For 160 years, Schell’s has kept it All in the Family
The brewing company has seen many shifts in the industry and as Schell’s reaches this latest milestone, the company prepares to shift to the next generation.
Schell’s Brewery is the second oldest family-run brewery in the United States and President/CEO Ted Marti has started transitioning leadership over to his three sons, Kyle, Jace and Franz.
There is no set retirement date for Ted but as he reaches 70 years of age he said he will be stepping back and the day-to-day administrative business will shift to his son Kyle.
“It is kind of nice, we all have the different areas we are working in to move the business forward,” Kyle said. “Jace has a big part of working with the brewery department and Dave Berg, our other head brewer, coming up with innovations and pushing the business forward. Then there is Franz, who is the Swiss Army Knife of the place doing a little bit of everything. He works hard maintaining the grounds and the buildings.”
Ted said he will spend most of his time finding and cataloging artifacts from the brewery with his wife Jodi but will continue to check in with sons and offer his two-cents on the business.
Kyle said his dad will still consult and be a sounding board at the company and will remain on the board of directors.
Kyle and his brothers Jace and Franz represent the sixth generation of the same family running Schell’s. The family and the brewery can trace its lineage back to August Schell who founded the business in 1860.
August Schell came to New Ulm with the Cinncinnati Turners. His first business was a flour mill on Front Street. After a few years, he decided to build a brewery.
“He was not a brewer but he was a businessman,” Ted said. “He partnered with a brewmaster. It wasn’t too long later the partner got sick and sold out.”
Though August had never run a brewery before, he did come from a country that had a lot of breweries. Ted believed the brewery business was not completely foreign to August.
Ted found it interesting that several people who worked at Schell’s in the early days would start brewing businesses of their own, including Jacob Schmidt.
Schell’s was not the only brewery in Minnesota in the 1860s, but it was on the frontier with few to no real breweries west of New Ulm. Ted said in those days successful breweries needed good water and Schell’s had access to spring water and ice from the Cottonwood River.
Otto Schell was the second generation and made many improvements in terms of equipment. Ted said the brewery was likely the best-equiped brewery in the state at that time.
Kyle Marti said it was Otto who added the artificial refrigeration which was state of the art at the time. This brought Schell’s into the new age of brewing.
The brewery faced some of its greatest adversity during Prohibition. The company could no longer sell beer and had to change production. During this period the company was nearly sold, but the offer was $10,000 too low. Schell’s would be one of the fortunate breweries to keep its doors open until Prohibition ended.
Ted and Kyle said some of the greatest fundamental changes to the brewing industry happen after WWII. Around this era, beer became available in cans for the first time and home refrigeration became the norm.
Ted said beer drinking shifted from the tavern to the home. Beer distribution also changed. The distributors separated the breweries from the retailers.
“That fundamentally changed the industry,” Ted said.
Local breweries had strong business through the 1950s but the larger beer companies began to dominate.
“It was tough because we were all making the same kind of beer and the advantage goes to the big guys because they could out-advertise,” Ted said.
Ted took over the brewery in the mid-1980s when the brewery was a difficult spot. He said the equipment was older and run down and the company needed an infusion of capital. This is when they began dabbling in craft beers.
“There were lots of people looking for breweries to produce their beer for them,” Ted said. “We did a lot of contract brewing. If anything that helped us generate cash to do upgrades.”
Around this same time, Ted’s brother Georg began offering tours of the brewery to the public. Georg would play his accordion and entertain the crowds. These events proved popular. The first Bockfest was held in 1987.
This was a perfect time for Schell’s to take advantage of the growing popularity of craft brewing. By the 1990s there was a shift in perception toward small breweries and small local breweries were preferred. Ted credits the trend of craft beers on the next generation wanting more flavorful beers. As the original adopters of craft beers age, there are further trends toward healthy beers with lower calories and even a lower alcohol content.
Currently, the brewery is focusing on the 160th celebration. Schell’s had plans to larger group events, but the COVID-19 pandemic changed that. All year Schell’s has promoted 160 Random Act of Kindness events, including community outreach such as beer deliveries to the nursing homes that are under lockdown; flower deliveries to NUMC and a cash donation to local fire departments.
“We’re asking people on our social media channels to follow suit and help people in these tough times,” Kyle said.
They also released a line of specialty beer series called “Shift Happens.” The beer is released in four-packs of 16 oz cans.
“It was kind of a nice departure,” Kyle Marti said. “Our breweries each got a chance to use specialty hops.”
The Shift Happens series is a way for the company to discuss how things are brewed at Schell’s but also a chance to talk about the generational shift happening at Schell’s.
Reflecting on his time as President of Schell’s Ted said he was proud of rebuilding the brewery on the inside. “We’re capable of doing different beers and great beers,” he said. Ted believes his tenure will be remembered for moving August Schell’s from a typical American Lager to a respected craft brewery.
As his sons take over the family business the goal will be to build off this success.
“The goal is to let people know Schell’s beers are just as good as the big guys, if not better,” Kyle said. “We’re not just the Brewery down the street. We’ve invested 160 years into making beer as good as we are.”
Kyle believed the ongoing struggle will be keeping up with the market. “Change is the name of the game,” he said. “Being nimble is important. it is crazy how fast people like stuff and moves on to something else.”
Right now there is a trend toward Seltzer, but that could change soon. IPAs are still the darling of the industry. Kyle said Schell’s will continue to give consumers what they want.