Dethroning the King

by Julie MacIntosh

  The Third spared no expense on marketing, which ranked alongside the brewing operation as the two areas in which quality mattered to him most. He routinely demanded things people felt were impossible, refusing to compromise on the final product because of the finite number of hours in a day or the amount of money something might cost. As they shot and reshot expensive commercials and raced around the country on private jets, his staffers got the sense that money and time didn’t matter.

  “He let costs get out of control,” said a former ad agency head. “But there was no question that he was going to spend what was necessary on advertising, in media, on promotions, and in production of the advertising to make it the world’s best. And he did. It helped create some of the best advertising of all time.”

  The company’s marketing dollars weren’t spent solely on the consumer—Anheuser spent a good chunk of change making its own employees and beer wholesalers feel special, too. It operated what it called a “three-tiered” distribution system that consisted of the company itself, hundreds of distributors who served as regional middlemen, and the retailers who bought beer from those distributors. A critical part of the system’s success was keeping the distributors happy. And one of the company’s most tried-and-true ways of doing that was its annual wholesaler convention. The conventions technically served as a forum for sharing information and presenting upcoming ad campaigns. Anheuser-Busch’s real agenda seemed to be hammering home that it was the biggest, most powerful brewer in the world. Its distributors—mainly men who were millionaires or on their way to becoming millionaires—would arrive dressed in black tie, their wives decked out in furs and jewels, to celebrate the success of the past year and pay tribute to the company that was helping them get rich. “The Third made so many of those wholesalers multimillionaires that they would have followed him anywhere,” said one person who attended the conventions. “There was a huge amount of deference paid, a huge amount of respect. Nobody second-guessed a Busch decision, even in a three-tiered system, which is odd.”

  To mark the festivities, Anheuser-Busch would put all of its company-branded toys on display—its hydroplane, its race car, its hot air balloon—and use the power of its name and pocketbook to draw the attendance of Hollywood legends such as Lucille Ball, Frank Sinatra, Sammy Davis Jr., and Paul Newman. Marketing honcho Mike Roarty rubbed elbows with them all, and even co-emceed one evening’s glamorous events in 1988 alongside Bob Hope and a bevy of showgirls who paraded in front of a curtain of dangling gold beads. When the conventions took place in California, the crowd and the nighttime performance roster were so thick with A-list movie stars that “you just got sick of it after a while,” said one attendee.

  “What we wanted to show was the big picture—to let people see that we’re number one,” said an aging Roarty 20 years later, as he reminisced at his home in an upscale suburb of St. Louis. “It was a great success, and it gave us an opportunity to say to our wholesalers: ‘We’re number one; make no mistake about it.’ ”

  Two drawings of Roarty by Al Hirschfeld, the world’s most sought-after caricaturist, hung carefully framed on the wall not far from where he sat, and his entire house was filled with photos of him hobnobbing with the rich and famous—a testament to the connections Anheuser-Busch had in entertainment, sports, and politics. A glint flashed in Roarty’s eyes as he recalled filming a commercial with Frank Sinatra, one of several “Rat Pack” members he knew well. “We had a lot of fun, Frank and I,” Roarty said, repeating that comment five minutes later in reference to Milton Berle. Movie stars, sporting legends, and powerhouse political figures were key to Anheuser’s efforts to show distributors that their devotion to Anheuser-Busch was well worth it.

  The conventions weren’t always easy, however, for Anheuser’s marketers. The Third liked to stage viewings of the year’s upcoming commercial lineup in front of a packed convention hall to whip up excitement and send his salesmen home in eager anticipation. Each TV spot usually elicited thunderous applause as the giant screens at the front of the room went black. But that wasn’t always the case.

  During one of the company’s annual conventions, the audience posted a muted reaction to an avant garde Budweiser commercial D’Arcy had produced. Gauging the crowd’s disappointment, August III stood up. “How many of you dislike this advertising as much as I do?” he asked. As the comment elicited 5,000 collective “Boos,” D’Arcy’s advertising staffers shrunk into their chairs.

