Modern Brewery Age Reprint Jan, 1960 -
Schmidt's Will Celebrate Its Century
Of Growth Throughout The Year
When Christian Schmidt, 27 year old brewmaster, formerly of Machstadt in Wurtemberg, acquired Courtenay's Brewery in Philadelphia in 1860 it was producing 4,000 barrels a year. (sic. other sources list 500). After the sale he put up a sign. It said simply: C. Schmidt. That was 100 years ago.
In 1960, C. Schmidt & Sons, its main plant still located on the original site in Philadelphia, can produce 2,200,000 barrels in all plants. Its president, Carl E. von Czoernig, is a great-grandson of Christian Schmidt. Its chairman of the board, Edward A. Gardiner, is a grandson of the founder (600,000 barrels of the present capacity is attributed to the wholly owned subsidiary, Valley Forge Brewing Co., of Norristown, Pa.)
Schmidt's of Philadelphia will celebrate a century of growth and progress throughout 1960. The brewery ranks approximately 13th in sales in the country, and enjoyed one of its best years in 1959, with sales of approximately 1,750,000 barrels. Schmidt products are presently marketed in 13 states along the Atlantic Coast as well as in Ohio. However, there is great local demand for the beer, about 65% of sales taking place in Philadelphia and the surrounding area.
To the Philadelphia tavern customer Schmidt's and beer are practically synonymous. The beer is first in sales in that city, and first in draught sales as well. Since the days of Christian Schmidt himself, the brewery has maintained a special interest in the patron of the neighborhood tavern, who enjoys his foaming glass of draught after a day's hard work. One third of Schmidt's sales are still in draught, almost double the national average, which is under one fifth.
Schmidt's caters to the thrift-consciousness of the beer drinker. Executives believe the brewery owes a good part of its success to its pioneer introduction of the quart bottle and other large containers.
Throughout its history Schmidt's has been a family-controlled brewery, closely supervised and staffed on the executive level by members of the family selected for their ability to carry out specific administrative tasks.
Five Heads in 100 Years
There have been only five heads over the hundred year span, and two of them, the original Christian Schmidt, and Edward A. Schmidt, his son, served over an 84 year period, 1860-1944. Frederick W. Schmidt, another son, served as president from 1944-1945 and then became chairman of the board. From 1945-1958 Christian H. Zoller, a grandson, served as president. In May, 1958, Carl E. von Czoernig, the youthful 40 year old great-grandson took over the helm.
Under each head there has been growth and consolidation, and with each there is a significant record of accomplishment. Christian Schmidt provided the spark which brought the brewery from obscurity to a place among Philadelphia leading firms within 13 years of purchase.
During the presidency of Edward A. Schmidt, the brewery grew from local to national prominence. Under Christian Zoller came the great modernization of the brewery, and acquisition of the Valley Forge brewery.
It has fallen once again to the lot of another youthful brewery executive, Carl von Czoernig, to consolidate the gains made and prepare ground for new advances. Under von Czoernig the brewery has adopted modern marketing techniques and introduced an entirely new management-marketing team in an effort to increase sales by 30% over the next three years.
The original Christian Schmidt learned the art of brewing in Stuttgart and then emigrated to the United States at the age of eighteen. After working for several years as a brewer he was hired by Courtenay's Brewery, eventually acquiring an interest, and finally the controlling interest which started the Schmidt dynasty in 1860.
By 1871 Christian Schmidt had built what is described in a financial paper of the day as a "commodious malt house on Edward Street, four stories in height, with a capacity for malting 50,000 bushels of grain during the season."
The article went on to say: "He has made several improvements in different branches of the business since he took possession of it: among others may be mentioned a spacious and convenient cellar, 18 feet below the street, and capable of containing 4000 barrels. This is constructed under the malt house and is connected with the brewery by pipes.
By 1873, when the above article was published, Christian Schmidt was brewing 20,000 barrels a year, a figure which had already "raised his brewery from insignificance to an importance which entitles it to rank among the largest establishments of the city and State."
