Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer (24 page)

After more than five years of watching Miller dominate the light beer market, August finally was ready to commit the Budweiser name—with all of its prestige and tradition—to the fight. When the meeting ended, Steinhubl walked over to where August was sitting and placed a handwritten note on the desk in front of him.

“What's that?” August asked.

“It's your recipe.”

“Already?”

“Yeah; it doesn't take long.”

“When can I taste it?”

“I can have it for you by the first of September.”

Steinhubl knew he was in for a rough few months. He may have written the recipe, but ultimately August was going to decide the taste of Budweiser Light. And until August tasted what he liked, he would make Steinhubl's life difficult.

Much of the company lived in constant fear of August's taste buds. He functioned as A-B's unofficial taster-in-chief, relentlessly sampling the output of all nine plants. “And if he tasted something he didn't like, then everyone down the line was definitely going to hear about it,” said one longtime senior executive.

Each brewery had a tasting room where a panel of five to seven men from the brewing and malting operations sat at tables every afternoon and, along with the brew master and his staff, sampled and took notes on their plant's product, as well as that of other plants. Among other things, they tasted for the specific attributes of each brand, checking for any variations among the breweries. It was no easy task ensuring that 100 million barrels a year tasted consistent and uniform to the consumer.

Of course, a good taster could discern deviations that the average beer drinker would never notice. It was said that members of Andy Steinhubl's master tasting panel, which met in Room 220 of the Old Brew House, could sample a bottle of Budweiser and identify which plant it came from by the characteristics of the water that went into it.

August was considered one of the company's best tasters, if not the very best. He could tell whether a beer was five days old or fifteen. “There were very few who could taste like he could,” said one former executive. “He was a genius at it,” said Denny Long. “He set our standard.”

He also enforced it. Plant managers outside St. Louis never knew when he might drop down out of the sky in one of the corporate jets, but whenever he did, they knew there would be a command performance in their tasting room that day. Gathering as many as twenty people, he would call for a particular batch from the cooler, say, Tuesday's Budweiser from the Newark brewery, and they would all take several sips and make notes. Then he'd ask what they had noticed. A wrong answer would be to have missed something he'd written down.

The tasting went on constantly wherever August went. At the end of a long day on the road meeting with wholesalers, he would press one or more associates into service in the hotel bar, announcing with almost childlike enthusiasm, “Let's taste some beer,” and the sipping and quizzing would begin. If he happened to be in Denver, where there was no A-B plant, and he felt the need to taste that day's Budweiser from Houston, then samples would be flown to him.

“He truly enjoyed the process,” said Mike Brooks, a former vice president of sales. “And by virtue of the fact that he did it with such commitment, it said to everyone in the company that quality was the most important dynamic of the business, because the chairman was on it like white on rice.”

Serving as a roving one-man quality control department, August incessantly scanned bottles and cans for the “date codes” that identified not only where the beer had been brewed but also the date and the fifteen-minute interval during which it had come off the production line. Because the taste of beer deteriorates over time, A-B had a strict policy that any beer older than 105 days had to be pulled from distribution, removed from retail shelves, and destroyed. And woe betide the local wholesaler if August ever came upon an expired freshness date.

“Everyone knew that at any time they could get a phone call telling them that August had found a problem with their beer and they had to be available to discuss their involvement,” said Brooks.

Andy Steinhubl remembers the call he got from August at home on a Saturday morning a few days before Christmas.

“I had some beer from St. Louis last night, and it was absolutely terrible,” August said. “So I want you to come out here to the farm, and on the way I want you to stop at four different places and pick up a six-pack of Budweiser, and we will taste it together.”

Steinhubl schlepped the beer thirty miles out to Waldmeister, but neither man could find anything wrong with it. “The beer I had the other night didn't taste like any of these,” August said as Steinhubl began looking through the beer cooler under the bar. He pulled out a couple of bottles from the brewery in Columbus, Ohio. “Let me see that,” August said, checking the date codes and finding, to his horror, that the beer was four months old. He turned to his wife in the kitchen and asked, “Ginny, where did this old beer come from?” Without even looking in his direction, she replied, “You know I never touch your beer, dear.”

August knew then that he had allowed his own stock of beer to go beyond its expiration date. “You must think I'm a horse's ass,” he said to Steinhubl.

“No, I don't.”

“Yes, you do. I want you to tell me I'm a horse's ass.”

“No, I am not going to do that.”

“You can't leave here until you tell me I'm a horse's ass.”

Realizing that August probably would not let him leave, and that this was his awkward way of apologizing for wasting three hours of his time on a weekend, Steinhubl gave in. “Okay, you're a horse's ass.”

August smiled broadly and said, “Good.”

Steinhubl and his brewing team set to work creating Budweiser Light in a small pilot brewery behind the Brew House. They were shooting for a crisp, full-bodied beer with a “flavor impact” that built up quickly and then “finished clean,” meaning it would leave no aftertaste in its wake. It would be brewed naturally and contain only five ingredients—water, rice, barley, hops and yeast. In other words, it would be pretty much like Budweiser, but with 60 fewer calories. And therein lay the difficulty.

To make a lower-calorie beer, it is necessary to reduce the amount of sugar produced in the mashing process, which in turn reduces the amount of alcohol produced in fermentation. Most beer drinkers are unaware of the direct correlation between calories and alcohol content. Steinhubl expected that naturally brewed Budweiser Light would have an alcohol content of 3 percent at best, compared to Miller Lite's 3.2 percent, which was achieved with the help of non-natural chemical additives. The disparity, though slight, could put Budweiser Light at a competitive disadvantage, since “less alcohol” was hardly a selling point to the college crowd.

