Schell’s Brewing Company
Photos by Kris Kathmann
Schell’s Kitchen
New Ulm couple builds on family brewing tradition started the year before Honest Abe became U.S. President.
Perched on a New Ulm hillside overlooking the Cottonwood River, Schell’s Brewing Company produced 115,000 barrels of beer last year. Each barrel filled 14 cases. That’s a lot of suds.
At the helm of this fifth-generation family-owned-and-operated business is company president Ted Marti, the great-great-grandson of founder August Schell. Ted’s wife, Jodi, is the special projects coordinator, or as she said, “I do everything Ted doesn’t do.”
The company was founded in 1860 and survived the U.S.-Dakota War of 1862 unscathed. Throughout many changes over the last 151 years, the idea of continuity coupled with innovation has allowed the brewery not only to survive, but also to thrive.
“I always knew I’d be back here,” said Ted, a former gymnast and Olympics alternate. “During high school, I worked in production (bottling and cellaring), and in cleaning of the production area.” Cellaring is the process of filtering the beer into tanks before it is bottled or kegged.
Ted graduated from the University of Michigan in 1972 with a BS degree in natural resources. Originally a chemical engineering major, he switched to natural resources for the easier class load to pursue gymnastics. He went on to the University of Minnesota, where, he said, “I’m one paper away from having a graduate degree in Parks and Recreation Administration.” He also spent time with a gymnastics coach in California, hoping to compete in the 1976 Olympics.
“I returned to New Ulm in late 1974, when it was tough times for breweries,” Ted said. “Dad wanted to diversify and decided to begin a hydroponic tomato garden. He needed me, so I came back but continued to train for the Olympics. It was a real challenge. I probably wasn’t ready to come back at that time, but I came because of loyalty to family. I was doing gymnastics since age six. It’s a family tradition. August Schell was one of the founders of Turner Hall here in New Ulm. (The word ‘Turner’ means gymnastics.) There’s a lot of marching, followed by calisthenics. The motto is ‘sound mind, sound body.’ Every family member became a Turner. My dad and both brothers also were gymnasts.”
Although neither the hydroponic enterprise nor the Olympic hopes worked out—the latter because of an injury—Ted soon had a new challenge.
“When the brew master had a heart attack in 1978, I came to the brewery, where I was trained in baptism by fire. I didn’t have the full formal six-month training, but I now have the equivalent because I have studied at the Siebel’s Institute of Brewing in Chicago, in the Master Brewers’ Association Executive Brewing Course in Madison, Wisconsin, and at several breweries in Germany. Great-grandpa Otto Schell, went to brewing school in Germany, and our son Jace recently completed the course in Berlin, Germany and has two internships.” Two other sons, Kyle and Franz, are serving in the U.S. military.
Ted officially became the brew master and moved into general management when his father, Warren, retired in 1986. Ted handles the company’s finances, sales and marketing. Jodi, who is in charge of human resources, is known as “Mom Marti” to the 55 full-time employees (60 percent in the plant, 40 percent in administration, support and sales), 16 part-timers with the gift shop, museum and tours, and a few additional workers during the summer bottling season.
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Having studied floraculture and light horse management at the University of Minnesota, Waseca, Jodi augmented the formal gardens, and she oversees the garden staff. She met Ted when she created the floral arrangements for an industry appreciation event at the brewery in September 1974. They were married in May 1975.
“I continued to work as a florist for a while and then worked at AMPI as a credit manager,” Jodi said. “In 1992, I went out into the brewery and saw it was crazy-busy, so I said, ‘You should hire me.’” She has since developed the gift shop as well as the gardens.
“I do ordering for the gift shop and for our mail order business,” Jodi said. “We had a catalog, and now we’re also online. (Nevertheless, Schell’s revenue is 90 percent from beer and five percent each from soft drinks and peripherals.) I have to order things both for rural markets and metro markets, for promotional giveaways. In the shop we have everything from European glassware and steins to T-shirts, hats, jackets and promotional items. I’m a creative person, so one of my favorite times is redoing the shop into a Christmas wonderland. I also do point-of-sale advertising pieces, such as neon signs for bars or temporary signage for special events.
“The grounds here are a tourist destination,” Jodi said. “We offer public tours seven days a week from Memorial Day through Labor Day, private tours and off-season public tours. We get about 30,000 people every year, as well as giving complimentary tours to distributors. And many people come here to eat their lunch or wander through the grounds.” (Schell’s was a founding partner in the “Sips of History” beer and wine trail sponsored by the Blue Earth County Historical Society.)
