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Rainier Brewing Company

 


Address:
P.O. Box 24828
Seattle, Washington 98124
U.S.A.

Telephone: (206) 622-2600
Fax: (206) 622-7989
http://www.rainierbeer.com

Statistics:
Wholly Owned Subsidiary of Stroh Brewing Company
Incorporated: 1878 as Seattle Brewing and Malting Company
Employees: 325
Sales: $90 million (1997 est.)
SICs: 2082 Malt Beverages


Company History:

A Pacific Northwest mainstay for more than a century, Rainier Brewing Company brews and sells a handful of beer brands, including the company's flagship brand, Rainier Beer. Headquartered in Seattle, where the company produces its beer on the same site it occupied in the late 19th century, Rainier Brewing was acquired by G. Heileman Brewing Company in 1977. In 1996 G. Heileman was acquired by Stroh Brewing Company, uniting the United States' fifth and fourth largest brewing operations, respectively, and adding the Rainier brand to a stable of other beer brands that included Colt 45, Mickey's, Schaefer, Schlitz, Carling Black Label, and Stroh's.

Birth of a 19th Century Beer

Rainier Brewing's long legacy as a regional brewer in the Pacific Northwest began in 1878 when a German immigrant named Andrew Hemrich founded a small brewery in Seattle. Hemrich, whose family had been brewers for generations, was part of the distinct wave of German brewers who immigrated to the United States during the 19th century and left a lasting mark on the U.S. beer industry. With them, the transplanted Germans brought their extensive background in brewing beer, a centuries-old tradition that gave the new arrivals the means to survive in the burgeoning New World. Across the nation, hundreds of small breweries were established, with German immigrant brewmasters at the helm, enriching the flavor and the population of the beer industry in America. From these ranks, the country's largest beer companies emerged, national giants such as Schlitz Brewing Company, Stroh Brewing Company, and Anheuser-Busch Company. Close behind these future industry stalwarts were the regional breweries, breweries like the one operated by Hemrich's Seattle Brewing and Malting Company. Although his company and its signature beer, Rainier, never made the leap to national dominance, Hemrich did create a powerful regional force, one that dominated the Pacific Northwest and at one time appeared to be on the verge of becoming one of the largest breweries in the world.

Hemrich opened his brewery, the Bayview Brewery, in 1878, establishing it on a site south of Seattle where Rainier beer would be brewed more than a century later. Also in 1878, Hemrich formed Seattle Brewing and Malting Company--Rainier Brewing Co.'s earliest predecessor&mdashø operate the brewery. Hemrich brewed three beers at Bayview, selling them to residents in nearby Seattle under three different labels: Bayview, Bohemian, and the company's premier label, Rainier. There was no shortage of different beers for Seattlites to choose from during Hemrich's early years as a brewer and, accordingly, no shortage of competition for his fledgling brewery. The country teemed with small, independent breweries, each vying for a share of its local market. The years of large, national breweries were decades away, as were the means of transportation to distribute beer beyond a limited geographical area, creating a landscape of small breweries clustered around population centers, with each focused exclusively on its local market. Hemrich's Bohemian, Bayview, and Rainier labels fought for distinction among a parade of other brands, including Horluck's, Aero Club, Selah Springs, Lorelei, Golden Age, Mountain Club, Rocky Mountain, Edel-Brau, Gold Seal, Olympic Club, Tacoma Pale, and Washington Viking. Of these distinctly Pacific Northwest beers--and a host of others--only one brand would survive through the 20th century. That singular, enduring brand was Hemrich's Rainier Beer.

By the early 1890s, after more than a decade of business, Hemrich was ready to expand, his three labels having won over enough customers to finance and necessitate a brewing facility larger than the Bayview plant. In 1893 Hemrich constructed a larger, more modern brewery several miles from the Bayview, erecting the new plant in the Georgetown area of south Seattle. During the next 20 years, with the new Georgetown brewery underpinning its operation, Seattle Brewing and Malting Company thrived, becoming overwhelmingly successful in the business of brewing and marketing beer. As the company's business flourished, it benefited from the advancement of technology around it and was no longer fettered to the confines of the Puget Sound area. Distribution channels opened up during the early 20th century, as various modes of transportation emerged that enabled the shipment of beer thousands of miles from the clustered breweries surrounding large population centers. For Hemrich, a greater distribution area meant more customers and greatly accelerated financial growth, and for people living on the West Coast the shipment of beer by rail, truck, and boat meant a growing familiarity with the Rainier label. Rainier Beer was sold throughout the Pacific Northwest, up into the gold fields of Alaska, down south in California, and as far away as Asia. The effect on the company's stature was huge. By the 1910s Seattle Brewing and Malting Company was the largest single industrial enterprise in the state of Washington. Hemrich's brewery ranked as the sixth largest in the world.

