The Gunds in Cleveland

by Carl Miller

Reprinted from American Breweriana Journal.

For just about a century now, the Gund name has been well-known among Clevelanders. The family’s many business pursuits—everything from coffee manufacturing to major league sports—have kept them in the public eye for three generations. Their involvement in civic affairs, as well, has made the Gunds a topic of constant local interest, perhaps more so today than ever before. But it was beer which brought the Gunds to Cleveland. And it was beer which built the family’s first fortune. And although the lofty accomplishments of later generations of Gunds have all but eclipsed their origins as brewers, there was nevertheless a time when Gund beer was among the most popular in Cleveland.

Untimely Arrival

At the close of the nineteenth century, Cleveland’s brewing industry was in the throes of a fierce competitive battle. A majority of the city’s nearly 20 breweries had been substantially enlarged during the prosperous 1880s, which created a general push among brewers for wider sales. But the economic depression of 1893 caused a sharp downturn in local beer consumption, putting a quick end to the optimism of previous years. Excess brewing capacity soon permeated the industry, and the fight for business intensified dramatically. By the late 1890s, as the competitive environment continued to worsen, many of Cleveland’s brewers had begun to struggle for their very survival.

It was right in the midst of these conditions that George F. Gund came to Cleveland in April of 1897. He had come to the shores of Lake Erie to purchase the Jacob Mall Brewing Company, one of the city’s smaller breweries. The unfavorable competitive situation apparently did not discourage Gund. After all, he was no newcomer to the business of making and selling beer. He had grown up watching his father build the John Gund Brewing Company of LaCrosse, Wisconsin into one of the largest breweries in that state outside of Milwaukee.

After spending his young manhood in various positions at the family brewery, Gund left Wisconsin in 1890 in search of his own fortune. He wound up in Seattle, where he ultimately filled the office of president of the Seattle Brewing & Malting Company. For reasons not entirely clear, the forty-two year old Gund severed all connections with the Seattle brewing firm in 1897 and departed for Ohio.

The brewery which lured George F. Gund to Cleveland has a long history. It began around 1850 when German immigrant Martin Stumpf established a small lager beer brewery on Hamilton Avenue. Saloon owner Paul Kindsvater and brewer Jacob Mall bought the works in 1859, commencing business as the Kindsvater & Mall Lion Brewery.

By 1870, healthy sales lead to construction of an entirely new brewery on nearby Davenport Avenue along the shore of Lake Erie. It is likely that the location was chosen in part for its proximity to the lake, thus easing the troublesome task of harvesting ice during winter. In addition, the property was crossed by a steep bluff, which facilitated the digging of beer cellars.

After Kindsvater’s departure from the business in 1871, Mall carried on alone for the next twenty years until his death in 1891. Son-in-law Gustav Kaercher assumed control of the brewery after Mall’s passing, and business remained strong.

However, the increasingly competitive conditions of the late 1890s left many local brewers uncertain of their future. And it must have been just these conditions that compelled the Mall and Kaercher families to sell the brewery to George F. Gund in 1897 and retire from the business of brewing.

Making A Go Of It

Gund, of course, was determined to make a success of his new enterprise. Among his early strategies for staving off the tough local competition was the cultivation of a strong household trade. To that end, Gund erected a new bottling plant in 1897 and introduced his feature brand, Gund’s Crystal Bottled Beer. (The kegged product, called Mall’s Crystal Lager, remained in production as well). A second bottled brand—Ye Old Lager—was introduced later, and advertisements noted that it was created exclusively for the “family trade.”

To inaugurate the new century, the name of the brewery was officially changed from the Jacob Mall Brewing Company to the Gund Brewing Company on January 1, 1900.

