Milwaukee isnโt known as the Brew City for nothing, and a resurgence in the local craft brewing industry over the last decade means the nickname wonโt be going away anytime soon.
Chippewa Falls-based Jacob Leinenkugel Brewing Co. started brewing craft beers before it was cool, back in 1867.
Today, Leinenkugel Brewing is part of Chicago-based MillerCoors LLC and is driving double-digit sales growth for the MillerCoorsโ Milwaukee-based craft beer division, Tenth and Blake Beer Co.
Leinenkugel Brewing Co. is in its fifth generation of family management. Dick Leinenkugel is the business development manager at the companyโs Tenth Street Brewery in Milwaukee. Jake Leinenkugel is the president of Leinenkugel Brewing, and John Leinenkugel is a trade quality manager. The three brothers appear together in television ads for the Leinenkugelโs brand.
MillerCoors, the second-largest brewer in the country, has capitalized on the popularity of craft beer with Tenth and Blake, which was created in August 2010 to separate its craft, specialty and import beers from the larger Miller and Coors brands.
The company is named for the Tenth Street Brewery in Milwaukee and the Sandlot Brewery on Blake Street in Denver.
โTwo years ago, we decided that we really needed to put the appropriate level of focus, investment and capability in this part of the business to accelerate our growth,โ said Tenth and Blake president Tom Cardella.
While national beer sales are flat overall, Tenth and Blake craft brews such as Leinenkugelโs and Blue Moon are experiencing huge success.
MillerCoors reported in its second quarter earnings report that its net income had increased 9.1 percent from the same quarter a year ago to $436 million, driven in large part by the strong performance of the Tenth and Blake craft beer brands, such as Leinenkugelโs. Changing consumer tastes have led the company to shift its brand mix to capitalize on the popularity of Tenth and Blake brands, the report said. The divisionโs growth in the quarter was led by Leinenkugelโs, with a double-digit increase from its best-selling beer, Summer Shandy.
A family of brewers
Jacob Leinenkugel, immigrated from Meckenheim, Germany, in 1845. In that first year, he and business partner John Miller produced 400 barrels of beer, which were delivered by horse cart.
After innovating through prohibition by making soda water and a malt beverage called Leino, the Leinenkugel family was able to strengthen the company and go up against large national breweries with expanded sales and advertising over the next several decades.
A hospitality center was added to the Chippewa Falls brewery in 1979 so customers could learn more about the company.
By 1987, Leinenkugel was brewing about 67,000 barrels of beer per year. The next year, it was acquired by Miller Brewing Company, which later became part of MillerCoors LLC. These days, Leinenkugelโs produces at least 10 times that amount of beer, but still considers itself a family craft brewer.
A family-focused advertising campaign features the three Leinenkugel brothers โ Jake, John and Dick โ participating in outdoor activities in the Northwoods and touting the motto, โJoin us out here.โ The company also hosts a โfamily reunionโ at the brewery each year and several biking and canoeing events around the state.
โThe Miller policy (with Leinenkugel Brewing) was hands off, give them the resources to grow, but let them run the business,โ Dick Leinenkugel said.
The sixth generation of the Leinenkugel family is gearing up to continue the brewing tradition, with Jakeโs sons C.J. and Matt working at the company.
โBorn into beerโ
As business development manager, Dick Leinenkugel is helping to drive the innovative growth of Tenth and Blake.
He attended Marquette University from 1976 to 1980 and then entered the U.S. Marine Corps, where he was stationed in Hawaii.
After his service, Dick took a position with Kemper Sports Management as executive director of the LPGA Womenโs Kemper Open, held in Hawaii.
He wanted to gain outside experience, but ultimately came back to his family business. When he became a father in 1987, Dick wanted to come back home, so he pitched Jake on creating a sales position in Chicago.
โYou kind of are born into beer,โ Dick said. โYou certainly have a pride because it is your name for the beer and the product and for continuing the legacy that is Leinenkugelโs. The beer business is very demanding, and weโre stronger as three brothers rather than just two.โ
While Dick was entering the business, Miller Brewing approached the family about a partnership. Rather than starting its own brand to compete with Leinenkugelโs, Miller pursued an existing, popular beer company, Dick Leinenkugel said.
He worked in sales for several years before taking a Leinenkugel Brewing marketing role in 1998. Dick was leading sales and marketing for the company in 2008 when then-Gov. Jim Doyle asked him to become secretary of the state Department of Commerce. Leinenkugel said his private sector experience prepared him for the role.
โI had spent 21 years prior to becoming Commerce secretary in the beer business,โ he said. โIt helped me to give back to the state that has blessed me and my family and my familyโs business.โ
He exited the brewing company as Miller was transitioning into a joint venture with Coors.
โI couldnโt represent Leinenkugelโs or its business at that time in my professional capacity in Wisconsin as its Commerce secretary,โ Dick said.
His family seemed excited about his new role, but probably werenโt expecting it, he said.
โI think they were surprised. I remember calling my brother Jake when the governor had called me,โ Dick said. โThere was this moment of silence.โ
Jake says he initially thought Dickโs call was a joke. But Jake said he was glad his brother was getting a learning experience working to help all of the stateโs businesses.
