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LITTLE SWITZERLAND BREWERY RISE & FALL
Thoughts on What Happened to Little Switzerland
by J.S.
 Roughly 1,400 U.S. breweries were forced out of business due to state and nationwide Prohibition laws in the early part of the 20th century. Only 756 of them re-opened after Prohibition ended in 1933. Among them was the Fesenmeier Brewing Company. In the months and years that followed, closings, mergers and acquisitions all combined to create a situation where more beer was being produced by fewer companies. About 165 were still operating when the Little Switzerland Brewing Company officially opened in 1968. Within 5 years that number would dwindle to 70. The brewery was torn down a decade before the trend finally began to reverse itself in the early 1980s; when the craft-brewing revolution more or less took off.
By this time only about 35 remained. Today, fewer than 20 brewing concerns have ties to Prohibition. However, the actual number of breweries operating in the United States now hovers close to pre-Prohibition levels! As of 2009 there were just about 1500. Brewpubs account for about 900 - while the rest are mostly micro breweries and regional craft/specialty breweries. The remaining small-independent beer makers with Prohibition ties are now reaping the benefits of this revolution. The Huntington brewery had the potential to be a part of it. Why wasn't it? What if it had been?
A New Beginning
 The Fesenmeier plant officially became Little Switzerland Brewing Company on April 1st, 1968. The name, "Little Switzerland" was a clever choice, inspired by an early nickname for the State of West Virginia. Another source of inspiration surely must have come from one of the slogans for Fesenmeier Centennial beer - "Brewed in the Switzerland of America."
It has been widely reported that production of Fesenmeier Centennial continued for a period of time. Even the brewery's prospectus (business plan) proposed to continue marketing the label. But so far there is no evidence that they produced any Fesenmeier brand beer. One plausible theory is that they simply bottled and/or distributed the leftover Fesenmeier Centennial product until it was gone. Two new brands were introduced that summer: Charge "The Bold American Premium Beer," and Innkeeper Beer.
A 3.2 % Nightmare, One of The Camel's Least Favorite Straws
Alan L. Hann served as brewmaster and production manager, while Jack Berno acted as executive vice-president and general manager. Each of these men were internationally recognized in the brewing industry and spoke with confidence about their new products. The company proceeded to pour hundreds of thousands of dollars into new labels, signs and all associated items; as well as modernizing the plant's production area, with additional improvements to the offices and hospitality room.
Little Switzerland offered shares of stock for sale only to residents of West Virginia, and hoped to make the brewery a major tourist attraction. However, one thing they could not provide to consumers in the "Switzerland of America" was beer above 3.2% alcohol. In order to taste the higher-strength versions of the brewery's products, one had to go to Ohio or Kentucky. It is common knowledge that the 3.2% limit in West Virginia was one of the key factors in the brewery's struggle to stay profitable. The problem of having to produce two separate batches of each beer haunted both Fesenmeier and Little Switzerland throughout their histories.
The Name Change
One aspect that has not been fully explained is the decision to re-name the Fesenmeier brewery in the first place. Was it necessary? It's unclear whether they had a choice in the matter. Was there an image problem? Why didn't they just carry on with business as usual? In general, a company changing its name was and is - nothing new. But in West Virginia, where tradition and loyalty matter, it can prove disastrous. Consider that the Fesenmeier family had been in Huntington for almost 70 years, their brewery surviving floods, fire and Prohibition. For 34 years the plant had been known by the family name.
The very sale of the brewery no doubt sent a shockwave throughout its marketing and distribution system. Continuing to do business as Fesenmeier would have eased the offending shockwave. Further reassurance could have been provided by inviting some of the Fesenmeier family to stay on-board for a couple of years and help the company make a seamless transition to new ownership. Clever as the name was, changing to Little Switzerland was probably viewed as breaking from tradition, creating suspicion among retailers and consumers alike.
Production of the West Virginia brand continued, however, new ownership opted to change the memorable slogan, "West Virginia - That'll win ya!" to - "West Virginia - Brewed to win ya!" The original slogan projected confidence, a bold statement of excellence to old and new consumers of West Virginia Beer & Ale. The re-vamped slogan appeared to be aimed at a consumer base that did not yet exist. It lacked confidence, coming off more as a plea; thus, confusing the new brewery's otherwise solid link to the past.
