Nestled along the Cottonwood River in New Ulm, Minnesota, the August Schell Brewing Company stands as a testament to family tradition, German heritage, and unwavering resilience. Founded in 1860 by German immigrant August Schell, it is the second-oldest family-owned brewery in the United States, surpassed only by D.G. Yuengling & Son. As one of the few pre-Prohibition breweries still operating under family control, Schell’s has weathered wars, economic turmoil, and the 13-year ordeal of Prohibition, emerging as a cornerstone of American brewing history. This article delves into the brewery’s origins, its survival through Prohibition, and its enduring legacy as a craft beer pioneer.
The History of August Schell Brewing Company
August Schell was born on February 15, 1828, in Durbach, in the Grand Duchy of Baden, Germany. At age 20, he immigrated to the United States in 1848, seeking opportunity amid the political unrest following the failed revolutions in Europe. After working as a machinist in Cincinnati, Ohio, Schell joined a group of German immigrants from the Turner Society, a cultural and gymnastic organization, to co-found the town of New Ulm, Minnesota, in 1857. Recognizing the growing German population’s thirst for traditional beer, Schell partnered with Jacob Bernhardt, a former brewmaster, to establish a small brewery in 1860. They chose a scenic site two miles from New Ulm’s center, where spring water and ice from the Cottonwood River provided ideal brewing conditions.
The brewery began modestly, producing about 200 barrels annually. In 1866, Schell bought out Bernhardt, assuming sole ownership and initiating an unbroken chain of family stewardship. Despite challenges like the Dakota War of 1862, which damaged much of New Ulm but spared the brewery, Schell’s operation grew steadily. By the 1880s, the family built a grand mansion, gardens, and a deer park on the brewery grounds, now listed on the National Register of Historic Sites. August invested in advanced equipment, including a $25,000 copper brew kettle, optimizing production for the acidic wort and beer. When August died in 1891, his wife, Theresa, inherited the brewery, with their son Otto, who had studied brewing in Germany, taking over management.
Modernization and Pre-Prohibition Growth
Otto Schell modernized the brewery, introducing refrigeration by 1900, which replaced the reliance on river ice stored in caves to control fermentation temperatures. This allowed year-round brewing, boosting production. The brewery was incorporated in 1902 as the August Schell Brewing Company, with Otto as president, Theresa as vice-president, and George Marti, August’s son-in-law, as secretary-treasurer. The company thrived, serving the region’s German-American communities, though it faced competition from larger breweries like Anheuser-Busch and local rivals in New Ulm, such as Hauenstein Brewery. Otto’s sudden death in 1911, followed by Theresa’s four months later, left George Marti in charge, steering the brewery toward its greatest challenge: Prohibition.
Surviving Prohibition: Adaptation and Grit
The passage of the 18th Amendment in 1919, enacting Prohibition, banned the manufacture, sale, and transportation of alcoholic beverages, devastating the American brewing industry. Of the roughly 1,900 breweries operating in 1915, only about 600 survived by 1934. Schell’s was among the fortunate few, thanks to strategic adaptation led by George Marti. The brewery shifted to producing “near-beer” (a low-alcohol beverage with less than 0.5% ABV, legal during Prohibition), soft drinks, and candy. It also began making 1919 Root Beer, named for the year Prohibition began, which remains a popular product today.
To generate income, Schell’s sold off taverns and properties it owned in nearby towns, which had previously ensured exclusive distribution of its beer. A ledger from the 1920s, displayed in the brewery’s museum, records inventories of these non-alcoholic products, while an ebulliometer used to verify near-beer’s alcohol content underscores the scrutiny breweries faced. Despite these efforts, survival was precarious, and the brewery nearly closed. Family lore recounts illicit moonshining, with a still—later destroyed by George Marti to avoid federal detection—kept in the brewery museum as a relic of those desperate times.
When Prohibition ended with the 21st Amendment in 1933, Schell’s swiftly resumed brewing. Having maintained its equipment, the transition was smoother than for many competitors. George Marti’s leadership ensured the brewery’s survival, but he died in 1934, passing the reins to his wife, Emma, and son, Alfred (“Al”) Marti, who became president and manager.
