Early history Christian Schmidt was born in
Magstadt,
Württemberg,
Germany in 1833. He spent three years in
Stuttgart, where he learned brewing, before emigrating to
Philadelphia, Pennsylvania, at the age of 18. After his arrival in Philadelphia, he worked for six months on the
Camden & Atlantic Railroad that was being built to
Atlantic City, and then secured employment in the brewing business. By the late 1850s he had become associated with the brewery of Robert Courtney, which was located on Edward Street near the intersection of Second Street and Girard Avenue Production in 1860 has variously been stated to be either 500 or 3,000 barrels of ale and porter a year. By 1873, production had grown to 20,000 barrels a year After the expansion, the plant was capable of producing 200,000 barrels a year.
Prohibition era (1920–1933) Like all American breweries, C. Schmidt & Sons was forced to stop selling alcoholic beer in 1920 after Prohibition came into effect. During Prohibition, Schmidt's produced non-alcoholic
cereal beverages. Non-alcoholic brands that it produced included Puritan Special and Green Label.
Post-prohibition era Following the repeal of the
Volstead Act in March 1933, Schmidt's began selling 3.2% beer on April 7, 1933. After repeal, Edward A. Schmidt implemented a program to expand and modernize the Schmidt's plant. Further modernization and building programs were carried out between 1947 and 1950. In the mid-1960s, Schmidt's became the first brewer to use computers for production, planning and inventory control. The West Side Cleveland brewery was then closed. In 1972, Schmidt's bought the brands of the
Duquesne Brewing Co. of
Pittsburgh, whose flagship brand was Duke Beer. Duquesne produced 642,734 barrels in 1971, and had been Pittsburgh's second-largest brewer. Schmidt's moved production of the Duquesne brands to its Cleveland brewery and the Pittsburgh plant (which Schmidt's did not purchase) closed. The closure of the Duquesne brewery caused a lot of bitterness in the Pittsburgh area and a boycott of Schmidt's-produced Duke Beer ensued. Sales of the Duquesne brands plummeted in Pittsburgh, although they did not slip as much in eastern Ohio. Schmidt's began having financial troubles in the early 1970s, as competition from both national and other regional breweries intensified. Purchasing the brands (but not the plants) of failing breweries became a common method employed by regional brewers like Schmidt's to boost sales. Schmidt's 1972 purchase of the Duquesne brands proved to be the first of five such acquisitions Schmidt's would make over a 10-year period. Schmidt's held a 25% share of
Delaware Valley beer sales in 1972, while Schaefer held 15% and Ortlieb's and
Budweiser each had 8%. 1974 brought price shocks in the commodities used to brew beer, which further compounded Schmidt's difficulties. In October 1974, Schmidt's announced that its Norristown brewery was being closed because it was inefficient. Schmidt's produced 3,470,000 barrels in 1974, about 200,000 barrels less than the prior year, Carl E. von Czoernig served as president of the company until he was removed on April 16, 1975. Drew Lewis, an outside manager hired by
First Pennsylvania Bank, trustee for the stockholders of the family-owned company, was brought in to run the company. Schmidt's then reported that talks were underway to sell the brewery and on May 30, 1975,
G. Heileman Brewing Co. of
La Crosse, Wisconsin announced that it had agreed to buy Schmidt's for $16 million in cash and notes. In August 1975, however, the sale fell through, reportedly because Schmidt's failed to fulfill nine conditions for the sale. On March 30, 1975,
The Philadelphia Inquirer had published an article about a
blind taste test involving 10 beers, including
Coors and Schmidt's. At the time, Coors was not officially distributed east of the
Mississippi, and it enjoyed considerable mystique in the East. Schmidt's was judged the best beer in the taste test, while Coors finished fifth. The article generated favorable publicity for Schmidt's, which capitalized on it with an
advertising campaign. As a result, Schmidt's experienced a sales bump. It has been said that the improved business outlook made Schmidt family members less interested in selling the brewery and that this was why the sale to Heileman fell through. In April 1976, Schmidt's acquired the brands of the
Reading Brewing Co. of
Reading, Pennsylvania, which was closing. Reading brewed the Reading Premium and Bergheim brands, and had produced about 200,000 barrels in 1975.
