A statue of the legendary patron of brewing, King Gambrinus, stands proudly in a snow-covered courtyard at Pabst, the oldest brewery in Milwaukee.
But the toast of good health he offers, a gold cup hoisted high, seems to mock the town of Milwaukee. Once heralded as the beer capital of the world, Milwaukee now is the home of only two breweries, Miller and Pabst. And the city may lose Pabst, the last independent brewery here.
By the end of this week, California businessman Paul Kalmanovitz is likely to obtain majority control of Pabst through a tender offer, and the company is waiting to hear his plans for the Milwaukee plant.
Once there were some 72 breweries in Wisconsin, recalls Charles Walter of Walter Brewing, one of the four small breweries left in the state.
Now there are seven.
Walter Brewing, too, is in the process of being sold, reportedly to a Chicago businessman.
The Walters family came to the United States with numerous other German brewmasters and started operations in upper Wisconsin in 1889.
The German brewmasters were attracted to Wisconsin because of the abundant natural waters and the proximity to grain supplies. In addition, Wisconsin then offered -- and still does -- the highest per capita of beer consumers in the country.
Milwaukee became the home of the largest brewing families, who founded dynasties on such legendary names as Frederick Miller, Frederick Pabst and Joseph Schlitz. Other breweries also sprung up in Milwaukee, including Gettleman and Blatz.
For decades the name Milwaukee was synonymous with premium beer, and there were no shortages of brands capitalizing on the name. Schlitz labels boasted that it was the beer that made Milwaukee famous. Blatz said it was Milwaukee's finest beer, and one beer called itself Old Milwaukee.
Five visitors touring the Pabst plant the other day heard no mention of changes in the works as they wandered through the original mid-19th-century buildings and gazed down at brewery workers pushing out another day's production of the company's 13 brands.
But citizens of Milwaukee are coming to accept the exodus of major breweries. "We in Milwaukee say this is the home of great beer, but it's made somewhere else," said Robert Marotz, president of the Wisconsin State Brewers Association.
Analysts say the original attraction of pure water and grain no longer holds; companies now want to be close to their primary markets, such as California and the Sun Belt.
While water still is important to the image of high-quality beer, raw materials now come from all over the West, including Montana and the Dakotas.
"Transportation of the finished product, not the raw material, is a primary criterion," said one analyst.
Obsolete plants and high labor costs also have played a role in the area's diminishing influence in brewing.
Industry observers say that Miller presented a marketing challenge to the traditional old family breweries when it was acquired by Philip Morris in the early 1970s. With a seemingly unlimited marketing budget from Philip Morris along with the subsequent introduction of its Lite beer -- a category soon to capture over 20 percent of the beer market -- Miller pushed the beer industry into the 20th century, they say.
"What Philip Morris brought to Miller was a total ignorance of the brewing industry. It was a brewing industry before, not a marketing company. They were order-takers at Miller, not marketers," said Al Easton, vice president with Miller.
"People buy brands now, not beer," agreed an old-time brewing industry spokesman.
"The good-old-boy system of making beer this way and marketing it that way was out" when Miller started its aggressive campaign, said one industry source. "Schlitz never adjusted, and when it did it had a product quality problem and a bad advertising campaign."
Pabst's marketing response was hindered by a lengthy takeover attempt by Minneapolis entrepreneur Irwin Jacobs. Bill Smith from Pittsburgh Brewing, brought in to head Pabst in 1981, pins Pabst's real demise with the takeover attempt.
"At least we could have stabilized," Smith said. "But the takeover attempts left us vulnerable because we had to spin off our most valuable assets."
Pabst forfeited its Perry, Ga., plant and some of its brands to Heileman to pay off Pabst shareholders and stave off a Jacobs acquisition.
"Milwaukee is just a larger version of what is happening to the beer industry as a whole," said an industry analyst, pointing to declining sales nationwide. "The name of the game now is market share, and the industry is in the final stage of contraction. In a few years we may end up with only two to four national breweries and a handful of good regional breweries."