Prohibition and Rebirth

After nearly 40 years of existence, Seattle Brewing and Malting Company had developed into a formidable regional force that appeared destined to become one of the nation's mainstay beer brands, but just as the company was poised for such expansion, its business was made illegal. In 1916, three years before the 18th Amendment was ratified, thereby prohibiting the use and sale of alcohol, the state of Washington declared the production and sale of alcohol illegal. Virtually overnight, Hemrich was out of business. The jewel of his promising enterprise, the massive Georgetown brewery, was converted into a feed mill. The Rainier brand, which had held sway in the greater Pacific Northwest region for years, was relinquished by Hemrich as well. It was sold to a California firm and soon disappeared from sight for roughly 15 years.

With the repeal of the 18th Amendment in 1933, the U.S. beer industry quickly came back to life, as more than 700 breweries opened and braced themselves for the heavy demand ahead. One of those breweries that started anew in 1933 was the Rainier Brewing Company, the same firm that had acquired the Rainier brand from Hemrich in 1916. The company sold its version of Rainier in California and Oregon, brewing the brand 900 miles from its original location. To the north, however, a father and son team was making every effort to bring the once-famous Rainier brand back to its home in the Pacific Northwest.

Fritz Sick and his son Emil were in Seattle preparing for the second coming of Rainier Beer--the Seattle version. The pair had developed extensive brewing interests in several Canadian cities and moved to Seattle to take part in the 1933 rejuvenation of brewing beer in the United States. The Sicks purchased the old Bayview brewery, re-equipped it, and started the Century Brewing Company. At the old Bayview facility, the Sicks brewed and bottled Rheinlander beer while they negotiated with the Rainier Brewing Company of San Francisco to acquire the rights for the Rainier brand. Negotiations stumbled forward for two years before the Sicks could at least claim a partial victory. In 1935, in their continuing pursuit to acquire the assets of Seattle Brewing and Malting Company, the Sicks acquired the old Georgetown Brewery and purchased the rights to use the Rainier brand name in Washington, Idaho, and Alaska, provided they paid a royalty on each barrel of Rainier sold to San Francisco's Rainier Brewing Company. It was not until 1953 that the Sick family gained exclusive, worldwide rights to the Rainier brand.

Rheinlander and a three-state right to the Rainier brand were enough, however, to keep Century Brewing Company in business and growing. As the company moved forward through the World War II period and on into the postwar economic rebirth of America, meaningful changes were occurring both within Century Brewing Company and within the U.S. beer industry as a whole. From the macroscopic perspective, the U.S. beer industry was undergoing a decades-long consolidation of its participants, as the era of myriad independent breweries that flourished during Hemrich's day gave way to an era in which behemoth national brewers ruled the day. From the more than 700 breweries in operation following the repeal of the 18th Amendment in 1933, the number of independent breweries was winnowed down to less than 50 by 1978. Regional brewers like the Sick family's Century Brewing Company were becoming increasingly rare.

Ownership Changes in the Late 20th Century

At Century Brewing Company, some of the changes mirrored the developments occurring in the company's industry. Emil Sick, who had taken over after the death of his father, died in 1964, leaving his adopted son, Alan B. Ferguson, to assume the company's executive management responsibilities. By the early 1970s Ferguson had been appointed chairman of the corporation, making room for Edwin S. Coombs, Jr.'s ascension to the presidential post. It was during these changes in leadership that the Century Brewing Company underwent significant changes to its corporate structure. A name change was effected, changing the company's corporate title to Rainier Brewing Company, and a holding company was subsequently formed, called The Rainier Companies. Amid the general trend that signaled the end of independent brewers and favored larger, conglomerate brewers, The Rainier Companies fit well with the times. Molson Breweries Ltd., a Canadian brewer that ranked as a giant and stood as the oldest brewing firm in North America, owned the majority of The Rainier Companies' stock.

