As local breweries across the country were shutting their taps, Bill Leinenkugel reimagined his family's century-old brand as the latest thing in beer fashion: a craft brew.
Seeking to compete against national brands whose marketing and distribution budgets dwarfed his own, he diversified the northern Wisconsin favorite into a half-dozen specialty brews. When the decades-long trend of brewing-industry mergers came at last to Chippewa Falls in 1988, he agreed to an acquisition of the brewery by Miller Brewing Co. But his family still ran the business, and the company prospered while establishing a national identity apart from its owner.
"It became a model for how a large brewer would handle a small brewer that it took under its wing," says Paul Gatza, director of the Brewers Association in Boulder, Colo.
Founded in 1867 by Mr. Leinenkugel's great-grandfather, the brewery in the early days was meant to serve Chippewa Falls's large population of lumberjacks. Prohibition slashed the number of America's small breweries, but Leinenkugel's survived by bottling soda water and a not-so-popular near-beer called Leino.
When Bill Leinenkugel joined the family business as a salesman in the early 1950s, there were about 350 brewers left in the country. By 1980, that number had dropped to just 40.
After Milwaukee powerhouse Joseph Schlitz Brewing Co. introduced its budget Old Milwaukee brand in the early 1960s, Mr. Leinenkugel took marketing classes and positioned his beer as a classier, and more expensive, alternative.
"We were much higher than Old Milwaukee but lower than Schlitz and for a while we sold less beer but we made more money," he told Beer Business Daily in an interview in August.
Mr. Leinenkugel began courting college students in Madison with gimmicks such as logo T-shirts, then an uncommon strategy. He established the "Leinie Lodge," a tasting room at the brewery meant to attract tourists. He even dressed up his bottles with aluminum foil over the cap.
"The bartenders hated it because it got in the way," he said in the Beer Business Daily interview. "They cost a penny apiece and I got a dollar a case more for Leinenkugel's Limited" -- his early Oktoberfest-style brew.
Sales began to take off as Bill Leinenkugel secured a Chicago distributor and began producing light, bock and other specialty brews. After the company's sale to Miller, the Chicago Tribune asked: "Can a pure and innocent specialty beer from a small town in Wisconsin survive under ownership of the nation's second-largest brewer, a monolith that probably spills more each year than the little guy produces?"
The answer turned out to be yes. Miller, which is now part of global company SABMiller PLC, left Leinenkugel's pretty much on its own, as management passed to Mr. Leinenkugel's sons. The brewery remained in Chippewa Falls, although it is no longer the town's largest employer. With Miller's increased marketing and distribution muscle, bottles of Leinenkugel can now be found across the country. Production increased to 465,000 barrels in 2007 from 61,000 barrels in 1987.
Where ads once touted the water from "Big Eddy Springs," the focus now is more on the outdoor lifestyle of Wisconsin's North Woods. Leinenkugel's draft taps feature a model canoe.
While marching in the Chippewa Springs Memorial Day Parade, Mr. Leinenkugel fell ill and was diagnosed with a brain tumor. He eschewed treatment and continued sipping his product until days before his death in Chippewa Falls on Sept. 22 at age 87. He liked to say his two favorite brews were Leinenkugel's and free beer.
By: Stephen Miller
The Wall Street Journal; September 30, 2008