Thus, in thirteen years Schmidt's production had increased five-fold, from 4,000 barrels to 20,000 barrels. Within another nineteen years there was another 500% increase in production. By 1892 Christian Schmidt's three sons, Henry, Edward and Frederick, became partners in the business. Ten years later the firm was incorporated, with Edward A. Schmidt assuming the presidency. Edward A. Schmidt remained president from 1902 until his death in 1944.
By 1881 Christian Schmidt had already acquired the Robert Smith Ale Brewing Co. which had been established in Philadelphia in 1774. This gave the Schmidt company a link with the Philadelphia of Colonial days, for Robert Smith had arrived in the colony in 1744 "to set up a Brew House for Ale."
Schmidt's continued to prosper and grow under Edward A. Schmidt. Although the hiatus of Prohibition took place during his administration it did not for long slow down the development of the brewery. Schmidt's did not shut down during the long interruption, but used its facilities to produced non-alcoholic cereal beverages.
Immediately upon relegalization in 1933 Edward A. Schmidt embarked upon plans to enlarge and modernize the brewery. During the 1930's the plant on Edward Street began to take the form and shape it holds today. Extensive modernization and expansion were carried out, and new large capacity buildings and equipment were added.
About a year after repeal sales began to mushroom. It was not long after repeal that Schmidt's came out with a full quart bottle. This proved to be one of the brewery's most successful pioneering packages. Later they introduced a 16 oz. bottle.
Edward A. Schmidt exercised aggressive promotional and advertising policies. He was responsible for the erection of one of the early spectacular billboards placed in downtown Philadelphia. Other spectaculars have been placed in strategic places throughout the marketing area since those days, and many more have been in use for years.
The slogan "None Better Since 1860" promoted sales during the days immediately following repeal. During World War II, the highly successful "Beer as Beer Should Be" was introduced.
Schmidt's achieved regional distribution during the 30's. Before World War II it had become the largest selling beer and ale in Maine. The beer was sold in Pennsylvania, New York, Maryland and farther south. Today western Pennsylvania and eastern Ohio have been added to the marketing area.
By the late 1930's C. Schmidt & Sons had already become one of the 20 largest breweries in the United States.
The 1940 Expansion
An article printed in the 1940 issue of Modern Brewery Age celebrates the completion of the expansion program of the 1930's. The author toured Schmidt's modern new office building, the new malt storage building, the new ale stockhouse, new gas collecting cellar, new bottling cellar, and the "highly modern bottling and canning department." A bird's eye view shows a spacious modern bottling department with four "high speed" bottling lines and one canning line. Today Schmidt's operates seven production lines in the space once occupied by five, with far larger and bulkier pasteurizers, bottle washers and packaging machinery crowding the modernized bottling department.
Edward Schmidt A Practical Brewer
Like his father, Edward A. Schmidt was a practical brewer, having gained his knowledge through many years of actual experience in the plant. His knowledge made it possible for him to closely supervise the modernization of the company's facilities.
"Mr. Schmidt has wisely surrounded himself with a staff of executives who pride themselves on their open minds," Modern Brewery Age said in 1940. "They are constantly vying with one another in a spirit of friendly competition to see who can evolve the most novel- yet thoroughly practical- methods for the efficient operation of their departments. When they believe they have even a germ of a new wrinkle they present it to 'the chief' …and very soon another new piece of equipment is facing the acid test under the watchful eye of Schmidt technical experts."
Hipp and Slama
In 1940 two names who have become synonymous with the creativity and flexibility characteristic of the organization were prominently mentioned. They were master brewer Arthur H.P. Hipp, son of Schmidt master brewer William Hipp of an earlier day, and father of the present William A. Hipp, now production manager. Arthur Hipp was busy superintending the final touches being applied to the new ale house in 1940.
The other name to reckon with is Chief Engineer Richard Slama who was the guiding genius behind many of the custom-built machines and innovations used extensively throughout the brewery. In 1940 Slama adopted the conventional Nye pulsometer pump, used previously in dredging and sand pits, for pumping away the brewery's spent grains. Under Mr. Slama applied this type of automatic pressure vacuum type pump in the disposition of spent grains, it had never performed a similar duty in any brewery.
