Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer

340 Pages·2012·2.56 MB·English

by  William Knoedelseder

DEDICATION
Dedicated to my sisters—
Mary, Ann, Kate, and Martha—
who have helped make me the man I am.
ACKNOWLEDGMENTS
For their aid and encouragement, I would like to acknowledge the following:
• My agent for life, Alice Martell, who has been my dear friend and champion
for nearly thirty years.
• My most excellent editor at HarperCollins, Hollis Heimbouch, who should start
a brewery with a name like that; • Adolphus IV, Billy, and Trudy Busch, and
Lotsie Busch Webster, and Lotsie Herman Holton—members of a great
American family who shared their story on the record; • Gary Sgouros, who
shared his memories of Gussie’s last days at Grant’s Farm;
• Former Anheuser-Busch executives Denny Long, Andy Steinhubl, and my
brother-in-law Mike Brooks, who helped make a great American company
what it was; • Former Pima County deputy sheriff Ron Benson and former St.
Louis Police detective Nick Fredericksen, who did their jobs; • All the dozens
of other people who contributed to this narrative but prefer to remain
anonymous;
• Glenn Jamboretz, PR consultant par excellence, who helped every time I called
(and sometimes when I didn’t); • Pat Crane, Nancy Cason, John Crotty, and
Suzanne Otto—old St. Louis friends who did likewise;
• Michael London, John Sayles, Barbara Wall, Kevin Beggs, and all the good
people at Lionsgate Television, who believed in this book even before it was
finished.
• John Mettler, Deborah Rybak, Jeff Kwatinetz, Bill and Nancy Cason, and
Dennis McDougal—members of my finance committee, who made it possible
for me to eat regularly and sleep under a roof during the writing process.
• Father John Rechtien, Don Crinklaw, and, especially, Irv Letofsky—who set
me on the road to a writing career years ago and inspire me to this day; •
Dennis McDougal, a fellow traveler on that road who deigns to talk to me
every morning;
• Matthew, Colin, and Halle Knoedelseder, my three astonishing, creative
children, who keep me young at heart and hopeful about the future.
CONTENTS
DEDICATION
ACKNOWLEDGMENTS
BUSCH FAMILY TREE
PROLOGUE: “AUGUST IS NOT FEELING WELL”
1 “BEER IS BACK!”
2 THE ALPHA BUSCH
3 “BEING SECOND ISN’T WORTH SHIT”
4 “THE MAN WHO SAVED THE CARDINALS”
5 THE MAGICAL BEER KINGDOM
6 THE PRUSSIAN LIEUTENANT
7 THE OLD MAN AND THE KID
8 GUSSIE’S LAST STAND
9 CHOOSING SIDES
10 CAMELOT’S END
11 “WE ARE AT WAR”
12 REBIRTHING BUD
13 “TELL ME I’M A HORSE’S ASS”
14 WARNING SIGN
15 “DO YOU KNOW WHO I AM?”
16 “I PROBABLY FEEL WORSE ABOUT THIS THAN YOU DO”
17 “HEY, PAL, YOU GOT A QUARTER?”
18 HERE COMES THE SON
19 “WAY, WAY, WAY BEYOND TIGER WOODS”
20 “A BAD APPLE AT THE TOP”
21 THE LAST WATCH
22 “THEY DIDN’T JUST DROP OUT OF THE SKY”
EPILOGUE: AN AMERICAN DREAM
NOTES
INDEX
PHOTOGRAPHIC INSERT
ABOUT THE AUTHOR
CREDITS
COPYRIGHT
ABOUT THE PUBLISHER
FOOTNOTES
BUSCH FAMILY TREE
PROLOGUE
“AUGUST IS NOT FEELING WELL”
In the grand ballroom of the Hyatt at Capitol Hill in Washington, D.C., on the
afternoon of May 13, 2008, several hundred Anheuser-Busch distributors sat in
rows of uncomfortable chairs, restlessly awaiting the arrival of August Busch IV,
the forty-three-year-old president and CEO of Anheuser-Busch, Inc., America’s
premier brewery.
“The Fourth,” as he was commonly called in the industry, was twenty
minutes late, and no one from the company had appeared with an explanation for
the delay.
The distributors were among 1,200 beer professionals from around the world
attending the eighteenth annual National Beer Wholesalers Association/Brewers
Legislative Conference. This year’s three-day event coincided with the seventy-
fifth anniversary of the repeal of Prohibition, and Anheuser-Busch had taken the
opportunity to schedule a separate meeting with its distributors, the independent
operators who—by a law passed in Prohibition’s wake—serve as the middlemen
between the brewery and retailers.
There was much to talk about. Beer sales were on the decline globally, and
the industry was weathering a period of rapid consolidation that threatened A-
B’s century-long dominance. In the past few years, Milwaukee’s Miller Brewing
had merged with London-based South African Breweries to form SABMiller;
Canada’s Molson had merged with Colorado-based Adolph Coors to form
Molson Coors, which then merged its U.S. operations with SABMiller to form
Miller Coors; and Belgium’s Interbrew SA had merged with Brazil’s AmBev to
create InBev, which had knocked A-B out of its perennial position as the world’s
largest brewer. A-B was still the most profitable brewer, with its brands
accounting for about 50 percent of beer sales in the United States, the world’s
most lucrative market. But the company’s drop to No. 2 in volume, coupled with
the fact that its stock price had remained flat for nearly five years, or roughly the
period that August IV had been in charge of the brewing division, was fueling
speculation that the aggressively acquisitive InBev was eyeing A-B as a possible
takeover target. Busch had dismissed the talk of a takeover during a meeting