Jodi handles public relations and coordinates Schell’s participation in special events, such as Toast and Taste at the Minnesota Landscape Arboretum in Chaska. Schell’s is the exclusive beer at events such as Stillwater Lumberjack Days and has a small sponsorship with sports teams—the Vikings and the Twins. Schell’s also is one of many participants at the Minnesota State Fair, where its beer is available on tap in Heritage Square, and at the Minnesota Renaissance Festival.
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“There are more events in parts of the country with a higher population, on the East and West Coasts, where there are more breweries and wineries,” Ted said. “You might see more small breweries popping up now. We’re probably unique, though, with so many tours. It used to be that visitors asked if they could buy a beer after a tour, but it wasn’t legal. With the new pint law it’s a future possibility, but we aren’t doing it yet, except for special events such as Bock Fest and the Minnesota Fire Department Charity Chili Cookoff.”
Jodi explained why Schell‘s doesn’t want to rush into serving on tap: “We don’t want to compete with the downtown bars. Schell’s has survived because the local bars have supported us. What’s good for New Ulm is good for us.”
It’s that philosophy that has led both Ted and Jodi to take part in community organizations. A partial list includes the Brown County Historical Society, the John Lind Home, Citizens Committee of the Brown County National Guard, New Ulm Hockey, New Ulm Legion Baseball, Brown County Beyond the Yellow Ribbon, New Ulm Turnverein (Turner Hall), Citizens’ Bank Board, the New Ulm Chamber of Commerce, Convention and Visitors’ Bureau, and the Brown County Agricultural Society. Ted has served dinner to U.S. troops in Kosovo and Iraq, and plans to do so in Kuwait next February. Then there are the industry-related organizations: the Minnesota Safety Council, The Master Brewer’s Association of America and the Brewers’ Association of America, which Ted has served as president.
Schell’s does a mix of radio, TV and social media advertising, along with sponsorships. The company’s sales representatives take part in 80 beer festivals a year throughout seven neighboring states—and Pennsylvania. Ted explained the anomaly thus: “About 20 years ago, the industry was changing, with craft beer gaining popularity rather quickly. New breweries popped up because consumers wanted a fuller-flavored beer, brewed without the use of corn or rice. These smaller ‘craft brewers’ began to sell on quality and flavor rather than quantity. As an old, regional brewery, we moved into the craft all-malt beers. In 1985, we teamed up with an importer who distributed in 26 states. That’s how we got the guy in Pennsylvania. We dropped some of the others after the contract expired and refocused on the Midwest, but the specialty distributor in Pennsylvania has stayed interested in our brand.”
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Schell’s has had some of its distributors since the end of Prohibition in 1933. The law that went into effect at that time separated the brewer from the retailer in a three-tier system, with the wholesaler or distributor in the middle. Although Schell’s primary customers are distributors (wholesalers), in a small (grandfathered in) exception to the law, Schell’s can distribute directly to retailers within a 40-mile radius of the brewery, a market serviced by one of Schell’s eight sales reps.
Globalization is the latest trend having an impact on breweries. Ted explained, “Seven of 10 brewing companies in the United States are foreign-owned and investment-driven. The distribution level has consolidated and is going in the same direction, so the stakes are higher and the challenges are greater. But the beer business is a fun business, and we have 150 years of stories. George Marti, my great-grandfather, had a designated driver horse that took him home in the wagon from downtown. Grandpa Al would go downtown to collect money from the week’s beer deliveries and would tell the bartender to set everybody up. After chatting with the bartender, Grandpa went out the front door to the next bar, and everyone would get off the barstool and get to the next bar through the back door ahead of him for the next free set-up.”
Jodi offered a perspective, saying, “Beer is a legal social product. People get together over a beer. It’s like everything—if you do things to excess, you’ll have problems.”
Like stories from the brewery’s earlier days, Ted’s business philosophy is old school. “I’ve always tried to run the business to do the right thing, to be fair and to treat people well,” he said. “We make the kind of beers we like and believe in.”
Perhaps that’s why Schell’s received the Minnesota Family Business Award in 2010 and was named one of the “Top Ten” breweries at the 2011 U.S. Open Beer Championships.
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Who’s Who
- Position in family? Ted: Second of three boys. Jodi: Second of three girls.
- Favorite subject? Ted: Math–I like numbers. Jodi: Art–being creative.
