The background photo was the former Ohio Union Brewery before Prohibition. It became the Bruckmann Plant Nol 2 after Prohibition was repealed. Briefly, the plant was owned by Herschel Condon Brewing Co. in 1949 - 1950. It was then sold to Bavarian Brewing Co. in April, 1950, for possible use as a Warehouse and Garage for their Cincinnati Branch.
The Bavarian Brewing Co.
TURNAROUND EFFORTS (1953 - 1958)
Whereas, in the previous 15 years Bavarian was on the offense, enjoying increased sales and expanding their production, the following several years starting about 1953, the brewer was on the defense. In a period of greater competition and reduced sales, they needed to reduce costs to be profitable and viable. But they were met with a headwind that had several different currents.
The acquisition of the Heidelberg Brewery in 1949 created multiple problems for Bavarian as their sales declined a few years later. Foremost, they also had a duplication of work forces and equipment, which created higher labor costs. Bavarian also had substantial aseets that were placed into Heidelberg, and their Plant No. 2, which had lost signifcant value and that were rather illiquid. Bavarian no longer needed a second brewery plant by 1954. However, this would cause workers they no longer needed and created issues with their unions.
The unions also wanted the brewer to participate in a pension program and other fringe benefits, which they did. (Please see the photo on the side with the first Bavarian employee to retire with a pension.) But it was also necessary to make more investments in order to reduce costs and remain viable. Further, Bavarian needed to modernize and expand their main Plant No. 1, which was estimated at a cost of over $1 million at the end of 1953. This required additional capital and changes in their organizational documents and changes in management. Additionally, it necessitated the acquisition of adjacent property, new equipment and new buildings. At the same time, Bavarian was involved in litigation trying to protect their Bavarian's Old Style Beer name, against two larger brewers. One wanted to prevent their use of "Old Style" and another wanted to use the name "Bavarian" with a new and competitive brand. Since Bavarian's advertising may have been partly responsible for their sales declines, more funds needed to be devoted to this area and their overall marketing needed to be improved. Ultimately, beginning in mid-1956, Bavarian would need to create an entirely new image and brand, introduced in 1957. These challenges are discussed in more detail as follows, accompanied by photos and other relevant images.
1954. On the left, Mr. Wagner, a truck driver, was the first Bavarian employee to retire on a pension. He is in the Tap Room with Joe Ponzer, Sales Manager.
MANAGEMENT CHANGES & OWNERSHIP
In January, 1953, there was some modest change in the officers of the Bavarian Brewing Co. The eldest son of William C. Schott (Will), Wm. R. Schott (Bill), became Secretary. Will's youngest son, Louis, became Treasurer. Previously, Bill held both positions as Secretary and Treasurer, and Louis was the Assistant for both of these positions. The other officer positions unchanged were Will as Vice President, his brother Lou as President and Ray Hoffman as the Vice President and General Manager. However, in November of 1954, Lou became Chairman of the Board and Bill became President, with Louis becoming both Secretary and Treasurer. Another significant development at that time, was that Louis L. Schott became a a Director, replacing Joseph Vehr who had served in that capacity since 1945. The four Directors for Bavarian, all with the last names of Schott, then became Lou, Bill, Will and Louis. Evidently Vehr left the firm in late 1954 and disposed of the few shares of stock he held in the company, which were primarily so that he could be a signatory for payroll checks and other financing, to the Schott Family. Vehr's departure as controller was filled by Melvin Aichholz.
As Bavarian's production and profitability declined in the early 1950s, it appears the two older Directors were willing to step back, and the management of Bavarian was mostly left to Will's sons, Bill and Louis, who held the positions of President and Secretary/Treasurer, respectively. These brothers were also the grandsons of Bavarian's founder, Wm. Riedlin and the sons of his daughter Lucia. With the closing of Plant No. 2 and the need for a consolidation and modernization program, changes were needed. The fate of the company, involving difficult decisions needed to restore profitability, was largely left up to Will's sons, and primarily to his eldest son Bill, who was the President. Apparently due to some disagreement in the aforesaid program Bavarian decided to pursue, Ray Hoffman, the V.P. and G.M, resigned in December, 1955. Becoming unprofitable in 1955 and to conserve cash, Bavarian did not provide any bonuses to key employees in that year as they had each year for nearly two decades. There was evidently some attrition of key employees, because when bonuses resumed the following year, they involved several different employees. Instead of the bonuses being somewhat arbitrarily decided, they were provided on a performance basis. The 16 key employees receiving such bonuses at that time were; Mel Aicholz, Perry Austin, Lyle Baker, James Caldwell, Herman Determan, Frank Hamilton, Harld Klink, Carl Moeller, Joseph Ponzer, Larry Rinck, Larry Schrand, Jack Shannon, C.H. Wimberly, Paul Wettig, John Wuest and Walter Zanis.
