And Ms. Stroh has taken the rare step, in the secretive world of America’s wealthiest, of going public with her family’s downward spiral in a remarkably intimate book, “Beer Money: A Memoir of Privilege and Loss.” In revealing detail, she documents a trifecta of misfortunes, some of them self-inflicted: the unraveling of her immediate family, shaken by alcohol and drug abuse; the collapse of her family’s brewing empire; and the fall of Detroit, hometown of Stroh’s beer.
The book has struck a nerve in certain circles, and Ms. Stroh says she has received an outpouring of support and commiseration.
“I heard from all kinds of people about lost fortunes, lost businesses, often coupled with substance-abuse issues within the families,” she said. “My story resonated with their own experience because of this lingering sort of sense of something that’s unresolved when a family business is lost.”
Headlines tend to focus on billionaires who fall from grace after committing crimes, like the Ponzi schemer Bernard L. Madoff, or the former WorldCom chief executive Bernard J. Ebbers. But the more time-honored and reliable way to lose a fortune, however, often comes down to just one word: family.
An abundance of heirs mixed with patriarchal lines of succession that fail to produce talented leaders can be disastrous. The Strohs’ saga is a textbook example.
Bernhard Stroh immigrated to Detroit from Germany in 1850, selling his popular beer door-to-door. A brewery followed and grew regionally, especially thriving after World War II. By the 1980s, it was America’s third-largest beer company.
Then the fourth generation of family managers decided the best way to expand was through expensive acquisitions and going national, buying the Schlitz, Schaefer and Old Milwaukee brands, among others.
But debt from those deals kept the company from making competitive moves. Stroh’s missed the timely pivot to light beers, and sales plummeted.
Other bad investments followed, including ventures in which the family had less expertise, like biotech and Detroit real estate as the city faced severe decline. Hundreds of millions more were lost.
All through the company’s boom and bust, the number of heirs grew, many relying on annual dividends of up to hundreds of thousands of dollars to fund sometimes lavish lifestyles. Ms. Stroh’s father spent millions on antiques and collectibles, like rare cameras and guitars. (Later the family would discover many of these were fakes or worth far less than what he paid.)
As the brewery’s profits dried up, the dividends to the heirs continued, but the money was siphoned from principal, further hastening the company’s decline. By 1999 . . .