Early Modern Bottling Lines
Philip Miner was in charge of the bottling department in 1940. At that time the canning line had just been installed. It included an unscrambler, rinser, dating machine, crowner, band filler and pasteurizer, as well as weight checking machines for 12 and 32 ounce cans, an automatic packer and a carton sealer. All this was the very latest equipment for the time.
The four bottling lines had been installed between 1934 and 1940. Two more were devoted exclusively to quart bottles even as far back as 1940, and the other two handled 12 ounce bottle demands. Considered high speed for the time was the 175 bottles per minute rate for the 12 oz. line, and the 90 bottles per minute rate for the quart line. Mr. Miner was proud of his department's ability to turn out almost a million bottles and cans over a 24 hour stretch.
Sales Managers Role
The post of sales manager has always been an important one in a brewery as sales minded as C. Schmidt & Sons. Henry C. Schmidt, one of the brothers of Edward A., who had become a partner in 1892, was sales manager until 1919. From 1919 to 1934 Christian Zoller was sales manager. With repeal Frederick W. Schmidt II, Henry C.'s son, became retail sales manager and advertising manager and held these posts for many years. Frederick H. Schmidt, son of Frederick W. Schmidt II, is now assistant vice president and director of public relations.
For generations the name of Gardiner had been well known in brewing circles. The family owned the Continental Brewing Co. in Philadelphia. John Gardiner married a daughter of Christian Schmidt. John Gardiner Jr., and Edward A. Gardiner, sons of John Gardiner, joined Schmidt's to add new luster, in, respectively, sales and finance., to the family management team.
During the entire period of relegalization- including the peak year of 1955- and through to 1958, John Gardiner Jr., a grandson of the founder, was sales and advertising manager for the brewery. Mr. Gardiner, now a vice president, saw sales rise under his management from 106,000 in 1934 to almost 2 million in 1955.
Edward A. Gardiner, his brother, now chairman of the board, was responsible for the financial arrangements which made possible the various expansions of the brewery in the 1930's, 40's and early 50's. It was Mr. Gardiner's raising of the funds to accommodate the expansion of the company in 1947 and 1948 which kept the brewery abreast of modern changes and in a position to meet the difficult competitive challenge of the postwar years.
With the passing of Edward A. Schmidt in 1944, a great era came to an end. Although his brother Frederick W. Schmidt assumed the presidency for a year, he was soon made chairman of the board, a position he held until his death in 1949.
Great Sales Expansion
In the middle of World War II problems, Christian H. Zoller, son of Anna M. Zoller, a daughter of the founder, took over the presidency, Mr. Zoller presided over the greatest sales expansion in the brewery's history.
Plans were immediately laid for postwar expansion and the first big modernization and building program after the war was carried out in the years 1947 and 1948, with additions from 1948 through 1950.
In the postwar expansion an addition was made to the existing brewhouse; a new power plant, a new storage cellar building and an addition to the bottling plant were completed. To these facilities were added new and higher capacity machinery and equipment of all kinds.
A new brew kettle of 750 barrel capacity was added to the two 750 barrel brew kettles in use since 1912. The modern additions to the brewhouse is, in stark contrast to the older portion, a clean-lined streamlined steel framed structure having concrete floors and brick walls. All interior walls are faced with an easy-to-clean glazed tile.
On the roof of the brewhouse were added four water storage tanks, two for cold and two for hot water. Each of these 800-barrel-capacity tanks was glass lined, insulated and covered with aluminum sheeting.
Fermentation and Storage
In 1949, a new steel frame building to handle fermentation and storage was completed. It consists of a basement and three floors, completely insulated with four inches of cork inside the outer brick walls and under the roof, to allow complete refrigeration. The basement and second floor are storage cellars and the third floor is the fermenting cellar. The first floor is used for full keg storage.
By 1951 the inventions and innovations of Chief Engineer Richard Slama, by then a veteran of 24 years, could be seen everywhere in the Schmidt plant. The first of the Slama circular pasteurizers was installed in 1948 and proved to be so satisfactory that two more were added in 1949, and one in 1950, and a fifth installed in 1951.
The first Slama pasteurizer had a production rate of 116 quart bottles per minute, operating 24 hours a day, six days a week, with a holding temperature of 140 degrees Fahrenheit for 20 minutes. Later versions turned out 250, 12 ounce bottles and 140 quarts per minute respectively.
