The Craft Beer Revolution: How a Band of Microbrewers Is Transforming the World's Favorite Drink
272
The Craft Beer Revolution: How a Band of Microbrewers Is Transforming the World's Favorite Drink
272eBook
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Overview
Over the past 40 years craft-brewed beer has exploded in growth. In 1980, a handful of "microbrewery" pioneers launched a revolution that would challenge the dominance of the national brands, Budweiser, Coors, and Miller, and change the way Americans think about, and drink, beer. Today, there are more than 2,700 craft breweries in the United States and another 1,500 are in the works. Their influence is spreading to Europe's great brewing nations, and to countries all over the globe. In The Craft Beer Revolution, Steve Hindy, co-founder of Brooklyn Brewery, tells the inside story of how a band of homebrewers and microbrewers came together to become one of America's great entrepreneurial triumphs. Beginning with Fritz Maytag, scion of the washing machine company, and Jack McAuliffe, a US Navy submariner who developed a passion for real beer while serving in Scotland, Hindy tells the story of hundreds of creative businesses like Deschutes Brewery, New Belgium, Dogfish Head, and Harpoon. He shows how their individual and collective efforts have combined to grab 10 percent of the dollar share of the US beer market. Hindy also explores how Budweiser, Miller, and Coors, all now owned by international conglomerates, are creating their own craft-style beers, the same way major food companies have acquired or created smaller organic labels to court credibility with a new generation of discerning eaters and drinkers. This is a timely and fascinating look at what America's new generation of entrepreneurs can learn from the intrepid pioneering brewers who are transforming the way Americans enjoy this wonderful, inexpensive, storied beverage: beer.
Product Details
| ISBN-13: | 9781137437884 |
|---|---|
| Publisher: | St. Martin's Publishing Group |
| Publication date: | 04/22/2014 |
| Sold by: | Macmillan |
| Format: | eBook |
| Pages: | 272 |
| File size: | 5 MB |
About the Author
Steve Hindy is the author of Beer School and co-founder, chairman and president of Brooklyn Brewery, one of America’s top 20 breweries. A former journalist, he became interested in homebrewing while serving as a Beirut-based Middle East Correspondent for the Associated Press. He and Brooklyn Brewery have been featured in The New York Times, the New York Post, Crain’s New York Business, New York magazine, CNN, The Huffington Post, and countless beer blogs and specialty publications. Hindy is a member of the Board of Directors of the Beer Institute and the Brewers Association. He lives in Brooklyn, NY.
Read an Excerpt
The Craft Beer Revolution
How a Band of Microbrewers Is Transforming the World's Favorite Drink
By Steve Hindy
Palgrave Macmillan
Copyright © 2014 Steve HindyAll rights reserved.
ISBN: 978-1-137-43788-4
CHAPTER 1
THE PIONEERS
1965–1984
1965: 1 microbrewery 182 national and regional breweries
1984: 18 microbreweries 76 noncraft national and regional breweries
In the beginning there was Fritz Maytag. And for more than a decade, he stood alone. He was the pioneer. Others followed — in the West, there was Jack McAuliffe, Jane Zimmerman, and Suzy Denison of New Albion Brewing Company, the first home-built microbrewery; Ken Grossman and Paul Camusi of Sierra Nevada Brewing Co.; Randolph Ware and David Hummer of the Boulder Beer Company; the Cartwright Brewing Company; Bert Grant of Yakima Brewing and Malting Co.; and the Independent Ale Brewery (Redhook) in Seattle, Washington. In the East, there was Matthew Reich of the Old New York Brewing Co., the pioneer of contract brewing, and Bill Newman of Wm. S. Newman Brewing Co. But Fritz Maytag started it all.
According to the Oxford English Dictionary a pioneer is "one of a body of foot-soldiers who march with or in advance of an army or regiment, having spades, pickaxes, etc. to dig trenches, repair roads, and perform other labours in clearing and preparing the way for the main body."
I am quite sure that Fritz Maytag and the others did not think of themselves as "preparing the way for the main body," but that's what they did in the 1960s and 1970s. They built the foundation for the craft brewing movement, which, as I write, includes more than 2,700 breweries and accounts for a rich 6.5 percent of the US beer market by volume and more than 10 percent by dollar. They laid down the enduring principles of smallness, independence, and all malt beers (as opposed to the rice and corn additives favored by the national brewers). They figured out how they had to price their beer to make their companies viable. Maytag was generous with his time, advice, and even ingredients when others came to visit his brewery in San Francisco.
