Pearl

by Jeremy Banas

  There would be a lot of excitement the rest of the decade. Perhaps the most significant business decision for the brewery in 1961 was its acquisition of the historic Goetz Brewery in St. Joseph, Missouri. This gave Pearl Brewing an additional brewing facility in a part of the country that would allow it to reach a wider audience outside of its southwestern dominance. To give a little context to this purchase, we must look back to 1951 for a moment. After numerous offers from larger breweries around the country to purchase Pearl had been turned down, Pabst Brewing out of Milwaukee came calling, and B.B. McGimsey was interested. He saw it as a way for the brewery to grow and for an investor such as himself to reap huge profits. Pearl’s vast dominance in Texas and around the Southwest had not gone unnoticed by larger brewers around the country.

  This page and opposite: Pearl Light Park. San Antonio College and the Alamo Colleges District Foundation.

  Not everyone on the board, including Otto A., was interested in this. In fact, the narrowly defeated vote to sell Pearl would drive a deep wedge in McGimsey’s relationship with Pearl and the Koehler family. This division continued over the next few years and would lead to McGimsey’s exit from the brewery. However, McGimsey did land on his feet, having made a tidy sum over the last few decades that helped open Kelly Field National Bank in San Antonio in 1956. He would go on to have several other business interests in San Antonio; he also became a thirty-second-degree mason.

  Pearl’s need to grow and diversify was soon satisfied by another historic regional brewery. After a lot of research, Goetz Brewing in St. Joseph, Missouri, fit the bill. Although it would not see monetary savings until later, it was able to begin brewing Pearl soon after the purchase at the St. Joseph facility (while also brewing the Goetz brands at the San Antonio location). Some jobs were eliminated that were duplications of efforts, but Pearl Brewery treated the former employees of Goetz exactly like its own, with some Goetz employees coming to San Antonio to work at Pearl. A.J. Range became vice-president, with H.J. Eickenrot handling the PR work.

  Koehler Park, 1920s. San Antonio College and the Alamo Colleges District Foundation.

  The remainder of 1961, as well as subsequent years, saw many additional sponsorships and new products introduced. Pearl Brewing wanted to continue to have an edge over the competition. It sponsored a Wild West performance troupe known as the Pearl Gunslingers in 1961, and in March 1962, Pearl purchased the radio and television rights of the Houston Colt .45s, the Major League Baseball expansion team that would go on to become the Houston Astros. Pearl sponsored a total of 162 radio broadcasts and 14 telecasts of away games in 1962. When the John Wayne movie The Alamo premiered in 1963, the Duke himself was on hand for the showing at the Pearl Brewery.

  The year 1965 saw Pearl introduce Pearl draft beer in cans and quart bottles, as well as a home draft beer system known as “Pearl Port-A-Tap,” essentially a boxed draft system that was placed in a refrigerator. There were also ring pop top–style cans that required no opener and the purchase of the Judson Candy Company. Why Pearl entered the candy business is something that has puzzled many for decades. Pearl was profitable in 1965, and although its business interests varied, the candy company still seemed rather “out of the box” for the brewing company.

  The Judson Candy Company had already made a name for itself in Texas and throughout the Southwest. Although it was clearly not the largest candy company in the country, its presence was well known. Three sons and their father, George Eugene Judson Jr., founded the Judson Candy Company, which produced cherry sours, pralines and peanut brittle, as well as other candies, at its long-standing factory on South Flores Street. At one point, Judson Candy Company made more than one hundred different varieties. In fact, it was a popular destination for school field trips in the San Antonio area. Pearl ran the Judson Candy Company from 1965 until 1983, when Atkinson Candies purchased Judson from Pearl. Despite Pearl owning 20 percent of the popular candy company, Pearl’s name was never listed on any advertising for candy boxes. The only evidence of Pearl’s ownership rested in signs and office supplies around the company’s plant.

  One could speculate that Pearl Brewing Company’s purchase of the Judson Candy Company had much to do with its bitter rivalry in the beer industry with the Lone Star Brewing Company. The purchase of Judson Candy Company may have had something to do with Lone Star’s president, Harry Jersig, who became president in 1949. Jersig had worked at Judson Candy Company for quite a number of years before his tenure at Lone Star and still thought fondly of its employees when he left. In addition to it being a business opportunity, Otto A.’s purchase of the Judson Candy Company may have been about knocking Lone Star.

