to : The Early Days of Brewing in America
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Brewing in America dates to the first communities established by English and Dutch settlers in the early to mid seventeenth century. Dutch immigrants quickly recognized that the climate and terrain of present-day New York were particularly well suited to brewing beer and growing malt and hops, two of beer&#;s essential ingredients. A map of New Amsterdam details twenty-six breweries and taverns, a clear indication that producing and selling beer were popular and profitable trades in the American colonies (Baron, Chapter Three). Despite the early popularity of beer, other alcoholic beverages steadily grew in importance and by the early eighteenth century several of them had eclipsed beer commercially.
Between and the Civil War, the market for beer did not change a great deal: both production and consumption remained essentially local affairs. Bottling was expensive, and beer did not travel well. Nearly all beer was stored in, and then served from, wooden kegs. While there were many small breweries, it was not uncommon for households to brew their own beer. In fact, several of America&#;s founding fathers brewed their own beer, including George Washington and Thomas Jefferson (Baron, Chapters 13 and 16).
-: Brewing Begins to Expand
National production statistics are unavailable before , an omission which reflects the rather limited importance of the early brewing industry. In , America&#;s 140 commercial breweries collectively produced just over 180,000 barrels of beer.[1] During the next fifty years, total beer output continued to increase, but production remained small scale and local. This is not to suggest, however, that brewing could not prove profitable. In , James Vassar founded a brewery in Poughkeepsie, New York whose successes echoed far beyond the brewing industry. After several booming years Vassar ceded control of the brewery to his two sons, Matthew and John. Following the death of his brother in an accident and a fire that destroyed the plant, Matthew Vassar rebuilt the brewery in . Demand for his beer grew rapidly, and by the early s, the Vassar brewery produced nearly 15,000 barrels of ale and porter annually, a significant amount for this period. Continued investment in the firm facilitated even greater production levels, and by its fifty employees turned out 30,000 barrels of beer, placing it amongst the nation&#;s largest breweries. Today, the Vassar name is better known for the college Matthew Vassar endowed in with earnings from the brewery (Baron, Chapter 17).
-: Brewing Emerges as a Significant Industry
While there were several hundred small scale, local breweries in the s and s, beer did not become a mass-produced, mass-consumed beverage until the decades following the Civil War. Several factors contributed to beer&#;s emergence as the nation&#;s dominant alcoholic drink. First, widespread immigration from strong beer drinking countries such as Britain, Ireland, and Germany contributed to the creation of a beer culture in the U.S.. Second, America was becoming increasingly industrialized and urbanized during these years, and many workers in the manufacturing and mining sectors drank beer during work and after. Third, many workers began to receive higher wages and salaries during these years, enabling them to buy more beer. Fourth, beer benefited from members of the temperance movement who advocated lower alcohol beer over higher alcohol spirits such as rum or whiskey.[2] Fifth, a series of technological and scientific developments fostered greater beer production and the brewing of new styles of beer. For example, artificial refrigeration enabled brewers to brew during warm American summers, and pasteurization, the eponymous procedure developed by Louis Pasteur, helped extend packaged beer&#;s shelf life, making storage and transportation more reliable (Stack, ). Finally, American brewers began brewing lager beer, a style that had long been popular in Germany and other continental European countries. Traditionally, beer in America meant British-style ale. Ales are brewed with top fermenting yeasts, and this category ranges from light pale ales to chocolate-colored stouts and porters. During the s, American brewers began making German-style lager beers. In addition to requiring a longer maturation period than ales, lager beers use a bottom fermenting yeast and are much more temperature sensitive. Lagers require a great deal of care and attention from brewers, but to the increasing numbers of nineteenth century German immigrants, lager was synonymous with beer. As the nineteenth century wore on, lager production soared, and by , lager outsold ale by a significant margin.
Together, these factors helped transform the market for beer. Total beer production increased from 3.6 million barrels in to over 66 million barrels in . By , brewing had grown into one of the leading manufacturing industries in America. Yet, this increase in output did not simply reflect America&#;s growing population. While the number of beer drinkers certainly did rise during these years, perhaps just as importantly, per capita consumption also rose dramatically, from under four gallons in to 21 gallons in the early s.
Table 1: Industry Production and per Capita Consumption, -
Year National Production (millions of barrels) Per Capita Consumption (gallons) 3.7 3.4 6.6 5.3 9.5 6.6 13.3 8.2 19.2 10.5 27.6 13.6 33.6 15.0 39.5 16.0 49.5 18.3 59.6 20.0 59.8 18.7Source: United States Brewers Association, Brewers Almanac, Washington, DC: 12-13.
An equally impressive transformation was underway at the level of the firm. Until the s and s, American breweries had been essentially small scale, local operations. By the late nineteenth century, several companies began to increase their scale of production and scope of distribution. Pabst Brewing Company in Milwaukee and Anheuser-Busch in St. Louis became two of the nation&#;s first nationally-oriented breweries, and the first to surpass annual production levels of one million barrels. By utilizing the growing railroad system to distribute significant amounts of their beer into distant beer markets, Pabst, Anheuser-Busch and a handful of other enterprises came to be called &#;shipping&#; breweries. Though these firms became very powerful, they did not control the pre-Prohibition market for beer. Rather, an equilibrium emerged that pitted large and regional shipping breweries that incorporated the latest innovations in pasteurizing, bottling, and transporting beer against a great number of locally-oriented breweries that mainly supplied draught beer in wooden kegs to their immediate markets (Stack, ).
Table 2: Industry Production, the Number of Breweries, and Average Brewery Size
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Year National Production (millions of barrels) Number of Breweries Average Brewery Size (thousands of barrels) 3.7 2,252 1,643 6.6 3,286 2,009 9.5 2,783 3,414 13.3 2,741 4,852 19.2 2,230 8,610 27.6 2,156 12,801 33.6 1,771 18,972 39.5 1,816 21,751 49.5 1,847 26,800 59.6 1,568 38,010 59.8 1,345 44,461Source: United States Brewers Association, Brewers Almanac, Washington DC: 12-13.
Between the Civil War and national prohibition, the production and consumption of beer greatly outpaced spirits. Though consumption levels of absolute alcohol had peaked in the early s, temperance and prohibition forces grew increasingly vocal and active as the century wore on, and by the late s, they constituted one of the best-organized political pressure groups of the day (Kerr, Chapter 5, ). Their efforts culminated in the ratification of the Eighteenth Amendment on January 29, that, along with the Volstead Act, made the production and distribution of any beverages with more than one-half of one percent alcohol illegal. While estimates of alcohol activity during Prohibition&#;s thirteen year reign &#; from to &#; are imprecise, beer consumption almost certainly fell, though spirit consumption may have remained constant or actually even increased slightly (Rorbaugh, Appendices).
-: The Dark Years, Prohibition
The most important decision all breweries had to make after was what to do with their plants and equipment. As they grappled with this question, they made implicit bets as to whether Prohibition would prove to be merely a temporary irritant. Pessimists immediately divested themselves of all their brewing equipment, often at substantial losses. Other firms decided to carry on with related products, and so stay prepared for any modifications to the Volstead Act which would allow for beer. Schlitz, Blatz, Pabst, and Anheuser-Busch, the leading pre-Prohibition shippers, began producing near beer, a malt beverage with under one-half of one percent alcohol. While it was not a commercial success, its production allowed these firms to keep current their beer-making skills. Anheuser-Busch called its near beer &#;Budweiser&#; which was &#;simply the old Budweiser lager beer, brewed according to the traditional method, and then de-alcoholized. &#; August Busch took the same care in purchasing the costly materials as he had done during pre-prohibition days&#; (Krebs and Orthwein, , 165). Anheuser-Busch and some of the other leading breweries were granted special licenses by the federal government for brewing alcohol greater than one half of one percent for &#;medicinal purposes&#; (Plavchan, , 168). Receiving these licensees gave these breweries a competitive advantage as they were able to keep their brewing staff active in beer-making.
The shippers, and some local breweries, also made malt syrup. While they officially advertised it as an ingredient for baking cookies, and while its production was left alone by the government, it was readily apparent to all that its primary use was for homemade beer.
Of perhaps equal importance to the day-to-day business activities of the breweries were their investment decisions. Here, as in so many other places, the shippers exhibited true entrepreneurial insight. Blatz, Pabst, and Anheuser-Busch all expanded their inventories of automobiles and trucks, which became key assets after repeal. In the s, Anheuser-Busch invested in motorized vehicles to deliver beer; by the s, it was building its own trucks in great numbers. While it never sought to become a major producer of delivery vehicles, its forward expansion in this area reflected its appreciation of the growing importance of motorized delivery, an insight which they built on after repeal.
The leading shippers also furthered their investments in bottling equipment and machinery, which was used in the production of near beer, root beer, ginger ale, and soft drinks. These products were not the commercial successes beer had been, but they gave breweries important experience in bottling. While 85 percent of pre-Prohibition beer was kegged, during Prohibition over 80 percent of near beer and a smaller, though growing, percentage of soft drinks was sold in bottles.
This remarkable increase in packaged product impelled breweries to refine their packaging skills and modify their retailing practice. As they sold near beer and soft drinks to drugstores and drink stands, they encountered new marketing problems (Cochran, , 340). Experience gained during these years helped the shippers meet radically different distribution requirements of the post-repeal beer market.
They were learning about canning as well as bottling. In , Blatz&#;s canned malt syrup sales were more than $1.3 million, significantly greater than its bulk sales. Anheuser-Busch used cans from the American Can Company for its malt syrup in the early s, a firm which would gain national prominence in for helping to pioneer the beer can. Thus, the canning of malt syrup helped create the first contacts between the leading shipping brewers and American Can Company (Plavchan, , 178; Conny, , 35-36; and American Can Company, , 7-9).