In 2010, Dick resigned his Commerce position and entered the U.S. Senate race as a Republican candidate, vying with Middleton real estate developer Terrence Wall, Watertown small business owner Dave Westlake and Oshkosh businessman Ron Johnson for the GOP nomination. The winner was ultimately Johnson, who then ousted incumbent Russ Feingold.
Leinenkugel dropped out of the race because of criticism over his previous association with a Democratic governorโs administration.
โIt also made him well aware that, geez, the family business and beer is really where his strength and his heart is,โ Jake Leinenkugel said.
In November 2010, Dick joined Tenth and Blake as its business development manager.
โHeโs responsible for getting the Leinenkugel brand established with some of the largest chains in Chicago,โ Jake said. โI know what his strengths are, and Iโm just happy heโs back.โ
Corporate growth engine
Leinenkugel Brewing purchased the Tenth Street Brewery in 1995 to increase its capacity as it was introduced to a wider national audience.
The 11 employees at Tenth Street Brewery, 1515 N. 10th St., Milwaukee, now primarily produce the specialty Big Eddy series, which includes Russian Imperial Stout, Wee Heavy Scotch Ale and Imperial IPA.
Each brew has its own recipe of hops, malt and other ingredients. For example, the Imperial IPA contains five different varieties of hops, and the Honeyweiss beer contains Wisconsin honey.
The Tenth Street Brewery has an 85-barrel brew kettle, or 2,635 gallons per brew, compared with the 175-barrel capacity of the kettle in Chippewa Falls, which produces 5,115 gallons per brew. It is easier to make some of the more complicated recipes in smaller batches, Dick Leinenkugel said. There are so many hops in the Imperial IPA, it can clog the hop strainer.
โThese beers are so robust in terms of malt content and hop content that itโs more efficient at a smaller scale,โ Dick Leinenkugel said. โWe make about 40,000 to 50,000 barrels here (at Tenth Street per year). The capacity is all driven by the styles you make.โ
The Tenth Street Brewery is Milwaukeeโs second-largest brewery, after the main MillerCoors plant at 4000 W. State St.
The brewery tries to keep its craft feel, while taking advantage of MillerCoorsโ scale in shipping and distribution, Dick Leinenkugel said.
To be sure, those MillerCoors connections draw criticisms from some smaller craft brewers, who argue with the notion that the Leinenkugel brand is still a true craft beer.
MillerCoors also benefits from the Leinenkugelโs partnership, which lends a strong brand name associated with the popular craft trend to its new division.
Cardella has been tasked with defining the Tenth and Blake Beer Company.
โItโs been a fairly robust agenda of innovation and learning that has positioned us very nicely in the craft and specialty space,โ Cardella said. โJust the ability to focus on the smaller businesses that get a little bit lost in the scale of MillerCoors, but also from the standpoint of creating a different culture. I think the separation or the creation of a separate division has significantly enhanced our ability, but I think, also, itโs done a lot in regards to our reputation.โ
Dick Leinenkugel works on innovation at the Tenth Street Brewery, where heโs currently experimenting with barrel aging to accomplish rye and bourbon flavors.
โBrewing beer is like preparing food, and thatโs why it goes so well with food,โ he said. โItโs part art, and itโs part science. This is truly handcrafting โ (we) are literally putting it in these barrels by hand.โ
Tenth and Blakeโs newest innovations include two Leinenkugelโs brews coming out this fall: an Imperial Baltic Porter and a Lemon Berry Shandy. Blue Moon will also release a caramel spice seasonal beer.
โWhatโs been really important is over the last 25 years, it is still a business that is run by the family,โ Cardella said. โThat personal equity that that family has with the business is very important. It is about Jake and Dick and John and the fact that they are still very actively driving this business.โ
Looking to the future
At Tenth and Blake, Dick Leinenkugel, who lives in Menomonee Falls, has essentially been the Leinenkugel of Milwaukee, where he continues to oversee his familyโs brand, in addition to the companyโs other specialty and import beers, which include Blue Moon, Peroni Nastro Azzurro and George Killianโs.
โWe have always felt that the family is critical to and inextricably linked to the brand,โ he said. โJake and John welcomed me back, and Iโm glad to be back.โ
Dick, 54, could be heading back to Chippewa Falls soon. As he continues to work as business development manager, he is also preparing to become a potential successor for Jake, 60. Dickโs three children havenโt expressed an interest in the beer business, but Jakeโs sons are on the path to continuing the family legacy.
โI want (Dick) by the end of this year, which is right around the corner, to start to work side-by-side with me,โ Jake said. โThe biggest advantage is heโs so well-connected to the craft universe, he knows much more than I do about whatโs going on day-to-day in the craft industry.โ
Dick has led the way in developing Tenth and Blakeโs partnerships with other companies, namely a minority stake in Terrapin Beer Co. in Athens, Ga. and the acquisition of Crispin Cider Co. in Minneapolis.
โItโs a tribute to Dickโs knowledge, respect, skills and his ability to build very deep and beneficial relationships within the industry,โ Cardella said. โBecause of Dickโs ability to build relationships in the industry based on his knowledge but also based on the family background and the brewing background, itโs just an excellent background for the role he plays.โ