THE powerful and rich Stroh family was once one of the richest families in America.
In 1988, the family was valued at $700 million by Forbes, which would be worth $9 billion in today’s terms if you matched the S&P 500.
According to Forbes, within a year, the steep decline of the Strohs’ fortunes would be set in motion with a series of bad business decisions that would see the once-illustrious clan almost penniless.
The Strohs’ prosperity, started with a German immigrant, Bernhard Stroh, in 1850 Detroit. He started with $150 and a family recipe for beer. For more than 100 years, the family business grew steadily in the Great Lakes region, taking advantage of the post-war boom years which saw it increase its sales from half a million barrels in 1950 to 2.7 million barrels in 1956.
The 1980s was the decade of real affluence, but also folly, for the family owned and run business. Peter Stroh took the reins in 1980 and had ambitious expansion plans. First, he bought the New York-based brewer F&M Schaefer. But it was the next purchase which set the path for the Stroh business.
In 1982 Peter Stroh borrowed $500 million against the company’s then-$100 million value to gobble up the Joseph Schlitz Brewing business in Milwaukee. It was all part of the grand plan of national reach. The acquisition made Stroh the third biggest brewers, with seven plants, in the US, behind Anheuser-Busch and Miller.
But it couldn’t match the ad spend of its bigger rivals and resorted to price to survive, which whittled away its margins. It also missed the defining trend of the times: light beer. The emergence of the Coors business (which has since merged with Miller to become MillerCoors) saw Stroh Brewery fall to fourth place in a market that could only really sustain three big breweries.
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