- What would you liked to have studied? Ted: I would have finished the engineering degree. Brewing is a science of chemistry, engineering and energy. Jodi: Psychology, for dealing with people.
- Hobbies? Ted: I hunt and fish and enjoy woodworking, especially in our log home. Jodi: I love to read, and we both love to cook and garden and travel together.
- Accomplishment of which most proud? Ted: Keeping the brewery alive and healthy against a lot of odds and growing as a destination. Jodi: Receiving the Sertoma Club’s Service to Mankind Award when so many people do so much more and don’t get recognized. Also, serving dinners to our troops.
- Most valued possession? Ted: Brewery memorabilia and artifacts. Jodi: Our house in Cambria, our sanctuary. If we lived on the brewery grounds, we’d never stop working.
- Most valued intangible? Both: Free time.
- Words that describe you? Ted’s words for Jodi: Passionate, committed, caring. Jodi’s words for Ted: Passionate, focused, fair.
- What would you be doing if not this? Ted: I bet I’d be in the Park Service. Jodi: I’d be raising and showing horses, which I did for eight years before we had kids.
Beer In The Headlights
If traveling to Minnesota, President Abraham Lincoln might have slaked his thirst with Schell’s beer. Schell’s Brewing Company has been making beer in New Ulm since Lincoln’s time and is the second oldest continually operating family-owned brewery in the nation.
The story begins with August Schell, who left Germany for America in 1848 at age 20. He met and married his wife, Theresa, in Cincinnati in 1853. Three years later, with two small daughters in tow, they headed to Minnesota with a group of fellow Germans known as the Cincinnati Turner Society. These German immigrants founded New Ulm.
Schell, who worked as a machinist, missed having the beer of his native land. He partnered with Jacob Bernhardt, a former St. Paul brew master, in building a small brewery on the banks of the Cottonwood River in late 1860. The river offered a means of transporting beer and supplies and provided ice for the aging and fermentation process. Large blocks of ice were harvested every winter and stored in underground caves to keep cave temperatures cool for aging and fermenting beer. The brewery produced 200 barrels the first year, using water from a nearby artesian spring.
Curiosity about the new enterprise drew visitors from the native Dakota population. Theresa Schell gave them food and clothing. Perhaps that’s why the brewery was untouched when New Ulm was burned during the U.S.-Dakota War of 1862.
The Schells prospered and built additions while raising a family of two sons and four daughters. Schell eventually bought out Bernhardt. By 1880, the business had grown to become the dominant brewery in the region. The family built the Schell Mansion on the brewery grounds in 1885, complete with formal gardens and a deer park. All are listed on the National Register of Historic Sites. (A deer appears in the Schell family crest and on all labels.)
August Schell suffered from severe arthritis by age 50, so he turned over company management to his son Adolph. After Adolph left, the younger son, Otto, who had studied brewing in Germany, co-managed with August’s son-in-law George Marti.
With August’s death in 1891, Otto became the company’s driving force. The brewery was incorporated in 1902, and Otto was elected president, his mother vice president and his brother-in-law George secretary-treasurer. When Otto died unexpectedly in 1911, and his mother followed four months later, George Marti took charge and soon faced a new challenge–Prohibition.
Just prior to Prohibition (1919-1933) there were more than 1,900 breweries in the country. By the time Prohibition was repealed, only 600 remained. Schell’s survived by producing “near beer” and soft drinks, and selling candy.
After George Marti’s 1934 death, son Alfred took the lead. He was followed by his son, Warren, who in 1985 re-introduced 1919 Root Beer (first produced during Prohibition) in a cooperative venture with Arneson Distributing of Sleepy Eye.
Ted Marti took over when Warren Marti retired in 1986. Ted introduced a line of specialty beers, a number of which became medal winners. Schell’s also began contracting to brew beers for others. In 1999, the brewery added a new state-of-the-art brew house, with four imported stainless-steel kettles, each operating a different stage of the brewing process.
Schell’s acquired the 109-year-old Grain Belt beer in 2002 to keep this legendary Minnesota beer from extinction. With this addition, Schell’s became the largest Minnesota brewery in terms of gallonage.
Schell’s opened a new visitor’s center in 2006, including a museum, gift shop and tap room.
THE ESSENTIALS: Schell’s Brewing Company
- Founded: 1860
- Phone: 507-354-5528
- Web: schellsbrewery.com and grainbelt.com
