Monday, October 10, 2016

Shorty Kuenzl, Lee Beverage, and the Undoing of the Oshkosh Brewing Company

David Uihlein was probably glad to see Shorty Kuenzl go. The 63-year-old treasurer of the Oshkosh Brewing Company was too tied-up with the past. Kuenzl was the last remaining member of the OBC board of directors whose family history traced back to 1894 and the origin of the brewery.

A 1950s picture of Shorty Kuenzl in his office at the Oshkosh Brewing Company
Uihlein, who purchased controlling interest of OBC in 1961, represented a break with the past. And he was intent on recasting the brewery in a mold of his own making. When Shorty Kuenzl retired in 1963, the lineage he embodied came to an end. There could be no mistaking that this was now David Uihlein’s brewery.

David Uihlein, right, in the brewhouse of the Oshkosh Brewing Company
What Uihlein didn’t realize was that losing Shorty Kuenzl would help bring on the demise of OBC. Soon after retiring from the brewery in the spring of 1963, Shorty reappeared as a competitor. He had no intention of calling it quits. Beer was his life.

Shorty Kuenzl’s grandfather, Lorenz Kuenzl, had helped launch the Oshkosh Brewing Company. Shorty went to work at OBC at the close of Prohibition in 1933. He became the brewery’s treasurer in 1940. He also worked as sales manager. Shorty helped set the course for OBC as the brewery attained its peak in the late 1950s. It was a family business. He was knit to it.

Kay Kuenzl-Stenerson remembers her grandfather’s bond to OBC. “Every glass in our cupboard, every paper cup I drank out of, the t-shirts I wore had Chief Oshkosh Beer on it,” she says. “My grandpa’s identity was the Chief Oshkosh Brewery.”

The association began to unravel in 1961. Early that year, the Horn and Schwalm families, who together held controlling interest in the brewery, began privately negotiating the sale of their shares to David Uihlein. At the time, Shorty Kuenzl owned approximately 14% of OBC’s issued stock. But with nearly 52% of OBC stock held by the Horn and Schwalm families, there was nothing he could do to prevent the sale.

On August 16, 1961 David Uihlein announced that he had purchased controlling interest of OBC. Uihlein appointed himself the brewery’s president.

Shorty Kuenzl remained as treasurer at OBC. That wouldn’t last. Relations between he and Uihlein were strained. Shorty retired from the brewery two years after the sale. Uihlein replaced him with a former race-car driver named Carl Marchese. He was an Uihlein cronie with no experience in the beer business. Unwittingly, Uihlein was setting the stage for his own undoing.

Shorty Kuenzl didn’t waste much time in exacting a toll on his former boss. Almost immediately upon leaving OBC, he purchased Lee Beverage, a beer distributorship based in Oshkosh.

Lee Beverage, had previously posed little threat to OBC. Its primary brands – Old Style and Pabst – were sold as premium beers. A case of either of those beers usually sold for about a dollar more than a case of Chief Oshkosh Beer.

Shorty Kuenzl would change the direction of Lee Beverage. Instead of basing his business on higher-priced beers, he’d use budget beer to go head to head with Oshkosh's breweries – OBC and Peoples – which continued to control much of the local market.

As the local distributor for G. Heileman Brewing of La Crosse, Lee Beverage had access to a number of low-price brands the brewery had acquired over the previous decade. Among them was Kingsbury. Despite almost no promotion, Kingsbury had been selling moderately well in Oshkosh since the mid-1950s.

Shorty Kuenzl was well aware of the potential of the brand. In 1957, he had been involved in tracking the local impact of Kingsbury for OBC. He realized that his predecessor at Lee Beverage hadn’t used the beer to its full advantage. That immediately changed when the Kuenzl family took over the business.

Lee Beverage began to heavily promote Kingsbury in Oshkosh. Ads for the beer appeared in the Oshkosh Daily Northwestern just days after Lee Beverage had been sold.

Kingsbury was all about price. It was among the cheapest beers in Oshkosh. As further incentive, a case of Kingsbury was often offered with an additional free quart of beer. It was a tactic, OBC and Peoeples found impossible to compete with.
August 25, 1966, Oshkosh Daily Northwestern
Lee Beverage ramped-up quickly. The company outgrew its small warehouse on 6th Avenue. Shorty purchased three acres in the Oshkosh Industrial Park on Oregon Street where he had a new facility built to house the business. Lee Beverage was now a force to be reckoned with.

But there was conflict at the heart of Shorty’s new endeavor. He still owned that 14% share of the Oshkosh Brewing Company. The success of Lee Beverage was chiseling away at the value of his OBC holdings. If Shorty was conflicted, he didn’t let it interfere with his work. He threw himself into building the beer distributorship. The entire Kuenzl family was with him.

Shorty’s sons, Bud, who worked for OBC; and John, who had recently completed military service; both went to work for Lee Beverage. Kay Kuenzl-Stenerson, daughter of Bud Kuenzl, recalls how they all pitched in.

“Almost right away, when Lee Beverage was bought, my mom went to work there. She was probably the fourth employee. She did the book work. Next my dad joined, before that he was still working at OBC. He came on to do pre-selling. We had the phone ring at our house as well as at the business. One ring was ours, two short rings was Lee Beverage. I was taught to answer the business phone when my parents weren’t home. Many Friday nights I had to take an order, and get a hold of my dad, so he could take a half barrel or whatever to Beaner’s, College Inn, or wherever. My family moved to Oregon Street to be close to the warehouse. Lee Beverage grew because of hard work by all the Kuenzl's.”

Meanwhile OBC was tanking. From 1964 onward, production at the brewery tumbled. Uihlein fought to stanch the bleeding. He went on an extended tour of local taverns trying to boost the declining sales of Chief Oshkosh Beer. It was to no avail.

At the same time, Shorty Kuenzl was also making the rounds. “My grandpa, Shorty, went to his old OBC accounts,” says Kuenzl-Stenerson. “He was well liked and got many of them to take on Old Style to help Lee Beverage grow.”

Lee Beverage’s ascent continued. OBC imploded. In 1971 the brewery closed. Later that decade, Lee Beverage purchased distributorships in Sheboygan and Eau Claire. It was the beginning of a series of acquisitions that would position the company as one of Wisconsin’s top beer distributors. That remains the case. Lee Beverage of Wisconsin continues to operate from its base in Oshkosh.

For Shorty Kuenzl, the victory had to have been bittersweet. He was 63 years old when he aligned his family with Lee Beverage. In the latter stage of his life he found himself in the disorienting position of working against the brewery his ancestors had helped launch, a brewery he had dedicated much of his life to.

Lorenz “Shorty” Kuenzl died in 1986. He’s buried in Riverside Cemetery near his grandfather, Lorenz Kuenzl, a founder of the Oshkosh Brewing Company.

Kay Kuenzl-Stenerson remembers her grandfather fondly. She paints a more complete picture of Shorty Kuenzl.

“He loved Westerns, read them and watched them on TV, Matt Dillon was his favorite. He made the best homemade lemonade, very tart. He like playing cards and spent many an evening at the kitchen table playing canasta. He told great stories, and had a warm laugh. He liked to BBQ, and lived a pretty simple life at home, there wasn’t a lot of partying or fancy type of things going on in his life, really no high society stuff. My grandparents were pretty down to earth, quiet people. And he always called me Cookie.”

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