Case

Harvard Business School

9-381-092

Rev. December 20, 1984

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Hudepohl Brewing Company

Bob Pohl, age 32, was appointed general manager of the Hudepohl Brewing Company

following the unexpected death of the company’s president in March 1980. Since 1975, Pohl had

managed Hudepohl’s marketing response to rapidly changing conditions in the brewing industry.

The death of the president, a relative, left Pohl as the only member of the founder’s family active in

the day-to-day activities of the business.

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Pohl was optimistic about the company’s future despite Hudepohl’s recent disappointing

performance. Since 1978 the brewery had been operating at less than 40% of its one-million-barrel1

capacity, and in 1978 the company had experienced the largest operating loss in its history—$538,000.

After adjusting for gains on Hudepohl’s securities portfolio and a tax loss carryback, net income for

that fiscal year was $95,161, down from $268,611 in 1977.

After only three months as general manager, however, Pohl was predicting improved

earnings in the near future. A 7% gain in sales during the first four months of 1980 seemed to confirm

his expectations. Pohl felt that by 1983 Hudepohl would achieve a 10% growth in sales.

Background on the Company

Based in Cincinnati, Ohio, Hudepohl was the twentieth largest brewery in the United States.

(Financial information is presented in Exhibits 1, 2, and 3.)

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Ownership and Organization

Hudepohl’s board of directors consisted of seven members, all descendants of founder Louis

Hudepohl. Chairman John Hesselbrock, age 73 and the uncle of Bob Pohl, held almost total control

over the board but did not take an active role in daily management decisions. The board, which made

the final decision on major expenditures, was generally conservative. Pohl felt that this had been

appropriate in the past, when other breweries were also conservative, but that a far more aggressive

approach was necessary in every area now.

1 The term barrel...