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Owners' new direction leaves former Pabst executives bitter; Fear spirit of brands will be destroyed

Pabst Brewing Co. resurrected its faded brands -- not with giant banners or shot-girls sporting logo-branded T-shirts -- but through grass-roots and guerrilla marketing efforts, such as someone painting a logo on a skateboard, a guy riding up a ski lift handing out free brews, and artists incorporating Pabst Blue Ribbon cans into their oil paintings.

"It was what the brand stood for, which was that we embrace people for what they are, their creativity and specialness," said Kevin Kotecki, who was chief executive from 2005 until he quit in November.

Now many former executives who helped breathe life into the company's stale brands, such as Schlitz and Old Style, and helped PBR become the fastest-growing national beer in 2009 and 2010, are on a different kind of campaign.

"I want it to fail," said Bryan Clarke, former vice president of marketing.

His wrath is aimed at billionaire C. Dean Metropoulos and his two sons, Daren and Evan, who took control of the Woodridge, Ill.-based company a year ago. "I hope they lose every dollar they have. If our core PBR drinker knew that what they were drinking is owned by guys like these, it's the last beer they'd want to drink."

When companies change ownership or direction resulting in the departure of executives, it's not uncommon for there to be some raw emotion or hard feelings. But lashing out publicly against a former employer is rare.

"They know that negative comments will harm them as much as the company," said Richard Coughlan, senior associate dean for graduate business programs and professor of management at University of Richmond's Robins School of Business.

Coughlan said it's even more unusual to see more than two dozen executives abandon a company at about the same time. But former employees at Pabst say this isn't just about beer. They saw themselves as the protectors of the people who loved their brands, even though 99 percent of Pabst's brands are brewed by Miller Brewing Co. They fear the spirit of the brands will be destroyed under its new owners.

"My job was to protect consumers from the stupid [junk] that old guys with gray hair come up with," said Clarke. "The brand is the people who drink it. And we treated it well. We were the stewards of it. We did a good job. We tried to keep from selling it out."

In effect, the Metropoulos family proposes a major shift in marketing. The family, whose $250 million bid for the company topped more than a dozen contenders, including a group headed by Kotecki, announced in May that it's moving Pabst's headquarters to Los Angeles. They said they plan to bring glamour and celebrity sponsorships to such Pabst brands as Old Milwaukee and Schlitz.

The family declined requests for interviews for this story.

"Just about everything that I'd been working on or trying to accomplish ended up not being a part of the plan going forward," Kotecki said.

When Kotecki joined Pabst it was owned by a California-based charitable trust, and its revenue had not grown in 14 years, he said. From 2005 to 2010, PBR brand volume increased 69 percent. Over that same period, said Kotecki, the company's gross margins increased 48 percent, operating profit rose 10 percent, and net revenue per barrel increased 28 percent.

The improvements made Pabst an attractive candidate for sale in 2010. Enter C. Dean Metropoulos, 65, a Greek immigrant billionaire known for savvy dealmaking in the food business, and his two sons.

Life at Pabst swiftly began to change.

In an internal memo to top staff one month after purchasing the company, C. Dean Metropoulos outlined a plan to see PBR sales grow 30 percent per year, Lone Star's sales to double and for the company to create a "Four Loko"-like version of Colt 45, backed by an African-American star and jingle.

"I also want to try to exit the 'Cubs' deal and divert this money behind Old Style 'Light,' " Metropoulos wrote. The relationship between Old Style and the Chicago Cubs baseball team has existed for 61 years.

In January, Clarke told Metropoulos in an e-mail that employees were looking for new jobs because they were being "yelled at," "harshly" and "unprofessionally," by his sons. Metropoulos forwarded the e-mail to his sons, who threatened Clarke's job and said he should consider working for the family "to be an honor." Clarke resigned in February.

Since the Metropoulos family took over the company, Pabst Blue Ribbon's growth has steadily slowed, and the company's four other largest brands collectively saw double-digit declines for the 52 weeks ended Dec. 26 and May 15, according Symphony IRI Group.

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