with distributors in Chicago the week before, drawing a standing ovation when
he declared, “Not on my watch.”
The Fourth was actually the sixth Busch to head the St. Louis–based
brewery, a responsibility handed down from father to firstborn son since his
great-great-grandfather Adolphus founded the company in the wake of the Civil
War. With the exception of the Fourth’s great-uncle, Adolphus III, each of his
predecessors had left an indelible imprint, not just on the company but on
American commerce as well. Over the course of five generations they’d taken a
tiny, bankrupt brewery that made bad-tasting beer on the banks of the
Mississippi River and transformed it into a colossus that pumped out more than
100 million barrels a year. They had steered the company through two world
wars, Prohibition, and the Great Depression, building their signature lager,
Budweiser, into the best selling beer on the planet, making Anheuser-Busch, in
the words of the Fourth’s father, August A. Busch III, “the world’s beer
company.”
Thanks to their beer, the Busch family had tasted all that America ever
promised the immigrant class from which they sprang—wealth almost beyond
comprehension, political power that provided access to presidents, and a lifestyle
rivaling that of history’s most extravagant royals. Along with that, of course,
came a king-size portion of heartbreak, scandal, tragedy, and untimely death. But
they had endured. Nearly all the other German immigrant brewers who’d built
their businesses by hand, branded their factories with their family names—
Schlitz, Miller, Pabst, Blatz, Schaefer, Coors, Lemp, Stroh, Hamm, Griesedieck
—and turned America into a beer-loving nation were gone, their paternalistic
empires swallowed up by foreign-based conglomerations of amalgamations with
soulless names like InBev. Of the brewing giants that boomed after Prohibition
and fought fierce and sometimes desperate battles for market share in the last
half of the twentieth century, only Anheuser-Busch remained as a freestanding,
independent company, still operated by the family that founded it.
So a lot was riding on the shoulders of August Anheuser Busch IV as the
audience at the Hyatt waited for him to make his appearance. His “watch” had
come at a portentous time for the company, bridging a glorious past and a
perilous future. His vision going forward could determine the fate of the
distributors’ families, and the families of thousands of A-B employees and
suppliers.
Thirty minutes into the wait, one of the Fourth’s trusted lieutenants, vice
president of marketing David Peacock, materialized at the podium and
apologized for the “tardiness.” He explained vaguely that the company plane had
had trouble landing at the airport and promised, “August will be here shortly.”
He then added that Busch was “taking medication for a sinus infection.” The
audience registered a collective “Huh?” at the seeming non sequitur, and it
quickly became apparent that Peacock was vamping for time.
Another ten minutes passed before Busch finally entered the room from
stage left, surrounded by his ever-present phalanx of inner-circle executives, “the
entourage,” as they were called inside the company. Tanned and perfectly
coiffed, wearing his trademark open-neck dress shirt, slacks, and cowboy boots,
he stepped up to the microphone and, barely acknowledging the audience,
launched into his prepared remarks. Casual about rehearsing for his public
speaking engagements, Busch was known for sometimes going off script, losing
focus and relying on his good looks and charm to get him through. Most often he
had not even looked at the speech before reading it in the teleprompter. Once, in
an appearance before the Beer Institute in Boca Raton, Florida, he was supposed
to say, “When our forefathers arrived on these shores, one of the first things they
did was to erect a beer house.” What came out of his mouth instead was, “When
our forefathers arrived on these shores with erections …” He laughed off the
arguably Freudian flub (“Did I really say that?”), and many in the audience
laughed along with him, but his twenty-seven-year-old wife, Kate, sitting next to
him on the dais, dropped her forehead to the table in embarrassment.
There was no laughter on this day. From the outset, it was clear that
something was wrong. As Busch attempted to address the effect of the slowing
economy on the beer business, he slurred words and stumbled over phrases. At
first, some in the audience thought he was having trouble with the teleprompter,
but it soon seemed that the Fourth was seriously impaired, and not from
overindulging in an A-B product or taking some mystery sinus medicine. No,
this appeared to be a deep state of stoned. Unmindful of the rising murmur and
the concerned looks on the faces in the crowd, he plowed on for several
excruciating minutes, speaking in a kind of slow-mo monotone. Finally,
mercifully, David Peacock intervened. He leaned in to the microphone and said,
“Obviously, August is not feeling well.” He then took Busch by the arm and led
him off the stage. Busch went docilely, stumbling once before he disappeared
from view.