  “I tell you what I’m doing right now,” The Third said, motioning for D’Arcy’s top executives in attendance to stand so the crowd could see. “I’m putting that agency on a plane tonight, they’re going back to St. Louis, and they’re going to create new advertising for Budweiser.” As the crowd roared in approval, the chastised D’Arcy team marveled at how deftly The Third had been able to turn the meeting into a power-solidifying, tribal spectacle.

  The Third held his marketers to incredibly high standards of both performance and behavior. “It was a family-run business with a ton of tradition and a ton of ego,” said one former agency executive. “It was slightly like working with royalty. There was a certain amount of decorum that had to be practiced. You spoke when spoken to, you made your point once, but you never made it a second time. Once it was settled, it was settled.” August III liked to put every new staffer to the test right away, prompting some of them to compare it to boot camp for the Marines.

  Marketing was The Third’s go-to tool in tough times, and it usually worked. Right before Christmas in 1976, he pulled a bunch of marketing managers into a conference room, flipped on the overhead projector, and slapped a transparency onto it that showed Miller’s sales coming on like a freight train. He pulled out a grease pencil, smashed its soft point down onto the screen, and then dragged it out to the right, extending both lines to show that Miller was soon going to overtake Anheuser-Busch. He turned his icy glare out toward the men in the room, staring them down one-by-one. “If these trends aren’t a whole lot different a year from now, a lot of you won’t be in this room,” he said. Then he flipped off the projector, wished the group a Merry Christmas, and walked out.

  The Third had a talent for judiciously doling out special treatment as reward for the stress, though his carrots were often calibrated to just barely make up for the harshness of the stick. The company lavished expensive but puzzlingly useless items on valued employees and ad agency staffers. As a Christmas gift, one executive received a full set of silverware emblazoned with the Anheuser-Busch crest. Another was gifted with a giant statue of an eagle, meticulously carved out of white alabaster, at his retirement party.

  One of Anheuser’s favorite perks, however, was a trip down to the company-owned compound on the Lake of the Ozarks, a snaking, 92-mile-long man-made lake west of St. Louis that teems with power boats, drunken partiers, and precariously balanced, bikini-clad women during the busy summer months. The Third would often invite up-and-coming marketers from various agencies out for a few days to the site, which was also used for company meetings and strategic retreats. It’s a relatively easy three-hour drive from St. Louis, but Anheuser-Busch often shuttled people there by helicopter, sometimes piloted by The Third himself. On one jaunt that proved particularly frightening for his co-passengers, The Third deftly swooped down over a pasture and buzzed a herd of grazing livestock.

  The lake compound’s decor was maintained in 1970s fashion well through the 1980s and early 1990s, with its shag carpeting and Naugahyde bedspreads. “It was so Hugh Hefner,” said one frequent guest during that time period. “It was just flirting with the period after disco—very luxurious, but had a dated look to it.” Behind a square of living units lay the tennis courts and an elevated helicopter pad. A grassy space for volleyball and badminton sat off to one side not far from the pool, and several refrigerators stocked with cold beer were scattered around the property for easy access.

  August IV was a big powerboat racer, and he loved to blow off steam by taking spins around the lake i
n the boats Anheuser-Busch moored at the compound, pushing them to bone-shattering speed as they smacked loudly across the water. “It was like a test to see what I could handle,” said one of The Fourth’s unwitting powerboat accomplices, who could feel his brain shaking in his helmet during one particular ride. If they started going too fast, The Fourth had instructed his passenger to touch the back of his hand.

  “I said to myself, ‘I’ll be damned if I’m touching any part of him to slow down!’ ” the passenger said. So The Fourth pushed the boat to its limit. “We’re going 110 miles an hour, knocking over guys in fishing boats with our wake. The wind and G-force is pulling at our faces. I thought: ‘What a foolish way to die.’”