Almost all of us in the movement think of ourselves as pioneers in our home markets. And we were. The breweries that opened subsequently played important roles in building a market for craft beer in America. All of us knew what it was like to confront a barroom full of Bud/Miller/Coors drinkers who turned up their noses at our dark and flavorful beers, our hoppy beers, our strong beers.
But it must have been even more difficult in 1965 when Maytag bought the failing Anchor Brewing Company in San Francisco. At the time microbrewed beers, or craft beers, did not exist. There were no domestic beers competing with the foreign imports. The import segment itself was growing in the United States, but that was because sophisticated drinkers already recognized it as "better beer." Fritz Maytag and his cohorts had to make it all up, the same way the early settlers did when they pushed their wagons across the Allegheny Mountains.
First off, I have a confession to make. In my early days in the craft brewing industry, I did not understand the adoration afforded Fritz Maytag. I guess it was a class thing. After all, he was the grandson of Frederick Louis Maytag, founder of the Maytag Washing Machine Company, the gold standard of washing machines in the United States, known everywhere for its TV ads with a dozing Maytag repairman who had nothing to do because Maytag washing machines were so darn sturdy and reliable. Fritz's father, Frederick Louis Maytag II, developed Maytag Blue Cheese, an American original based on the French Roquefort style.
Fritz Louis Maytag III was educated at Deerfield Academy in Massachusetts and then got a degree in American literature from Stanford. He dressed in tweedy jackets and button-down shirts. He wore wire-rimmed glasses and spoke with a mellifluous baritone that commanded attention. And he was a Maytag.
I remember saying to my colleagues, "I don't see what the fuss about Fritz Maytag is. He is an heir to the Maytag Washing Machine Company. He is playing with different sheet music than the rest of us."
How wrong I was. I apologize, Fritz. Those of us in the "main body," as I'll call the band of brewers that followed the pioneers, are so fortunate to have had Maytag out in front. Over the years he gave spellbinding speeches at Craft Brewers' Conferences. He elevated our passion for brewing. He quoted Euripides and Aeschylus speaking of the honor of being a brewer. He chided the contract brewers for being fake brewers because they contracted with other breweries to produce their beer, but he applauded them for educating the public about good beer. When we bitched about beer distributors, he reminded us that the three-tier legal system — which in many states prevents brewers from owning distributors and retail outlets — protects the independence of distributors and impedes big brewers' ability to create monopolies, allowing independent brewers to cut into the market.
Years later I got to know Maytag better when we both served on the board of the BAA. Fritz was a treasure for the craft brewing movement. And he arguably was the forerunner not just for microbrewing, but the entire DIY movement that includes cheese making, winemaking, and distilling.
But back to the story.
In the early 1960s Maytag spent some time in Japan after he graduated from college, but he soon moved to San Francisco, the ultraliberal city that was the epicenter of the hippie movement. Haight-Ashbury was ground zero for the "tune in, turn on, drop out" culture of the LSD advocate Dr. Timothy Leary. I didn't know Maytag at that time, but I doubt LSD drew him to San Francisco. He did have a full beard, but he declined to talk to me about the '60s.
Maytag, seventy-four, shared his story with fifty-seven-year-old Grossman, cofounder of Sierra Nevada, at the 2011 Craft Brewers Conference in San Francisco. Grossman was a student of Maytag's early work, but the two deserve equal credit for founding the craft brewing industry. The interview provides important insights into the early brewing experience of both men.
"I actually got into brewing before I got into the wine world, just barely but a little before," Maytag said, sitting in a comfortable easy chair before the audience of small brewers. "I used to hang out at an old place in San Francisco called the Old Spaghetti Factory — those who knew it remember it well. It was a charming place. And it was the equivalent of my local, as they would say in England. I would go there in the evening for a few beers before bed, meet with friends most every night. And one day the owner, Fred Kuh, asked me if I had ever been to the Anchor brewery and said they were closing down that next weekend, and he thought I should go see it before it was closed because it was the kind of thing I would like.
"And I later realized he was hoping I would either loan them some money or buy in or something, and that's what happened. I went down. I sat in the taproom with the owner-manager guy, Lawrence Steese, lovely man, and I just fell in love. I've often said you don't get up in the morning and think you are going to fall in love today. I had no idea I would buy the brewery when I went. But before the day was out, we had done a deal."
Not too many people could fall in love and buy a piece of a brewery just like that. But Maytag could.
Grossman quickly followed with the question: "Your family think you were nuts?"
Maytag replied: "Yeah, but they thought I was kind of goofy anyway. ... My father had actually died a very young man in 1962, so he was not there. I think if he had been around, he would have realized any business is better than no business at all."
