Beer and Cost Cutting
- 1976 - Schlitz changed brewing method for Schlitz beer (TIME 10 Aug 1981)
- Replaced most barley malt with corn syrup (cheaper)
- Shortened brewing cycle from 40 days to 15 (cheaper)
- Changed foam stabilizer (get around labeling laws)
- Result: What the management wanted - a cheaper, more profitable beer.
- Problems with cheaper beer:
- Tasted lousy and Schlitz drinkers noticed it
- Broke down quickly, ingredients bonded and produced mucus-like
precipitate in bottom of can
- Who wants "snot beer?" Not too many, as it turned out.
- Another result: not what the management wanted
- Sales collapsed
- After first stonewalling, they recalled 10 million cans of the cruddy beer.
- Reputation of Schlitz was ruined
- Schlitz fell out of the top 3 and never recovered
- Brewery in Milwaukee shut down in 1981
- Schlitz sold to Stroh's in 1982
- Take-away: sometimes cost-cutting produces unintended results