Slama Hop Strainer
The stainless steel Slama hop strainer installed in this expansion consists of a circular housing in which a rotating table carries strainer plates. The hot wort is distributed over the entire surface of the plates by a spreader. Hot wort flows continuously onto the rotating tables where the wort drains through the milled screen slots while the hops remain on top.
Room for oncoming wort is made available as the rotating table continually moves hops away from the spreader. Proper time is allowed for wort to drain through the milled slots since the top sparger is located part way around and above the table.
Much of the present lineup of executive officers and administrative supervisors were playing important roles by 1951, but a few have since passed on or retired. Carl E. von Czoernig was then vice-president in charge of production, and Frederick H. Schmidt assistant vice president. John Gardiner, Jr., was vice president in charge of sales and advertising, and Edward A. Gardiner was treasurer. Thomas McConnell III, then as now, was executive vice president and secretary. Mr. McConnell came with the company as counsel in 1936, became secretary in 1944, and rose to executive vice president the following year. W. Simms Sharinghausen, now secretary, was assistant secretary, and Charles S. Strickler, now treasurer, was assistant treasurer.
Alphonse J. Miller, Sr., by then a quarter century man, was master brewer. Arthur H.P. Hipp, had risen from master brewer to general superintendent. Young William A. Hipp, third in line to work for the brewery, was then assistant brewmaster. He later became brewmaster, and, in 1959, was appointed production manager. The post of brewmaster was filled by Frederick H. Ehmann.
Growth in the '50s
Throughout the 1950's following the great modernizations, the C. Schmidt brewery continued to grow. Sales in 1951 were 1,115,734 barrels, and the brewery stood 15th in the country. By 1954 they were 1,515,549 and the brewery had moved to 12th place in sales. By 1955 sales reached the all-time high of 1,916,708 barrels. These sales included the Adam Scheidt Brewing Co. which had been purchased in mid-1954.
A curious factor, reflective of the competitive problems faced by breweries in the 1950's kept the brewery in 12th place in its record breaking year. Other breweries in attempts to maintain their sales position and to enlarge their share of the market were merging and buying breweries, with the result that even a 400,000 barrel increase in a single year, meant only holding fast in sales position.
The Adam Scheidt Brewing Co. since renamed the Valley Forge Brewing Co., was 89 years old when C. Schmidt & Sons acquired it in 1954. Scheidt was well known throughout Pennsylvania, and its products: Valley Forge Beer, Prior Beer, and Rams Head Ale were respected throughout the state.
Valley Forge's modern brewhouse was completed in 1938. The bottling plant was built as recently as 1948. Transportation of raw materials to the main plant is highly efficient because of the many truck loading areas and the availability of a direct spur of the Reading Railroad. Master brewer Edward G. Oertel continues to brew the same fine beer for which he has been responsible for the past 18 years.
Modern Bottle Shop
The $2,000,000 bottle shop is directed by bottling superintendent Harry D. Bradley as it has been almost since its opening 12 years ago. It is a smartly tiled, light, airy and spotlessly clean department. Bottling house windows are of amber glass filter out harmful rays of sunlight.
At the Valley Forge brewery C. Schmidt's produces Prior Beer, a domestic product that has the same acceptance as many imported beers, and is considered by many a connoisseur to be the equal if not the superior of imported European beers. Its history goes back to 1939 when the last pre-war shipment of Pilsner Urquell was received in New York from Czechoslovakia. There was need for an American version of the no longer available beer, and so out came Prior, "Imported Quality at Domestic Price." Sales grew tremendously.
Valley Forge Brands Go On
Today Schmidt's continues to market all the familiar Valley Forge brands, while adding to the productive capacity of the Norristown plant to care for extra demand for the Schmidt brands.
During the years following 1955, Schmidt's managed to remain high among the list of brewers, being 13th in 1956 and 1957, and 14th in 1958. However sales gradually declined to a mark of 1,660,909 in 1958, and there was need for new direction and leadership which would keep the brewery in the forefront of the industry.