Conversely, their slogan for Charge was quite imaginative: "Take Charge, The Bold American Premium Beer" - with another, lesser-known permutation directed at baby-boom hipsters, "Young America is Taking Charge." This second slogan itself was a stroke of genius because at the time much of young America was seeking out lesser-known brands of beer made by obscure companies. Many of the seekers had tasted "real" beer while backpacking through the U.K. and Europe.
Still, without the changes, the new owners would have given themselves plenty of time to develop a new advertising and marketing strategy. The road to keeping the brewery afloat was going to be hard enough, and ownership didn't do themselves any favors with all this extra burden. Instead of being mired in start-up costs, they would have saved loads of money by leaving the product labeling unchanged - everything from bottles and cans to brewery trucks, signs, cartons, letterhead, envelopes, etc. Additionally, with no Swiss motif to worry about, a much more cost-effective remodeling job could have taken place, concentrating only on the plant's critical needs, such as upgrading the brewing equipment.
Craft Beer
It is impressive to note that Little Switzerland was making beer in accordance with the Bavarian purity law, Rheinheitsgebot, adopted in the year 1516, which decreed that only malted barley grains, hops, yeast and water be used in the making of real beer.
For reasons relating mainly to the short supply of barley, most American brewers had gotten into the habit of using corn, rice, chemicals and other adjuncts in their recipes by the late 1800s. Some still do. While there is nothing inherently wrong with this kind of beer, the taste is noticeably different from beer made exclusively with the Rheinheitsgebot ingredients. Charge, for example, was made with partially imported grains and all imported hops from Southern Bavaria to give it distinctive flavor characteristics. By today's standards, given the attention to detail and the small size of the brewery, one would almost be tempted to call them a "craft brewer". In many ways they stood out from the pack. Had the company known a brewing revival was already underway, they could have taken their process a step further and become one of the pioneer regional-craft/specialty brewers like Anchor.
Fritz Maytag's purchase and rescue of the failing Anchor Brewing Company of San Francisco in 1965 is generally referred to as the beginning of the American craft beer revolution. Anchor was the smallest brewing concern in the U.S. at the time. While they busied themselves by producing world-class beer in small batches, the rest of America (most notably the big nationals) raced to turn beer into a straw colored, watered down, mass-produced commodity that was no more spectacular than tins of tuna fish. What they ended up with was that ever-popular derivative of Pilsner Lager known as, "Light Beer." In this case Fesenmeier had been "light years" ahead of the curve, producing West Virginia Light as early as 1956.
Thanks to the success of Lite Beer from Miller in the mid-1970s, every brewing company soon had its own version of light beer, putting the nation's taste into a coma from which it still hasn't fully recovered. In spite of the craft beer revolution, most Americans still prefer to drink light beer. Consequently, the three biggest-selling brands in the U.S. today are: Bud Light, Lite Beer from Miller, and Coors Light.
Showdown in the Ohio Valley
Back when Little Switzerland opened in 1968, craft-breweries like Anchor were still just a flicker of light on the horizon, and brewpubs were still illegal in all states, a leftover from Prohibition. Anheuser-Busch opened their Columbus, Ohio brewery that same year, making the Ohio Valley market more accessible to them than ever before. The stage was set for a showdown between the independent breweries operating in this territory and Anhueser-Busch. Yes, Schlitz, Pabst and other nationals had a major presence too, no doubt. But they did not have breweries in the region. Although that does not leave them out of this equation, it does leave them out of this discussion.
Little Switzerland was blessed with built-in logistical and competitive advantages that larger brewers couldn't match. It was the only brewery in West Virginia, and the only one within 150 miles of Huntington. To the west was Hudepohl, Burger, and Schoenling in Cincinnati; Falls City in Louisville; Wiedemann in Newport, KY - who had just been given a new lease on life in 1967 when they were purchased by G. Heileman. To the north was Anhueser-Busch and August Wagner in Columbus; Stroh in Detroit; Pittsburgh Brewing in Pittsburgh (no kidding?). Stroh and Falls City were among the furthest away, but invested heavily in the Huntington market nonetheless. As a result, their flagship brands were two of the most popular beers in the area.
