Joseph Schiltz Brewing Company was a United States beer company launched out of Wisconsin in the 19th century. Schiltz was known for making Wisconsin famous because of its original flavor that attracted customers. After the company’s original owner, August Krug, died in 1856 Joseph Schiltz took over managing the company. Over the next two decades the company grew to become one of the biggest breweries in Milwaukee. Joseph Schiltz died in 1875 because a ship he was on sunk coming back from Germany. This is when the company’s demise began. After several new managers were filtered though the company they made a crucial mistake then led to their downfall by cutting cost by replacing some of the malted barley with corn syrup and swapping cheaper hop pellets instead of using fresh hops, and shortening production time by a method they called accelerated batch fermentation. This cut production time from 25 days down to 15 days. If Joseph Schiltz Brewing Company focused more on quality control and customer satisfaction which proved successful for the company until new management did the opposite hoping that their customers would not be able to notice much of a difference they might still be one of the top breweries today.
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-Reason for companies collape
This essay will examine why cost cutting led to the collapse of one of Americas top beer brands, and how cutting costs can cause an organization to collapse.
Schlitz's began in 1846 by August Krug. August was an immigrant to the United States who originally resided in Bavaria. He was in the restaurant business and had a goal to have his own beer to sell in his restaurant which was located in Milwaukee at the time. Two years after he introduced his company he decided he was ready for the next step of hiring employees in an attempt to bring his small brewing company to the next step. Krugs first employee who he hired was a German man named Joseph Schiltz. This is where the companies name originated from because several years after Schiltz joined the company in 1856 his boss died and he decided to pursue developing the company and made the name his own. From 1856 until Schiltz’s death in 1875 the company grew annually and was starting to become a well-known local brand, but it wasn’t until the following decades the company really started to prosper. Management was taken over by relatives of August Krug. Every year the company was growing larger by maintaining quality control of the original recipe ingredients and motivated employees. It wasn’t until the company reached it goal of becoming the number one sold beer in the United States that management began to make poor decisions that would lead the company in a downward spiral. From 1940 until 1950 the top brand with the most sales was Schiltz. Budweiser then surpassed Schiltz in 1957 which made management anxious to make a major change in order to boost profits. The Uihleins managers decided to cut costs in the production to try to boost profits, These decisions made in an attempt to compete with Budweiser left customers disappointed and there sales plummeted which eventually led the company’s failure
By 1967 the company's president and chairman was August Uihlein's grandson, Robert decided that if he could not sell more been than Anheuser-Busch, he would at least make his company more profitable than his St Louis rival. The first step in Uihlein's plan to save money was a new brewing method Schlitz called "accelerated batch fermentation," or ABF. This cut the brewing time for Schlitz beers from 25 to 21 days, and then from 20 to 15 days, compared to the 32 to 40 days of storage – or "lagering" – used for Budweiser.
The result was that Schlitz was now getting much more beer out of the same amount of plant, with all the boost in margins that...
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