  “Port-A-Tap,” a home draft system. Jeremy Banas.

  Pearl Pavilion at the 1968 World’s Fair. Pearl LLC Archives.

  Many more changes would occur over the next few years. In 1966, Pearl Brewing became the first company to contract for exhibit space at the 1968 World’s Fair held at Hemisphere Plaza. Later that year, it introduced twist-off caps on all twelve-ounce non-returnable bottles. With all this promotion and increased sales, another update to the brewery was needed. In 1967, more than $1 million worth of fermentation tanks, a new filter and grain mill were added. By December 1967, Pearl Brewing had purchased RC Cola bottling plants in Houston, Beaumont and Galveston, Texas. When Hurricane Beulah hit, Pearl donated fifty thousand quarts of bottled water to victims that likely came from these bottling plants.

  More self-promotion in 1967 was seen in the form of the Pearl Beer Country Music Spectacular in September, starring Faron Young, Porter Waggoner and the one and only Willie Nelson. The Pearl Brewing Company went on to sponsor events such as Saturday night boxing on local television, and in 1968, the Pearl Brewing Pavilion premiered at the 1968 Hemisphere World’s Fair.

  In 1969, Otto A. Koehler’s involvement in the former San Antonio Brewing Association, now the Pearl Brewing Company, came to an end when the beloved leader passed away. Things would never be the same at the brewery. Since its humble beginnings in 1886, the Koehler family helped steer the Pearl Brewery into statewide and regional dominance, as well as had a profound effect on the San Antonio community.

  PERIOD V

  THE DECLINE OF THE PEARL, 1969–2001

  FOR EVERY UP THERE IS A DOWN AND THE STRANGE TALE OF OTTO A. JR.

  With the death of yet another Otto Koehler, Pearl Brewing faced a similar void in leadership as it did with the first Otto Koehler. Vice-President A.J. Range became president after Koehler’s passing.

  With new leadership in place, Pearl set out to continue its growth. One of its first changes was buying the RC Cola bottling plant of El Campo to add to its three other RC Cola bottling plants. Pearl also continued its sponsorship efforts with the sponsorship of a Formula One race car. The year 1969 would continue to be a transitional one for Pearl, although it also served to revisit certain business-related plans that were initiated by B.B. McGimsey and shot down by Otto A. Koehler. After Otto A.’s passing, the Koehler family soon saw that it would be increasingly difficult to compete with larger breweries around the country. The year 1969 saw a giant change in the purchase of Pearl Brewing Company by the Southdown Corporation of Houston, thus ending independent ownership of the brewery for the first time in more than eighty years.

  The death of Otto A. would not be the last anyone would hear the name Otto A. Koehler. In a strange turn of events, his son Otto A. Koehler Jr.’s name began to hit the news. In January 1964, Otto A. Jr. was committed to Emory John Brady Hospital in Colorado Springs, Colorado, for “mental issues.” Although there is speculation, the exact reason for the confinement is unknown. Consider that Otto A. Jr. was heir to the Koehler fortune when, in 1969, his mother, Mrs. Otto A. Koehler, obtained a court order upholding her son’s confinement. This was after Otto A. himself had passed and prior to the sale to Southdown. Here Otto A. Jr. sat for ten years, until 1974, when he hired an attorney to start a court action to have himself released from the sanitarium, a
rguing that his confinement had been executed against his will.

  Otto A. Koehler (sitting) and Pearl’s board of directors. Pearl LLC Archives.

  His attorney first cited that his client needed more in-hospital freedom and then later sought Otto A. Jr.’s outright release from the hospital. Later, in May 1974, U.S. District Judge Hatfield Chilson ruled that Otto A. Jr. had been given many freedoms when he was transferred from Brady Hospital to Mount Airy Psychiatric Center in Denver, Colorado. It is against Mount Airy that Otto A. Jr.’s suit is filed. It seems Otto A. Jr. had been given open freedoms to wander around, including being allowed to leave Mount Airy for up to two hours at a time. Rumors of Brady Hospital having a habit of confining wealthy people began to surface, and later in 1977, a Senate subcommittee heard allegations regarding the hospital and mistreatment.

