Over the decades many have come to believe that the brewery was born of socialist ideas brought to Northeastern Minnesota by immigrants to “resist the evils of capitalism” represented by larger breweries that operated tied houses. The creation of People’s Brewery, so goes the tale, involved a revolt of saloonkeepers against the likes of Fitger’s, Duluth Brewing & Malting, Hamm’s, and the other large breweries that owned many of the city’s saloons and hotels. The city’s independent saloonkeepers would show them: they’d make their own beer to sell in their own saloons.
And perhaps that’s just what promoter Fred C. Toelle wanted them to believe. Toelle had spent his life as a traveling salesman based in Detroit, Michigan, and had hit on a plan that had proved profitable. He came to the Zenith City looking for investors for a new brewery, trying to raise $300,000 at $100 a share. He bypassed the city’s wealthy capitalists and targeted “liquor retailers”—aka saloonkeepers—to raise capital. He claimed to have done the same thing in seventeen other communities across the U.S.
Indeed, in 1900 the Detroit Free Press reported Toelle was promoting a new brewery, and that “many of the leading liquor dealers of the city will be among the stockholders.” Toelle went on to establish at least seven breweries in 1905 and 1906 alone, including Capital City Brewing Co. of Indianapolis, Indiana; Falls City Brewery of Louisville, Kentucky; Franklin Brewing Company of Columbus, Ohio; Chicago Heights Brewing Co. of Chicago Heights, Illinois; Lake Brewing Co. of Houghton, Michigan; and Union Brewing Co. of New Orleans, Louisiana. Capital City’s investors included 112 saloonkeepers, Fall City’s over 200.
In 1905 he also established a People’s Brewing Co. in Terre Haute, Indiana—and it wasn’t the first. Between the 1880s and 1935 no less than a dozen other American breweries organized under the name People’s. Toelle’s method was to raise the capital and incorporate a brewery, accept payment for his organizational efforts, and then resign from the firm before it produced a drop of beer.
Duluth’s People’s Brewing Company officially organized on January 1, 1907, with a board of independent saloon owners including Patrick Doran, co-owner of the Campbell & Doran Saloon; Frank G. Sandstedt, and Martin Smith, who operated both the Hotel Astoria and the Nicollet Hotel; Doran would act as president, Sandstedt vice president, and Smith as secretary.
So the creation of People’s wasn’t a socialist revolt, it was a capitalistic investment opportunity. Proprietors of Duluth’s independent saloons and hotels started their own brewery so they could get beer at a lower price and profit from both wholesale and retail sales. In February the new brewing rm announced it had found a location between Forty-Second and Forty-Third Avenues West along Superior Street. They planned to build a $225,000 brewery, “modern in every concern,” that could produce up to 75,000 barrels a year. It would be operational by October 1907.
In March, however, Toelle had raised only $75,000. Apparently discouraged, he ran a notice in local newspapers stating that he had resigned and the brewery would not be built, asserting that Duluth did not “offer a sufficiently attractive field for such an enterprise.” The news came as a surprise to People’s board of directors, who responded immediately, assuring their stockholders that the brewery would be built. They had no idea what prompted Toelle’s action, and clarified that he was brought to Duluth “to promote the deal on a percentage basis.” It appears that the Duluth project was among his last.
People’s Brewing Co. officers and investors pressed on without Toelle, stating they could “build a brewery which will compare to any that Mr. Toelle has ever erected and that they can carry out the plans with better results and do so sooner than Toelle contemplated.”
In June the News Tribune announced that Duluth’s “Independent Brewing Company” would soon sign with a building contractor—apparently People’s had reorganized after Toelle’s exit, but the business itself would still be called People’s. The company’s officers reshuffled: Sandstedt was now president, saloon-owner Michael Gleeson vice president, Smith treasurer, and John Dunphy secretary. Construction would begin soon, and they hoped to be selling beer by May 1908.
F. F. Bollinger of Pittsburgh broke ground on July 10. No architect is credited as drawing Duluth’s People’s Brewing Co. plant. Bollinger had already built several breweries in the east, and the design for its Westchester County Brewery in Mount Vernon, New York, is nearly identical to that of People’s. When Bollinger broke ground in Duluth the firm was already at work on eight other breweries in the U.S.
The company planned to produce 50,000 barrels of beer during its first year, although with its 175-barrel kettle the facility’s capacity was twice that. Bollinger assured News Tribune readers that all equipment‚ from ice machines to boilers and the power plant, would be the “most up-to-date in Minnesota.” The board lured Ernest A. Koenig to Duluth to serve as brewmaster. Koenig had spent his first fifteen years in the business working as the brewmaster of Munich’s Royal Bavarian Hofbräuhaus. By the time he came to Duluth he had been brewing beer for thirty years.
They sure had a grand time at the grand opening on June 30. An open house scheduled for 3 P.M. to 5 P.M. lasted until nine in the evening to accommodate all two thousand curious beer drinkers who showed up to try the first batch of draft beer. Stockholders acted as a reception committee, a full orchestra played into the evening, and many a beer was downed in the wood-paneled taproom on the brewery’s fourth floor, outfitted with plush leather furniture and a hand-carved bar.
1910 People’s Brewery paid dividends to its stockholders for the first time. The plant increased production, and by March 1911 sales had greatly exceeded the previous year’s. The brewery had expanded its business throughout the Iron Range and hoped to soon reach into Wisconsin in towns along the Minneapolis, St. Paul & Sault Ste. Marie Railroad. At the brewery’s annual stockholders meeting in June, secretary Theodor Frerker announced dividends of 10 percent. Shareholders presented president Frank Sandstedt with a diamond ring as a token of their appreciation of his work—they credit his efforts as the reason for the brewery’s success. It now had a capacity to brew fifty thousand barrels a year.
Sadly, Koenig died on September 1. Assistant brewmaster Frank Luckow took over for Koenig. Luckow, a native of Germany and graduate of Chicago’s Siebel’s Brewing Academy, had joined People’s in 1909 as a cellar man. By June 1912 the company employed about fifty men with an annual payroll of $40,000 and still made enough to pay dividends, and continued to pay out until Prohibition stopped beer production in 1919.
When Prohibition began, Sandstedt remained in place as president and brewmaster Luckow stayed on as the company changed its name to the People’s Bottling Company; the company stopped paying dividends after 1919, suggesting that its structure was reorganized along with the name change. The staff was cut to fourteen employees as People’s began bottling rear beer and soft drinks, including Golf Club, a variety of flavored sodas, People’s Choice sparkling water, and a near beer called Safety Brew. But the stock market crash of 1929 hit the company hard, By January 1931 People’s had fallen into receivership and had not payed taxes for the previous two years.