Together with Anheuser-Busch and the other nationals, they would present the biggest challenge for Little Switzerland. Iron City beer from Pittsburgh was well-received throughout the state but never quite caught on in the Huntington area. Beer makers from Cincinnati were less aggressive in their penetration of West Virginia, maintaining no more than a market-presence because it put a strain on their brewing capacities to make special batches of 3.2% alcohol beer. Other breweries kept their products out of the state entirely for the very same reason.
Anhueser-Busch on the other hand, was able to brew unlimited amounts of 3.2% beer in their spanking-new Columbus brewery. They used aggressive, soon-to-be-legendary pricing tactics along with record amounts of advertising to squeeze the profit margins of the other brewers in the market area. Little Switzerland was the smallest brewing concern of them all, even at full-capacity, and had no business getting involved in the fight. Three years later they became the first to close.
They were to be followed by Burger in 1973, whose brands were acquired by Hudepohl. Next was August Wagner in 1974, the brewer responsible for purchasing and closing Little Switzerland in the first place - their brands acquired by Pittsburgh. Falls City shut its doors in 1978 after failing in their attempt gain national prominence with Billy Beer. G. Heileman closed down the Wiedemann plant in Newport in 1983 - production was transferred to Heileman's Evansville brewery. Eventually the brand was acquired by Pittsburgh via Evansville.
Hudepohl merged with Schoenling in 1986. Two years later, they entered into an agreement to brew small batches of hand-crafted beer for the Boston Beer Company, who purchased the Hudepohl-Schoenling brewery outright in 1997. They sold off the brands in 1999 to Snyder International Brewing group, who now produces the Cincinnati beers in Fredrick, Maryland. Boston Beer still operates the Cincinnati plant, which recently underwent a multi-million dollar renovation. It is known today as The Sam Adams Brewery.
Stroh Brewing of Detroit mounted a quest to go national beginning in 1981 with the purchase of F & M Schaefer. Later acquisitions included Joseph Schlitz in 1982, making Stroh the third largest brewer in the United States. Their plan worked for little while before sales began to drop. In an ill-advised move in 1996, they purchased the bankrupt G. Heileman Brewing Company. By 1999, Stroh was out of the brewing business for good, its brands going to Pabst and Miller. Pittsburgh Brewing Company filed for bankruptcy protection under Chapter 11 in January 2006. The brewery continued to operate as events unfolded. By 2008 they had a new group of investors and a new name, Iron City Brewing Company.
Supply and Demand
In the mid-1960s, few post-Prohibition brewers thought about carving out their own niche, limiting their distribution area and letting demand for their product exceed the supply. Most of them never considered brewing world-class beer in small batches. Mainly because they were fighting for their lives. The vast majority of smaller companies like Little Switzerland were still trying to compete head-to-head with the nationals. While a handful were able to operate "under the radar," most felt they had no choice but to fight.
The post-Prohibition independents that survive today did so mostly because they followed the supply and demand rule. They were able to see their role in the game. While the nationals duked it out with each other and anyone else willing to step into the ring, these independents marched to their own drummer and continued making good beer. Unfortunately, examples like these are few and far between.
Some of them include:
Anchor Brewing Company of San Francisco
August Schell of New Ulm, Minnesota, hometown of one of our contributors, Steve Fesenmaier.
Stevens Point Brewery of Stevens Point, Wisconsin
Straub Brewing Company of St. Marys, Pennsylvania
D.G. Yuengling of Pottsville, Pennsylvania - America's oldest brewery
Little Switzerland fit the basic profile of the surviving independents listed above rather nicely: They were a small operation; they had a desire to make superior beers; they were only a few years removed from the old styles of beer the Fesenmeier's once produced; pale ales, bock beers, and seasonal beers were a common sight on the plant's bottling lines up until the 1950s. But new ownership clearly had no intention of finding a niche, and spoke of building the Charge brand into a nationally recognized product. Fesenmeier's production capacity was 100,000 barrels, but the most they ever sold was about 60,000 in 1949. They were still profitable when they sold just under 30,000 barrels in 1966, netting about $38,000 after expenses, which is like saying $250,000 today. On the surface it sounds good but it was getting harder and harder to make that profit.
