, the Hi-Pointe and the Way Out Club might not be spectacularly revealing, Pabst has gathered a head of steam in joints that, at face value, appear to contradict its gritty, nostalgic image. Mangia Italiano, the Pageant Theatre and its Halo Bar, Tangerine and the Delmar all consistently rank among the brand's top dozen on-premises retailers, according to the brewer's internal tracking.
If Pabst's re-emergence has its San Antonio-headquartered brass flashing their pearly whites, what's equally clear is that the Puma of the beer industry doesn't exactly have Pestalozzi Street shaking in its boots. But a sustained surge in nostalgic coolness, coupled with unprecedented power plays by the likes of Denver-based Coors, have some wondering whether the brewing giant's deft marketing brain trust should quietly reassess some of its home-turf tactics -- if it hasn't already.
There was a time when A-B and Pabst -- which was founded in Milwaukee and now subcontracts its brewing operations to Miller -- dueled annually for the title of top U.S. brewer. Unfortunately for Pabst, that time was more than a century ago, when Pabst earned a blue ribbon as America's best beer at the 1893 Chicago World's Fair -- hence the name Pabst Blue Ribbon. Since then, A-B has never looked back -- whereas Pabst and essentially every domestic brewer outside of the Big Three, including former local kingpins Falstaff and Griesedick, have either been squeezed out of business or relegated to the end of the retail bench by rampant industry consolidation.
Nowadays, Pabst's advertising and marketing budget is "close to zero," says Eric Shepard of Beer Marketer's Insights, a popular industry newsletter. This is a slight exaggeration, of course, but not much of one -- Reutter classifies a no-frills one-eighth-page newspaper ad as a "big commitment" for the brewery. The only variation of this low-overhead strategy came shortly after Pabst acquired Stroh's in 1999 and launched a $40 million radio and newspaper advertising campaign. This investment was driven, Reutter says, by an unexpected surge in the popularity of various Pabst brands in the Pacific Northwest and Chicago, as well as on the snowboarding and skateboarding circuits -- where extreme-sport stalwarts such as Seattle-based snowboarder Blue Montgomery voluntarily wear Pabst gear and publicly extol the old-school brewer's anti-establishment virtues.
"Our ads follow the consumers, not vice versa," explains Reutter.
By contrast, the Big Three combine to spend some $1 billion per year on advertising, paced by Coors' five-year, $300 million deal to become the NFL's exclusive regular-season sponsor. Even if Pabst had the loot to pull off such a coup, doing so might imperil the brand's underground popularity and stealthily cool image.
"When Red Hook aligned itself with Anheuser-Busch, they lost that edge," says St. Louis Brewing's Kopman of the Seattle-based craft-brewing pioneer. He vows not to make the same mistake with his Schlafly line.
"It's like Uncle Tupelo," says Miller's Sullivan, a native St. Louisan who has served time with all of the Big Three. "Once they named a magazine [No Depression] after them, they weren't as cool. Pabst has a lot of appeal because it's kind of the anti-brand."
It's also a damned inexpensive anti-brand, something that dovetails nicely with a persistently flagging American economy. And affordability is a factor for both patron and proprietor, as evidenced by Llewelyn's recent decision to sell Pabst in its upstairs music room in the Central West End.
"Our main reason was just for all the college kids that come here on Friday and Saturday," says Llewelyn's manager Mike Headrick. "Some of our beer was a little too pricey for them. I needed to give them some kind of a break."
Reutter has a more elaborate theory about Pabst's popularity among undergrads -- especially come wintertime.
"When kids first go back to school, they've got money. They're buying Sierra Nevada and whatnot," says Reutter, a 40-year-old St. Louis native who spent seven years in the Bay Area working for Miller before returning to the Midwest for Pabst in 1994. "Come the first of the year, they're looking for a bargain."
"It's cheap," says 22-year-old Casey Pinkert at South Grand Boulevard's dimly lit CBGB's, the number-one on-premise Pabst purveyor in town, which offers PBR bottles for a meager $1.50. "It's good, though, too."
Good? That's stretching it. But does Pabst really taste any worse than Budweiser?
"I choose PBR over Bud when available if I'm drinking domestic," says South Side resident Fred Hessel. "It's cheaper than Bud and better-tasting than other discount beers. But let's face it -- they're both swill."
Not everyone agrees with Hessel's sentiments, even among A-B's competitors.