  Otto A. Jr. would get his freedom from confinement only to go missing. Mrs. Otto A. Koehler then filed a petition to be made conservator of her son’s reported $10 million estate. This petition was denied. Otto A. Jr. was found and released six days later, only to die a year later in 1975.

  The deal to purchase Pearl Brewing was large enough that it made the newspapers around the country, especially in Texas and Louisiana. The Monroe News-Star announced on July 15, 1969, that the board of directors for each company had agreed in principle to a merger of Pearl with Southdown on a tax-free basis, subject to approval. Southdown’s board had already approved. The deal worked out well for Pearl’s acting president, A.J. Range, who would end up with a seat on Southdown’s board, as well as a spot on the College of Engineering Foundation advisory panel at the University of Texas–Austin.

  Range indicated that the merger would be good for Pearl, as Southdown also had rice farms in addition to sugar, with rice being a key ingredient to Pearl’s recipe and sugar able to be used for Judson Candy Company. Each of the 1,451,476 shares of stock from Pearl would receive 1 share of Southdown preferred stock in return. From there, each of Southdown’s preferred shares would receive eight-tenths of a share of Southdown common stock. Each share of Southdown stock would receive a vote toward any matters that came up. A condition of the sale would also allow Pearl stockholders to sell if they wished—and at an exorbitantly high forty-five dollars per share.

  The Southdown corporation began as a sugar cane company in the 1930s and later diversified itself into a multitude of other businesses as it reorganized in later decades. In addition to acquiring the Pearl Brewing Company, the Southdown Corporation of Houston also acquired its 179 trucks, the Judson Candy Company business, all of Pearl’s RC bottling plants and both the Pearl Brewery and the Goetz breweries in St. Joseph.

  Pearl pinball machine converted sometime in the 1960s. Jeremy Banas.

  Various San Antonio Brewing Association bottles of XXX Pearl Beer. Jeremy Banas.

  A Pearl recycler smiles while holding a bag of XXX Pearl cans headed to a recycling plant. Pearl LLC Archives.

  In 1971, Frank Horlock, who had the largest Pearl distribution center in Houston, Texas, was appointed acting president of the Pearl Brewing Company by Southdown ownership. In the same year, Horlock and Pearl filed suit against Anheuser-Busch and Schlitz for antitrust violations, including selling beer below market cost. Despite all this, the move was pretty good to most. Pearl beer was sold in nine states, and Country Club Malt Liquor was sold in forty-two states and was, in fact, the highest-selling malt liquor in the United States.

  In 1972, Lee Birdsong was installed as president of Pearl Brewing, and he would oversee many changes that year. Pearl became the first national sponsor of the Mutual Black Network, purchasing thirteen weeks of one-minute radio spots for Country Club Malt Liquor. The Pearl Coral and Safari rooms would be renovated as the Jersey Lilly and 1886 rooms, harkening back to Pearl’s beginnings. The year 1972 would also see a wooden replica of the Judge Roy Bean Saloon, which would double as the brewery’s gift shop, as well as the fourth return of Texas Pride. Pearl Light was introduced for the first time in addition to Kassel Beer, a house brand for local San Antonio Handy Andy grocery stores.

  Otto A. in the Safari room. San Antonio College and the Alamo Colleges District Foundation.

  Frank Horlock at the press conference for Jersey Lilly. Pearl LLC Archives.

  Pearl president Horlock (second from right) and the Pearl Can Club. Pearl LLC Archives.

  In 1973, Frank Horlock became CEO of Pearl, with Lee Birdsong remaining president. Pearl would also become a major sponsor of the San Antonio Spurs, a new ABA basketball team. Pearl aluminum recycling centers opened, and an extension to the San Antonio River was proposed that would run right behind Pearl. The Pearl would also complete a German beer garden that would serve Pearl Beer to river barge traffic that would come by on the future extension.

  PEARL BREWING JOINS THE PABST BREWING FAMILY

  The next few years saw little change. Between 1974 and 1976, Pearl bought the Jax Beer brand and formula, opened an aluminum can manufacturing plant and closed the St. Joseph, Missouri brewery. The year 1977 would see a major change for Pearl Brewing with Southdown Inc. divesting itself of Pearl to the General Brewing Company of San Francisco, owned by Paul Kalmanovitz and his S&P Company, which would go on to acquire other brands as well, including Pabst. It would take more than a few attempts for Kalmanovitz to acquire Pabst, as the nation’s third-largest brewer resisted for a while.