These expensive investments in automobiles and bottling equipment were paid for in part by selling off branch properties, namely saloons (See Cochran, ; Plavchan, ; Krebs and Orthwein, ). Some had equipped their saloons with furniture and bar fixtures, but as Prohibition wore on, they progressively divested themselves of these assets.
-: The Industry Reawakens after the Repeal of Prohibition
In April Congress amended the Volstead Act to allow for 3.2 percent beer. Eight months later, in December, Congress and the states ratified the Twenty-first Amendment, officially repealing Prohibition. From repeal until World War II, the brewing industry struggled to regain its pre-Prohibition fortunes. Prior to prohibition, breweries owned or controlled many saloons, which were the dominant retail outlets for alcohol. To prevent the excesses that had been attributed to saloons from reoccurring, post-repeal legislation forbade alcohol manufacturers from owning bars or saloons, requiring them instead to sell their beer to wholesalers that in turn would distribute their beverages to retailers.
Prohibition meant the end of many small breweries that had been profitable, and that, taken together, had posed a formidable challenge to the large shipping breweries. The shippers, who had much greater investments, were not as inclined to walk away from brewing.[3] After repeal, therefore, they reopened for business in a radically new environment, one in which their former rivals were absent or disadvantaged. From this favorable starting point, they continued to consolidate their position. Several hundred locally oriented breweries did reopen, but were unable to regain their pre-Prohibition competitive edge, and they quickly exited the market. From to , the number of breweries fell by ten percent.
Table 3: U.S. Brewing Industry Data, -
Year Number of Breweries Number of Barrels Produced (millions) Average Barrelage per Brewery Largest Firm Production (millions of barrels) Per Capita Consumption (gallons) 1,568 59.5 37,946 1.5 20.1 1,345 59.8 44,461 1.1 18.7 756 37.7 49,867 1.1 7.9 766 45.2 59,008 1.1 10.3 739 51.8 70,095 1.3 11.8 754 58.7 77,851 1.8 13.3 700 56.3 80,429 2.1 12.9 672 53.8 80,059 2.3 12.3 684 54.9 80,263 2.5 12.5Source: Cochran, ; Krebs and Orthwein, ; and United States Brewers Almanac, .
Annual industry output, after struggling in and , began to approach the levels reached in the s. Yet, these total increases are somewhat misleading, as the population of the U.S. had risen from 92 to 98 million in the s to 125 to 130 million in the s (Brewers Almanac, , 10). This translated directly into the lower per capita consumption levels reported in Table 3.
The largest firms grew even larger in the years following repeal, quickly surpassing their pre-Prohibition annual production levels. The post-repeal industry leaders, Anheuser-Busch and Pabst, doubled their annual production levels from to .
To take for granted the growing importance of the leading shippers during this period is to ignore their momentous reversal of pre-Prohibition trends. While medium-sized breweries dominated the industry output in the years leading up to Prohibition, the shippers regained in the s the dynamism they manifested from the s to the s. Table 4 compares the fortunes of the shippers in relation to the industry as a whole. From to , Anheuser-Busch and Pabst, the two most prominent shippers, grew much faster than the industry, and their successes helped pull the industry along. This picture changed during the years to , when the industry grew much faster than the shippers (Stack, ). With the repeal of Prohibition, the tides changed again: from to , the brewing industry grew very slowly, while Anheuser-Busch and Pabst enjoyed tremendous increases in their annual sales.
Table 4: Percentage Change in Output among Shipping Breweries, -
Period Anheuser-Busch Pabst Industry - 1,106% 685% 248% - 58% -23% 78% - 173% 87% 26%Source: Cochran, ; Krebs and Orthwein, ; and Brewers Almanac, .
National and regional shippers increasingly dominated the market. Breweries such as Anheuser-Busch, Pabst and Schlitz came to exemplify the modern business enterprise, as described by Alfred Chandler (Chandler, ), which adeptly integrated mass production and mass distribution.
Table 5: Leading Brewery Output Levels, -
Brewery Plant Location (bls) (bls) (bls) Anheuser-Busch St. Louis, MO 2,087,000 2,306,000 2,468,000 Pabst Brewing Milwaukee, WIPeoria Heights, IL
1,640,000 1,650,000 1,730,000 Jos. Schlitz Milwaukee, WI 1,620,000 1,651,083 1,570,000 F & M Schafer Brooklyn, NY 1,025,000 1,305,000 1,390,200 P. Ballantine Newark, NJ 1,120,000 1,289,425 1,322,346 Jacob Ruppert New York, NY 1,417,000 1,325,350 1,228,400 Falstaff Brewing St. Louis, MONew Orleans, LA
Omaha, NE
622,000 622,004 684,537 Duquesne Brewing Pittsburgh, PACarnegie, PA
McKees Rock, PA
625,000 680,000 690,000 Theo. Hamm Brewing St. Paul, MN 750,000 780,000 694,200 Liebman Breweries Brooklyn, NY 625,000 632,558 670,198Source: Fein, , 35.
World War One had presented a direct threat to the brewing industry. Government officials used war-time emergencies to impose grain rationing, a step that led to the lowering of the alcohol level of beer to 2.75 percent. World War Two had a completely different effect on the industry: rather than output falling, beer production rose from to .
Table 6: Production and Per Capita Consumption, -
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Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 684 54.9 12.5 574 55.2 12.3 530 63.7 14.1 491 71.0 15.8 469 81.7 18.0 468 86.6 18.6Source: USBA, 12-14.
During the war, the industry mirrored the nation at large by casting off its sluggish depression-era growth. As the war economy boomed, consumers, both troops and civilians, used some of their wages for beer, and per capita consumption grew by 50 percent between and .
-: Following World War II, the Industry Continues to Grow and to Consolidate
Yet, the take-off registered during the World War II was not sustained during the ensuing decades. Total production continued to grow, but at a slower rate than overall population.
Table 7: Production and per Capita Consumption, -
Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 468 86.6 18.6 407 88.8 17.2 292 89.8 15.9 229 94.5 15.4 197 108.0 16.0 154 134.7 18.7 117 157.9 21.1 101 188.4 23.1Source: USBA, 7-8.
The period following WWII was characterized by great industry consolidation. Total output continued to grow, though per capita consumption fell into the s before rebounding to levels above 21 gallons per capita in the s, the highest rates in the nation&#;s history. Not since the s, had consumption levels topped 21 gallons a year; however, there was a significant difference. Prior to Prohibition most consumers bought their beer from local or regional firms and over 85 percent of the beer was served from casks in saloons. Following World War II, two significant changes radically altered the market for beer. First, the total number of breweries operating fell dramatically. This signaled the growing importance of the large national breweries. While many of these firms &#; Anheuser-Busch, Pabst, Schlitz, and Blatz &#; had grown into prominence in the late nineteenth century, the scale of their operations grew tremendously in the years after the repeal of prohibition. From the mid s to , the five largest breweries saw their share of the national market grow from 19 to 75 percent (Adams, 125).
Table 8: Concentration of the Brewing Industry, -
Year Five Largest (%) Ten Largest (%) Herfindahl Index[4] 19.0 28.2 140 24.9 38.3 240 28.5 45.2 310 39.0 58.2 440 47.6 63.2 690 64.0 80.8 74.3 92.3 75.9 93.9Source: Adams, , 125.
The other important change concerned how beer was sold. Prior to Prohibition, nearly all beer was sold on-tap in bars or saloons; while approximately 10-15 percent of the beer was bottled, it was much more expensive than draught beer. In , a few years after repeal, the American Can Company successfully canned beer for the first time. The spread of home refrigeration helped spur consumer demand for canned and bottled beer, and from onwards, draught beer sales have fallen markedly.
Table 9: Packaged vs. Draught Sales, -
Year Packaged sales as a percentage of total sales(bottled and canned)
Draught sales as a percentage of total sales 30 70 52 48 64 36 72 28 78 22 81 19 82 18 86 14 88 12 88 12Source: USBA, 20; USBA, 14.
The rise of packaged beer contributed to the growing industry consolidation detailed in Table 8.
-: Continued Growth, the Microbrewery Movement, and International Dimensions of the Brewing Industry
From to , beer production continued to rise, reaching nearly 200 million barrels in . Per capita consumption hit its highest recorded level in with 23.8 gallons. Since then, though, consumption levels have dropped a bit, and during the s, consumption was typically in the 21-22 gallon range.
Table 10: Production and Per Capita Consumption, -
Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 101 188.4 23.1 105 193.8 22.7 286 201.7 22.6Source: USBA, 7-8.
Beginning around , the long decline in the number of breweries slowed and then was reversed. Judging solely by the number of breweries in operation, it appeared that a significant change had occurred: the number of firms began to increase, and by the late s, hundreds of new breweries were operating in the U.S. However, this number is rather misleading: the overall industry remained very concentrated, with a three firm concentration ratio in of 81 percent.
Table 11: Production Levels of the Leading Breweries,
Production (millions of barrels) Anheuser-Busch 99.2 Miller 39.8 Coors 22.7 Total Domestic Sales 199.4Source: Beverage Industry, May , 19.
Although entrepreneurs and beer enthusiasts began hundreds of new breweries during this period, most of them were very small, with annual production levels of between 5,000 to 100,000 barrels annually. Reflecting their small size, these new firms were nicknamed microbreweries. Collectively, microbreweries have grown to account for approximately 5-7 percent of the total beer market.
Microbreweries represented a new strategy in the brewing industry: rather than competing on the basis of price or advertising, they attempted to compete on the basis of inherent product characteristics. They emphasized the freshness of locally produced beer; they experimented with much stronger malt and hop flavors; they tried new and long-discarded brewing recipes, often reintroducing styles that had been popular in America decades earlier. Together, these breweries have had an influence much greater than their market share would suggest. The big three breweries, Anheuser Busch, Miller, and Coors, have all tried to incorporate ideas from the microbrewery movement. They have introduced new marquee brands intended to compete for some of this market, and when this failed, they have bought shares in or outright control of some microbreweries.
