In 1976, the last working brewery in New York City shut its doors. The F. & M. Schaefer Brewing Company, which had been making beer in the city since 1842, moved its operations out of Brooklyn for good.
It was not a failing product. In the year it closed, the company had spent decades ranked among the five bestselling beers in the United States. The reason was not the taste in the glass. It was the ground underneath the brewery, and who could still afford to stand on it.
The story began in Manhattan in 1842, when Frederick Schaefer, a Prussian immigrant who had arrived with almost nothing, bought a small brewery on Broadway with his younger brother Maximilian. Frederick had spent a year working as a hired hand at that brewery, learning the American trade from the inside. Maximilian had brought something more valuable than money: a formula for lager. In 1839, almost no one in America was making it.
Most beer sold in the country was top-fermented ale, heavy, bitter, and served warm. Lager, by contrast, fermented slowly in cold storage and rested for weeks or months. It came out lighter, crisper, and cleaner. It was a completely different product.
The two brothers bet everything on the idea that New York was ready for it. They were right almost immediately. German immigrants who remembered lager from home took to it at once, and so did New Yorkers who had never tasted anything like it. Within three years, the Broadway brew house was too small.
In 1845, the brothers built a larger plant on Seventh Avenue. That too was soon outgrown. Through the second half of the nineteenth century, Schaefer expanded by acquiring regional breweries in Albany, Cleveland, and Baltimore, planting its name in markets before competitors thought to enter them. By 1871, less than three decades after the founding, the company ranked sixth among all breweries in the United States.
Growth carried a cost. By the early twentieth century, the brewery’s own home on Park Avenue sat on some of the most valuable real estate in the country, and a brewery with its vats and delivery yards was an increasingly awkward tenant. The company sold the property and built a purpose-designed plant on the East River in Williamsburg, Brooklyn, completed around 1916. Maximilian’s son, Rudolph J.
Schaefer, oversaw the move and remained president until his death in 1923. The company had traded Manhattan ground for industrial waterfront, and it gained the room to grow. But it had also moved one step further from the place where its story began. Schaefer faced its first existential test in 1920, when Prohibition became law.
Of the roughly 1,200 breweries operating before the ban, only about half survived to see repeal thirteen years later. Schaefer’s leadership later described the moment as a genuine crisis of survival. The company improvised, producing near beer under names like Special Brew and Schaefer Special, adapting its brewing equipment to produce dye during a wartime shortage of imported colorants, and filling gaps with ice production. None of it was beer, but all of it kept the lights on.
Rudolph J. Schaefer died in 1923, a decade before repeal. His sons Frederick and Rudolph Jr. took over, and when the 21st Amendment ended Prohibition in 1933, Schaefer was one of the breweries still standing.
By 1938, it was producing a million barrels a year and had resumed its place among the top ten American breweries. A second test came in 1949. On April 1, a labor contract between New York’s brewery unions and the city’s fourteen brewing companies expired without a replacement. Roughly 7,000 workers walked out over a demand for a second worker on every delivery truck and higher wages.
The strike shut down every brewery in the city for 81 days. During that time, distributors reached for beer from New Jersey, from Valantine, from national brands like Budweiser and Schlitz, and New Yorkers drank whatever was not on strike. When the walkout ended on June 21, Schaefer’s leadership admitted they were uncertain how badly the interruption had hurt them. But the company clawed its position back within a month.
By 1970, Schaefer was again the fifth bestselling beer in the United States, a ranking it had held twenty years earlier as well. The company had survived a federal ban and a citywide strike. What it could not survive was a different kind of competition. In 1968, Schaefer went public, raising $106 million from investors rather than from years of accumulated beer sales.
That same year, it broke ground on a massive new brewery in Breinigsville, Pennsylvania, near Allentown in the Lehigh Valley. The plant opened in 1972 with an initial capacity of 1. 1 million barrels a year. By 1975, that capacity had grown past 5 million barrels, more than the entire company had brewed in its first century combined.
The bet was clear. Budweiser, Miller, and Schlitz were building continental production and distribution networks backed by advertising budgets no regional brewery could match. To keep its seat at the table, Schaefer needed a plant built for that fight. Output did climb, more than doubling by 1980.
But the gap between Schaefer and the true national leaders widened instead of narrowing. Budweiser pulled decisively ahead as the bestselling beer in the country. A single very large plant in Pennsylvania, however impressive, was not enough to manufacture national scale out of capital, distribution, and advertising reach that a regional company could not command. The plant built to secure Schaefer’s future became the first piece of the company standing outside the city that made it.
Brooklyn was no longer the center of the company’s own story. In May 1981, the Schaefer family gave up ownership of the company entirely, selling to the Stroh Brewery Company of Detroit. Schaefer was still producing more than twice as much beer as a decade earlier and still running its Pennsylvania plant. What had changed was the arithmetic of independence.
Going public in 1968 had opened the door for someone else to own the capital the company had raised. Stroh absorbed the Allentown plant and the Northeastern distribution network, and the combined company jumped to seventh place in national sales. Eighteen years later, in 1999, Stroh was itself absorbed by the Pabst Brewing Company. Schaefer, once independent, was now two acquisitions deep.
Pabst eventually chose to stop brewing at the Lehigh Valley plant entirely, becoming what the industry calls a virtual brewer, owning brands but contracting production to other facilities. The plant was sold to Diageo, which used it to bottle Smirnoff Ice, a flavored malt beverage with nothing in common with the lager it had been engineered to produce. In 2008, the Boston Beer Company purchased the facility. The closure of the Brooklyn plant arrived on January 23, 1976, as a short wire report.
The company chairman told a reporter that about 850 workers would lose their jobs. Production wound down through the year, department by department, until nothing was left running. New York City, a place that had brewed beer continuously since a Dutch settler first did it in 1413, no longer had a single working brewery inside its five boroughs. Schaefer had been the last one standing.
The building stood empty for years on the East River waterfront before being cleared to make way for a residential development called Schaefer Landing, two glass apartment towers built for people who mostly have no idea what used to stand on that ground. Corporately, Schaefer no longer exists as an independent company. The name is owned by Pabst, which licenses it out, and the beer is brewed under contract at facilities owned by someone else. In 2020, Pabst brought the brand back to New York City for the first time in decades, brewed under contract by the FX Matt Brewery in Utica, New York, with an updated recipe and a lighter alcohol content.
The physical trace of the original company has almost entirely vanished. On the old grounds at Kent Avenue and South 8th Street, one of the few surviving buildings still stands, and mounted on its wall is a small stone relief, a raised glass with hops climbing around it, cast by people who had no way of knowing it would be one of the last physical fragments of itself left in Brooklyn. Schaefer did not lose because its beer stopped tasting good. It lost to a different kind of company, one that did not have to choose between staying where it started and competing at the scale the national market demanded.
The company saw the wall coming and did exactly what a disciplined company should do. It raised capital, built bigger, and consolidated production into the most efficient facility it could design. The Lehigh Valley plant was not a mistake. It was the correct answer to the wrong problem.
The thing standing between Schaefer and the top of the American beer market was never its own inefficiency. It was the compounding advantage of national capital against regional capital. The company built the biggest weapon it could afford.
It just turned out the other side had a bigger budget.