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Schlitz Tries to Revive '50s Heyday

Hammered by A-B's Price Cuts, Pabst Brewing Turns to Retro Marketing

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CHICAGO (AdAge.com) -- The beer that made Milwaukee famous had been famed for its low price -- until that selling point was undercut by category leader Anheuser-Busch.

Schlitz brand beer is getting a retro marketing makeover.
Schlitz brand beer is getting a retro marketing makeover.
Now, the marketer of the 157-year-old Schlitz is trying to re-establish itself with a retro makeover, including a reprise of the gilded bottle that carried the brew in the 1950s when it was the world's best-selling beer.

Sorely needed marketing push
Distributors say renewed marketing efforts are sorely needed for much of the low-priced portfolio of Schlitz's marketer, San Antonio-based Pabst Brewing Co., which has suffered disproportionately from price cuts instituted by A-B's Natural Light and Busch that rendered them cheaper than Schlitz and Pabst Blue Ribbon.

"They absolutely have to do something," said distributor Don Faust Jr. at Faust Distributor Co., Houston. "If price isn't going to get people to buy Pabst and Schlitz, the alternative has to be more marketing."

Market-share data suggests the situation is urgent. Pabst Brewing's total market share dropped last year, to 3.2% of beer shipments from 3.6%. Shipments fell about 24% since 2002, according to Beer Marketer's Insights.

Pabst growth pre-empted
Those losses occurred despite double-digit growth for flagship Pabst Blue Ribbon during 2003 and 2004, which was ultimately pre-empted by A-B's price cuts. Those gains were fueled by an effort to play up the brand's retro downscale chic with word-of-mouth, on-premise promotions and event sponsorships.

Schlitz, the country's No. 3 brew as recently as 1981, before its profile dramatically faded under a succession of owners that emphasized other brands before it, seems to fit the profile for the retro-beer treatment. And Pabst Senior Brand Manager Tim Jacobi said double-digit growth in 25 mid-sized markets last year, including Austin, Texas, Lincoln, Neb. and Burbank, Calif., shows the time may be right for a Schlitz renaissance. There is no agency for the brand.

"There's a sense that the stars are lining up for us," said Mr. Jacobi. "We're playing with it and trying to respond to consumer demand."

The trick, a spokesman said, will be reviving Schlitz in a manner that doesn't cannibalize the brewer's other 100-something-year-old, low-priced retro brew with Milwaukee roots, PBR. But experts said that after this year's results, Pabst may not have the luxury of caution.

"They had so much success with Pabst, but it's been so tough lately," said Harry Schumacher, editor of Beer Business Daily. "Sometimes these things wind up helping each other out more than hurting each other."
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