A final dimension of the brewing industry that has been changing concerns the emerging global market for beer. Until very recently, America was the biggest beer market in the world: as a result, American breweries have not historically looked abroad for additional sales, preferring to expand their share of the domestic market.[5] In thes, Anheuser-Busch began to systematically evaluate its market position. While it had done very well in the U.S., it had not tapped markets overseas; as a result, it began a series of international business dealings. It gradually moved from exporting small amounts of its flagship brand Budwesier to entering into licensing accords whereby breweries in a range of countries such as Ireland, Japan, and Argentina began to brew Budweiser for sale in their domestic markets. In , it established its first breweries outside of the U.S., one in England for the European market and the other in China, to service the growing markets in China and East Asia.[6]
While U.S. breweries such as Anheuser-Busch have only recently begun to explore the opportunities abroad, foreign firms have long appreciated the significance of the American market. Beginning in the late s, imports began to increase their market share and by the early s, they accounted for approximately 12 percent of the large U.S. market. Imports and microbrews typically cost more than the big three&#;s beers and they provide a wider range of flavors and tastes. One of the most interesting developments in the international market for beer occurred in when South African Breweries (SAB), the dominant brewery in South Africa, and an active firm in Europe, acquired Miller, the second largest brewery in the U.S. Though not widely discussed in the U.S., this may portend a general move towards increased global integration in the world market for beer.
Annotated Bibliography
Adams, Walter and James Brock, editors. The Structure of American Industry, ninth edition. Englewood Cliffs, New Jersey: Prentice Hall, .
Apps, Jerry. Breweries of Wisconsin. Madison, WI: University of Wisconsin Press, . Detailed examination of the history of breweries and brewing in Wisconsin.
Baron, Stanley. Brewed In America: A History of Beer and Ale in the United States.
Boston: Little, Brown, and Co, : Very good historical overview of brewing in America, from the Pilgrims through the post-World War II era.
Baum, Dan. Citizen Coors: A Grand Family Saga of Business, Politics, and Beer. New York: Harper Collins, . Very entertaining story of the Coors family and the brewery they made famous.
Beverage Industry (May ): 19-20.
Blum, Peter. Brewed In Detroit: Breweries and Beers since . Detroit: Wayne State University Press, . Very good discussion of Detroit&#;s major breweries and how they evolved. Particularly strong on the Stroh brewery.
Cochran, Thomas. Pabst Brewing Company: The History of an American Business. New York: New York University Press, : A very insightful, well-researched, and well- written history of one of America&#;s most important breweries. It is strongest on the years leading up to Prohibition.
Downard, William. The Cincinnati Brewing Industry: A Social and Economic History. Ohio University Press, : A good history of brewing in Cincinnati; particularly strong in the years prior to Prohibition.
Downard, William. Dictionary of the History of the American Brewing and Distilling Industries. Westport, CT: Greenwood Press, : Part dictionary and part encyclopedia, a useful compendium of terms, people, and events relating to the brewing and distilling industries.
Duis, Perry. The Saloon: Public Drinking in Chicagoand Boston, -. Urbana: University of Illinois Press, : An excellent overview of the institution of the saloon in pre-Prohibition America.
Eckhardt, Fred. The Essentials of Beer Style. Portland, OR: Fred Eckhardt Communications, : A helpful introduction into the basics of how beer is made and how beer styles differ.
Ehert, George. Twenty-Five Years of Brewing. New York: Gast Lithograph and Engraving, : An interesting snapshot of an important late nineteenth century New York City brewery.
Elzinga, Kenneth. &#;The Beer Industry.&#; In The Structure of American Industry, ninth edition, edited by W. Adams and J. Brock. Englewood Cliffs, New Jersey: Prentice Hall, : A good overview summary of the history, structure, conduct, and performance of America&#;s brewing industry.
Fein, Edward. &#;The 25 Leading Brewers in the United States Produce 41.5% of the Nation&#;s Total Beer Output.&#; Brewers Digest 17 (October ): 35.
Greer, Douglas. &#;Product Differentiation and Concentration in the Brewing Industry,&#; Journal of Industrial Economics 29 (): 201-19.
Greer, Douglas. &#;The Causes of Concentration in the Brewing Industry,&#; Quarterly Review of Economics and Business 21 (): 87-106.
Greer, Douglas. &#;Beer: Causes of Structural Change.&#; In Industry Studies, second edition, edited by Larry Duetsch, Armonk, New York: M.E. Sharpe, .
Hernon, Peter and Terry Ganey. Under the Influence: The Unauthorized Story of the Anheuser-Busch Dynasty. New York: Simon and Schuster, : Somewhat sensationalistic history of the family that has controlled America&#;s largest brewery, but some interesting pieces on the brewery are included.
Horowitz, Ira and Ann Horowitz. &#;Firms in a Declining Market: The Brewing Case.&#; Journal of Industrial Economics 13 (): 129-153.
Jackson, Michael. The New World Guide To Beer. Philadelphia: Running Press, : Good overview of the international world of beer and of America&#;s place in the international beer market.
Keithan, Charles. The Brewing Industry. Washington D.C: Federal Trade Commission, .
Kerr, K. Austin. Organized for Prohibition. New Haven: Yale Press, : Excellent study of the rise of the Anti-Saloon League in the United States.
Kostka, William. The Pre-prohibition History of Adolph Coors Company: -. Golden, CO: self-published book, Adolph Coors Company, : A self-published book by the Coors company that provides some interesting insights into the origins of the Colorado brewery.
Krebs, Roland and Orthwein, Percy. Making Friends Is Our Business: 100 Years of Anheuser-Busch. St. Louis, MO: self-published book, Anheuser-Busch, : A self-published book by the Anheuser-Busch brewery that has some nice illustrations and data on firm output levels. The story is nicely told but rather self-congratulatory.
&#;Large Brewers Boost Share of U.S. Beer Business,&#; Brewers Digest, 15 (July ): 55-57.
Leisley, Bruce. A History of Leisley Brewing. North Newton Kansas: Mennonite Press, : A short but useful history of the Leisley Brewing Company. This was the author&#;s undergraduate thesis.
Lender, Mark and James Martin. Drinking in America. New York: The Free Press, : Good overview of the social history of drinking in America.
McGahan, Ann. &#;The Emergence of the National Brewing Oligopoly: Competition in the American Market, -58.&#; Business History Review 65 (): 229-284: Excellent historical analysis of the origins of the brewing oligopoly following the repeal of Prohibition.
McGahan, Ann. &#;Cooperation in Prices and Capacities: Trade Associations in Brewing after Repeal.&#; Journal of Law and Economics 38 (): 521-559.
Meier, Gary and Meier, Gloria. Brewed in the Pacific Northwest: A History of Beer Making in Oregon and Washington. Seattle: Fjord Press, : A survey of the history of brewing in the Pacific Northwest.
Miller, Carl. Breweries of Cleveland. Cleveland, OH: Schnitzelbank Press, : Good historical overview of the brewing industry in Cleveland.
Norman, Donald. Structural Change and Performance in the U.S. Brewing Industry. Ph.D. dissertation, UCLA, .
One Hundred Years of Brewing. Chicago and New York: Arno Press Reprint, (Reprint ): A very important work. Very detailed historical discussion of the American brewing industry through the end of the nineteenth century.
Persons, Warren. Beer and Brewing In America: An Economic Study. New York: United Brewers Industrial Foundation, .
Plavchan, Ronald. A History of Anheuser-Busch, -. Ph.D. dissertation, St. Louis University, : Apart from Cochran&#;s analysis of Pabst, one of a very few detailed business histories of a major American brewery.
Research Company of America. A National Survey of the Brewing Industry. self-published, : A well research industry analysis with a wealth of information and data.
Rorbaugh, William. The Alcoholic Republic: An American Tradition. New York: Oxford University Press, : Excellent scholarly overview of drinking habits in America.
Rubin, Jay. &#;The Wet War: American Liquor, -.&#; In Alcohol, Reform, and Society, edited by J. Blocker. Westport, CT: Greenwood Press, : Interesting discussion of American drinking during World War II.
Salem, Frederick. . Beer: Its History and Its Economic Value as a National Beverage. New York: Arno Press, (Reprint ): Early but valuable discussion of American brewing industry.
Scherer, F.M. Industry Structure, Strategy, and Public Policy. New York: Harper Collins, : A very good essay on the brewing industry.
Shih, Ko Ching and C. Ying Shih. American Brewing Industry and the Beer Market. Brookfield, WI, : Good overview of the industry with some excellent data tables.
Skilnik, Bob. The History of Beer and Brewing in Chicago: -. Pogo Press, : Good overview of the history of brewing in Chicago.
Smith, Greg. Beer in America: The Early Years, to . Boulder, CO: Brewers Publications, : Well written account of beer&#;s development in America, from the Pilgrims to mid-nineteenth century.
Stack, Martin. &#;Local and Regional Breweries in America&#;s Brewing Industry, -.&#; Business History Review 74 (Autumn ): 435-63.
Thomann, Gallus. American Beer: Glimpses of Its History and Description of Its Manufacture. New York: United States Brewing Association, : Interesting account of the state of the brewing industry at the turn of the twentieth century.
United States Brewers Association. Annual Year Book, -. Very important primary source document published by the leading brewing trade association.
United States Brewers Foundation. Brewers Almanac, published annually, -present: Very important primary source document published by the leading brewing trade association.
Van Wieren, Dale. American Breweries II. West Point, PA: Eastern Coast Brewiana Association, . Comprehensive historical listing of every brewery in every state, arranged by city within each state.
[1] A barrel of beer is 31 gallons. One Hundred Years of Brewing, Chicagoand New York: Arno Press Reprint, : 252.
[2] During the nineteenth century, there were often distinctions between temperance advocates, who differentiated between spirits and beer, and prohibition supporters, who campaigned on the need to eliminate all alcohol.