By contrast, in 1966 Budweiser became the first brand in history to sell 10 million barrels in a year. That's 30,000 barrels a day, the same amount Fesenmeier sold for all of 1966!
In 1975, Anchor Brewing Company turned a profit for the first time in the Maytag era, and has never looked back. Go figure...
Priorities
The Little Switzerland prospectus clearly states, "The company believes itself to be capable of the production and marketing of beer, ale and allied  products at a profit, despite intense competition on the national level." Therefore, the very first priority of the company should have been to quickly determine exactly "where" the customer base was located geographically, and keep the plant humming along at the 1966 rate with an emphasis on carving out a niche for themselves and maintaining that customer base. 30,000 barrels after all, is nothing to sneeze at.
Had they chosen to "fly under the radar," focus more on making specialty beers, limit their marketing and distribution, combined with hard work and luck, Little Switzerland might still be here today.
Instead, they took the keys to the brewery and attempted to introduce a new company and two new brands. Not only that, they proposed to expand production and distribution in a market that was already saturated by the big nationals and larger regionals like Stroh and Falls City. By early 1970, the owners were lobbying the West Virginia Legislature to grant the brewery a tax-credit to keep it open. They even went so far as to host an event at the Daniel Boone Hotel in Charleston, where lawmakers could sample the beverages produced at Little Switzerland. Despite their best efforts the tax-credit failed and the facility went bankrupt in October 1970.
It was quickly sold to August Wagner of Columbus, Ohio, which planned to brew its products in Huntington, including the well-known Augustiner Beer. But something went wrong and they closed the brewery for good in 1971. It is unclear whether the plant sat idle or if August Wagner continued to produce Little Switzerland products before they shut it down. Perhaps the 3.2% alcohol limit was one of the sticking points that kept the Columbus brewer from following through with their plans? Who knows? In the end it mattered little. A couple of years later, August Wagner themselves were in serious financial trouble and by 1974, they too were forced out of business, unable to pay their enormous tax bills.
What Happened to the Nationals?
By the late 1960s the main competition for the nationals was really each other and Anheuser-Busch. Each one seemed to regard small brewers like Little Switzerland as more of a nuisance than a threat. Yet as a matter of "standard business practice" each big national was on a mission to systematically force all competing breweries both large and small out of business by giving incentives to distributors and retailers, as well as spending record amounts of advertising money.  Consequently, they not only wiped out the large and small independent brewers, they nearly wiped themselves out in the process. In fact, they may have already succeeded: As of the year 2000, the top three U.S. brewers had cornered the American beer market, producing over 90% of all the beer sold. And it's still true in 2009.
Anhueser-Busch has been number-one for almost half a century. But what about the other big boys? You may be surprised to learn that a number of the legendary nationals and large regional brands are now owned by the Pabst Brewing Company, the fourth largest brewer in the U.S. These labels include the flagship brand (Pabst), Ballantine, Schaefer, Stroh's, Schlitz, Old Milwaukee, Black Label, Pearl, Schmidt, Olympia, Lone Star, Rainier, and some of the Heileman brands - Old Style and Special Export among others.
The catch is that Pabst no longer operates any of its own breweries, opting instead to be a "virtual brewer." Their last plant was located in Milwaukee and closed in 2001. All 25 of the Pabst brands are produced under contract by Miller, the second largest brewer in the United States. Miller itself was part of the Phillip Morris company for three decades until 2002, when they were sold off to South African Breweries to become SAB Miller. The official Pabst website reveals a stunning variety of nearly-forgotten labels. Click here: Pabst Brewing and then go to "Our Beers." Decreasing demand has put several of these famous names in danger of being phased out of production, Falstaff being the latest victim.