William H. Pflaumer era Schmidt family ownership of the company ended in April 1976 when it was sold to
William H. Pflaumer. Pflaumer, then 42 years old, owned both a Schmidt's distributorship and a large beer trucking company. Pflaumer paid $15.9 million for Schmidt's, using only $150,000 of his own money and borrowing the rest. Billy Pflaumer, as he was known, had started in the beer trucking business in 1959 with one truck and $7,000, and he grew his business into a company with 118 tractors and 275 trailers. He also acquired a Schmidt's beer distributorship, which he grew to be the company's largest, sometimes by using tactics that antagonized other Schmidt's distributors. and it was expected that the addition of Rheingold's labels would increase Schmidt's output by about a million barrels a year. Schmidt's paid $5 million for Rheingold's brands and $2 million for its
Orange, New Jersey brewery, which it closed and sold. Production was shifted to Philadelphia, and 625 Rheingold employees lost their jobs. In the early 1970s, Schaefer spent $70 million in three stages to build a five million barrel brewery in
Fogelsville, Pennsylvania, that was considered to be the most efficient brewery in the eastern United States. In fighting the takeover attempt, Schaefer impugned Pflaumer's integrity by arguing that his prior legal problems would jeopardize Schaefer's licensing in New York and New Jersey. At the end of 1980, Schmidt's acquired the brands of crosstown rival Henry F. Ortlieb Brewing Co., whose brewery was closed in early 1981. Ortlieb's had produced about 250,000 barrels in 1980. This acquisition left Schmidt's as the only brewer in Philadelphia. The US beer market had changed dramatically in the 1970s, and in the process, the brand images of many "popular-priced" regional beers, including Schmidt's, suffered. Like most regional beers, Schmidt's was sold as a "popular-priced" beer, the market segment of beers that cost less than the
"premium" beers produced by national brewers. In the 1930s and 1940s, national brewers based in Milwaukee and St. Louis incurred relatively high costs transporting their beer to markets in the east and west. To cover these costs, they touted their beer as "premium" and charged more for it. They justified their higher prices by claiming that their beer was superior in taste, supposedly because of superior brewing skill and methods utilized at their breweries. Eventually, the national brewers, such as
Anheuser-Busch, reduced transportation costs by opening breweries around the country, but the premium prices and images remained, and higher profit margins resulted. The increased profits could then be used to pay for more advertising, further boosting the images of the premium brands. In 1970, popular-priced beer held 58.3% of the US market, compared to 37.6% for premium beer. In 1970, the
Philip Morris Company acquired sole ownership of the
Miller Brewing Company. It then brought the sophisticated marketing techniques and huge advertising budgets of the tobacco industry to the beer business. Other national brewers of premium brands, especially Anheuser-Busch, responded with huge advertising expenditures of their own. The increased advertising in the 1970s and the higher prices already charged for premium national brands like Budweiser further bolstered consumer perceptions that premium beers were superior in quality to popular-priced regional brands like Schmidt's. There was, however, little to no discernible difference between the taste of most premium and popular beers, and the amount of money it cost brewers to produce premium and popular brands was about the same. (The cost of beer packaging was about five times more than the cost of its ingredients). Although Schmidt's was a popular-priced beer, it was generally well-regarded by beer aficionados, and in 1977 won one-on-one blind taste tests against Budweiser, Miller, and Schlitz beers. Nevertheless, popular-priced beers steadily lost market share during the 1970s to more expensive premium beers that had more appealing brand images, and, consistent with this trend, sales of Schmidt's beer started to decline in 1974. Young drinkers especially gravitated to more expensive beers, and Schmidt's increasingly had a brand image as a beer that older
blue-collar workers drank. Schmidt's attempted to appeal to younger drinkers by redesigning its label and launching a $3 million advertising campaign in 1979 that featured comedian
David Brenner and singer
Lou Rawls, By 1982, Schmidt's was only brewing at 66% of its capacity. Above the kettle floor there were multiple tiers, including a mezzanine, that were reminiscent of an opera hall and a control room from which production was monitored using modern computers. After it left the brew house, lager and ale were fermented and stored in separate buildings. Another source of continuity at Schmidt's was William A. Hipp. Hipp was a third generation brewmaster for Schmidt's. His grandfather William Hipp had become brewmaster in 1892, when Christian Schmidt was still running the firm, and held that position until 1921. shortly after receiving a degree in agricultural biological chemistry from
Penn State. Described as one of the last of the gentlemen brewers, Hipp was bright, thorough, and knew how to handle people. Hipp was the first recipient of the
Master Brewers Association of the Americas' Award of Honor and that organization later established a scholarship in his name. The striking Rolling Rock workers were members of
AFL–CIO affiliated unions, and the
Teamsters Union that represented Schmidt's workers refused to support them unless they joined the Teamsters. but after more than a decade of criminal investigations into his practices and allegations of ties to organized crime, Billy Pflaumer was convicted in 1983 of a false billing scheme involving his trucking company, in which he had evaded paying $125,000 in excise taxes in three states. The Cleveland brewery had employed about 200 workers, while the Philadelphia brewery had a workforce of 1,400 in 1984. Schmidt's market share in the Philadelphia area, which had been 33% in 1962, was said to be between 5% and 12% in 1986. Pflaumer received a three-day furlough from prison to return to Philadelphia to negotiate the sale of the brewery. In early April 1987, the G. Heileman Brewing Company of La Crosse, Wisconsin, reached an agreement to purchase Schmidt's brands. Pflaumer apparently wanted to sell the brewery plant as well, but Heileman declined, and the brewery closed. The closing of Schmidt's brewery in 1987 marked the first time in over 300 years that there was no brewery operating in the city of Philadelphia. After 1992, the beer was sometimes marketed as "Schmidt's", while at other times it was called "Schmidt", and labels could incorporate elements derived from both the Philadelphia and Minnesota beers. Heileman's brands were acquired by
Stroh Brewing Co. in 1996. In 1999, Stroh's closed and its Schmidt's-related brands were sold to Pabst. , a "Schmidt" beer was produced by Pabst, but its packaging was derived entirely from the Minnesota beer. Some other old Schmidt's of Philadelphia brands are still owned by Pabst. The trademarks of some other Schmidt's brands have been sold, while still others were allowed to lapse and have now been acquired by other brewers.
Brewery demolition After the brewery closed, the property stood vacant for thirteen years. In 2000, real estate developer
Bart Blatstein purchased the complex at sheriff's auction for $1.8 million. The property, including all 26 of its buildings, were demolished shortly after the purchase. Plans for redeveloping the site were proposed, protested, and stalled numerous times. In May 2009 the Piazza at Schmidt's, a $150 million retail, restaurant, and apartment complex, opened on the former brewery grounds. == Schmidt's brands ==