[3] The major shippers may have been taken aback by the loss suffered by Lemp, one of the leading pre-Prohibition shipping breweries. Lemp was sold at auction in at a loss of 90 percent on the investment (Baron, , 315).
[4] The Herfinhahl Index sums the squared market shares of the fifty largest firms.
[5] China overtook the United States as the world&#;s largest beer market in .
[6] http://www.anheuser-busch.com/over/international.html
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to : The Early Days of Brewing in America
Brewing in America dates to the first communities established by English and Dutch settlers in the early to mid seventeenth century. Dutch immigrants quickly recognized that the climate and terrain of present-day New York were particularly well suited to brewing beer and growing malt and hops, two of beer&#;s essential ingredients. A map of New Amsterdam details twenty-six breweries and taverns, a clear indication that producing and selling beer were popular and profitable trades in the American colonies (Baron, Chapter Three). Despite the early popularity of beer, other alcoholic beverages steadily grew in importance and by the early eighteenth century several of them had eclipsed beer commercially.
Between and the Civil War, the market for beer did not change a great deal: both production and consumption remained essentially local affairs. Bottling was expensive, and beer did not travel well. Nearly all beer was stored in, and then served from, wooden kegs. While there were many small breweries, it was not uncommon for households to brew their own beer. In fact, several of America&#;s founding fathers brewed their own beer, including George Washington and Thomas Jefferson (Baron, Chapters 13 and 16).
-: Brewing Begins to Expand
National production statistics are unavailable before , an omission which reflects the rather limited importance of the early brewing industry. In , America&#;s 140 commercial breweries collectively produced just over 180,000 barrels of beer.[1] During the next fifty years, total beer output continued to increase, but production remained small scale and local. This is not to suggest, however, that brewing could not prove profitable. In , James Vassar founded a brewery in Poughkeepsie, New York whose successes echoed far beyond the brewing industry. After several booming years Vassar ceded control of the brewery to his two sons, Matthew and John. Following the death of his brother in an accident and a fire that destroyed the plant, Matthew Vassar rebuilt the brewery in . Demand for his beer grew rapidly, and by the early s, the Vassar brewery produced nearly 15,000 barrels of ale and porter annually, a significant amount for this period. Continued investment in the firm facilitated even greater production levels, and by its fifty employees turned out 30,000 barrels of beer, placing it amongst the nation&#;s largest breweries. Today, the Vassar name is better known for the college Matthew Vassar endowed in with earnings from the brewery (Baron, Chapter 17).
-: Brewing Emerges as a Significant Industry
While there were several hundred small scale, local breweries in the s and s, beer did not become a mass-produced, mass-consumed beverage until the decades following the Civil War. Several factors contributed to beer&#;s emergence as the nation&#;s dominant alcoholic drink. First, widespread immigration from strong beer drinking countries such as Britain, Ireland, and Germany contributed to the creation of a beer culture in the U.S.. Second, America was becoming increasingly industrialized and urbanized during these years, and many workers in the manufacturing and mining sectors drank beer during work and after. Third, many workers began to receive higher wages and salaries during these years, enabling them to buy more beer. Fourth, beer benefited from members of the temperance movement who advocated lower alcohol beer over higher alcohol spirits such as rum or whiskey.[2] Fifth, a series of technological and scientific developments fostered greater beer production and the brewing of new styles of beer. For example, artificial refrigeration enabled brewers to brew during warm American summers, and pasteurization, the eponymous procedure developed by Louis Pasteur, helped extend packaged beer&#;s shelf life, making storage and transportation more reliable (Stack, ). Finally, American brewers began brewing lager beer, a style that had long been popular in Germany and other continental European countries. Traditionally, beer in America meant British-style ale. Ales are brewed with top fermenting yeasts, and this category ranges from light pale ales to chocolate-colored stouts and porters. During the s, American brewers began making German-style lager beers. In addition to requiring a longer maturation period than ales, lager beers use a bottom fermenting yeast and are much more temperature sensitive. Lagers require a great deal of care and attention from brewers, but to the increasing numbers of nineteenth century German immigrants, lager was synonymous with beer. As the nineteenth century wore on, lager production soared, and by , lager outsold ale by a significant margin.
Together, these factors helped transform the market for beer. Total beer production increased from 3.6 million barrels in to over 66 million barrels in . By , brewing had grown into one of the leading manufacturing industries in America. Yet, this increase in output did not simply reflect America&#;s growing population. While the number of beer drinkers certainly did rise during these years, perhaps just as importantly, per capita consumption also rose dramatically, from under four gallons in to 21 gallons in the early s.
Table 1: Industry Production and per Capita Consumption, -
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Year National Production (millions of barrels) Per Capita Consumption (gallons) 3.7 3.4 6.6 5.3 9.5 6.6 13.3 8.2 19.2 10.5 27.6 13.6 33.6 15.0 39.5 16.0 49.5 18.3 59.6 20.0 59.8 18.7Source: United States Brewers Association, Brewers Almanac, Washington, DC: 12-13.
An equally impressive transformation was underway at the level of the firm. Until the s and s, American breweries had been essentially small scale, local operations. By the late nineteenth century, several companies began to increase their scale of production and scope of distribution. Pabst Brewing Company in Milwaukee and Anheuser-Busch in St. Louis became two of the nation&#;s first nationally-oriented breweries, and the first to surpass annual production levels of one million barrels. By utilizing the growing railroad system to distribute significant amounts of their beer into distant beer markets, Pabst, Anheuser-Busch and a handful of other enterprises came to be called &#;shipping&#; breweries. Though these firms became very powerful, they did not control the pre-Prohibition market for beer. Rather, an equilibrium emerged that pitted large and regional shipping breweries that incorporated the latest innovations in pasteurizing, bottling, and transporting beer against a great number of locally-oriented breweries that mainly supplied draught beer in wooden kegs to their immediate markets (Stack, ).
Table 2: Industry Production, the Number of Breweries, and Average Brewery Size
-
width=&#;504&#;>
Year National Production (millions of barrels) Number of Breweries Average Brewery Size (thousands of barrels) 3.7 2,252 1,643 6.6 3,286 2,009 9.5 2,783 3,414 13.3 2,741 4,852 19.2 2,230 8,610 27.6 2,156 12,801 33.6 1,771 18,972 39.5 1,816 21,751 49.5 1,847 26,800 59.6 1,568 38,010 59.8 1,345 44,461Source: United States Brewers Association, Brewers Almanac, Washington DC: 12-13.
Between the Civil War and national prohibition, the production and consumption of beer greatly outpaced spirits. Though consumption levels of absolute alcohol had peaked in the early s, temperance and prohibition forces grew increasingly vocal and active as the century wore on, and by the late s, they constituted one of the best-organized political pressure groups of the day (Kerr, Chapter 5, ). Their efforts culminated in the ratification of the Eighteenth Amendment on January 29, that, along with the Volstead Act, made the production and distribution of any beverages with more than one-half of one percent alcohol illegal. While estimates of alcohol activity during Prohibition&#;s thirteen year reign &#; from to &#; are imprecise, beer consumption almost certainly fell, though spirit consumption may have remained constant or actually even increased slightly (Rorbaugh, Appendices).
-: The Dark Years, Prohibition
The most important decision all breweries had to make after was what to do with their plants and equipment. As they grappled with this question, they made implicit bets as to whether Prohibition would prove to be merely a temporary irritant. Pessimists immediately divested themselves of all their brewing equipment, often at substantial losses. Other firms decided to carry on with related products, and so stay prepared for any modifications to the Volstead Act which would allow for beer. Schlitz, Blatz, Pabst, and Anheuser-Busch, the leading pre-Prohibition shippers, began producing near beer, a malt beverage with under one-half of one percent alcohol. While it was not a commercial success, its production allowed these firms to keep current their beer-making skills. Anheuser-Busch called its near beer &#;Budweiser&#; which was &#;simply the old Budweiser lager beer, brewed according to the traditional method, and then de-alcoholized. &#; August Busch took the same care in purchasing the costly materials as he had done during pre-prohibition days&#; (Krebs and Orthwein, , 165). Anheuser-Busch and some of the other leading breweries were granted special licenses by the federal government for brewing alcohol greater than one half of one percent for &#;medicinal purposes&#; (Plavchan, , 168). Receiving these licensees gave these breweries a competitive advantage as they were able to keep their brewing staff active in beer-making.
The shippers, and some local breweries, also made malt syrup. While they officially advertised it as an ingredient for baking cookies, and while its production was left alone by the government, it was readily apparent to all that its primary use was for homemade beer.
Of perhaps equal importance to the day-to-day business activities of the breweries were their investment decisions. Here, as in so many other places, the shippers exhibited true entrepreneurial insight. Blatz, Pabst, and Anheuser-Busch all expanded their inventories of automobiles and trucks, which became key assets after repeal. In the s, Anheuser-Busch invested in motorized vehicles to deliver beer; by the s, it was building its own trucks in great numbers. While it never sought to become a major producer of delivery vehicles, its forward expansion in this area reflected its appreciation of the growing importance of motorized delivery, an insight which they built on after repeal.
The leading shippers also furthered their investments in bottling equipment and machinery, which was used in the production of near beer, root beer, ginger ale, and soft drinks. These products were not the commercial successes beer had been, but they gave breweries important experience in bottling. While 85 percent of pre-Prohibition beer was kegged, during Prohibition over 80 percent of near beer and a smaller, though growing, percentage of soft drinks was sold in bottles.
This remarkable increase in packaged product impelled breweries to refine their packaging skills and modify their retailing practice. As they sold near beer and soft drinks to drugstores and drink stands, they encountered new marketing problems (Cochran, , 340). Experience gained during these years helped the shippers meet radically different distribution requirements of the post-repeal beer market.
