Joseph Schnaider’s late 1880’s were a time of trusts – well capitalized businesses that created monopolies in certain industries. Railroads, steel, oil, tobacco and even beer faced stiff competition, buyouts, and consolidation. Coupled with rapid technological advances in the beer world, a business advantage was created for those who knew how to play it. One of the first breakthroughs was mechanical refrigeration, eliminating the need for caves. Refrigeration enabled year-round production, and when extended to railway boxcars, led ambitious brewers to develop regional and national distribution. Mass production reduced costs all down the line. Large breweries like Lemp and Anheuser-Busch took early advantage, establishing filling depots and rail centers across the country. Pasteurization and improved bottle closures extended shelf life and made global distribution possible.
St. Louis breweries raced to modernize. The expense required to mechanize production and bottling inhibited new and small operations. This spurred consolidation among the smaller brewers. Formation of a St. Louis beer workers union in 1886 drove up production costs further, making it clear that without scale, breweries would have to merge to survive.
Casting a business eye south
In 1889, eighteen noteworthy local brewers, including Joseph Schnaider’s Chouteau Avenue Brewery, formed the St. Louis Brewing Association (SLBA). The Association was less than a year along when a British syndicate bought it. Member brewers were allowed to maintain their brands, but many production plants were shuttered and combined with others.
The writing on the wall was clear to Joseph M. Schnaider. By nature a risk-taker, he seized a new opportunity far to the south.
Prior to 1890, Mexican breweries were small scale affairs offering a poor quality product within a tiny area. Growth of a domestic beer market was hindered by a punitive government tax on production. This, in addition to lack of ice, capital, technology and transportation. Local tastes leaned toward pulque, a fermented juice of the agave, or it’s stouter cousins, tequila and mescal.
France took over the Mexican government in 1861, while the United States was preoccupied with Civil War. It put a member of the Austrian Habsburg dynasty, Maximilian I in charge, and he ruled until 1867, when France withdrew support and he was overthrown. During his brief reign, he never traveled without his two brewmasters, and introduced Viennese style dark amber beer (somewhat like today’s Modelo Negra) to Mexico. He also encouraged German immigration, and the newcomers brought their drinking preferences with them.
Porfirio Diaz assumed power in 1876, and instituted a very business-friendly environment. He stressed order in society, and investment in industry and infrastructure. Diaz worked to attract foreign capital, offering tax abatements for new investment in Mexican industry.
A wealthy businessman named Jose Calderon Penilla owned a trading house that reliably and profitably distributed Schnaider’s beer in northeast Mexico for seven years. As tastes changed and better quality beer became available in Mexico, imports from the U.S. grew 580% from 1884 to 1888.
The price for a mediocre local beer was 15-20 cents. An import cost 50-70 cents. As the average Mexican worker made about 45 cents per day, he couldn’t afford local beer, and an imported one was 30 times the cost of pulque. By contrast, in St. Louis, draft beer was selling at two glasses for a nickle. A local brewery was an economic necessity if there was to be any growth in the market for beer.
Monterrey, in northeastern Mexico had both a hot climate and no access to pulque. In 1886, Calderon Penilla launched a small beer brewing house adjacent to his ice factory in Monterrey. Encouraged by his early success, he came to St. Louis and met with Joseph Schnaider. Penilla sought technical help and the investment to build a large German style brewery in Monterrey.
Schnaider builds a market
Joseph Schnaider clearly recognized the opportunity for a clean reboot; this time without the burdens of a temperance movement, unionization, or even competition. Almost immediately he relocated to Monterrey, and began planning construction of a new brewery. Calderon Penilla died shortly after this, but Schnaider allied himself with a group of four local businessmen and formed a new company, Cerveceria Cuauhtemoc. Joe Schnaider owned fully half the shares in this enterprise.
Schnaider invested heavily in the Mexican brewery. He hired German brewing professionals to run it, and employed the latest technologies to ensure product stability and rapid growth. He supervised both construction and the beer making process, while journeying back to the States numerous times to hire personnel and buy equipment. A first class laboratory was built on site.
The new brewery opened in 1891 with 70 workers producing 1,500 bottles per day. Its first commercial product was Carta Blanca brand. Savvy to the benefits of promotion, Schnaider made sure to show off his new product. It won first prize at the Chicago Worlds Fair in 1893, Paris Exhibition in 1900, and the St. Louis Exposition in 1904.
Innovations in fermenting and the adoption of pasteurization moved beer brewing from a cottage industry to a global manufacturing process. By 1903, Cuauhtemoc beers were available throughout Mexico. The brewery employed 500-600 workers and turned out 80,000 bottles and 100,000 barrels per year. Seven years later, this grew to 300,000 bottles with the same number of barrels.
