August-Schell Brewery is Minnesota's oldest operating brewery and the second-oldest family-run brewery in the United States (Yuengling in Pennsylvania is first). The New Ulm-based brewery has seen a lot of hard times, surviving the U.S.-Dakota War of 1862, Prohibition, and a number of other historical events. More recently, the brewery purchased the Grain Belt line, which has directly affected its market presence in the state while keeping another historic Minnesota brew alive.
In our ongoing series with Minnesota brewers, City Pages talked with Schell's president Ted Marti, the great-great grandson of brewery founder August Schell. The brewery still stands on its original, hillside location on the edge of town. In October, the city of New Ulm will host its annual Oktoberfest. Locally, the October 13 Zombie Pub Crawl Ocho will feature special cans of Brain Belt Cranium for the event. See also: Summit at 26 years: 'We're very true to ourselves' Beer fests abound in and around the Twin Cities[jump]
Hot Dish: What was it like growing up in the industry? Did you always know you'd end up at the brewery?
Ted Marti: I always kind of knew I'd end up here. We grew up here, and I played in the brewery and worked in the brewery in high school and then back in college. In high school I never really thought much about it. I wanted to be in natural resources somehow, then I wanted to be an engineer. As college when on, I was a gymnast, so I was training for that. When that career ended, then I knew I would be back.
HD: You took over the company in the 1980s and started expanding into craft beers. Why did you start the move in that direction?
Marti: We could see that as a small brewer--and there weren't very many of us back then--we weren't going to survive if we kept making the same thing that everybody at the big breweries were. If you're making the same beer, you've got to match them in price, and that wasn't working. So we started dabbling in different beers, hoppier beers like exports, putting more marketing behind our bock beer. We'd always made a bock beer and then gradually expanded it from there. By 1985 we had a pilsner and a weissbier, and then it went on from there.
HD: How has the rise in craft brewing affected Schell's identity?
Marti: I think a couple things have happened. Obviously, we're very much a part of the craft beer scene. We've got a full lineup now, and it's been that way for a while. We did a lot of contract brewing in the '90s for people, so we've certainly brewed a lot of different styles of beers. We're pretty much out of contract brewing now.
We obviously have a big portfolio of [craft]. On the Schell's side, it's the majority of our portfolio, but then we acquired the Grain Belt side, which is an American lager style, so we have to think with two different hats on constantly. One of the things that has gone hand-in-hand with the craft movement is sort of a retro appeal of breweries, the nostalgia. It sort of flies in the face of new craft beers, but we feel like there's some spin-off appreciation for local, historic breweries with heritage.
HD: The acquisition of Grain Belt has been successful. Was there concern in mixing the two brands?
Marti: We've been in the business for 152 years and we're from a small, rural area, and you have a lot of beer drinkers that like American lagers. We evolved into that in the late 1800s, and it was just a natural progression in American brewing, so there's some history to American lagers. It's not all tasteless lagers -- there's some history there.
There is a little bit of concern there, but the Grain Belt brand is pretty iconic, and it has a following of a lot of the same people that drink craft beers.
HD: The past few years have seen a boom in Minnesota-based breweries. What do you think led to this?
Marti: They always say everything starts on the coasts and works its way to the center of the country, and we're sort of the last one's to catch on--population may be something of it.
It probably took a bit longer, but now, I think, you find more and more people seeing what it takes, and certainly there's some opportunities there. Retailers have come on board and are more eager. Wholesalers back in the '90s kind of got burned. There was a lot of contract beer on the shelves that ended up not moving, so there was sort of a retrenchment where retailers were reluctant to put beer on the shelves, and some of the beer wasn't very good, and so the consumers sort of backed away.
So it took a little while for everybody to get confident again. You've got distributors that see pretty good dollar signs in craft beer, and you've got eager retailers and lots more information on brewing, so the learning curve is probably lower to jump in. It's still costly and a lot of hard work, but the barriers are a little smaller, and the ability to distribute is pretty good.
HD: It's definitely a rapidly changing industry. Has the extra local competition affected your approach or do you rely on your consistency and history?
Marti: Well, I think it's going to affect everybody. I think as the river rises, everybody does to a point. The competition for draft lines is pretty fierce because there's not an unlimited amount, like shelves on the grocery store. You've got to get a little more creative in the bars and restaurants, and you just have to look for those consumers who, for our part, are potentially more loyal. It's tough to do business if they have a six-pack of yours and they have 50 other varieties they want to try, so next year they get around to buying another one of yours. Our strategy is sort of based around building that loyal customer. We do a lot of different things throughout the year. We're probably not as extreme as some breweries, maybe don't come out as often with new beers, but still try to build that slow, steady growth.
HD: Is it by choice to come out with fewer beers (you used the word "extreme") to keep it slow and steady?
Marti: Yeah, that's pretty much by choice. I think a lot of people, me included--although extreme beers are fun and we do some pretty extreme stuff once in a while--but we sort of believe in the sessionable beers. The beers you can drink a fair amount of and the sociability of it. That's been our philosophy that speaks to the German style of beer, and we have a German heritage, and that's where we've planted our stake.
HD: How do you think that New Ulm and being in a more rural part of the state has affected Schell's as a company?
Marti: I think it makes it more challenging. The local appeal of craft brewers is, if you're in a larger population you obviously have a larger local area, so your opportunities are greater. When we take our product to the Twin Cities we're not the local guy. Summit is up there, they're sort of the darling of the metro, and then the other local guys. It's a challenge competing with that.
I should back up and say it is getting better, because I think the appeal for craft beers isn't just a small percentage anymore. It's gotten older people--the age for preference of craft beers is growing. Maybe not all the time, but [older drinkers] drink craft beers now, and then you go back to American lagers, so that helps in the rural areas because now our market is expanding.
HD: On the 150th anniversary series you found a recipe book in the attic?
Marti: We had a lot of fun with that one, pulling out some of those old recipes. We used to use juniper berries back in the early 1900s.
HD: Are there a lot of those hidden treasures around the brewery?
Marti: You find them here and there. You come across a book or a note stuffed in a book. What we don't have is stuff going back to the 1860s, some of those brewing tricks, which is kind of too bad. Back then they were worried about surviving and not saving stuff.
Information on brewery tours is available at the Schell's website. New Ulm Oktoberfest will be held October 5-6 and 12-13.
The brewery is also holding several events in the metro area in the coming months.
Emerald Rye kickoff party Rail Station September 19, 6:30 p.m.-8:30 p.m.
Bike Night Mad Jack's Brooklyn Park Great specials on Schell and Grain Belt brands, Schell and Grain Belt sampling September 20, 6:30 p.m.-8:30 p.m.
Emerald Rye kickoff party Skinner's Pub September 21, 7 p.m.-9 p.m.
Oktoberfest sampling Sweeney's September 22, 8:30 p.m.-10:30 p.m.
Oktoberfest Pub 500, Mankato September 22, 2-7 p.m.