Headquarters: New Ulm
Employees: 65 full time, about 20 part time
Revenue (2016): N/A
Drinkers of a certain age might recall a time when the beer section of their favorite liquor store was dominated by bland, taste-alike lagers and pilsners from such titans as Miller and Anheuser-Busch.
Ted Marti remembers those days well; not only did the stranglehold enjoyed by those megabrands nearly derail his career before it got started, but it was almost the undoing of one of Minnesota’s most iconic family businesses.
Marti, president of New Ulm-based August Schell Brewing Co. since the mid-1980s, characterizes that time with typical understatement. “It was a tough time in the beer business because the big guys had all these advantages of scale,” he says.
Fortunately, Marti had a legacy of creativity and perseverance to draw on as he shepherded Schell’s through that dark era; after all, it had survived Prohibition by making soft drinks and near beer. To keep going during the 1970s and ’80s, the company opened hydroponic tomato gardens and even sold several of the prized walnut trees on its property.
That patience and ingenuity has more than paid off—Schell’s recently hit a steady annual volume of around 140,000 barrels. What’s more, Schell’s has established itself as the spiritual grandfather of the craft and small-batch brewers whose products are enjoyed almost to the point of obsession by millennial beer enthusiasts.
“Ted knows how to change with the times,” says Dan O’Gara, owner of O’Gara’s Bar & Grill in St. Paul. “There’s a good reason Schell’s is called Minnesota’s original craft brewery. It hasn’t surprised me that his brews have caught on with that niche.”
Marti, 66, represents the fifth generation of leadership at the brewery started by German immigrant August Schell in 1860. The great-grandson of August Schell’s son-in-law, Marti began at the brewery loading and unloading trucks, stacking empty cases and pushing a broom.
He assumed his current position in 1985, at a time when Schell’s was among a handful of regional brewers that had weathered tough times but was still limping along well behind the Budweisers of the world. But that was about to change. Small brewers in the Twin Cities such as Summit Brewing Company not only started popping up with new varieties of stouts and pale ales, but were profitable doing so. A hundred miles away in New Ulm, Marti watched with interest.
“We could see the writing on the wall,” Marti says. “To continue what we were doing—which was making American lagers that got lighter and lighter, in an attempt to compete with the giants—wasn’t going to get us anywhere.”
Marti sensed that a backlash was growing against what he terms “everyday, mundane” types of mass-produced beers. Schell’s put a toe in the water—which was turning into a wave—by re-introducing its bock beer, the copper-colored, caramel-flavored seasonal brew that was a traditional fall favorite of German brewers. He also tried to be creative with the aging infrastructure that Schell’s had at its disposal.
“We had a lot of capacity, so we had lots of other people coming to us to brew their beer,” he says. “We got exposed to lots of different kinds of ales.”
That experience showed Marti that the future was in diversification, and as the craft-beer craze has grown, so has Schell’s. But unlike the scores of small-batch brewers who seem determined to see who can create the most obscure flavors, Schell’s seeks further refinement of the German-style brews that are its bread and butter. That thirst for innovation within a traditional formula has even led Schell’s brewmasters to work with Dr. Jochum J. Wiersma, a small-grain specialist in the department of agronomy and plant genetics at the University of Minnesota, as it develops a new Munich-style helles lager.
“There’s a bit of what’s old is new,” says Marti. “We’ve perfected those German styles and added some twists to it—more aromatic hops. But we put a stake in the ground that said we are a German brewery and we’re proud of that.”
All three of Marti’s sons are involved with Schell’s at a time when, 157 years after its founding, it’s Minnesota’s largest brewery. The company is settling into its expanded brewhouse and a four-year-old building that holds eight 750-barrel fermentation tanks.
Along with the brisk sales it enjoys, the brewery’s headquarters, which are tucked into New Ulm’s south end near the Cottonwood River, are a popular tourist destination. Nine weekly tours of the brewery routinely sell out, and the brewery museum and gift shop offer mementos and souvenirs, as well as a view of the five pet peacocks that roam the grounds. But the brewery’s on-site taproom strictly limits how much beer it sells to tourists, Marti says, out of deference to the local establishments that sell Schell’s beers.
“We wouldn’t be here if it wasn’t for the bars and restaurants in New Ulm,” he says. “This city has been great to us.”
Marti’s plans for the last chapter of his career are about the same as they’ve been all along: Watch, learn and lead by example. “The most satisfying thing to me is that we were able to remain a family-run business and build a strong brewery,” he says. “I’d like to leave behind a fully functioning, well-oiled machine.”
1950 - Born in New Ulm, Minn.
1968 - Graduates from New Ulm High School as a three-letter athlete.
1970 - Member of the NCAA gymnastic championship team at the University of Michigan.
1972 - Earns B.S. in natural resources from the University of Michigan.
1975 - Begins working full time at the family brewery as a brewmaster.
1985 - Joins Schell’s management as president.
1984 - Introduces Schell’s Pils, a traditional Bavarian-style pilsner beer.
1990 - Starts experimenting with specialty beers such as pale ales.
2002 - Buys Grain Belt brand, making Schell’s the state’s largest brewery.
2014 - Oversees a $2 million expansion of Schell’s brewing facilities.
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