Because alcohol enriches the combined flavors of hops and barley, less alcohol in the brewing process can result in less taste. Along with the entire A-B hierarchy, August thought Miller Lite tasted thin and watery, so Steinhubl's recipe for Budweiser Light increased the amount of hops in the mix to give it more flavor. Hops contribute a bitter taste that plays against the sweet taste of the barley malt. The relative bitterness, or “hoppiness,” of beer is measured numerically by what are known as “international bitterness units.” The higher the IBU number, the more bitter the brew. At the time, most European beers had an IBU between 20 and 45. Budweiser had an IBU of 15. For Budweiser Light, Steinhubl bumped the IBU to 17, which was potentially problematic because August didn't like bitter. In fact, he claimed that whenever he tasted Budweiser that contained a slightly elevated level of hops, he experienced a throbbing sensation in his forehead that he called “head feel.”
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Veterans of tasting sessions with August had seen head feel. It registered on his face as he squinted his eyes, furrowed his brow, and began rubbing his forehead with his forefinger and thumb. But only one other person, Denny Long, ever felt the sensation. “Maybe it was because he trained me to taste,” said Long, who described the feeling as “the onset of a sinus headache right above the eyebrows.” Still, Long said he only experienced head feel once or twice. And most of August's fellow tasters thought head feel was a figment of his imagination. They'd roll their eyes and exchange looks whenever he brought it up, and joke behind his back: “Yeah, I've had head feel, boss. It's called a hangover.”

After a month of tinkering with the Budweiser Light recipe, Steinhubl and his crew had the first sample brew ready for the tasting panel. The consensus in Room 220 was that it still needed a little tweaking, but they were close.

“Overall, pretty good,” said August. “Nice body, smooth, with a good flavor impact that leaves nothing hanging in your mouth.” Then came the note Steinhubl was expecting. “But it tastes a little bitter. What's the IBU?”

“Seventeen,” Steinhubl admitted.

“How'd we get that?” August asked.

“We wanted to give it more flavor.”

August didn't complain about head feel, and perhaps because no one else said the beer was too bitter, he didn't tell Steinhubl directly to reduce the hops. But in subsequent weeks, he pressured him in other ways. Mike Roarty let Steinhubl know that August was voicing misgivings about the IBUs. “He doesn't like a number that high,” Roarty said. August sent samples to Professor Russell Ackoff's group at the Wharton School, and they conducted a taste test at a local tavern. Steinhubl only learned of the test when one of Ackoff's assistants came to St. Louis to present their findings in the conference room next to August's office. The studious-looking young man used a chalkboard to explain the methodology underlying the survey, which showed that a group of patrons at a bar in Philadelphia had found the beer to be “too bitter.”

Irritated by what he saw as a put-up job, Steinhubl asked, “Did you taste the beer yourself?”

“No,” the young man replied, adding, “I never drink beer.”

“Did any of your research group taste it?” The young man shook his head.

Steinhubl turned to August in exasperation. “If we change it, then it will not taste the way you want it to. So please let us go ahead.”

Once again, August gave no directive regarding the hops content. But several weeks later he called Steinhubl to Room 220, where he'd tasted the beer for the umpteenth time. “I just don't like it,” he said. “We're not going to be able to sell it, and the board of directors is going to fire me. I'll be the first person to go.”

Steinhubl didn't believe for a minute that the board would fire August, but he could tell that the boss was genuinely worried. After all, he was about to put tens of millions of dollars and the reputation of the company on the line. To him, Budweiser Light wasn't just another brand, more brightly colored packaging aimed at crowding competitors off the retail shelves. Budweiser was his great-grandfather's grandest achievement, his family's heritage. Nothing with the Budweiser name on it had ever failed, and he sure as hell didn't want it to happen on his watch.

Steinhubl was worn down from the months of pressure. “August, we are all good people trying to do our best, and we think this beer is right,” he said. “But if you really disagree, just tell us what you want us to do, and then go away and leave us alone.”

“I can't do that,” August said heavily, as if history itself would not let him. Then, surprised at Steinhubl's uncharacteristic outburst, he asked, “Aren't you afraid I am going to fire you?” Steinhubl looked at him and said, “No, because Peter Stroh [the CEO of Detroit's Stroh Brewing]
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told me they have a job for me anytime I want it.”

Somewhere in that exchange, August apparently found the reassurance he was seeking. He believed in building a team of smart people, listening to what they had to say, and trusting their judgment. To a man, his team was telling him that Budweiser Light was good to go. Was he going to believe them, or some random bunch of barflies in Philadelphia?

The next thing Steinhubl knew, August was telling him, “I want to make this beer in Los Angeles, and I want to fly out there the day after New Year's to taste the first commercial packaging that comes off the line.”

By the time Budweiser Light was ready for its debut, Denny Long and Mike Roarty had built a sales and marketing juggernaut geared toward servicing nearly a thousand hyperregional markets (roughly corresponding to wholesale distributorships) with made-to-order media plans. It was “the first comprehensive quantitative-qualitative marketing program in the industry,” according to Long, who dubbed it Total Marketing in honor of the Dutch soccer team that came within a game of winning the World Cup in 1974 playing a style of game its legendary coach, Rinus Michels, called Total Football (Soccer) because it called for every member of the team, including the goalkeeper, to attack the opponent's goal. Long's Total Marketing recognized that beer drinkers in Dallas were different not only from beer drinkers in Boston but also from beer drinkers in San Antonio, El Paso, and Houston. It subdivided Latino consumers into Puerto Ricans, Mexicans, and Cubans. It broke down geographical regions not just by states and cities but also by neighborhoods and even individual bars. And it designed a distinct plan for each, resulting in approximately ten thousand individual sales promotion programs nationwide.