They were learning about canning as well as bottling. In , Blatz&#;s canned malt syrup sales were more than $1.3 million, significantly greater than its bulk sales. Anheuser-Busch used cans from the American Can Company for its malt syrup in the early s, a firm which would gain national prominence in for helping to pioneer the beer can. Thus, the canning of malt syrup helped create the first contacts between the leading shipping brewers and American Can Company (Plavchan, , 178; Conny, , 35-36; and American Can Company, , 7-9).
These expensive investments in automobiles and bottling equipment were paid for in part by selling off branch properties, namely saloons (See Cochran, ; Plavchan, ; Krebs and Orthwein, ). Some had equipped their saloons with furniture and bar fixtures, but as Prohibition wore on, they progressively divested themselves of these assets.
-: The Industry Reawakens after the Repeal of Prohibition
In April Congress amended the Volstead Act to allow for 3.2 percent beer. Eight months later, in December, Congress and the states ratified the Twenty-first Amendment, officially repealing Prohibition. From repeal until World War II, the brewing industry struggled to regain its pre-Prohibition fortunes. Prior to prohibition, breweries owned or controlled many saloons, which were the dominant retail outlets for alcohol. To prevent the excesses that had been attributed to saloons from reoccurring, post-repeal legislation forbade alcohol manufacturers from owning bars or saloons, requiring them instead to sell their beer to wholesalers that in turn would distribute their beverages to retailers.
Prohibition meant the end of many small breweries that had been profitable, and that, taken together, had posed a formidable challenge to the large shipping breweries. The shippers, who had much greater investments, were not as inclined to walk away from brewing.[3] After repeal, therefore, they reopened for business in a radically new environment, one in which their former rivals were absent or disadvantaged. From this favorable starting point, they continued to consolidate their position. Several hundred locally oriented breweries did reopen, but were unable to regain their pre-Prohibition competitive edge, and they quickly exited the market. From to , the number of breweries fell by ten percent.
Table 3: U.S. Brewing Industry Data, -
Year Number of Breweries Number of Barrels Produced (millions) Average Barrelage per Brewery Largest Firm Production (millions of barrels) Per Capita Consumption (gallons) 1,568 59.5 37,946 1.5 20.1 1,345 59.8 44,461 1.1 18.7 756 37.7 49,867 1.1 7.9 766 45.2 59,008 1.1 10.3 739 51.8 70,095 1.3 11.8 754 58.7 77,851 1.8 13.3 700 56.3 80,429 2.1 12.9 672 53.8 80,059 2.3 12.3 684 54.9 80,263 2.5 12.5Source: Cochran, ; Krebs and Orthwein, ; and United States Brewers Almanac, .
Annual industry output, after struggling in and , began to approach the levels reached in the s. Yet, these total increases are somewhat misleading, as the population of the U.S. had risen from 92 to 98 million in the s to 125 to 130 million in the s (Brewers Almanac, , 10). This translated directly into the lower per capita consumption levels reported in Table 3.
The largest firms grew even larger in the years following repeal, quickly surpassing their pre-Prohibition annual production levels. The post-repeal industry leaders, Anheuser-Busch and Pabst, doubled their annual production levels from to .
To take for granted the growing importance of the leading shippers during this period is to ignore their momentous reversal of pre-Prohibition trends. While medium-sized breweries dominated the industry output in the years leading up to Prohibition, the shippers regained in the s the dynamism they manifested from the s to the s. Table 4 compares the fortunes of the shippers in relation to the industry as a whole. From to , Anheuser-Busch and Pabst, the two most prominent shippers, grew much faster than the industry, and their successes helped pull the industry along. This picture changed during the years to , when the industry grew much faster than the shippers (Stack, ). With the repeal of Prohibition, the tides changed again: from to , the brewing industry grew very slowly, while Anheuser-Busch and Pabst enjoyed tremendous increases in their annual sales.
Table 4: Percentage Change in Output among Shipping Breweries, -
Period Anheuser-Busch Pabst Industry - 1,106% 685% 248% - 58% -23% 78% - 173% 87% 26%Source: Cochran, ; Krebs and Orthwein, ; and Brewers Almanac, .
National and regional shippers increasingly dominated the market. Breweries such as Anheuser-Busch, Pabst and Schlitz came to exemplify the modern business enterprise, as described by Alfred Chandler (Chandler, ), which adeptly integrated mass production and mass distribution.
Table 5: Leading Brewery Output Levels, -
Brewery Plant Location (bls) (bls) (bls) Anheuser-Busch St. Louis, MO 2,087,000 2,306,000 2,468,000 Pabst Brewing Milwaukee, WIPeoria Heights, IL
1,640,000 1,650,000 1,730,000 Jos. Schlitz Milwaukee, WI 1,620,000 1,651,083 1,570,000 F & M Schafer Brooklyn, NY 1,025,000 1,305,000 1,390,200 P. Ballantine Newark, NJ 1,120,000 1,289,425 1,322,346 Jacob Ruppert New York, NY 1,417,000 1,325,350 1,228,400 Falstaff Brewing St. Louis, MONew Orleans, LA
Omaha, NE
622,000 622,004 684,537 Duquesne Brewing Pittsburgh, PACarnegie, PA
McKees Rock, PA
625,000 680,000 690,000 Theo. Hamm Brewing St. Paul, MN 750,000 780,000 694,200 Liebman Breweries Brooklyn, NY 625,000 632,558 670,198Source: Fein, , 35.
World War One had presented a direct threat to the brewing industry. Government officials used war-time emergencies to impose grain rationing, a step that led to the lowering of the alcohol level of beer to 2.75 percent. World War Two had a completely different effect on the industry: rather than output falling, beer production rose from to .
Table 6: Production and Per Capita Consumption, -
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Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 684 54.9 12.5 574 55.2 12.3 530 63.7 14.1 491 71.0 15.8 469 81.7 18.0 468 86.6 18.6Source: USBA, 12-14.
During the war, the industry mirrored the nation at large by casting off its sluggish depression-era growth. As the war economy boomed, consumers, both troops and civilians, used some of their wages for beer, and per capita consumption grew by 50 percent between and .
-: Following World War II, the Industry Continues to Grow and to Consolidate
Yet, the take-off registered during the World War II was not sustained during the ensuing decades. Total production continued to grow, but at a slower rate than overall population.
Table 7: Production and per Capita Consumption, -
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Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 468 86.6 18.6 407 88.8 17.2 292 89.8 15.9 229 94.5 15.4 197 108.0 16.0 154 134.7 18.7 117 157.9 21.1 101 188.4 23.1Source: USBA, 7-8.
The period following WWII was characterized by great industry consolidation. Total output continued to grow, though per capita consumption fell into the s before rebounding to levels above 21 gallons per capita in the s, the highest rates in the nation&#;s history. Not since the s, had consumption levels topped 21 gallons a year; however, there was a significant difference. Prior to Prohibition most consumers bought their beer from local or regional firms and over 85 percent of the beer was served from casks in saloons. Following World War II, two significant changes radically altered the market for beer. First, the total number of breweries operating fell dramatically. This signaled the growing importance of the large national breweries. While many of these firms &#; Anheuser-Busch, Pabst, Schlitz, and Blatz &#; had grown into prominence in the late nineteenth century, the scale of their operations grew tremendously in the years after the repeal of prohibition. From the mid s to , the five largest breweries saw their share of the national market grow from 19 to 75 percent (Adams, 125).
Table 8: Concentration of the Brewing Industry, -
Year Five Largest (%) Ten Largest (%) Herfindahl Index[4] 19.0 28.2 140 24.9 38.3 240 28.5 45.2 310 39.0 58.2 440 47.6 63.2 690 64.0 80.8 74.3 92.3 75.9 93.9Source: Adams, , 125.
The other important change concerned how beer was sold. Prior to Prohibition, nearly all beer was sold on-tap in bars or saloons; while approximately 10-15 percent of the beer was bottled, it was much more expensive than draught beer. In , a few years after repeal, the American Can Company successfully canned beer for the first time. The spread of home refrigeration helped spur consumer demand for canned and bottled beer, and from onwards, draught beer sales have fallen markedly.
Table 9: Packaged vs. Draught Sales, -
Year Packaged sales as a percentage of total sales(bottled and canned)
Draught sales as a percentage of total sales 30 70 52 48 64 36 72 28 78 22 81 19 82 18 86 14 88 12 88 12Source: USBA, 20; USBA, 14.
The rise of packaged beer contributed to the growing industry consolidation detailed in Table 8.
-: Continued Growth, the Microbrewery Movement, and International Dimensions of the Brewing Industry
From to , beer production continued to rise, reaching nearly 200 million barrels in . Per capita consumption hit its highest recorded level in with 23.8 gallons. Since then, though, consumption levels have dropped a bit, and during the s, consumption was typically in the 21-22 gallon range.
Table 10: Production and Per Capita Consumption, -
Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 101 188.4 23.1 105 193.8 22.7 286 201.7 22.6Source: USBA, 7-8.
Beginning around , the long decline in the number of breweries slowed and then was reversed. Judging solely by the number of breweries in operation, it appeared that a significant change had occurred: the number of firms began to increase, and by the late s, hundreds of new breweries were operating in the U.S. However, this number is rather misleading: the overall industry remained very concentrated, with a three firm concentration ratio in of 81 percent.
Table 11: Production Levels of the Leading Breweries,
Production (millions of barrels) Anheuser-Busch 99.2 Miller 39.8 Coors 22.7 Total Domestic Sales 199.4Source: Beverage Industry, May , 19.
Although entrepreneurs and beer enthusiasts began hundreds of new breweries during this period, most of them were very small, with annual production levels of between 5,000 to 100,000 barrels annually. Reflecting their small size, these new firms were nicknamed microbreweries. Collectively, microbreweries have grown to account for approximately 5-7 percent of the total beer market.