Eleven years after Maytag bought Anchor, Grossman started running a bicycle shop in Chico, California. He said he could have bought the shop, but he thought he would be bored for the rest of his life. So instead he started a home-brew shop, selling equipment and ingredients, "which wasn't a great way to make a livelihood either. ... Getting into the brewing business sounded like an exciting career. I'm sure that has been an inspiration for a lot of people here. Brewing beer is a great thing to do with your life."
Maytag asked what Grossman's family thought about his building a brewery.
"They thought I was nuts," Grossman said, "They just stopped thinking that a few years ago." Sierra Nevada expected to pass the million-barrel sales mark in 2013 (a barrel of beer is thirty-one gallons, or about fourteen cases of twenty-four twelve-ounce bottles of beer) and is building a $120 million state-of-the-art brewery in Ashville, North Carolina.
Maytag recalled brewing about a thousand barrels of beer that first year. Anchor was the smallest brewery in America. The Anchor brewhouse was fifty-five barrels, and the company only brewed one or two brews a month. "We brewed more than we sold because it turned sour before we could sell it sometimes," he said.
"Well, I invested in the Anchor brewery," he said. "I was the majority owner, not the sole owner. And I was absolutely amazed at the idea of owning a brewery. And I knew about the Brewers' Association of America [BAA], and I knew they had a convention, and I was in Chicago at that time for another reason. I actually snuck into the convention. I never told anyone who I was, and there were all these big important guys in double-breasted suits and badges and I don't know what-all, and there were exhibits of beer signs, and I just snuck around thinking, 'Wow, I am part of this, I guess,' and then I left. But I then did next year go to the convention, which was the first year they held it in Fort Lauderdale. It had been in Chicago for many years. ...
"We went one year to Florida, and the Budweiser distributors were having their convention nearby, and I went over there and some of their yachts were bigger than my brewery."
The BAA was the trade association for small US brewers. It was started in 1942, when the government started rationing commodities like tin for World War II, by Bill O'Shea, owner of a printing company that made labels for many breweries. Small brewers came together to demand their share of the metal to make bottle caps. After the war, the BAA continued to represent small brewers' interests in Washington, DC.
When Fritz Maytag invested in Anchor, the United States had fewer than fifty breweries, and the family-run breweries were losing out to large breweries like Anheuser-Busch (AB) and Miller that were shipping and advertising their beers nationally. The Adolph Coors Company brewery was stubbornly regional at the time, but it too would go national in the 1980s. The large national breweries had a huge advantage of scale. They could use their size to buy large quantities of raw materials at lower prices. They could also use mass marketing budgets to sell the idea that their beer was better than the local stuff over TV and radio ads: "Our beer is so special we ship it all the way from St. Louis and Milwaukee to you." The use of corn and rice additives — a cheaper alternative to malted barley adjuncts that also extended the beer's shelf life — was ubiquitous even among family-run breweries. Anchor was the only brewery making all-malt beer.
Grossman asked Maytag about his first experience selling Anchor Steam Beer, a rich malty brew that was completely different from what most Americans drank at the time.
"Well, yeah, it was a tough row to hoe," said Maytag. "All the small American brewers, the small family brewers, were making very mild, light lager beers, and so the idea of having an all-malt, hoppy brew as a domestic was just unheard of. But the imports, bless their hearts — that was the category, that was the umbrella that I used to think of. Price-wise, we would be at the import price, or just below, and in terms of character and flavor, and styles, some of [the imports] were dark. Some of them were flavorful. Most of them were not. Most of them were very, very mild. If you think about it, the imports were all lagers, but there was the Mackeson Stout, the Guinness Stout, even the Dos Equis, and that was the story we told — 'Look, there are different beers for different times, and if you are going to sit by the fire and read a book, you want something you can chew on, like we did.'"
I think it safe to say most San Franciscans stuck with their Budweiser or Miller or Hamm's or Bergy or Lucky Lager. But some fell in love with Anchor Steam. My neighbor in Brooklyn, Charley Ryan, is the co-owner of Brooklyn Bowl, a bowling alley with a stage and performance space that serves great food and only carries beer from Brooklyn breweries. Charley was living in San Francisco in 1972, and he recalls buying kegs of Anchor Steam Beer for his parties.
"That beer was so rich, so fresh, so different," he recalled. "There was nothing else like it. The flavors were so vivid. It still colors my memory of San Francisco." Charley became a lifelong advocate of microbrewed and, later, craft brewed beer, thanks to Fritz Maytag and Anchor Steam beer.