Against the backdrop of these changes, the Rainier brand was approaching its centennial, having withstood the tests of a century that saw it beat back a host of competitors during the era when independent brewers prevailed, survive the more than decade-long hiatus of Prohibition, and continue to flourish as large, national brewers predominated its industry. Aside from the company's signature Rainier brand, Rainier Brewing marketed Rheinlander beer, Highlander beer, Brew 66, and Rainier Ale, selling the brands in Washington, Oregon, Idaho, Montana, Alaska, and part of Wyoming. As the mid-1970s approached, Rainier Brewing began selling its beer in Hawaii.

The ties with much larger brewers became even closer in 1977 when The Rainier Companies sold the Rainier Brewing Company to La Crosse, Wisconsin-based G. Heileman Brewing Company, the seventh largest brewing company in the United States. Although its acquisition by a much larger brewer could have portended the assimilation of the company's brewing assets and signaled the end of the Rainier brand, Rainier Brewing became part of a unique situation as a brewer operating under G. Heileman's corporate umbrella. Unlike the country's other large brewers who blanketed the nation's markets with one or two brands, G. Heileman achieved its growth by acquiring and developing regional brands that appealed to distinct markets. G. Heileman rose through the U.S. beer industry's rankings by acquiring regional brands and retaining their identity, accumulating a portfolio of brands that included Old Style, Schmidt's, Colt 45, Mickey's, Special Export, Champale, Lone Star, and Henry Weinhard.

In the wake of G. Heileman's 1977 acquisition, Rainier Brewing continued to distinguish itself as a steady financial performer, registering profitable years throughout the 1980s. Owing to its consistent performance and its entrenched position in Pacific Northwest markets, Rainier Brewing became the prize of the G. Heileman empire, an asset its parent company desperately needed as it headed into murky financial waters in the late 1980s. A leveraged acquisition of the diversified regional brand owner by Australian businessman Alan Bond in 1987 delivered a pernicious blow to the Wisconsin-based brewer, saddling the company with debilitating debt. As a result of the acquisition, which made Bond Brewing International the ultimate corporate parent of Rainier Brewing, G. Heileman was forced to declare bankruptcy in January 1991. G. Heileman emerged from Chapter 11 protection in the early 1990s, by which time ongoing negotiations with a close rival were midway through their completion. Rainier Brewing was set to become a valuable asset in one of the U.S. beer industry's largest mergers.

Rumors about Rainier Brewing's sale to a much larger, nationally oriented brewer had been circulating since the late 1980s. Although G. Heileman was suffering from profound financial ills at the time, the company could not afford to let the jewel of its empire leave its control. G. Heileman, meanwhile, was the subject of acquisition rumors itself during the late 1980s. Stroh Brewing Company, which ranked as the country's fourth largest beer company, attempted to acquire G. Heileman in 1990, but did not have the financial resources available to complete the deal. By 1996 Stroh's financial position had changed, enabling the company to acquire G. Heileman and all of its regional breweries, including Rainier Brewing. The 1996 acquisition wedded the nation's fourth and fifth largest brewing operators, creating a beer company with more than $1.3 billion in sales.

With this new parent company supporting its efforts in the Pacific Northwest, Rainier Brewing entered the late 1990s much like it had entered the 20th century. The company held a prominent position in the Pacific Northwest, predicated on strong brand name recognition. Its ties to the territory it served represented a century-long link to generations of consumers, a legacy imbedded by the staying power of the Rainier brand. As the company moved forward under the auspices of Stroh, Rainier Brewing officials were confident that the future would be no different from the past.

Principal Subsidiaries: Rainier Bottling Co.





Further Reading:


Denne, Lorianne, "Rainier Sale Speculation Abounds Despite Denials," Puget Sound Business Journal, March 18, 1991, p. 3.
Rainier Brewing Company, Rainier Beer: The First Hundred Years, Seattle: Rainier Brewing Company, 1978.
Richardson, Pat, "Rainier Brewing Company--Serving Seattle Since 1878," Washington Purchaser, August 1974, p. 7.

Source: International Directory of Company Histories, Vol. 23. St. James Press, 1998.




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