Microbreweries represented a new strategy in the brewing industry: rather than competing on the basis of price or advertising, they attempted to compete on the basis of inherent product characteristics. They emphasized the freshness of locally produced beer; they experimented with much stronger malt and hop flavors; they tried new and long-discarded brewing recipes, often reintroducing styles that had been popular in America decades earlier. Together, these breweries have had an influence much greater than their market share would suggest. The big three breweries, Anheuser Busch, Miller, and Coors, have all tried to incorporate ideas from the microbrewery movement. They have introduced new marquee brands intended to compete for some of this market, and when this failed, they have bought shares in or outright control of some microbreweries.
A final dimension of the brewing industry that has been changing concerns the emerging global market for beer. Until very recently, America was the biggest beer market in the world: as a result, American breweries have not historically looked abroad for additional sales, preferring to expand their share of the domestic market.[5] In thes, Anheuser-Busch began to systematically evaluate its market position. While it had done very well in the U.S., it had not tapped markets overseas; as a result, it began a series of international business dealings. It gradually moved from exporting small amounts of its flagship brand Budwesier to entering into licensing accords whereby breweries in a range of countries such as Ireland, Japan, and Argentina began to brew Budweiser for sale in their domestic markets. In , it established its first breweries outside of the U.S., one in England for the European market and the other in China, to service the growing markets in China and East Asia.[6]
While U.S. breweries such as Anheuser-Busch have only recently begun to explore the opportunities abroad, foreign firms have long appreciated the significance of the American market. Beginning in the late s, imports began to increase their market share and by the early s, they accounted for approximately 12 percent of the large U.S. market. Imports and microbrews typically cost more than the big three&#;s beers and they provide a wider range of flavors and tastes. One of the most interesting developments in the international market for beer occurred in when South African Breweries (SAB), the dominant brewery in South Africa, and an active firm in Europe, acquired Miller, the second largest brewery in the U.S. Though not widely discussed in the U.S., this may portend a general move towards increased global integration in the world market for beer.
Annotated Bibliography
Adams, Walter and James Brock, editors. The Structure of American Industry, ninth edition. Englewood Cliffs, New Jersey: Prentice Hall, .
Apps, Jerry. Breweries of Wisconsin. Madison, WI: University of Wisconsin Press, . Detailed examination of the history of breweries and brewing in Wisconsin.
Baron, Stanley. Brewed In America: A History of Beer and Ale in the United States.
If you want to learn more, please visit our website YME.
Boston: Little, Brown, and Co, : Very good historical overview of brewing in America, from the Pilgrims through the post-World War II era.
Baum, Dan. Citizen Coors: A Grand Family Saga of Business, Politics, and Beer. New York: Harper Collins, . Very entertaining story of the Coors family and the brewery they made famous.
Beverage Industry (May ): 19-20.
Blum, Peter. Brewed In Detroit: Breweries and Beers since . Detroit: Wayne State University Press, . Very good discussion of Detroit&#;s major breweries and how they evolved. Particularly strong on the Stroh brewery.
Cochran, Thomas. Pabst Brewing Company: The History of an American Business. New York: New York University Press, : A very insightful, well-researched, and well- written history of one of America&#;s most important breweries. It is strongest on the years leading up to Prohibition.
Downard, William. The Cincinnati Brewing Industry: A Social and Economic History. Ohio University Press, : A good history of brewing in Cincinnati; particularly strong in the years prior to Prohibition.
Downard, William. Dictionary of the History of the American Brewing and Distilling Industries. Westport, CT: Greenwood Press, : Part dictionary and part encyclopedia, a useful compendium of terms, people, and events relating to the brewing and distilling industries.
Duis, Perry. The Saloon: Public Drinking in Chicagoand Boston, -. Urbana: University of Illinois Press, : An excellent overview of the institution of the saloon in pre-Prohibition America.
Eckhardt, Fred. The Essentials of Beer Style. Portland, OR: Fred Eckhardt Communications, : A helpful introduction into the basics of how beer is made and how beer styles differ.
Ehert, George. Twenty-Five Years of Brewing. New York: Gast Lithograph and Engraving, : An interesting snapshot of an important late nineteenth century New York City brewery.
Elzinga, Kenneth. &#;The Beer Industry.&#; In The Structure of American Industry, ninth edition, edited by W. Adams and J. Brock. Englewood Cliffs, New Jersey: Prentice Hall, : A good overview summary of the history, structure, conduct, and performance of America&#;s brewing industry.
Fein, Edward. &#;The 25 Leading Brewers in the United States Produce 41.5% of the Nation&#;s Total Beer Output.&#; Brewers Digest 17 (October ): 35.
Greer, Douglas. &#;Product Differentiation and Concentration in the Brewing Industry,&#; Journal of Industrial Economics 29 (): 201-19.
Greer, Douglas. &#;The Causes of Concentration in the Brewing Industry,&#; Quarterly Review of Economics and Business 21 (): 87-106.
Greer, Douglas. &#;Beer: Causes of Structural Change.&#; In Industry Studies, second edition, edited by Larry Duetsch, Armonk, New York: M.E. Sharpe, .
Hernon, Peter and Terry Ganey. Under the Influence: The Unauthorized Story of the Anheuser-Busch Dynasty. New York: Simon and Schuster, : Somewhat sensationalistic history of the family that has controlled America&#;s largest brewery, but some interesting pieces on the brewery are included.
Horowitz, Ira and Ann Horowitz. &#;Firms in a Declining Market: The Brewing Case.&#; Journal of Industrial Economics 13 (): 129-153.
Jackson, Michael. The New World Guide To Beer. Philadelphia: Running Press, : Good overview of the international world of beer and of America&#;s place in the international beer market.
Keithan, Charles. The Brewing Industry. Washington D.C: Federal Trade Commission, .
Kerr, K. Austin. Organized for Prohibition. New Haven: Yale Press, : Excellent study of the rise of the Anti-Saloon League in the United States.
Kostka, William. The Pre-prohibition History of Adolph Coors Company: -. Golden, CO: self-published book, Adolph Coors Company, : A self-published book by the Coors company that provides some interesting insights into the origins of the Colorado brewery.
Krebs, Roland and Orthwein, Percy. Making Friends Is Our Business: 100 Years of Anheuser-Busch. St. Louis, MO: self-published book, Anheuser-Busch, : A self-published book by the Anheuser-Busch brewery that has some nice illustrations and data on firm output levels. The story is nicely told but rather self-congratulatory.
&#;Large Brewers Boost Share of U.S. Beer Business,&#; Brewers Digest, 15 (July ): 55-57.
Leisley, Bruce. A History of Leisley Brewing. North Newton Kansas: Mennonite Press, : A short but useful history of the Leisley Brewing Company. This was the author&#;s undergraduate thesis.
Lender, Mark and James Martin. Drinking in America. New York: The Free Press, : Good overview of the social history of drinking in America.
McGahan, Ann. &#;The Emergence of the National Brewing Oligopoly: Competition in the American Market, -58.&#; Business History Review 65 (): 229-284: Excellent historical analysis of the origins of the brewing oligopoly following the repeal of Prohibition.
McGahan, Ann. &#;Cooperation in Prices and Capacities: Trade Associations in Brewing after Repeal.&#; Journal of Law and Economics 38 (): 521-559.
Meier, Gary and Meier, Gloria. Brewed in the Pacific Northwest: A History of Beer Making in Oregon and Washington. Seattle: Fjord Press, : A survey of the history of brewing in the Pacific Northwest.
Miller, Carl. Breweries of Cleveland. Cleveland, OH: Schnitzelbank Press, : Good historical overview of the brewing industry in Cleveland.
Norman, Donald. Structural Change and Performance in the U.S. Brewing Industry. Ph.D. dissertation, UCLA, .
One Hundred Years of Brewing. Chicago and New York: Arno Press Reprint, (Reprint ): A very important work. Very detailed historical discussion of the American brewing industry through the end of the nineteenth century.
Persons, Warren. Beer and Brewing In America: An Economic Study. New York: United Brewers Industrial Foundation, .
Plavchan, Ronald. A History of Anheuser-Busch, -. Ph.D. dissertation, St. Louis University, : Apart from Cochran&#;s analysis of Pabst, one of a very few detailed business histories of a major American brewery.
Research Company of America. A National Survey of the Brewing Industry. self-published, : A well research industry analysis with a wealth of information and data.
Rorbaugh, William. The Alcoholic Republic: An American Tradition. New York: Oxford University Press, : Excellent scholarly overview of drinking habits in America.
Rubin, Jay. &#;The Wet War: American Liquor, -.&#; In Alcohol, Reform, and Society, edited by J. Blocker. Westport, CT: Greenwood Press, : Interesting discussion of American drinking during World War II.
Salem, Frederick. . Beer: Its History and Its Economic Value as a National Beverage. New York: Arno Press, (Reprint ): Early but valuable discussion of American brewing industry.
Scherer, F.M. Industry Structure, Strategy, and Public Policy. New York: Harper Collins, : A very good essay on the brewing industry.
Shih, Ko Ching and C. Ying Shih. American Brewing Industry and the Beer Market. Brookfield, WI, : Good overview of the industry with some excellent data tables.
Skilnik, Bob. The History of Beer and Brewing in Chicago: -. Pogo Press, : Good overview of the history of brewing in Chicago.
Smith, Greg. Beer in America: The Early Years, to . Boulder, CO: Brewers Publications, : Well written account of beer&#;s development in America, from the Pilgrims to mid-nineteenth century.
Stack, Martin. &#;Local and Regional Breweries in America&#;s Brewing Industry, -.&#; Business History Review 74 (Autumn ): 435-63.
Thomann, Gallus. American Beer: Glimpses of Its History and Description of Its Manufacture. New York: United States Brewing Association, : Interesting account of the state of the brewing industry at the turn of the twentieth century.
United States Brewers Association. Annual Year Book, -. Very important primary source document published by the leading brewing trade association.
United States Brewers Foundation. Brewers Almanac, published annually, -present: Very important primary source document published by the leading brewing trade association.