Besides controlling the management of the firm, Will's family also controlled about 70 percent of the ownership in Bavarian. His brother Lou and his family owned the remaining 30 percent. Individual stockholders were Will and his wife Lucia as well as Lou and Lou's wife Melba and their daughter Melba Ann. In addition, each of Will's sons, Bill and Lou, owned about a 20 percent interest in trust for their families. Therefore, the closely held family ownership of Bavarian was divided among only these seven shareholders.
A DECLINE IN SALES VOLUME & PRODUCTION
The acquisition of the Heidelberg Brewing Co. by Bavarian Brewing Co., creating Bavarian Plant No. 2 in 1949, was a short term solution to meet Bavarian's growing sales. It helped Bavarian achieve its peek annual production of about 350,000 barrels in their September 30th fiscal year, ending in 1950. But beginning around 1952 or 1953, Bavarian began to suffer a decline in sales when production evidently dropped to around 300,000 barrels. By the end of 1954, sales began to drop more precipitously to about 275,000 barrels, and after the closure of Plant No. 2 in late 1954, production declined somewhat under 250,000 barrels by 1955. However, the largest decline was in 1956 when production dropped to only about 211,000 barrels. However, due to a new advertising campaign and warehouse in 1957, sales and production began to improve.
It should be noted that in other writings by T.J. Holian in Over the Barrel and Rob Musson in Brewing Beer in the Queen City Volume IX, indicated that Bavarian's production decline was much more severe; from 350,000 barrels in 1952 to 200,000 barrels in 1953, largely due to a price increase in 1953. However, it appears the production number they cited in 1953 was only for Plant No. 1, excluding Plant No. 2. And, it wasn't until three years latter than previously indicated in those writings, that Bavarian's production declined to about 200,000 barrels. (Please see Corporate Material.) In addition, the price increase significantly damaging sales didn't occur until in April,1955. Another factor causing sales to decline later that year was because Bavarian experienced some changes in the taste of their beer, making it a little "too hoppy" for some of Bavarian's customers. This was corrected near the end of 1955, but it impacted sales for the fiscal year ending in 1956.
The major problem attributable to Bavarian's sales decline beginning in the early 1950s was its relatively high expenses in contrast to its main competitors. This was primarily a result of operating two plants in the same trade area concomitantly, which created a duplication in their work force, equipment and bookkeeping. All of Bavarian's local competitors had been operating only one plant and spending money to reduce their production costs. Unfortunately, Bavarian's investment in Plant No. 2 did the opposite. Another critical issue was that overall demand for beer in the U.S. in the early 1950s, and within Bavarian's market area, was nearing a plateau. So, expanding sales basically required the need to cannibalize sales from other brewers. Without lower production expenses, allowing a brewer to more effectively compete on the basis of cost, and that also allowed for more funds to continue to modernize and increase and improve advertising/marketing, Bavarian found itself at a competitive disadvantage. However, in an effort to revitalize their sales, they made some modifications in their advertising between 1952 and 1956 as explained next. Most importantly, they knew it was necessary to make fundamental changes, as explored under Consolidation and Modernization Program.
Bavarian had used "A Man's Beer" advertising theme from 1946. An example of this slogan is on a packages of Bavairian's beer is on the side with Paul Dixon, believed to be at a radio station around 1952. With the decline in sales around that time, it became obvious that a change in their slogan and advertising was overdue. Along with changing times, Bavarian realized they needed to modify their advertising message. As shown by the coaster and ad below, the slogan was transitioned to emphasize "...and Hers Too!" The slogan was used in about 1953 and 1954. (Please see below.) But "A Man's Beer" slogan was not completely dropped.
Bavarian sponsored a variety of other television programs. As shown on the invitation below, these included the News and A Favorite Story. Others added were Monday Night Fights and Abbott and Costello. However, their main emphasis was with radio programs that covered primarily news, sports and music. In the photo lower left, nearly all the radio and TV announcers involved with the programs Bavarian sponsored are gathered together in the Bavarian Tap Room with two Bavarian officers, the brothers Wm. R. Schott and Louis L. Schott, seated 3rd and 5th from left, respectively. Second from left is Paul Dixon, who appears in the above photo flanked by two women above as well. Dixon went on to be a pioneer in TV talk shows and have a very successful program based in Cincinnati, shortly after the photo below was taken.
c. 1954. Above is a coaster and to the right is an ad in a local paper. Note the women in the ad is similar to those in the photo above. Source: Schott Family Collection.