In 1975 Coors was the fifth largest U.S. brewer, yet they were still operating from a single plant and had no national distribution system. Although they managed to get into third place over time, they have been more or less stuck there for quite awhile now. In February 2005 they completed a merger with Canadian brewing giant, Molson, to become the world's fifth largest brewer, the Molson-Coors Brewing Company.
As a bit of a side note - the once independent Latrobe Brewing Company of Latrobe, Pennsylvania, makers of Rolling Rock Premium Beer were purchased in 1987 by that other formidable Canadian giant, Labatt, which itself is now part of the largest brewing conglomerate in the world, (by volume) InBev, a company based in Belgium that was formed when Brazilian brewer Ambev merged with Interbrew. Besides the aforementioned Rolling Rock and Labatt labels, the InBev roster includes such famous international names as: Bass Ale, Stella Artois, Tennent's, Brahma, Beck's, and Leffe. Are you confused yet?
Since the 1980s, the market share for craft beer in the U.S. has been steadily rising to the point where companies like Anheuser-Busch, SAB Miller, and Molson-Coors (Budmillercoors) now look upon craft brewers and the remaining regionals as a major threat to their well-being. Consequently, "Budmillercoors" have been quick to develop their own knock-off craft beers, while simultaneously gobbling up smaller brewers and micros to operate under their "leadership." And yet, the craft beer share continues to grow every year.
 Imagine if Little Switzerland had Survived
Imagine if Little Switzerland or Fesenmeier had somehow managed to survive another 15 years into the mid-1980s? The micro and craft-brewing revolution along with West Virginia's eventual repeal of the 3.2% alcohol limit in beer, allowing for the sale of higher strength brew, surely would have helped breathe new life into the brewery.
If you have a brewery near you, support it. If you're traveling, drink the local brew. Don't believe us? Take a look at the former Fesenmeier brewery being destroyed.. Yes, it's okay, you're allowed to vomit. Photo clipping from the Herald-Dispatch.
That's not all. Central City saw a major rebirth in the 1980s as the antique-capitol of the Tri-State, a tradition that continues to this day. It is without question that a brewery of any size with strong ties to the old neighborhood would have been the cornerstone of that rebirth. A beacon of pride and a major tourist attraction, celebrating an ancient craft. Thus, fulfilling the dream of Little Switzerland's owners. We can only imagine what might have been. All reports indicate that with one or two exceptions, the beer produced by this brewery throughout its history was equal or superior to the competition. At the end of the day, the big nationals didn't put all the independent brewers like Fesenmeier and Little Switzerland out of business. Beer drinkers played the biggest part. They believed the advertising and made their choices. Shame on them!
BudMillerCoorsMolsonInbev Updates
April 2005
First there was the merger between Molson and Coors to become the Molson/Coors Brewing Company CLICK HERE: Molson/Coors. But wait. See Update 10/07!
May 2006
To further confuse and confound you, Anheuser-Busch purchased the Rolling Rock brands from InBev in May of 2006. In typical corporate fashion, they shut-down the 1.2 million barrel Latrobe brewing plant, electing to instead produce the legendary brands at their Newark, New Jersey facility, putting 200 people out of work. The Latrobe Brewery is now searching for a buyer. CLICK HERE: Anheuser-Busch buys Rolling Rock.
October 2007
SAB Miller and Molson/Coors merged to become Miller/Coors. Poor Molson. I'll bet he's spinning in his grave! CLICK HERE: Miller/Coors
December 2008
And then in an even weirder twist of events, the unthinkable happened: In the summer of 2008 Anhueser-Busch, brewer of the "King of Beers" was sold to InBev. Wow. Talk about coming full-circle! CLICK HERE: Anhueser-Busch Sold
Photos of West Virginia billboard poster, Little Switzerland keg top, West Virginia pennant, and Charge bottle caps - courtesy of Phil Dobeck
Photo of Fesenmeier tray by J.S. - tray from the collection of Phil Dobeck
All other photos by J.S.
Special thanks to John Smallshaw for inspiring me to tackle this article and use the term "Budmillercoors," which I first saw on his Falstaff website!
Related Links:
falstaffbrewing.com John Smallshaw's excellent Falstaff website
Shakeout in the Brewing Industry - from Beer History.com
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