Despite substantial increases in its beer production up to that point, the Gund brewery was not able to entirely escape the pitfalls of local competition. Early in 1898, nine breweries in Cleveland and two in Sandusky, Ohio combined to form the Cleveland & Sandusky Brewing Company. Gund, like the city’s other independent brewers, suffered greatly as a result of the combine’s ruthless competitive tactics. When Ohio’s Attorney General charged that the Cleveland & Sandusky Brewing Company was operating illegally as a trust, George F. Gund was called upon to testify against the combine. He told of Cleveland & Sandusky’s practice of buying saloon properties where rival beer was being sold, then evicting saloonkeepers who refused to handle only the combine’s beer. He also testified that saloonkeepers were offered interest-free loans in exchange for agreements to sell only Cleveland & Sandusky beer. In the end, the combine was, indeed, found to be in violation of anti-trust laws, but was merely fined a small sum and allowed to continue in business.

For the remainder of the pre-prohibition years, competition between the combine and the independent brewers was fierce. Nevertheless, the Gund brewery managed to build a substantial local trade, ranking as one of the city’s largest producing breweries by 1910. The old Gund’s Crystal Bottled Beer was retired in 1912 and replaced with a new flagship brand, Gund’s Finest Beer.

The growing importance of the household consumer was apparent in the features that accompanied the new Gund’s Finest. For example, the standard wooden bottle case used by brewers everywhere was deemed by Gund to be inappropriate for family use. “Filth, dirt and disease,” warned one advertisement, “lurk in the pockets of the partitioned wood.” Thus, bottles of Gund’s Finest were available in modern disposable cardboard cases, something yet novel among brewers.

Every case of Gund beer, furthermore, included a handful of coupons for Gund’s new “Profit-Sharing Plan,” a system whereby consumers could exchange their coupons for merchandise in a brewery-issued premiums catalog. Items in the catalog ranged from small kitchen gadgets to major household appliances. This type of promotion was effective in attracting housewives—presumably the primary buyers of the family groceries.

A New Generation

George F. Gund passed away in March of 1916 at age sixty. His son, George F. Gund II, came to Cleveland from his home in Seattle to take over management of the family business. Since his graduation from Harvard Business School in 1909, George II had spent his youth exploring the wild west. He ranched in Nevada, studied animal husbandry in Iowa, worked as a silent film stunt man in early westerns, and rode broncos in rodeos. Settling in his boyhood home of Seattle, George II took a position at the Seattle National Bank. It was a job which foreshadowed George’s later career in banking in Cleveland—a career that would ultimately make the Gunds the wealthiest family in the city.

Upon his arrival in Cleveland in 1916, George II took his father’s place at the head of the Gund brewery and began placing his personal stamp on the business. He introduced the new Clevelander Beer, the bottle labels of which depicted a jubilant Moses Cleaveland overlooking the city which bears his name, and holding a mug of the beer which does the same. The slogan was “A Wonderful City—A Wonderful Beer.”

But, within just a few years, George II would be facing the demise of his family’s beer business. Statewide Prohibition took effect in Ohio on May 27, 1919, leaving George II in search of new ventures. For the sum of $130,000, he bought the Kaffee Hag Corporation, producers of the first decaffeinated coffee in America. After building the company into a multi-million dollar endeavor, George II sold the Kaffee Hag brands and formulae to the Kellogg Corporation in 1927 for $10 million, paid mostly in Kellogg stock. (Kellogg ultimately sold Kaffee Hag to General Foods, which changed the name to Sanka.) Even today, the Gund family is a large holder of stock in the Kellogg Corporation.

Happy Days Are Here Again

By the time Prohibition was repealed in 1933, the Gund family was involved in pursuits far removed from brewing, and their interest in returning to beverage-related fields was minimal. Nevertheless, the old brewery was not to remain idle for long.