  The Ozarks compound served as a testing ground for manliness and virility, at least for those who were unlucky enough to be subjected to The Third and The Fourth’s occasional dares. From its executive suite on down to its brewery floors and delivery routes, the culture of Anheuser-Busch was heavily man-centric. A person would have to be daft not to notice the locker room atmosphere, several former employees and advisors wryly joked. Anheuser-Busch sold beer, after all, not breast pumps. The fresh air of Missouri’s great outdoors tended to bring executives’ testosterone-fueled agitation to a head. Gary Prindiville, a sixth degree judo black belt and former police officer who worked in corporate security for Gussie, The Third, and The Fourth, performed more than a few physical acts of manliness in response to the Busch men’s challenges.

  On a sunny afternoon at the lake during The Third’s tenure, a group of marketing staffers stood down at the water’s edge where the powerboats were moored. Several of them were already a few beers deep on the day, and as they stood gazing out blearily over the lake, The Third turned to Prindiville and wagered that he couldn’t swim to the opposite shore and back. Despite the group’s beer goggles, it was clear that the lake measured a good distance across—probably more than half a mile. The entire lake, which is actually a dammed-up river, has more coastline than the state of California, and it teems with fast-moving motorboats.

  No matter, Prindiville thought. He walked down to the dock, dove in, and swam the distance. He later dieted to lose 75 pounds and finished Hawaii’s Ironman triathlon, again to prove his mettle to his Anheuser bosses.

  The Third was a fit man himself, and The Fourth employed a particularly enthusiastic bodyguard named Bong Yul Shin, a charismatic Korean tae kwon do and judo grandmaster, who had a way of luring staffers into the health room at the crack of dawn no matter how bad their hangovers were. For a while, Mr. Shin and The Fourth were inseparable—he would even join The Fourth on jogging routes through sketchy areas of St. Louis or other towns in which the crew was traveling.

  “Don’t cheat yourself!” Mr. Shin would yell across the room as the yawning ad executives punched the air and sweated in their karate suits, shooting occasional glances off to the side to gauge whether they were impressing anyone.

  More often than not, The Third’s group recreational trips to the lake served as thinly veiled work events. The outings were often charged with as much tension and stress as the days staffers spent at headquarters, working away beneath the whirring blades of his helicopter on the roof. Anyone looking to practice judo at dawn had to add it to his already-thick early morning roster—even out at the lake. “We’d spend a lot of time preparing, and it was a tough go,” said an advertising executive who attended several weeks’ worth of planning meetings there over the years. The Third went to bed around 8:30 P.M. regardless of how late everyone else stayed up, and presentations started each morning promptly at 7:00. “By the time we had lunch,” the executive said, “it felt like dinner.”

  The Third liked to multitask at the lake by listening to business presentations during meals. His subordinates obliged, of course, but they tended to leave the table hungry. John Greening, DDB Needham’s top ad honcho on the Anheuser-Busch account, was summoned to dinner at The Third’s house on the compound one evening in the early 1990s to present his agency’s newest work. After exchanging pleasantries and quickly organizing their materials, Greening and Susan Gillette, the president of DDB’s Chicago office, launched into their presentation. The Third, listening intently, tore into a pork chop his personal waiter had carefully positioned on his plate.

  Forty-five minutes later, they finished their pitch, and Greening sat down to his own cut of meat, which by that time had gone frigid and was as tough as shoe leather. He motioned to the waiter. “This pork chop is kind of cold and tough now. Could you give me some barbecue sauce?”

  The waiter paused, turned calmly, and bent down toward Greening’s ear. “He doesn’t approve of barbecue sauce,” the man said, nodding in The Third’s direction before striding back to the kitchen.

  Charlie Claggett made only one trip down to the lake compound, but it yielded similar results. Bob Lachky, Claggett’s main contact in Anheuser’s marketing department, walked up to him one afternoon with a nerve-wracking request: “August would like to have dinner with you.”