The overwhelming success of the brewery transformed Monterrey, as vertical integration and need for cheap bottles and boxes birthed Mexican glass and packaging industries. The development of better transportation for moving beer attracted more industries attempting to exploit greater reach. The reduction in bottle costs drove beer prices down and the brewery’s market share in Mexico grew from 29% in 1900 to 53% in 1910. Cerveceria Cuauhtemoc became the largest privately owned company in Mexico.
Buoyed by his early success at Cerveceria Cuauhtemoc, Schnaider expanded his operations to Guadalajara in 1897, and bought a brewing plant he called La Perla.
He introduced five more regionally successful beers there, while maintaining his majority stake in Cuauhtemoc.
Here come the revolutionaries
1910 was a high water mark for the next few years, as something else brewed in the rural countryside. The Mexican Revolution began, and the businesses of Monterrey, wanting only a stable political climate in which to conduct business, supported the existing regime. High profile raids by populist firebrands Emiliano Zapata and Pancho Villa made this a good time for neither peace nor business stability in Mexico.
Villa joined forces with Venustiano Carranza in 1913, and the federal army slowly crumbled. The U.S. quietly backed the rebels, and refused to recognize the regime in place at the time. Mexican industries and the national economy tanked. In Monterrey, Schnaider’s brewery sustained itself by purchasing its own locomotives and engineers, while keeping the tracks open with strategic bribes. When the government finally collapsed in 1914, Schnaider’s brewery lost its political cover.
Mexico devolved into civil war in late 1914. Pablo Gonzalez led Carranza forces in a march on Monterrey. The owners of the brewery fortified it against siege, and men and arms readied their defense. They hoped to hold on until government troops rode to the rescue. Gonzalez got there first, and took the city in two days. The cervecería owners didn’t want to see the brewery ruined by shelling, and the rebels agreed not to damage it.
Carranza realized that he needed beer revenues to pay for promised reforms and to buy more arms. The brewery owners fled the facility, heading for Texas. The remaining business leaders in Monterrey became “guests” of Gonzalez in what was called “ the aristocrat’s hotel,” and were held for ransom there.
Schnaider plays some hardball
Gonzalez ordered brewery production resumed, with all proceeds held as payment for fines from the now-absent owners. Aware of the generally negative attitude President Wilson held toward the rebellion, Joseph Schnaider appeared in Washington D.C. three weeks after his brewery was confiscated. He protested directly to the State Department, alleging that huge forced loans were being imposed on the brewery. Schnaider succeeded in securing a quick response.
In June, 1914, Secretary of State William Jennings Bryan messaged the American consul in Mexico, offering a reasonable settlement to Carranza, and also messaged Gonzalez with a reminder that US interests should be respected. He further wrote Carranza, expressing concerns about US interests, and added that he was sending Schnaider to him as his emissary.
Gonzalez, who must have been feisty indeed, pointedly responded that the brewery was a Mexican corporation, juridically Mexican, regardless of nationality of ownership; and claimed there were no forced loans – only fines to be paid for efforts to impede the government during the recent unrest.
The American consul appealed Gonzalez’s position to Carranza, who kept them waiting three days for an audience. He then waved away the thick legal documentation the consul and Schnaider presente. Carranza ignored the offer of a 150,000 peso loan from Schnaider, and suggested the two men discuss things with lesser officials. Schnaider thanked the consul and returned to San Antonio. Schnaider’s associates, de facto exiles, stayed in Texas for the next two years, until the always fluid Mexican political climate settled enough for them to return. By 1920, production by Cerveceria Cuauhtemoc hit a new high.
The end of Joseph and continuation of Mexican beer
The La Perla brewery stayed in the Schnaider family until 1934. Joseph built a large mansion in Guadalajara, and a lake home nearby at Lake Chapala. He and his family lived there for several decades. Schnaider took trips to St Louis, and to his fathers old home in Baden, Germany. Joseph Jr passed in 1922 at age 64, in Baden, the same place his father died..
During a recent wave of global consolidation, both his original and his later breweries were absorbed, in a merger with Heineken in 2010.
Schnaider’s heirs to this day hold shares in what is now the Cuauhtemoc/Heineken Group, Mexico. The palette of beers offered by Cuauhtemoc included Carta Blanca, Bohemia, Superior, Tecate, Sol and Dos Equis, John Steinbeck loved Schnaider’s product, writing “Ah, Bohemia beer and the Pyramid of the Sun; entire civilizations have created less.” I’m not aware of any thoughts he shared regarding Schlitz or Budweiser.
