Handbook of Principles of Organizational Behavior - Soltanieh ...

574 J. ROBERT BAUM
region, and a buyout discussion with the distributor failed (the brothers proposed that they
purchase the distributorship, and the distributor countered with an offer to buy Lad and
Hooker).
Currently, Hans and Heinrich continue with the Coors distributor, but they are evaluating
the possibility of establishing their own distribution network, developing Lad and
Hooker soda, and development of a Brew Pub featuring Lad and Hooker beer.
Staub ’ s Famous Draft and Grub
In 1960, Marlan Staub ’s family had operated a Coors distributorship in Philadelphia, PA.
Coors beer was not pasteurized in the 1960s, and it was shipped in refrigerated trucks
to Pennsylvania and sold at a premium. Selling shipped beer at a premium was against
Coors policy, but the alternative for Coors was to fight a growing black market for their
fine Colorado beers. Over 30 years, Coors and the family business profited with little
apparent change. Marlan worked in the family business before it closed in 1996. Folks
said that Coors lost its special attraction in the region, and that Staub Beer Distributors
was slow to find alternative products. Staub Beer Distributors continued to pay the family
members exceptional salaries, even as the volume fell in the early 1990s. The cash drain
made it impossible to field an aggressive sales force or to promote Coors beer at the levels
demanded by Coors. The family business closed in 1996.
Marlan liked beer and he needed to do something to support his young family. He had
desperately tried to fi nd financing for the family business in its dying days, so he had local
“ angel financing ” connections. He decided to lean on the two things that he knew about:
beer and fi nancing.
Marlan read two books about beer making and decided that he could do it. In addition,
his exposure to Coors plant tours for their distributors gave him confidence to start his
own beer operation, so he decided to open a brew pub in Reading, PA, and make and sell
Staub ’s Famous Draft and Grub.
Marlan figured that he would need $ 1 million to purchase a used craft beer still and to
begin operations in a vacant factory building in Reading. Three months after he decided
to brew and open the brew pub, Marlan found a great deal on a used 100% copper still
and purchased it for $ 115,000, which left him with $ 25,000 in savings. He made a minimum
down payment ( $ 5000) on the factory building and received a contract that required
no principle payments for a year. Marlan spent three months placing the copper still in the
building, and planning the space for the restaurant. During this period, Marlan received
publicity from an admiring newspaper, his family, and the public for his entrepreneurial
vision. Many were thrilled that an old industrial building would be restored.
Eight months after conception, Marlan employed a friend to develop the first beer, a
hearty dark beer, and he paid him $ 70,000 per year plus a promise of a share of the company.
Again, he drew upon his dwindling savings.
Marlan spent five more months designing the renovations for the building. He fi nally
asked contractors to bid on the renovation 14 months after the initial purchase (at the 12th
month, the bank reluctantly extended the principal free mortgage period). Unfortunately,
renovation costs and the cost of restaurant fi xtures were finally quoted at $ 1.4 million.
The plumbing cost for the still exceeded estimates by $ 40,000. Marlan told local reporters
that the renovation delays were temporary.