Literally the writing on the wall. Photograph courtesy of the St. Louis Mercantile Library at the University of Missouri–St. Louis
The final chapter of the Falstaff story is a difficult one to write. It involves thousands of people losing their jobs, a family losing the company they had built for generations, historic breweries going dark forever, and the further diminishment of St. Louis as a major industrial center. This article will not be another rehashing of what has become almost an iconic story in St. Louis brewing history, but will rather look at new perspectives provided by Joe Jr., the last Griesedieck president of Falstaff, and Monsignor Griesedieck, who while serving as a priest through this tumultuous period, still kept close tabs on his family’s business.
The last act begins with the much-needed infusion of cash—$20 million—that Paul Kalmanovitz, the San Francisco investor and fellow brewery owner, provided to an ailing Falstaff in 1975. Monsignor Griesedieck recalls Boatmen’s Bank telling the company that they needed a capital infusion to save Falstaff. Joe Jr. further explains that Falstaff was completely overleveraged; the company had no money to pay their creditors, who were now coming for repayment. The business mistakes of the past decades now finally revealed their true costs, aging breweries that had become far too inefficient to keep up with Anheuser-Busch’s brand new “super breweries,” among them. Likewise, just as in nature, the brewing industry was facing a “mass extinction” in the 1970s; not even former No. 2 Schlitz survived, imploding after a quality control scandal. But family loyalty was still strong; Monsignor Griesedieck said his fellow family members held onto their stock, even as it plunged in value, out of a sense of duty to their employees. Selling would have been a betrayal.
Monsignor Griesedieck recalls that his family members, still working for the company, were under the impression that business operations would continue largely as they had before. In fact, he says Kalmanovitz promised as much. But the reality was much different; now controlling the company, Kalmanovitz proceeded to fire most of the Griesedeick family and the office staff on 5050 Oakland. A “For Sale” sign went up, tellingly informing potential buyers to call a San Francisco number if interested in buying the now-empty building. Joe Jr., who had been assigned to San Francisco by Falstaff before the 1975 takeover, survived the mass lay-offs. Kalmanovitz continued his cost-cutting by slashing the famous Falstaff advertising budget. Likewise, in almost exact order of efficiency, he began closing plants around the country, laying off what would eventually be thousands of workers. For the first time in years, Falstaff was not losing money, and was even making a small profit. Regardless, Monsignor Griesedieck said his family was “devastated” and felt they and their employees had been betrayed.
Not surprisingly, the overall reputation of Paul Kalmanovitz is not particularly good around St. Louis, and in the former cities where Falstaff once owned breweries. Monsignor Griesedieck’s perspective on the end of Falstaff strongly reflects his religious background as a Roman Catholic priest; from his viewpoint, Kalmanovitz was a brutish, immoral character.
“The old story about Kalmanovitz is that he got his start in the junking business, and then just continued to do that with companies for the rest of his career,” he jokes. In the eyes of the Monsignor, Kalmanovitz’s perceived betrayal of trust, and image as someone less than a gentleman, weighs heavily on his appraisal of the infamous investor’s reputation. Another story recounts how Kalmanovitz once showed up to a Falstaff board meeting contemptuously wearing a dirty white t-shirt in a room full of executives dressed in business suits. Whether the story is true or not, it certainly fits with the popular image of Kalmanovitz.
But Kalmanovitz a more complex character than the one portrayed in countless articles and books on the brewing industry. Joe Jr., who survived the axing of his fellow Griesediecks in the mid-1970s, went on to become the final president in its new headquarters in San Francisco. He is still an executive out in that city, and offers an interesting view on what it was like to work for Falstaff’s new owner. He also offers a much-needed, practical perspective of the famously reclusive Kalmanovitz. While acknowledging that many of his fellow Griesediecks might view Kalmanovitz as a “son of a bitch,” Joe Jr. credits him with saving the company. In his eyes, the company was overleveraged, and had very few options left. Without Kalmanovitz’s money, Falstaff was doomed anyway.
He was certainly “ruthless” in Joe Jr.’s eyes, but Kalmanovitz was also extremely intelligent, making shrewd business decisions that earned him hundreds of millions of dollars. Joe Jr. is one of only a handful of people who spent considerable time around the reclusive millionaire. Surprisingly, he even angered Kalmanovitz when he finally quit after a couple of years as president. Joe Jr., with that same sense of Griesedieck loyalty, worked to find new jobs for some employees laid off by plant closures, such as the last St. Louis brewery, Plant No. 10, in 1977. Interestingly, despite all of the vitriol against Kalmanovitz, it seems that few people, if any, blame or hold a grudge against the Griesediecks; their family’s strong emphasis on loyalty has endured to this day.
Sadly, Plant No. 10 still sits empty, slowing rotting away; Falstaff beer was brewed by contractors into the new millennium until finally ceasing production in 2005. All that remains now perhaps is to debate what went wrong. In the eyes of this author, a crippling problem was the strategy of buying up old and soon inefficient breweries in lieu of raising the massive capital for new production facilities. Several family members, while proud of the Griesedieck reputation for being well-educated, well-liked gentlemen, believe their family could have been a bit more ruthless in the shark tank of American brewing.
And ultimately, the end of Falstaff prompts an important question: for what purpose do corporations exist? Do they exist for the employment of good, hard-working people, with profits taking a second place? After all, in the end, former employees’ glowing reviews of how well the Griesedieck family treated them still resound to the present day. Or do corporations exist first and foremost to generate profit for their shareholders, creating good jobs in the process of making fortunes for their owners? For others, accepting the reality that the brewing industry was shrinking in the 1970s was the moral decision. Was Paul Kalmanovitz only guilty of doing the dirty work that no one else was willing to do?
Ultimately to this author, the Falstaff story is the story of how one family, the Griesediecks, through hard work and treating people with dignity and respect, created one of the most successful breweries in the United States. And even if it ended in failure, it is still a story worth celebrating.
The author would like to thank Cate, Judy, Joseph Jr. and Monsignor Ed Griesedieck for their valuable insights and encouragement in writing this story. Also Sean Visintainer and the Mercantile Library, as well as the Missouri History Museum provided access and permission to publish several rare photos from the Falstaff files.
This is the fourth installment of a series; here's where to read parts one, two, and three.
Chris Naffziger writes about architecture at St. Louis Patina. Contact him via e-mail at naffziger@gmail.com.