When Christian Zoller passed from the scene, in 1958, after building the brewery to its greatest successes with the aid of Schmidt's Gardiners and other members of the family, and expanding capacity beyond his forebears' wildest imaginations, the family decided to name a young man to head the brewery, a man who would have the vigor to carry on the fight for sales in an intensively competitive era.
That young man was there in the brewery all the time, in the person of Carl E. von Czoernig. When he assumed the presidency in May, 1958 he was 40 years old, but he had been with the brewery for 23 years. He had worked in every area of brewery production, and knew his operation from personal experience, in the great tradition of the family.
Von Czoernig is the kind of man who literally eats, sleeps and lives his job. When the world's largest mash filter was being installed he ate and slept on the spot until it was operating smoothly.
Von Czoernig has acted decisively to improve Schmidt's position. The company's immediate goal is to boost sales to 2.1 million barrels within three years. Preliminary reports on 1959 sales indicate a substantial increase in sales volume.
As a step toward greater increases in sales von Czoernig has created the new post of director of sales and marketing and has appointed William J. Shine to fill it. Shine brings to his assignment many years of beer sales experience.
The advertising agency of Ted Bates was engaged. Bates was taken on because it specializes in small low cost, frequently purchased packages. The agency is known for picking out a distinctive quality of a client's product, "a unique selling proposition," and building its campaign around that. The initial pitch for Schmidt's is built around "Full taste beer for the one man in four."
For the first time in its history, Schmidt's hired a specialized public relations firm, Gray & Rogers of Philadelphia. The agency's work is coordinated by public relations director Frederick H. Schmidt.
Under von Czoernig Schmidt is doing a great deal to improve its method of beer distribution, and to firm up relations with the trade.
The company plans to make its 100th Anniversary Year the biggest in Schmidt's history.
Interviewed by Modern Brewery Age, Bill Shine expressed his delight at joining a brewery which is unafraid to go in for innovations, which has the flexibility to try new marketing methods, and which has a record of firsts in packaging.
For example during the 1930's Schmidt pioneered many packaging innovations- all of which were a tremendous spur to growth. Quart bottles, cans and six-packs are among these. For a period Schmidt's was the biggest seller both percentage-wise and in total volume of quart cans in the entire country.
To this day Schmidt is constantly on the alert for new innovations. People who make new kinds of packages know that the company's door is wide open to receive them. Probably of all breweries Schmidt's uses more of its own original custom made equipment than any other brewery in the country.
Several new types of packages, which, for the moment are hush-hush, are undergoing executive consideration. Those that pass will be given test marketings before being generally placed on the market.
Although the 100th Anniversary will be celebrated throughout the year it will be fundamentally a soft sell. An Anniversary Seal will be exhibited in all ads- but it won't be very large. There will also be a neck label on bottles.
Special monthly promotions to be held throughout the year are aimed at stimulating salesmen and distributors. But even these are being kept under wraps until they break. As to other media the light touch will be evident here too. There will be a single point-of-sale centennial piece. There will be one full page black and white newspaper ad. Billboards will feature the centennial for a single go-round.
Why Addressed to Men
Elaborating on the "full taste beer" theme, Shine commented, "Our recent billboards have been addressed 'To the one man in four who wants full taste beer.'
Schmidt's research has shown that between 70 and 80% of beer is consumed by men. Women buy the beer that their men want. The woman is going to like what the man she admires likes. Women recognize that the brand of beer is the man's decision. About 60% of the advertising budget is going to TV.
Second on the list is outdoor. Schmidt's is going to be the first brewery to have the first spectacular in this part of the country with the new neon tubing. It is so brilliant it makes ordinary neon look like a safety match.
All of the huge Schmidt outdoor signs and electric 'spectaculars' are being refurbished with the new neon intensity tubing, called Luminare. It is eight times stronger than neon.
Point-of-purchase, because of legal restrictions, has always been a problem in Pennsylvania. Signs are not permitted outside the tavern. Inside, only one window neon per company is permitted to a location. Inside signs are limited as to dollar value.
Schmidt's developed a sign called "Twinkle-Toes" or "Sparkle Lite." This attractive electric sign, twinkles with countless rainbow colored points of light, like a constellation of stars. This sign has been put up in many taverns that had a previous "no sign" policy.