A portion of the brewery complex had been occupied for several years by a company doing business as the Erie Sales Company, a manufacturer of malt syrup. And it was that company’s directors—Abraham Miller and Joseph Hecht—who resurrected the brewery under the style of the Sunrise Brewing Company. Beyond leasing the brewery to the new company, the Gund family was not associated with the venture

In August of 1933, the new Sunrise Beer made its debut, brewed at the experienced hand of long-time Cleveland brewmaster Jaro Pavlik. Initially, only kegged beer was available. However, bottling began early in 1934, and advertisements for Sunrise Beer in bottles proclaimed that, “Socially, it is above reproach—no embarrassment from (pardon us) burping.” A money-back guarantee backed up that rather unusual claim.

Late in 1934, the Sunrise Brewing Company became embroiled in a highly publicized controversy which, in little more than a few months, resulted in the brewery’s loss of its operating license, seizure of the brewery by the U.S. Alcohol Tax Unit, and a court-ordered sale of the company and its assets. Among the charges launched in a Federal action against the company was that Sunrise employees were routinely instructed to illegally recycle tax stamps from already-sold kegs of beer for reuse on subsequent kegs. It was also charged that beer production records were falsified to reflect smaller-than-actual output levels. In addition to ordering the sale of the company to pay the heavy fines, the court also instructed the firm’s officers to retire permanently from the business of brewing.

Under new ownership, the brewery resumed operations on March 29, 1935 after having been idle since January 1st. Jaro Pavlik was kept on as brewmaster and the production of Sunrise Beer continued as before. In honor of Pavlik’s 35th year as a brewmaster, the company added two new brands—Cheerio Ale and Tip Top Beer ¬– in 1938. The following year, the success of the latter brand lead management to change the company name to the Tip Top Brewing Company.

For many years, there were rumors that the Tip Top Brewing Company was connected to organized crime. The rumors remained just that—rumors—until 1940, when a major portion of the brewery’s stock was transferred to Alfred “Big Al” Polizzi, a notorious Cleveland mafia boss. Polizzi was no stranger to the beer business. He and his cohorts had established the Lubeck Brewing Company in Toledo in 1933, shipping much of the beer to Cleveland. (Lubeck Beer was promoted with the happy slogan, “The Beer That Makes Friends.”) The Lubeck brewery closed in 1939 and Polizzi took control of the Tip Top brewery in Cleveland the following year.

However, after five calm and uneventful years in charge of the Tip Top brewery, Big Al Polizzi retired and moved to Palm Springs, Florida. He sold the brewery in 1944 to the Brewing Corporation of America, Cleveland-based brewers of Carling Red Cap Ale and Carling Black Label Beer. Brewing Corporation of America immediately shut down the plant and took over its war-time grain rations. The historic old brewery on Davenport Avenue never again produced beer.

Adding To The Gund Fortune

Just as the elder George F. Gund had imprinted his name indelibly on the history of brewing in Cleveland, George II made the Gund name forever synonymous with another local industry: banking. For nearly thirty years, George II was a key figure behind the growth of the mighty Cleveland Trust Company, for decades the largest bank in Ohio. Serving first as a director, then as president, and finally as chairman of the board, George II amassed great wealth as one of the primary stockholders in Cleveland Trust. Long regarded as the richest man in Cleveland, George II left an estate valued at more than $600 million at the time of his death in 1966. Much of his wealth was bequeathed to the George Gund Foundation, formed by George II in 1951 to support Cleveland-area social, educational and artistic programs.

George II’s children inherited their father’s entrepreneurial spirit. Perhaps most in the public eye are George III and Gordon Gund, owners since 1983 of the Cleveland Cavaliers NBA basketball team. When the Cavaliers’ imposing new arena opened in downtown Cleveland in 1995, its name was appropriately chosen as “Gund Arena”—perhaps a fitting monument to three generations of Gunds in Cleveland.

Indeed, when old George F. Gund first arrived in Cleveland a century ago, he could not have imagined the profound mark his family would leave on the city for generations to come. He certainly never could have predicted the proportions to which his initial fortune would grow, and the number of people and organizations that would be impacted by it. Gund, after all, was concerned merely with making good beer. From that simple goal has stemmed one of the greatest success stories in Cleveland history.

Copyright Carl Miller