Maytag, meanwhile, longed to bottle his beer. For years, he only sold his beer in kegs.
"As I look back on my earliest days in the brewing business, I used to eat dinner at a place called the Brighton Express, and they had a beautiful, beautiful black stout, Mackeson Stout. I used to sit — I'd come in from the brewery late in the evening, and I'd sit there at the communal table, and I'd have a Mackeson Stout, in a bottle, with a label, and I'd dream of the day our little brewery would be successful. And I loved those beers."
Grossman met Maytag in 1978 when Maytag did a tour of the Anchor Brewery for participants in the first wine and craft beer trade show, held in San Francisco. In those early days, Maytag encouraged Grossman to attend a BAA meeting.
"I remember encouraging you to come, and the one reason was, a small English brewer once said to me, 'The big guys come by every now and then and have a giggle.' No doubt they snickered a little behind our backs. But in fact, to our faces, and very genuinely, they welcomed us. And it was thrilling to feel welcomed to a trade. I'm sure you had the same experience."
Fritz recalled meeting many of the family brewers, including Warren Marti of August Schell Brewing Company; F. X. Matt of the Matt Brewing Company; Bill Leinenkugel of the Jacob Leinenkugel Brewing Co. Their regionally focused companies were under siege from the big national brewers, but he recalled a "cheerful camaraderie" among them.
"I mean, these were grand old brewing families, they loved getting together," Maytag said.
Grossman was just beginning to think of starting a brewery when he attended his first BAA meeting in the early 1980s.
"I was just a home brewer, so for me it was a whole new experience to meet and hang out with people who had run breweries for generations. I remember being a bit — feeling an outsider and also a little bit concerned because [industry analyst] Bob Weinberg had come out with some statement saying by the year 2000 there would only be two or three breweries left in America, and here he is the smartest brewing industry analyst. He got his PhD when he was nineteen. He's predicting my demise, and I'd go to that convention every year, and there would be a few less breweries, and everyone is talking about how terrible the industry is. I was a bit concerned the first few years." (Weinberg was partly right: by 2013 AB- InBev and MillerCoors would control about 74 percent of the US beer market.)
Both Grossman and Maytag recalled that small and large brewers were helpful to them during their early days.
Maytag said he believed they were collegial because these brewers were not directly competing with each other.
"Each had survived because it was in a rural area, often with a German population, significant German element, German oriented, and in general they didn't compete with each other. ... So there was a sense of brotherhood without the competitive aspect. And that was part of it there. Among the big brewers, I always remember when we called Miller in Los Angeles and asked if we could come and see something, and they said no. I was absolutely horrified, and it had started when Budweiser and Miller went after each other, dueling to the death. ... I don't remember what year it was, probably the early eighties or late seventies. That was the first time any brewer ever said no."
He was referring to the 1970s when AB and Miller Brewing Company bitterly accused each other of using chemical additives in their beers. They fought their battles in national advertisements on television and radio — the powerful weapons of the big brewers.
Another aspect of Maytag's experience that all craft brewers can identify with, even today, is the challenge of distribution.
"We had self-distributed from the beginning," Maytag said. (In some states, there are exceptions to the three-tier system that allow brewers to distribute their own beer.) "As far as I know, Anchor had never had a distributor, and when we got involved in 1965, we certainly did all our distributing, and the markup — we could not possibly have afforded the middleman in there, so we did all the delivering and all the rest of it. In fact, when we started bottling, which was in 1971 ... my key person, the guy who did the delivering, announced that he was going to work for the church or something. And so I did all the deliveries. And it did not take me long to understand the value of a beer distributor. We would have one account in San Jose, and one in Walnut Creek, and one in Santa Rosa, and if you drive all the way to Walnut Creek to deliver one keg of beer, it doesn't take you long to realize you need some help.
(Continues...)
Excerpted from The Craft Beer Revolution by Steve Hindy. Copyright © 2014 Steve Hindy. Excerpted by permission of Palgrave Macmillan.
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Table of Contents
Foreword; John Hickenlooper
Prologue
1. The Pioneers, 1965-1984
2. Politics, Writers, Teachers, and Community Builders
3. The First Generation: A Boom and the First Beer War, 1984-1994
4. The Class of '88
5. Big Money Meets Craft Brewing, 1994-2000
6. The Second Generation: Innovation
7. Beer and the Media
8. Craft Brewers Resuscitate the Brewers' Association of America
9. Jailbreak: Big Distributors Embrace Craft Beer
10. The Brewers' Association of America and the Association of Brewers Merge
11. A Seat at the Table
12. The Third Generation: Many Models Emerge
Epilogue