How much Pabst Blue Ribbon does $700 million buy? All of it.
Russian brewer Oasis Beverages just shelled out a heady sum for Pabst Brewing, the Milwaukee operation behind Old Milwaukee, Schlitz, Colt 45, and the suds hipsters and ski bums call “peee-brrrr.” The sum represents a staggering profit for C. Dean Metropoulos, the investment firm that bought Pabst in 2010 for just $250 million.
Pabst isn’t great beer, and it isn’t terrible. On Beer Advocate, which crowdsources reviews, PBR scores a 68 out of 100, edging out Budweiser (56) and Miller Light (53). Tasting decent helps, as does being cheap. But Pabst’s success to date is almost entirely a marketing story—even stretching all the way back into the 19th century.
The company started winning beer competitions just before the Civil War. It cashed in on those victories by tying blue ribbons around every bottle of its beer until 1916. The stunt worked, and the brewer was quickly burning through more than 1 million feet of silk per year.
In the 1940s, Pabst started sponsoring sporting events, which, believe it or not, was vanguard at the time. “It’s Pabst Blue Ribbon from the very first round,” the ads sang. In the late-1950s it hired fashion photograph Richard Avedon to shoot a series of stylish two-page spreads. The formula was classy: a man and a woman at leisure—on the beach; on a two-person bike—with the tagline “Pabst makes it perfect.”
All these campaigns were smart and successful, keeping Pabst near the top of America’s Big Beer pyramid. U.S. sales peaked in 1977 at 18 million barrels. Then things got cheesy. There was this TV ad featuring a young Patrick Swayze with disco fever.
And this spot with a boozy Jason Alexander (better known as Seinfeld’s Costanza). Perhaps, not surprisingly, sales tanked.
In 1985, Paul Kalmanowitz bought the company for $63 million and instated a no-advertising policy. The beer (and its low price) would speak for itself. The restraint struck a chord with drinkers who weren’t keen on their beer budget going to massive advertising campaigns, and PBR’s hipster cred was born. The beer was indie at a time when there wasn’t much craft around.
Sales slowly came back. In the past 10 years, sales of Pabst have more than doubled, this during a period when some of America’s most popular brands were losing customers.
Metropoulos, meanwhile, didn’t mess with the no-ad strategy—unless one considers a pile of PBR trucker hats, sweatbands, and jackets modeled after those worn by gas-station attendants. The investor also tried to cultivate its beer’s indie cred by sponsoring concerts, mural paintings, and burlesque festivals.
Last year, Metropoulos sold almost 6 million barrels of PBR, according to Euromonitor, a far cry from the beer’s 1970s hey-day, but a pretty heady figure nonetheless. Yeungling, Sam Adams, and a bunch of other All-American brands didn’t come close to that volume.