"A-B can do anything, but they make great American light lager," says Kopman, whose Schlafly Tap Room will add a suburban cousin, a 36,500-square-foot restaurant/brewery in Maplewood, this spring. "A-B also does a fantastic job of controlling distribution."
What Kopman's driving at is this: A-B has an army of its own in-house distributors canvassing the metropolitan region, whereas most other major brewers -- including Coors, Miller and Pabst -- rely on one distributor, Summit Distributing, to get their products into the city's bars, restaurants and markets of various sizes.
"Those sales reps are all being courted to push a certain brand during a different time period -- Guinness during St. Patrick's Day, Corona during Cinco de Mayo, etc.," Sullivan says. "At Anheuser-Busch, you have 100 percent mind share. Michelob Ultra Light didn't exist one day, and then it was ubiquitous."
This leaves reps and district managers for the lesser brewers -- guys like Reutter -- to duke it out with one another, sometimes literally, for precious shelf and tap space at local establishments.
"I've seen fistfights break out in front of cold boxes at grocery stores," says Reutter of a gladiatorial terrain that's unique to the testosterone-laden beer industry. "I ain't never seen two pop guys throw the blows."
Only the dimmest of beer hucksters would dare pull such chest-thumping malarkey with the hulking Reutter, whose hustle and gregarious nature have garnered him a healthy amount of street-level credit for his brand's recent surge in St. Louis. Between Jagermeister shots and Lucky Strikes at the Hi-Pointe one recent Friday, Reutter's all-out nature was on full display as the beer man talked patrons into test-driving bottles of Pabst -- which, according to Hi-Pointe bartender Tim Mize, is close on the heels of bestselling Old Style, also a Pabst brand.
"We move that shit," says Mize of PBR. "It's the most popular beer besides the [$4] Old Style pitcher."
At Tangerine, general manager Matt McMullin sought to offer Pabst for his eccentric establishment's kitschy 1970's Western-themed "Truck Stop Tuesdays," which feature old country records and thematic décor.
"Just about a year ago, they finally introduced PBR on draft in the St. Louis market," says McMullin. "They've done a big, huge marketing push."
Reutter confirms that Pabst only recently made PBR available on draft in the St. Louis area. He also says that the brewery's marketing -- KDHX and softball-team sponsorship aside -- is strictly of the shoe-leather variety. Here, Pabst relies on word of mouth to spread its gospel. And around these parts, Reutter is a veritable T.D. Jakes, evangelizing PBR's humble virtues, something that hasn't been lost on CBGB's head bartender Matt Wagner.
"Before I met Marc, I ordered Pabst, like, ten times and I didn't get it," says Wagner. "Then Marc came in one night. We were having a Johnny Cash birthday party. Marc drives from his home [in Arnold] -- it's snowing -- picks up the beer and [brought it] back that night."
Budweiser reps are somewhat smug by comparison, Wagner says.
"An A-B rep came in here to check born-on dates," recalls Wagner. "He opens up a cooler, and it was empty. I said, 'That's where I keep the Pabst.' He's, like, 'Oh, that'swhat kind of place this is.' I had three sixpacks of Bud in another cooler, and there were only, like, two beers gone. I don't think they care that much about us because we're such a small account."
Although he doesn't profess witnessing such outright rudeness from A-B reps, the Delmar's Doug Morgan says he sees an A-B rep "about once a year."
"The attitude that I've gotten is, you're kind of ignored if you don't have that tap handle," says Morgan, who only sells Bud longnecks at his U. City storefront.
The dreadlock-coiffed Morgan -- who says he drinks Pabst-owned Schlitz Malt Liquor at home -- began selling Pabst simply because he used to drink it at a "couple of dives" he liked in the '80s.
"Anybody who grew up in the Midwest remembers that PBR was big," says Morgan. "Some micros aren't the most accessible, and no one grew up drinking Heineken or Pilsner Urquell. Cheaper beer in general isn't making a comeback. It's got to have kitsch value -- and Pabst is number one in that department."
Still, Morgan says, the Bud longnecks "sell themselves," an omnipotence that's not lost on Whitney Keller, who used to handle Miller Brewing's account for St. Louis promotional agency Zipatoni.
"They [bartenders] would look at you kind of funny and find the only Miller in the back of the cooler," says Keller, now a stay-at-home mom in suburban Chicago. "I was in McGurk's one night. An acquaintance of mine, somehow related to the Busch family, said, 'What is Whitney doing drinking a Miller product?' I found it kind of amusing. I enjoyed being the only person in the bar drinking Miller."