Van Wieren, Dale. American Breweries II. West Point, PA: Eastern Coast Brewiana Association, . Comprehensive historical listing of every brewery in every state, arranged by city within each state.
[1] A barrel of beer is 31 gallons. One Hundred Years of Brewing, Chicagoand New York: Arno Press Reprint, : 252.
[2] During the nineteenth century, there were often distinctions between temperance advocates, who differentiated between spirits and beer, and prohibition supporters, who campaigned on the need to eliminate all alcohol.
[3] The major shippers may have been taken aback by the loss suffered by Lemp, one of the leading pre-Prohibition shipping breweries. Lemp was sold at auction in at a loss of 90 percent on the investment (Baron, , 315).
[4] The Herfinhahl Index sums the squared market shares of the fifty largest firms.
[5] China overtook the United States as the world&#;s largest beer market in .
[6] http://www.anheuser-busch.com/over/international.html
to : The Early Days of Brewing in America
Brewing in America dates to the first communities established by English and Dutch settlers in the early to mid seventeenth century. Dutch immigrants quickly recognized that the climate and terrain of present-day New York were particularly well suited to brewing beer and growing malt and hops, two of beer&#;s essential ingredients. A map of New Amsterdam details twenty-six breweries and taverns, a clear indication that producing and selling beer were popular and profitable trades in the American colonies (Baron, Chapter Three). Despite the early popularity of beer, other alcoholic beverages steadily grew in importance and by the early eighteenth century several of them had eclipsed beer commercially.
Between and the Civil War, the market for beer did not change a great deal: both production and consumption remained essentially local affairs. Bottling was expensive, and beer did not travel well. Nearly all beer was stored in, and then served from, wooden kegs. While there were many small breweries, it was not uncommon for households to brew their own beer. In fact, several of America&#;s founding fathers brewed their own beer, including George Washington and Thomas Jefferson (Baron, Chapters 13 and 16).
-: Brewing Begins to Expand
National production statistics are unavailable before , an omission which reflects the rather limited importance of the early brewing industry. In , America&#;s 140 commercial breweries collectively produced just over 180,000 barrels of beer.[1] During the next fifty years, total beer output continued to increase, but production remained small scale and local. This is not to suggest, however, that brewing could not prove profitable. In , James Vassar founded a brewery in Poughkeepsie, New York whose successes echoed far beyond the brewing industry. After several booming years Vassar ceded control of the brewery to his two sons, Matthew and John. Following the death of his brother in an accident and a fire that destroyed the plant, Matthew Vassar rebuilt the brewery in . Demand for his beer grew rapidly, and by the early s, the Vassar brewery produced nearly 15,000 barrels of ale and porter annually, a significant amount for this period. Continued investment in the firm facilitated even greater production levels, and by its fifty employees turned out 30,000 barrels of beer, placing it amongst the nation&#;s largest breweries. Today, the Vassar name is better known for the college Matthew Vassar endowed in with earnings from the brewery (Baron, Chapter 17).
-: Brewing Emerges as a Significant Industry
While there were several hundred small scale, local breweries in the s and s, beer did not become a mass-produced, mass-consumed beverage until the decades following the Civil War. Several factors contributed to beer&#;s emergence as the nation&#;s dominant alcoholic drink. First, widespread immigration from strong beer drinking countries such as Britain, Ireland, and Germany contributed to the creation of a beer culture in the U.S.. Second, America was becoming increasingly industrialized and urbanized during these years, and many workers in the manufacturing and mining sectors drank beer during work and after. Third, many workers began to receive higher wages and salaries during these years, enabling them to buy more beer. Fourth, beer benefited from members of the temperance movement who advocated lower alcohol beer over higher alcohol spirits such as rum or whiskey.[2] Fifth, a series of technological and scientific developments fostered greater beer production and the brewing of new styles of beer. For example, artificial refrigeration enabled brewers to brew during warm American summers, and pasteurization, the eponymous procedure developed by Louis Pasteur, helped extend packaged beer&#;s shelf life, making storage and transportation more reliable (Stack, ). Finally, American brewers began brewing lager beer, a style that had long been popular in Germany and other continental European countries. Traditionally, beer in America meant British-style ale. Ales are brewed with top fermenting yeasts, and this category ranges from light pale ales to chocolate-colored stouts and porters. During the s, American brewers began making German-style lager beers. In addition to requiring a longer maturation period than ales, lager beers use a bottom fermenting yeast and are much more temperature sensitive. Lagers require a great deal of care and attention from brewers, but to the increasing numbers of nineteenth century German immigrants, lager was synonymous with beer. As the nineteenth century wore on, lager production soared, and by , lager outsold ale by a significant margin.
Together, these factors helped transform the market for beer. Total beer production increased from 3.6 million barrels in to over 66 million barrels in . By , brewing had grown into one of the leading manufacturing industries in America. Yet, this increase in output did not simply reflect America&#;s growing population. While the number of beer drinkers certainly did rise during these years, perhaps just as importantly, per capita consumption also rose dramatically, from under four gallons in to 21 gallons in the early s.
Table 1: Industry Production and per Capita Consumption, -
Year National Production (millions of barrels) Per Capita Consumption (gallons) 3.7 3.4 6.6 5.3 9.5 6.6 13.3 8.2 19.2 10.5 27.6 13.6 33.6 15.0 39.5 16.0 49.5 18.3 59.6 20.0 59.8 18.7Source: United States Brewers Association, Brewers Almanac, Washington, DC: 12-13.
An equally impressive transformation was underway at the level of the firm. Until the s and s, American breweries had been essentially small scale, local operations. By the late nineteenth century, several companies began to increase their scale of production and scope of distribution. Pabst Brewing Company in Milwaukee and Anheuser-Busch in St. Louis became two of the nation&#;s first nationally-oriented breweries, and the first to surpass annual production levels of one million barrels. By utilizing the growing railroad system to distribute significant amounts of their beer into distant beer markets, Pabst, Anheuser-Busch and a handful of other enterprises came to be called &#;shipping&#; breweries. Though these firms became very powerful, they did not control the pre-Prohibition market for beer. Rather, an equilibrium emerged that pitted large and regional shipping breweries that incorporated the latest innovations in pasteurizing, bottling, and transporting beer against a great number of locally-oriented breweries that mainly supplied draught beer in wooden kegs to their immediate markets (Stack, ).
Table 2: Industry Production, the Number of Breweries, and Average Brewery Size
-
Year National Production (millions of barrels) Number of Breweries Average Brewery Size (thousands of barrels) 3.7 2,252 1,643 6.6 3,286 2,009 9.5 2,783 3,414 13.3 2,741 4,852 19.2 2,230 8,610 27.6 2,156 12,801 33.6 1,771 18,972 39.5 1,816 21,751 49.5 1,847 26,800 59.6 1,568 38,010 59.8 1,345 44,461Source: United States Brewers Association, Brewers Almanac, Washington DC: 12-13.
Between the Civil War and national prohibition, the production and consumption of beer greatly outpaced spirits. Though consumption levels of absolute alcohol had peaked in the early s, temperance and prohibition forces grew increasingly vocal and active as the century wore on, and by the late s, they constituted one of the best-organized political pressure groups of the day (Kerr, Chapter 5, ). Their efforts culminated in the ratification of the Eighteenth Amendment on January 29, that, along with the Volstead Act, made the production and distribution of any beverages with more than one-half of one percent alcohol illegal. While estimates of alcohol activity during Prohibition&#;s thirteen year reign &#; from to &#; are imprecise, beer consumption almost certainly fell, though spirit consumption may have remained constant or actually even increased slightly (Rorbaugh, Appendices).
-: The Dark Years, Prohibition
The most important decision all breweries had to make after was what to do with their plants and equipment. As they grappled with this question, they made implicit bets as to whether Prohibition would prove to be merely a temporary irritant. Pessimists immediately divested themselves of all their brewing equipment, often at substantial losses. Other firms decided to carry on with related products, and so stay prepared for any modifications to the Volstead Act which would allow for beer. Schlitz, Blatz, Pabst, and Anheuser-Busch, the leading pre-Prohibition shippers, began producing near beer, a malt beverage with under one-half of one percent alcohol. While it was not a commercial success, its production allowed these firms to keep current their beer-making skills. Anheuser-Busch called its near beer &#;Budweiser&#; which was &#;simply the old Budweiser lager beer, brewed according to the traditional method, and then de-alcoholized. &#; August Busch took the same care in purchasing the costly materials as he had done during pre-prohibition days&#; (Krebs and Orthwein, , 165). Anheuser-Busch and some of the other leading breweries were granted special licenses by the federal government for brewing alcohol greater than one half of one percent for &#;medicinal purposes&#; (Plavchan, , 168). Receiving these licensees gave these breweries a competitive advantage as they were able to keep their brewing staff active in beer-making.
The shippers, and some local breweries, also made malt syrup. While they officially advertised it as an ingredient for baking cookies, and while its production was left alone by the government, it was readily apparent to all that its primary use was for homemade beer.
Of perhaps equal importance to the day-to-day business activities of the breweries were their investment decisions. Here, as in so many other places, the shippers exhibited true entrepreneurial insight. Blatz, Pabst, and Anheuser-Busch all expanded their inventories of automobiles and trucks, which became key assets after repeal. In the s, Anheuser-Busch invested in motorized vehicles to deliver beer; by the s, it was building its own trucks in great numbers. While it never sought to become a major producer of delivery vehicles, its forward expansion in this area reflected its appreciation of the growing importance of motorized delivery, an insight which they built on after repeal.
The leading shippers also furthered their investments in bottling equipment and machinery, which was used in the production of near beer, root beer, ginger ale, and soft drinks. These products were not the commercial successes beer had been, but they gave breweries important experience in bottling. While 85 percent of pre-Prohibition beer was kegged, during Prohibition over 80 percent of near beer and a smaller, though growing, percentage of soft drinks was sold in bottles.