In the new set-up a meeting of the marketing committee is held every Friday. This includes all regional sales managers and the marketing research manager. Policy is set at these meetings, so that all departments of the marketing division are working mutually toward a common end.
Label Design Modernized
An entirely new unified packaging design for C. Schmidt's has been developed by Lippincott & Margulies. The new designs which are being carried out on labels, cartons, trucks, in advertising, and even on letterheads simplifies and takes the clutter out of Schmidt trademarks. The object was to create the image of an accepted modern product.
The familiar beers- Schmid't Light Beer, Schmidt's Tiger Head Ale, and Schmidt's Bock Beer (Mid-January to mid-April) will continue to be the chief brands in addition to the various Valley Forge brands.
According to executive vice president Thomas McConnell, III, Schmidt's is still one of the largest producers of quart and 16 oz. bottles. The brewery produces a smaller proportion of beer in cans than is average among breweries.
The new market management team is only part of Schmidt's preparations to meet the sales challenge of the 1960's. Modernization and expansion is a never-ending process at Schmidt plants. Management, keenly aware of the rapid rate of obsolescence in this competitive age, has new plant and equipment constantly on the drawing board or in process of construction.
For example, as recently as 1951 Modern Brewery Age told of an elaborate new conveyor system for handling cartons. By 1954 the conveyor system had been obsoleted by the introduction of palletization. Today fork lift trucks scoot in rhythmic arcs around an efficiently organized warehouse floor, loading and unloading motor trucks from covered docks. The pallet addition to the warehouse was completed in 1954, and includes stackers, pallet loaders and unloaders, and all the other equipment of a modern brewery warehouse.
A new bottling line will soon be underway in Philadelphia. Palletization is being increased in Norristown as well as Philadelphia.
In the bottleshop in Philadelphia the newest and biggest pasteurizer has recently been installed. Unlike the Slama pasteurizers it is an in-line job, and has far greater capacity than any of the brewery's other pasteurizers. It's double deck produces 640 cans per minute on top and 540 bottles per minute below. Compare this with the fastest speed of 260 bottles in the newest of the Slama pasteurizers!
A bottle can travel through the line where the newest soaker has been installed without being touched by human hands.
There are two 320 per minute can fillers, and a new high speed bottle filler can turn out 530 12 oz. bottles per minute, or 380 16 oz. bottles per minute. There are a total of nine fillers on the floor. The latest packers, case cleaners, automatic case feeds, six pack machines, and unloaders are used on Schmidt's constantly revised bottleshop lines. Continuing the tradition of in-company building, James Layton, a Schmidt engineer, developed the Layton packers which are used on the can machines. The entire unit was built and designed in the plant.
Can lines are fully automatic. Case unloaders are used at one end for automatic dumping.
Plant and product, sales and advertising are continually improved under the watchful eyes of management. It is a process that, after a century, has become inbred, and is likely to go on for yet another 100 years and more.
Christian Schmidt could have little dreamed that the modest enterprise on whose door he hung his sign in 1860 would become the giant brewery of 1960. Yet two things remain consistent over this century of growth. One is a certain becoming modesty. The simple C. Schmidt & Sons, Inc. is still no more elaborate than the original sign proclaiming simply, C. Schmidt. The second is the ability of Christian Schmidt's descendants to produce capable imaginative vigorous executives at the right time in history to impel continued growth and expansion. As one looks back down the century the names shine forth: Schmidt, Zoller, Gardiner, von Czoernig.
Toward the Future
And so it continues. Throughout their 100th Anniversary Year Schmidt's will conduct projects in Philadelphia of a civic nature. There will be a number of special dinners and celebrations.
Under the plan now, are a special 100th Anniversary employees celebration, and the issuing of a souvenir commemorative book of the centennial.
Thus with a leadership that combines the strength of youth and the vigor of family management that has the capacity to put its best talents forward, C. Schmidt & Sons, Inc. prepares gracefully to enter its second century of producing fine beer and ale. Schmidt's of Philadelphia is fully geared to meet the sales challenge of the 1960's with a powerful array of personnel, marketing methods, quality product and excellent productive equipment.