Zipatoni handled A-B's promotions for years, but, according to Keller, "got fed up by all the politics" and began working for Miller.
At the cash register, however, none of this perceived arrogance is hurting A-B, which pumps millions of dollars into local community events, philanthropy and education. In the last category, Anheuser-Busch has its moniker emblazoned on the buildings that house the St. Louis University Eye Institute and Washington University's law school -- ironic, when you consider that excessive drinking tends to cause cataracts and keeps the pockets of DWI attorneys well-lined.
Although any company trafficking in alcoholic beverages walks a fine line, A-B doesn't actively promote excessive drinking. Its critically lauded and seemingly ubiquitous advertising and promotional campaigns -- "Wazzup," "True," the Budweiser Frogs, the Clydesdales, the Bud Bowl -- appeal to a broad range of demographics, giving its brands the ability to be all things to all people.
Dirt beer it isn't.
The track records of A-B's Big Three rivals, Miller and Coors, have been decidedly mixed. Although Coors' lead brand, Coors Light, has legions of loyal consumers on the West Coast and in the Sun Belt, it has a disproportionately poor market share in St. Louis, despite the brewery's garish NFL ad campaign and pre-Rams-game tailgate parties.
Furthermore, it is difficult to see how Coors' dubious "Twins" NFL television-ad campaign -- with its dim, soak-your-buddy's-T-shirt-with-beer, "Hey everybody, get drunk, get laid," Limp Bizkit-y pandering to guys in their twenties -- promotes anything short of a lifestyle centered around chronic public inebriation and horrendously distasteful objectification of women.
At six-foot-one and 230 pounds, 26-year-old Clayton lawyer and former college linebacker Mike Fischer looks like the sort of bloke who'd be intentionally emptying a bottle of Coors Light on some chick's halter top in one of the "Twins" ads. But looks aren't everything.
"Perhaps the most offensive thing about the Coors ad campaign is the picture it paints of men," says Fischer. "There is certainly a place for fraternitylike behavior, but these Coors ads take meatheadedness to an entirely new level and assign its attributes to the entire male population. Can you imagine a Michelob Ultra Light campaign that had groups of women sipping beer with straws while a voiceover cries: 'I! Love! Shopping on TV! Soap-opera marathons! And manicures! Here's to ATMs!'?"
Fischer is not alone in his disdain for Coors and its leading brand, Coors Light (a.k.a. the "Silver Bullet").
"Luckily I haven't had to bend to the Silver Bullet crowd yet," says the Delmar's Morgan. "It's garbage beer. It's a West Coast thing."
In fact, given that Pabst brands -- with nary an advertising budget to speak of -- clobber third-ranked Coors in the St. Louis area, the Denver brewer's inability to appeal to St. Louisans may be even more of a phenomenon than the re-emergence of nostalgia beer. Still, even Morgan -- who is quick to point out that he likes the Coors commercials featuring Dr. Dre playing a drum machine on an airplane -- acknowledges that the "Twins" ads may well be effective.
"I think it [the campaign] is retarded, personally, but it works," says Morgan. "They [guys in their twenties] drink a lot of beer."
Of the campaign's efficacy thus far, Coors' Midwest field-marketing manager Monique Woodford says simply: "It's been going well." BMI's Shepard remains skeptical.
"I don't know," he says of whether Coors' NFL ad blitz has translated into sales. "I think they were expecting a little bit of a pop in late 2002. It's not clear that that occurred. I think the jury's still out."
Miller's Sullivan feels that, if nothing else, the "Twins" ads have generated considerable buzz among pop-culture tastemakers, both negative and positive. He should know; Miller Lite recently caused a decent media stir with its new "Catfight" campaign, which depicts the ideal male beer-commercial fantasy of a "tastes great, less filling" argument between two gorgeous women escalating into a nearly naked mud-wrestling showdown. Both Coors and Miller seem to be shamelessly pandering to the meathead set. But there's a critical difference: The Miller campaign's conclusion makes its tongue-in-cheek plotline crystal-clear. Not that Sullivan cares. After all, the old adage that no press is bad press still carries considerable intellectual credibility.
"It [the "Catfight" campaign] has outperformed anyone's expectations," says Sullivan. "It's generating a lot of buzz. Lite needs to become cool again for 21- to 27-year-old males."