Post-Prohibition Recovery and Challenges
Al Marti led Schell’s through the post-Prohibition era, a time of industry consolidation. By the 1950s, large breweries like Budweiser and Miller dominated, out-advertising smaller operations. Schell’s maintained a regional foothold, bolstered by New Ulm’s tight-knit German community. Al added local flair by founding the Schell’s Hobo Band, a community ensemble still active today. However, by the 1970s, only 42 U.S. breweries remained, and Schell’s faced severe financial strain. In a desperate move, the brewery sold lumber from a massive black walnut tree on its grounds to keep its doors open.
In 1969, Al retired, and his son Warren Marti took over. Warren diversified the product line with Schell’s Export Beer, Schell’s Light Beer, and the continued production of 1919 Root Beer. Despite these efforts, the rise of “mega-breweries” threatened small operations. Warren’s persistence and the brewery’s historical grounds, including the sale of the walnut tree, were critical to its survival.
The Craft Beer Renaissance and Modern Success
The turning point came in 1984 when Warren’s son, Ted Marti, assumed operations, becoming president in 1985. Trained at the Siebel Institute of Brewing and having studied under German brewers, Ted spearheaded Schell’s entry into the craft beer movement. In 1984, Schell’s brewed the first American wheat beer since Prohibition, a German-style Weiss Beer that evolved into its seasonal Hefeweizen. Ted introduced craft brews like Schell’s Pilsener, which won a gold medal at the Great American Beer Festival in 1988, and others, such as Alt and Pale Ale, which earned medals for their quality. By the 1990s, Schell’s produced 38 different beers, establishing a reputation for innovation.
In 2002, Schell’s acquired the Grain Belt brand after the Minnesota Brewing Company’s bankruptcy, expanding its portfolio with varieties like Grain Belt Nordeast (2010) and Southwest Cerveza (2019). A state-of-the-art brewhouse added in 1999 enhanced production capacity, while a gift shop and taproom opened in 2005, boosting tourism. The brewery’s grounds, with their historic mansion and gardens, draw thousands annually for tours, beer tastings, and events like Bock Fest and Oktoberfest, reinforcing its cultural significance.
Ted’s sons—Jace, Kyle, and Franz—represent the sixth generation, with Jace leading the Noble Star Collection of sour Berliner Weisse beers until his departure in 2024 to pursue distilling. The Starkeller facility, opened for these sour ales, now serves as a taproom. In 2020, Schell’s celebrated its 160th anniversary with the “Shift Happens” series, honoring its adaptability and Ted’s transition to his sons’ leadership. Today, Schell’s brews about 110,000 barrels annually, with 85% of sales in Minnesota, and distributes to several Midwestern states.
Legacy and Cultural Impact
The August Schell Brewing Company’s endurance is remarkable in an industry where most pre-Prohibition breweries vanished. Its survival stems from family dedication, strategic adaptation, and a deep connection to German heritage. The brewery’s focus on traditional German-style lagers and ales, combined with craft beer innovation, has earned it accolades, including a national reputation for Pilsners and Weiss beers. Its grounds, listed on the National Register of Historic Sites, and events like Bock Fest embody its role as a cultural hub in New Ulm.
Schell’s also reflects broader themes of German-American entrepreneurship. August’s involvement with the Turner Society highlights the role of ethnic networks in building businesses, while the brewery’s navigation of Prohibition and industry consolidation showcases resilience. Unlike many contemporaries, such as Mankato Brewing Co., which closed in 1969, Schell’s thrived by anticipating trends and maintaining regional loyalty.
As Ted Marti steps back, his sons are poised to carry the brewery forward, blending tradition with innovation. From August’s frontier vision to Ted’s craft beer revolution, Schell’s remains a beacon of family-owned brewing, proving that, as their 2020 campaign declared, “Shift Happens.” Here’s to a brewery that has poured history, one beer at a time, for over 160 years.
For today’s beer news: Click Here