On the City of Monterrey website, the Historical Archives of Monterrey has a note titled; “Joseph M. Schnaider – Father of Carta Blanca Beer”. Eduardo Cazares Puente wrote an excellent writeup on Diario Cultura called (in Spanish) “Joseph Schnaider, The Master Of Beer.” High praise from faraway places for a local brewer with a great second act.
Tying up loose ends in St. Louis
In 1885, Schnaider’s Chouteau Avenue Brewery was one of few nearly self-sufficient brew houses in St. Louis. It employed a force of eighty, and featured natural cellars, a spring, bottling facility and malt house. It also boasted the famous Schnaider’s Gardens. Joseph lived nearby at 1100 Mississippi Avenue, in a house his mother built for him in 1882.
A series of brewery worker strikes in the later 1880’s hastened the consolidation of eighteen major St. Louis brewers, including Chouteau Avenue Brewery. This trust, the SLBA, lost its independence to a British syndicate in late 1889. Joseph sold his house and moved to Mexico in 1891.
In 1893 the Chouteau Avenue Brewery closed and the beer garden was abandoned. The main brewery became a plant for ice production and refrigerated storage. The beer garden continued on, under shaky management. Just ten days before the great tornado of 1896, the Gardens, now called Terrace Park, hosted a week filled with vaudeville performances, concerts, trapeze performers, a child artist, a boxing pony and others. By then there was a midway with sideshow attractions.
The tornado did a number to the beautiful Lafayette Square retreat, and the Gardens were razed to provide land for the Roberts, Johnson and Rand Shoe Company plant in 1903. All that remains of the brewing complex is its old malt house, award-winningly rehabbed by Paul and Wendy Hamilton as the Malt House Cellar, Grand Petite Market, PW Pizza, Moulin, and Vin de Set.
Joseph’s house at 1100 Mississippi Avenue met the wrecking ball in 1958, having changed hands six times and been converted to a rooming house. It was vacant and vandalized in the two years before demolition.
Schnaider’s brewery building was finally demolished in 1960. Ubiquitous amateur historian William Swekosky enjoyed witnessing the destruction of the brewery, stating; “Acme Wrecking Company is having the grief, as steel beams covered with cement are some of the problems, thick walls of brick and stone; those Germans built them to last.”
Epilogue
The most interesting man in the world? Well, certainly the most intriguing American in early Monterrey, Mexico, and well worth remembering here in Lafayette Square . His Mexican beer brands are still very much in demand, while dozens of St Louis labels have passed on to the realm of memorabilia collectors.
Finally, a wonderful Tex-Mex collaboration (Doug Sahm, Augie Meyer, Freddie Fender and the incomparable Flaco Jimenez) extolling the joy of one more beer, regardless of which side of the border you’re on…
Thanks to many sources, including:
National Park Service; National Register of Historic Places; https://dnr.mo.gov/shpo/nps-nr/05001281.pdf 2005.
The Making Of The Mexican Border; Juan Mora-Torres; University of Texas Press; 2001
The Monterrey Elite And The Mexican State 1180-1940; Alex M. Saragoza; University of Texas Press; 1988
The Lost Caves Of St Louis; Hubert and Charlotte Rother; Virginia Publishing Company; 1996
Industry And Underdevelopment – industrialization Of Mexico 1890-1940; Stephen Haber; Stanford Press; 1989
Joseph Schnaider, The Master Of Beer; Relatose Historias; Eduardo Cazares Puente;http://relatosehistorias.mx/nuestras-historias/joseph-schnaider-el-amo-de-la-cerveza
The Cerveceria Cuauhtemoc And The Industrialization Of The Mexican Northeast; Universidad Autonoma De Nuevo Leon (from Spanish).
Joseph M. Schnaider; Father Of Carta Blanca Beer; Ciudad De Monterrey Gobierno Municipal website (from Spanish); 2016
The Birth Of The Brewing Industry In Mexico 1880 – 1910; Gabriela Recio; University of California at San Diego; 2004.
St. Louis Brews; Herbst, Roussin, Kious, and Russell; Reedy Press; 2015.
St. Louis Post Dispatch; May 17, 1896.
Notes by William G Swekosky; Missouri Historical Society.
Parts one https://lafayettesquarearchives.com/1881-schnaiders-beer-empire-part-1/ and two https://lafayettesquarearchives.com/1887-schnaiders-beer-empire-part-2/ are also available for your review.
Haha. That was a great one Mike!!
Mike,
You’re trending beer-themed posts… I love it.
All your research makes you the most interesting man in the world!
BudMan Dan