Sullivan also believes that PBR may owe a debt of gratitude to Miller's once-dormant High Life brand, dubbed "the Champagne of Beers," which unexpectedly touched a nostalgic nerve with young males in the late '90s and early this decade with an ingenious ad campaign devised by award-winning documentarian Errol Morris ["The Thin Blue Line"]. Featuring monotone narration and minimalist, domestic settings, these High Life ads extolled the virtues of deviled-egg consumption, slovenly machismo, less-than-firm tummies and coffee-stained wife-beaters.
"The whole manly ad campaign -- 'I'm not afraid of cholesterol' -- kicked in about five years ago," recalls Sullivan, who notes that High Life's growth had traditionally taken place among men over 44. "It was surprising how the young male demographic responded to those ads. They weren't aimed at them."
But thanks to an overzealous play in the emerging "malternative" market -- liquor-based drinks with substantially reduced alcohol content -- A-B's closest competitor has not been able to leverage High Life's surprising popularity into consistent success for its other brands. The chief criticism leveled against the brewery -- which recently announced a change of CEO -- is that it diverted promotional dollars from its core beer brands over the summer to pump up "malternatives" such as Jack Daniel's Hard Cola and Skyy Blue Vodka.
"They spent all summer pushing malternatives, but they bought back a lot [of product]," says Kopman. "I think you have to be a spirit-based company to successfully push spirits. A-B's move with Bacardi Silver is a defensive play. Miller took on multiple partners, maybe bit off more than they could chew."
Miller's Sullivan acknowledges that perhaps his company bet too much of its farm on too many different malternative brands, yet he remains a believer in the market.
"Jack Daniel's Hard Cola and Skyy Blue are growing like crazy," says Sullivan. "I don't know if it [pushing multiple malternatives] was too many, but it took focus away from our trademark brands. [However,] it is a brilliant strategy for the liquor companies to become relevant again."
Even as Miller struggles to regain focus and works to stem a slipping market share, any damage caused to its leading brand has hardly been terminal.
"The past two or three years, Miller has had a stronger presence," says Morgan. "I've had to bring in Miller Lite. Maybe I have a more transient crowd with college students."
Results have been similarly steady at supermarkets, where Miller Lite consistently battles Coors Light for third place in national sales rankings, behind Bud Light and Bud. In St. Louis, Miller Lite is number four, with A-B's bargain brand, Busch, nudging out Budweiser, the brewery's flagship label, for second place -- Coors Light places a distant eleventh. Whereas Pabst's Old Milwaukee brand holds its own in St. Louis supermarkets, its Blue Ribbon brand doesn't even register in the top twenty.
But PBR, despite its relatively skimpy overall market share, has seen an upsurge of 11.5 percent in recent supermarket sales nationwide, compared with a 1 percent gain for Miller High Life, according to BMI's Shepard, who considers the renaissance experienced by both PBR and High Life truly unique and finds himself at a loss to explain just why.
"If I had an answer, I'd be sitting in Milwaukee or St. Louis explaining it to people who would be giving me goo-gobs of money," says Shepard. "Generally when brands go down as far as both those brands had gone down from their peaks, it's very difficult to come back like they have."
With Reutter passing out all sorts of gear while making his nightly rounds, Pabst's retro mesh hats and gas-station jackets have become more popular than ever. And with the comeback of hard-rockin' "the" bands such as the Hives, Strokes, Vines and White Stripes showing no signs of letting up, the environment seems fertile for Pabst to continue to thrive by tapping into the rock & roll demographic. Still, relying on the fickle consumer whims of America's youth is not a survival strategy that any credible economist would prescribe. Conversely, Anheuser-Busch's model for global beer domination most assuredly is. As Beer Business Daily's Harry Schumacher says of the dirt-beer uprising: "It's definitely something to watch, but A-B is not worried about it."
No, not yet -- or at least one would assume. But Morgan has heard rumblings among Pestalozzi Street foot soldiers that the brewery is thinking about more aggressively pursuing the youthful dirt-beer crowd with its promotional efforts, something that Miller's Sullivan believes has already kicked in, with Bud employing a variation on its classic Clydesdales-playing-football campaign during its most recent Super Bowl ad blitz.
In the clubs of St. Louis, PBR and Reutter are more than enjoying their fifteen minutes, something that Frederick's Music Lounge owner Fred Friction recently affirmed by giddily replacing the Budweisers of a duo performing onstage with fresh bottles of PBR. Friction's a Stag man himself -- another Pabst brand that he refers to as "steaks, taters and gravy."
"That PBR sign subliminally affects people -- including me," says Friction of the cardboard can behind his stage. "I always drink Stag, but I ordered a PBR the other night. I don't know why."