  “Oh, great!” Claggett replied cheerily as a mild panic swelled up into his throat. He showed up at August III’s living quarters that evening to find a handful of other marketers also waiting to take their seats at a long table. Andrew Steinhubl, Anheuser-Busch’s top brewmaster, was hovering somewhat awkwardly in the adjoining living room.

  “Andy, I’ll be with you in a minute,” The Third called out. “Have a seat on the couch.” Steinhubl obligingly settled his substantial frame into the nearest piece of furniture.

  Once the group settled around the dining table, a waiter pranced in and started delicately parsing out Cornish game hens, one by one, starting with The Third at the head of the table. Anheuser-Busch was pondering the launch of Bud Light, and in his characteristic quiz-show style, The Third started firing off questions. “What do you think?” he rat-a-tatted, sawing away ferociously at his game hen and shoving chunks of meat into his mouth as he worked around the table. “Do you think we should do this?” His dinner guests were too preoccupied with preserving their jobs to care that their own plates were still hen-free.

  After another minute or so of speed-polling the group, August carved down to the last bits of flesh that clung to his hen’s bare carcass. The waiter, meanwhile, who was still moving around the table at a comically slow speed, gently laid a hen to rest in front of the next hungry executive waiting to be served, just a few spots down from August III’s seat.

  “Okay, gentlemen, thank you very much,” The Third said, brusquely excusing himself and then turning his attention toward Steinhubl in the living room. “Andy, let’s go.”

  “And that was my dinner with August,” said Claggett, chuckling about it years later. His plate was still bare when The Third strode out of the room that night.

  Anheuser-Busch wasn’t a place for people who needed frequent pats on the back for a job well done. It attracted those for whom merely being able to survive and, if possible, thrive in that type of environment was reward enough.

  “Mr. Busch was the greatest field general you could ever work for,” said Bob Lachky. “Yeah, it’s easy to say he was tough and was acting irregularly. But you know what? When you got patted on the back by the man, you would go through a wall for him.”

  “To me, the biggest carrot was just succeeding,” Charlie Claggett said. “You knew that if you took this particular hill, you were doing what other people were not given the opportunity to do. There was a big stripe you got to wear when you worked for that company. And they paid their executives really well.”

  That was certainly true. Thanks to Anheuser’s reputation for doling out above-average salaries, the homes of its executives were scattered up and down the sloping hills of the nicest suburbs of St. Louis. Their children attended the best private schools, their wives drove luxury cars, and they served on the boards of the top area hospitals and arts organizations.

  None of these creature comforts was a given, however. A good number of marketing staffers were eit
her fired by August III or, if they worked at an agency, quickly yanked off the company’s accounts after falling out of his good graces. “I was never asked to leave a meeting, ever,” said one ad executive who worked with A-B for years. “I consider that one of the high points of my career. But the real high point is that we were able to get such great creative work out of such a dysfunctional environment.”

  Denny Long’s dismissal during the graft scandal was probably the most controversial firing of The Third’s era. However, D’Arcy, Anheuser-Busch’s ad agency for 79 years, can lay claim to suffering the most dramatic and definitive beheading.

  In 1994, Advertising Age reported that D’Arcy’s media buying unit in New York had accepted business from Miller Brewing, Anheuser-Busch’s arch-nemesis. There was probably no worse offense than this to August III, given how greatly he despised Miller and its parent, Philip Morris. William Melzer, managing director of D’Arcy’s St. Louis office at the time, ducked into Charlie Claggett’s office the morning the report came out.

  “Do you know anything about this?” Melzer said. “Media buying for Miller?”

  “Wouldn’t happen,” Claggett replied. “Why would we do that?”

  “I guess I’d better call New York to check it out and see what’s going on,” Melzer said, turning on his heel and striding back into his own office.

  The next time Claggett saw Melzer, Melzer was livid. “It’s true—we did it,” he said. “We bought media for Miller.” Knowing how volatile The Third could be, the two debated which of them would confront their most important client with the news. The Third had already heard the reports well before Melzer reached him, however, and he went ballistic. It was going to take more than Melzer’s efforts alone to calm the storm.