The Beer Dance: How Schlafly Craft Beer Shook Up St. Louis

ST. LOUIS ( MainStreet) -- Schlafly Brewing Co.'s win against Boston Beer Co.'s ( SAM) Samuel Adams in our Beer Dance craft beer bracket last week looked like an upset. But just beneath its head was an outpouring of local pride that's been brewing for quite some time.

Schlafly has grown from an 880-barrel-a-year operation founded in a small St. Louis taproom in 1991 to a 15,000-barrel bottling operation in 2003 to a nearly 50,000-barrel enterprise with two restaurants, almost 50 styles of beer and distribution in 12 states. It doesn't give its beers wacky names -- its Biere De Garde saison and Oktoberfest Marzen seem downright quirky compared to its straightforward Pale Ale and Hefeweizen. Schlafly's production is still well below the nearly 2.5 million barrels of Samuel Adams brewed at facilities in Boston, Allentown, Pa., and Cincinnati, but looks a bit bigger when you compare Schlafly's 16,000 followers on Twitter to Samuel Adams' little more than 8,000.

"We had our annual staff meeting last Monday, and they showed us where all our money goes," says Troika Brodsky, Schlafly's communications director. "Our advertising and marketing budget was literally 3% of our spending, so in my world I don't have a budget on top of my paycheck. I have a couple of platforms and how far can I leverage them."

Three years ago, Brodsky didn't even have that. He has worked at Schlafly for the past decade as a graphic designer but only moved to his position behind the e-mails, tweets and Facebook profiles three years ago when he set up the brewery's first Twitter and Facebook pages.

"The level at which I'm plugged in is not necessarily something I want to be doing for the rest of my life," Brodsky says. "I swear it's made me more neurotic and I'll feel phantom buzzes in my phone and pull it out to check it, but if you're a community manager managing social media for a company, you have to do that because the expectation from people is that Facebook and Twitter communication is immediate."

When it came to the beer bracket, however, the big assist Brodsky received from his brewery's St. Louis fans and from the city in general was just as immediate. Outnumbered 150,000 to 17,000 by Samuel Adams' Facebook friends, Brodsky shifted his focus to Twitter and asked St. Louis' heavy hitters for help. More than 80% of all Schlafly beer is sold within the St. Louis metro area, so Brodsky asked Mayor Francis Slay and Missouri Sen. Claire McCaskill to tweet out a cry for help to their followers.

Support for Schlafly's Dry Hopped American Pale Ale came in from fans across city and from the St. Louis diaspora across the country for weeks. The sentiment behind it started building more than three years ago in November 2008, when InBev purchased Anheuser-Busch ( BUD) for nearly $52 billion, laid off U.S. employees, cut the pay of those who stayed, stopped making pension contributions to retirees and cut those same retirees' health benefits.

"In St. Louis, we have such a rich history of beer here, but the story has gone from having the biggest brewer in the world here and everyone having a neighbor who worked for them to the sale going through and the story completely changing," Brodsky says. "The people in St. Louis are just really excited to have something to rally around."

To understand St. Louis' support of Schlafly is to understand its beer heritage. In the 1800s, just before Prohibition, St. Louis was home to 40 breweries. Those breweries helped foot the bill for the 1904 World's Fair and helped St. Louis become the third-largest city in the U.S. for a time. After Prohibition, when consolidation left breweries scrambling for their lives, Anheuser-Busch soaked up more than 50% of the nation's beer production and poured it back into St. Louis through jobs and benefits.

"Anheuser-Busch is not known locally as Anheuser-Busch, it's known as The Brewery," says Dan Kopman, who co-founded the craft brewer with partner Tom Schlafly in 1991. "There are very few big public companies that people refer to them by what they make rather than the name of the company."

Schlafly still not only speaks in respectful tones about Anheuser-Busch and its connection to the city, but still gives it a great deal of consideration when mulling growth. Schlafly has managed to get multiple taps for its beer in Busch Stadium for Cardinals games, but Kopman still refers to Schlafly's "place" in St. Louis behind A-B and the deference required to prevent beer growth in the city from becoming "a fistfight."

Kopman notes that St. Louis now has nearly 20 small breweries joining The Brewery within city limits, but notes that A-B still plays a large role in the St. Louis Brewers Heritage Festival in June that features city brewers creating and serving unbranded styles of beer just outside Busch Stadium. Both Kopman and Schlafly factored A-B into their original business plan, but Kopman admits he never prepared for the sale of A-B when he returned from a job at Young's Brewery in London to open his own facility.

"When I moved back from England and we started this small brewery, we knew it was a long-term survival project in which we would start very small selling beers over the bar because no one would sell our beer," Kopman says. "Part of that was that they were unfamiliar with other beer styles, but part of that was the loyalty that they felt they owed to Anheuser-Busch, which in many cases was well-deserved."

That all changed in 2008 and Schlafly's sales skyrocketed in the wake of the A-B sale. Kopman figured Schlafly could always be a nice local beer and perhaps a regional product, but the sale made him and his partner wonder "what we're going to be when we grow up." Schlafly has already begun distributing beer to Washington, D.C., Virginia and Maryland as the brewery attempts to lobby the government for graduated excise taxes on craft brewers. On May 17, Schlafly makes its first appearance in the New York metro area when it puts 16 of its beers on tap at Barcade in Jersey City, N.J.

The A-B sale worked in Schlafly's favor, but neither Kopman nor anyone else at Schlafly seem to be clicking their heels over it, given the cost. Neighbors lost their jobs, former lifelong A-B workers are now opening small breweries in St. Louis and some A-B brewers have jumped on with Schlafly as consultants. In a city that's lost residents each decade since the 1950s and is just starting to see those losses dwindle after dropping from more than 856,000 in 1950 to just under 320,000 in 2010, the pain of landmark institutions is felt by everyone.

"The community felt betrayed," Kopman says. "You think about the Cardinals and Anheuser-Busch and those were two of the institutions that helped define this town and keep St. Louis a city of the world instead of just another city in the United States, so it was such a blow when Anheuser-Busch was sold."

That's how a little gimmicky beer poll and bracket on a business Web site becomes a big deal. That's how a 50,000-barrel brewer not only competes with the biggest brewery craft beer has to offer, but does so with respect and cordiality. That's why Schlafly's Brodsky contacted his counterpart Nick Gosselin at Boston Beer during the matchup and why Gosselin asked Brodsky for "some of that championship beer" when it was clear Schlafly was about to win.

Whether in sizing up brewing competition or putting out fires in the comment fields, humanizing the people they communicate with has worked wonders for both Schlafly and Brodsky. When it comes to dealing with consumers, competitors or critics, Brodsky says a bit of openness, flexibility and familiarity with the subject go a much longer way than money spent on outside consultants.

"Anyone who claims to be a 'social media expert' is kind of blowing smoke, because we're all learning and it's constantly evolving," Brodsky says. "What you want is someone who is bright, who knows the product and who you trust to be able to talk to your consumers without monitoring everything they're doing."

As for Schlafly and the St. Louis beer community, Kopman figures the best still lies ahead. The goal still has to be 40 breweries, because that was the number before prohibition, and Kopman feels the city is in the right part of the country and has the right resources to realize that potential again. Looking back on the Beer Dance win, Kopman thinks the polls indicate one thing more than any other: That there are fewer distractions in St. Louis when it comes to brewing culture.

"We don't have the mountains and we don't have the oceans, but for a couple hundred years we've been the leading brewing city in the United States," Kopman says. "Some may feel that position has diminished a bit, but I assure people around the country that the passion is still there."

-- Written by Jason Notte in Boston.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.

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