Complex Numbers

How To Lose Money

Having lived through the Great Coke Crisis of 1985, I'm still fascinated by how companies can sometimes shoot themselves in the foot.

    Oh, Schlitz: How a Historic Ad Campaign Helped Kill America’s Biggest Beer Brand  

Coca-Cola, of course, survived their mistake (or perhaps it was a calculated conspiracy  ). But can we really blame marketing for taking the L out of Schlitz?

Throughout the first half of the 20th century, the Milwaukee-based Joseph Schlitz Brewing Company held the gold crown as America’s largest brewer.

Which glosses right over the dark, dreary days of Prohibition, a significant chunk of "the first half of the 20th century." Like other brewers, Schlitz endured through diversification. But that's irrelevant right now.

Then a series of business decisions, including a disastrous ad campaign, dubbed the “Drink Schlitz or I’ll kill you” campaign, precipitated the downfall of America’s biggest beer brand.

That campaign lasted less than three months, coinciding with a tumultuous year for consumerism in general (1977). It's said that "no publicity is bad publicity," but I'm not so sure about that; still, I'm pretty sure other "business decisions" were more proximate. Like how they stopped making beer and started making formulaic adjunct lager like their competition.

By the late 1950s, Schlitz lost its top title to another quintessential American beer brand: Anheuser-Busch.

Calling that "beer" is an insult to beer, much like calling Kraft Singles "cheese" is an insult to cheese.

During the 1970s, in an attempt to cut production costs and keep up with growing demands, Schlitz’s owners decided to shorten the beer’s brewing time by implementing a process called “accelerated batch fermentation.”

This, by itself, should have been enough to kill the brand. But, as with New Coke, Americans will put up with a lot of enshittification.

They also opted to replace its malted barley with a cheaper ingredient, corn syrup, and began experimenting with the use of a silica gel to prevent haze once the beer was chilled.

That first bit, there, was enough to make it not-beer. Not necessarily bad; lots of great beverages start with corn syrup. But not beer.

And nowadays, of course, lots of people love hazy beers.

Sales dropped as Schlitz’s customers grew frustrated with the brand and started returning cases of beer.

As tasteless as many Americans are, you mess with their favorites at your own peril. (The silica gel thing resulted in a recall, incidentally, never a great thing for any business).

In an effort to stem its declining sales and improve its spiraling reputation, the company hired an ad agency, Leo Burnett & Co., to launch four television spots.

Now, here's the thing: that could have worked. Marketing, done right, can sell anything, including pet rocks and bottled water. You can have the shittiest product in existence, and if you have the right marketing, it'll sell anyway. And truly great products, without marketing, can fade into oblivion.

But by the time Schlitz did those ads, it had already become a terrible product.

Schlitz closed its Milwaukee brewery in 1981.

For context, home brewing became legalized in October of 1978, yet more proof that Jimmy Carter was a severely underrated President. That paved the way for smaller breweries to get some market niches. And Sierra Nevada opened in 1981, still producing craft beer today (I'm not a fan, but I can't argue that it's not real beer).

Today, of course, is a wonderful time to be a beer snob. I'd call it a "Golden Age," but Golden is associated with Coors, and they suck too.

But there are still beer marketing controversies, as I'm sure you remember from earlier this year.

I mention these things sometimes, because even if you're not trying to market anything (a book, perhaps), we're all affected by marketing every day, and a little cynicism can't hurt. And maybe this will help keep you from getting stranded up Schlitz creek without a paddle.