  In the same year that saw an ownership change with the purchase by General Brewing Company, Pearl introduced a few new items. The brewery, now on its second corporate owner, introduced Billy Beer and Pearl Light, which boasted sixty-eight calories, around 50 percent less than regular XXX Pearl Beer. Billy Beer would not prove to be a sound business decision and flopped in production.

  In 1979, Lutz E. Issleib was promoted from plant operations manager to executive vice-president and manager of Pearl, ushering the old brewery into its tenth decade. Pearl Brewing would go on to sponsor Boy Scout Explorer Post 840, led by Tom Nichols, the brewery’s director of environmental affairs. Issleib would also see the introduction of Pearl Light Genuine Draft and Pearl Cream Ale and see Pearl Light sent to Mexico, along with the return of Texas Pride, which would see distribution to Saudi Arabia and China.

  Lutz Issleib had a bit of the Koehler/Pearl influence when he came on board with the brewery. Issleib’s mother, Hertha Koethe Issleib, was niece to Emma Koehler and had come back with her on one of Emma’s trips to Germany with an eight-year-old Lutz in tow.

  As the company tried desperately to find its identity as a corporate brewery, it would see Pearl Light Genuine Draft and Pearl Cream Ale bomb in the eyes of consumers, almost as if these were merely attempts to take up shelf space—or perhaps they were brewed only for profit and not for the love of it. In fact, outside of records in local papers of various corporate parties and the flop of Select Special 50, the 1980s were rather bland. Upgrades were merely an afterthought during this time, as more money would be spent on advertisements to promote the brewery’s products, including an ill-fated Pearl Light roller derby–style television ad.

  Another poorly conceived idea to save money was the “leaking beer keg” policy. At times, Pearl allowed distributors to return unused leaking kegs to Pearl, with the beer then sucked out of the kegs and put back into storage tanks to be reused. Although it was not a formal policy, such a practice would prove to hurt Pearl’s long-standing reputation for good quality.

  Despite the failure of several other advertising campaigns, as well as newly introduced beers, one marketing campaign and one new beer saw fairly large success. Capitalizing on the popularity of the evening soap opera Dallas, Pearl Brewing created J.R. Ewing’s Private Stock, a beer that was marketed to those who either identified with or appreciated the sneaky and conniving J.R. Ewing character himself. In 1980, when the campaign was in full swing, the brewery claimed to have orders for more than 500,000 cases of the beer, which was already available in many parts of the country.

  Pearl vice-president Fran
k Spinosa gave the quote that defined corporate Pearl: “People today buy an image, not a beer, but a lot of people like a lot of JR’s image, a man will buy J.R. Ewing’s Private Stock because it says a lot about him without even opening his mouth.” J.R. Ewing’s Private Stock’s packaging was even a gimmick, placed in what were known as six-shooter six-packs, with twelve-ounce cans that featured a western-style belt. Advertising even featured a quote from J.R. Ewing himself: “If you have to ask how much my beer costs, you probably can’t afford it.”

  This carefree and relaxed attitude even extended to many brewery employees. Drinking among employees who worked on the canning line or cleaned the tanks was not uncommon. “Some of the employees even had their own mugs that they would bring to fill up throughout the day,” said Grant Wood, current head brewer for Revolver Brewing in the Dallas area. Wood was a Pearl plant employee and brewer from 1985 to 1989 before leaving for the Lone Star Brewing Company.

  Grant Wood originally interviewed for a position at the brewery, a lab position as microbiologist. Prior to that, he had been working at Vandewalle farms doing odd jobs. At Pearl, Ed Robby, who was head of quality control at the time, hired Wood. Two years later, plant manager Ed Mueller sent him to brewing school at the Siebel Institute in Chicago, with Wood returning to Pearl as a third-shift brewer.

  Wood was in charge of tank analysis, package approval and approval for brewing. “I worked with a bunch of old Germans at the brewery,” said Wood, “guys who had already been there for decades. I remember one guy would come in early around four in the morning, clean four tanks and then head home.” Wood also described one employee, Howell Parker, who hand-cleaned the tanks by crawling into them despite tales of hauntings in those tanks and the brewery itself, including from an old brewer. There were areas in G cellar that would lend one to think they were haunted, with odd noises and shadows spooking employees.