1889 – Joseph M Schnaider’s Second Act

A Legendary Joe In Old Mexico

 The 1880’s were a time of rapid technological change in the beer world, creating a business advantage for those who knew how to play it. One of the first breakthroughs was mechanical refrigeration, which eliminated the need for caves, allowed for year-round production, and when extended to railway boxcars, enabled regional and national distribution. Mass production reduced costs all down the line, so well-capitalized 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 were in a race to modernize. The expense required to mechanize production and bottling was prohibitive for 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. 

In 1889, eighteen noteworthy St Louis 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 out. Member brewers were allowed to maintain their brands, but many production plants were shuttered and combined with others. 

The writing seemed on the wall for Joseph M. Schnaider. By nature a risk-taker, he seized a new opportunity far to the south. 

In Mexico before 1890, breweries were small scale affairs offering a poor quality product within a tiny area. Growth of a domestic beer market was hindered by the imposition of a punitive government tax on production, in addition to lack of ice, capital, technology and transportation. Local tastes tended more 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 at war with itself. 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 Negro Modelo) to Mexico. He also encouraged German immigration, and the newcomers brought their drinking preferences with them. 

When Porfirio Diaz assumed power in 1876, he instituted a very business-friendly environment, stressing calm and order in society, and investment in industry and infrastructure. Diaz worked to attract foreign capital as well, and offered tax abatement for new investments in Mexican industry. 

A wealthy businessman named Jose Calderon Penilla owned a trading house that had reliably

Don Jose Calderon Penilla

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 US grew 580% from 1884 to 1888. The cost for a mediocre local beer was 15-20 cents, and an import from 50-70 cents. The average Mexican worker made about 45 cents per day, however, so couldn’t even afford local beer. An imported beer 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 for any growth of a 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 the results, he came to St Louis and met with Joseph Schnaider, seeking technical help and investment in building a large German style brewery in Monterrey.   

Joseph M. Schnaider clearly recognized the opportunity for a clean reboot; this time without the burdens of a temperance movement, unionization, an existing brewery of aging equipment, or even competition. He relocated, almost immediately, to Monterrey, and began planning construction of a new brewery. Calderon Penilla died soon after, but Schnaider allied himself with a group of four local businessmen and formed a new company, Cerveceria Cuauhtemoc. Schnaider owned fully half the shares in this enterprise. 

Joseph invested heavily in the building of the brewery, hired German brewing professionals to run it, and sought out the latest technologies to ensure product stability and rapid growth. He supervised both construction and beer making processes. He journeyed 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 1500 bottles per day. Its first commercial product was Carta Blanca brand. Savvy to the benefits of promotion, Schnaider made sure to show off his product. It received first prize at the Chicago Worlds Fair in 1893, Paris Exhibition in 1900, and the St Louis Exposition in 1904. 

Innovations in fermentation 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 led to the birth of the Mexican glass and packaging industries. Development of better transportation to move beer attracted yet more industry to exploit it. The reduction in bottle cost drove beer prices down and the brewery’s market share in Mexico grew from 29% in 1900 to 53% in 1910. Cerveceria Cuauhtemoc had become the largest privately owned company in Mexico. 

1910 was the high water mark for the next few years, as something else was brewing in the rural countryside. The Mexican Revolution began, and the businesses of Monterrey, seeking a stable political climate in which to conduct business, supported the existing regime.These were the days of raids by populist firebrands Emiliano Zapata and Pancho Villa – not a good time for peace or business stability in Mexico.  

 

Pancho Villa

When Villa joined forces with Venustiano Carranza in 1913, the federal army slowly crumbled. The U.S. quietly backed the rebels, and refused to recognize the regime in place at that time. Mexican industries and the economy tanked. In Monterrey, the brewery sustained itself by purchasing its own locomotives and engineers, keeping the tracks open with strategic bribes. When the government finally collapsed in 1914, the 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 were brought in for the defense. Their hope was to hold on until government troops could ride 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 took pains not to damage it. Carranza realized he needed beer revenues to pay for promised reforms and to buy more arms. The brewery owners fled the facility and headed for Texas. Business leaders that remained in Monterrey were made guests of Gonzalez in what was called “ the aristocrat’s hotel”, and held for ransom. 

Brewery At Monterrey – 1910

Gonzalez ordered brewery production resumed, with all proceeds held as payment of fines due  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 the brewery takeover, protesting to the State Department that his brewery had been confiscated. 

 Buoyed by his early success at Cerveceria Cuauhtemoc, Schnaider had moved from Monterrey to Guadalajara in 1897, and bought a brewing plant he called La Perla. He introduced five more regionally successful beers there. He also had maintained his major stake in Cuauhtemoc, and was quick to respond to the crisis there. He met with the State Department in Washington, further 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.

Pablo Gonzalez

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 position to Carranza, who in turn, kept them waiting three days for an audience. He then waved away the thick legal documentation the consul and Schnaider presented, ignored an offer of a 150,000 peso loan from Schnaider, and referred the two men to discuss things with lesser officials. Schnaider thanked the consul and returned to San Antonio. Schnaider’s associates, de facto exiles, would stay in Texas for the next two years, until the always fluid political climate settled enough for them to be encouraged to return. By 1920, production by Cerveceria Cuauhtemoc again hit a new high.   

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, with trips to St Louis, and to his fathers old home in Baden, Germany. Interestingly, Joseph Jr passed in 1922 at age 64, where his father died, in Baden. 

During the most 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 similar thoughts he may have had 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. 

Just to tie up affairs, back in St Louis, there were also changes galore:

By way of quick review, in 1885, Chouteau Avenue Brewery was one of the 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, in addition to the famous Gardens. Joseph lived very nearby at 1100 Mississippi Avenue, in a house his mother built for him in 1882. 

There was a series of brewery worker strikes in the later 1880’s which hastened the consolidation of the eighteen major St Louis brewers, including Chouteau Avenue Brewery into the SLBA, which then 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 was closed and the beer garden abandoned. The main brewery became a plant for ice production and refrigerated storage. The beer garden continued on, under shaky management. Here’s a sample of their line up from just ten days before the great tornado of 1896:

The tornado did a number to the beautiful Lafayette Square retreat, and the Garden was 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 was wrecked in 1958, having changed hands six times and

1100 Chouteau By Swekosky 1958

been converted to a rooming house. It was vacant and vandalized for the two years before demolition. The brewery itself was demolished in 1960. The ubiquitous William G. Swekosky had fun witnessing the destruction of the brewery, stating; “Acme Wrecking Company are 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.”

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.  

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; relatosehistorias.mx/nuestras-historias/joseph-schnaider-el-amo-de-la-cerveza (from Spanish)

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. 

Tags: , , , , ,