This remarkable increase in packaged product impelled breweries to refine their packaging skills and modify their retailing practice. As they sold near beer and soft drinks to drugstores and drink stands, they encountered new marketing problems (Cochran, , 340). Experience gained during these years helped the shippers meet radically different distribution requirements of the post-repeal beer market.
They were learning about canning as well as bottling. In , Blatz&#;s canned malt syrup sales were more than $1.3 million, significantly greater than its bulk sales. Anheuser-Busch used cans from the American Can Company for its malt syrup in the early s, a firm which would gain national prominence in for helping to pioneer the beer can. Thus, the canning of malt syrup helped create the first contacts between the leading shipping brewers and American Can Company (Plavchan, , 178; Conny, , 35-36; and American Can Company, , 7-9).
These expensive investments in automobiles and bottling equipment were paid for in part by selling off branch properties, namely saloons (See Cochran, ; Plavchan, ; Krebs and Orthwein, ). Some had equipped their saloons with furniture and bar fixtures, but as Prohibition wore on, they progressively divested themselves of these assets.
-: The Industry Reawakens after the Repeal of Prohibition
In April Congress amended the Volstead Act to allow for 3.2 percent beer. Eight months later, in December, Congress and the states ratified the Twenty-first Amendment, officially repealing Prohibition. From repeal until World War II, the brewing industry struggled to regain its pre-Prohibition fortunes. Prior to prohibition, breweries owned or controlled many saloons, which were the dominant retail outlets for alcohol. To prevent the excesses that had been attributed to saloons from reoccurring, post-repeal legislation forbade alcohol manufacturers from owning bars or saloons, requiring them instead to sell their beer to wholesalers that in turn would distribute their beverages to retailers.
Prohibition meant the end of many small breweries that had been profitable, and that, taken together, had posed a formidable challenge to the large shipping breweries. The shippers, who had much greater investments, were not as inclined to walk away from brewing.[3] After repeal, therefore, they reopened for business in a radically new environment, one in which their former rivals were absent or disadvantaged. From this favorable starting point, they continued to consolidate their position. Several hundred locally oriented breweries did reopen, but were unable to regain their pre-Prohibition competitive edge, and they quickly exited the market. From to , the number of breweries fell by ten percent.
Table 3: U.S. Brewing Industry Data, -
Year Number of Breweries Number of Barrels Produced (millions) Average Barrelage per Brewery Largest Firm Production (millions of barrels) Per Capita Consumption (gallons) 1,568 59.5 37,946 1.5 20.1 1,345 59.8 44,461 1.1 18.7 756 37.7 49,867 1.1 7.9 766 45.2 59,008 1.1 10.3 739 51.8 70,095 1.3 11.8 754 58.7 77,851 1.8 13.3 700 56.3 80,429 2.1 12.9 672 53.8 80,059 2.3 12.3 684 54.9 80,263 2.5 12.5Source: Cochran, ; Krebs and Orthwein, ; and United States Brewers Almanac, .
Annual industry output, after struggling in and , began to approach the levels reached in the s. Yet, these total increases are somewhat misleading, as the population of the U.S. had risen from 92 to 98 million in the s to 125 to 130 million in the s (Brewers Almanac, , 10). This translated directly into the lower per capita consumption levels reported in Table 3.
The largest firms grew even larger in the years following repeal, quickly surpassing their pre-Prohibition annual production levels. The post-repeal industry leaders, Anheuser-Busch and Pabst, doubled their annual production levels from to .
To take for granted the growing importance of the leading shippers during this period is to ignore their momentous reversal of pre-Prohibition trends. While medium-sized breweries dominated the industry output in the years leading up to Prohibition, the shippers regained in the s the dynamism they manifested from the s to the s. Table 4 compares the fortunes of the shippers in relation to the industry as a whole. From to , Anheuser-Busch and Pabst, the two most prominent shippers, grew much faster than the industry, and their successes helped pull the industry along. This picture changed during the years to , when the industry grew much faster than the shippers (Stack, ). With the repeal of Prohibition, the tides changed again: from to , the brewing industry grew very slowly, while Anheuser-Busch and Pabst enjoyed tremendous increases in their annual sales.
Table 4: Percentage Change in Output among Shipping Breweries, -
Period Anheuser-Busch Pabst Industry - 1,106% 685% 248% - 58% -23% 78% - 173% 87% 26%Source: Cochran, ; Krebs and Orthwein, ; and Brewers Almanac, .
National and regional shippers increasingly dominated the market. Breweries such as Anheuser-Busch, Pabst and Schlitz came to exemplify the modern business enterprise, as described by Alfred Chandler (Chandler, ), which adeptly integrated mass production and mass distribution.
Table 5: Leading Brewery Output Levels, -
Brewery Plant Location (bls) (bls) (bls) Anheuser-Busch St. Louis, MO 2,087,000 2,306,000 2,468,000 Pabst Brewing Milwaukee, WIPeoria Heights, IL
1,640,000 1,650,000 1,730,000 Jos. Schlitz Milwaukee, WI 1,620,000 1,651,083 1,570,000 F & M Schafer Brooklyn, NY 1,025,000 1,305,000 1,390,200 P. Ballantine Newark, NJ 1,120,000 1,289,425 1,322,346 Jacob Ruppert New York, NY 1,417,000 1,325,350 1,228,400 Falstaff Brewing St. Louis, MONew Orleans, LA
Omaha, NE
622,000 622,004 684,537 Duquesne Brewing Pittsburgh, PACarnegie, PA
McKees Rock, PA
625,000 680,000 690,000 Theo. Hamm Brewing St. Paul, MN 750,000 780,000 694,200 Liebman Breweries Brooklyn, NY 625,000 632,558 670,198Source: Fein, , 35.
World War One had presented a direct threat to the brewing industry. Government officials used war-time emergencies to impose grain rationing, a step that led to the lowering of the alcohol level of beer to 2.75 percent. World War Two had a completely different effect on the industry: rather than output falling, beer production rose from to .
Table 6: Production and Per Capita Consumption, -
Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 684 54.9 12.5 574 55.2 12.3 530 63.7 14.1 491 71.0 15.8 469 81.7 18.0 468 86.6 18.6Source: USBA, 12-14.
During the war, the industry mirrored the nation at large by casting off its sluggish depression-era growth. As the war economy boomed, consumers, both troops and civilians, used some of their wages for beer, and per capita consumption grew by 50 percent between and .
-: Following World War II, the Industry Continues to Grow and to Consolidate
Yet, the take-off registered during the World War II was not sustained during the ensuing decades. Total production continued to grow, but at a slower rate than overall population.
Table 7: Production and per Capita Consumption, -
Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 468 86.6 18.6 407 88.8 17.2 292 89.8 15.9 229 94.5 15.4 197 108.0 16.0 154 134.7 18.7 117 157.9 21.1 101 188.4 23.1Source: USBA, 7-8.
The period following WWII was characterized by great industry consolidation. Total output continued to grow, though per capita consumption fell into the s before rebounding to levels above 21 gallons per capita in the s, the highest rates in the nation&#;s history. Not since the s, had consumption levels topped 21 gallons a year; however, there was a significant difference. Prior to Prohibition most consumers bought their beer from local or regional firms and over 85 percent of the beer was served from casks in saloons. Following World War II, two significant changes radically altered the market for beer. First, the total number of breweries operating fell dramatically. This signaled the growing importance of the large national breweries. While many of these firms &#; Anheuser-Busch, Pabst, Schlitz, and Blatz &#; had grown into prominence in the late nineteenth century, the scale of their operations grew tremendously in the years after the repeal of prohibition. From the mid s to , the five largest breweries saw their share of the national market grow from 19 to 75 percent (Adams, 125).
Table 8: Concentration of the Brewing Industry, -
Year Five Largest (%) Ten Largest (%) Herfindahl Index[4] 19.0 28.2 140 24.9 38.3 240 28.5 45.2 310 39.0 58.2 440 47.6 63.2 690 64.0 80.8 74.3 92.3 75.9 93.9Source: Adams, , 125.
The other important change concerned how beer was sold. Prior to Prohibition, nearly all beer was sold on-tap in bars or saloons; while approximately 10-15 percent of the beer was bottled, it was much more expensive than draught beer. In , a few years after repeal, the American Can Company successfully canned beer for the first time. The spread of home refrigeration helped spur consumer demand for canned and bottled beer, and from onwards, draught beer sales have fallen markedly.
Table 9: Packaged vs. Draught Sales, -
Year Packaged sales as a percentage of total sales(bottled and canned)
Draught sales as a percentage of total sales 30 70 52 48 64 36 72 28 78 22 81 19 82 18 86 14 88 12 88 12Source: USBA, 20; USBA, 14.
The rise of packaged beer contributed to the growing industry consolidation detailed in Table 8.
-: Continued Growth, the Microbrewery Movement, and International Dimensions of the Brewing Industry
From to , beer production continued to rise, reaching nearly 200 million barrels in . Per capita consumption hit its highest recorded level in with 23.8 gallons. Since then, though, consumption levels have dropped a bit, and during the s, consumption was typically in the 21-22 gallon range.
Table 10: Production and Per Capita Consumption, -
Year Number of Breweries Number of barrels withdrawn (millions) Per Capita Consumption (gallons) 101 188.4 23.1 105 193.8 22.7 286 201.7 22.6Source: USBA, 7-8.
Beginning around , the long decline in the number of breweries slowed and then was reversed. Judging solely by the number of breweries in operation, it appeared that a significant change had occurred: the number of firms began to increase, and by the late s, hundreds of new breweries were operating in the U.S. However, this number is rather misleading: the overall industry remained very concentrated, with a three firm concentration ratio in of 81 percent.
Table 11: Production Levels of the Leading Breweries,
Production (millions of barrels) Anheuser-Busch 99.2 Miller 39.8 Coors 22.7 Total Domestic Sales 199.4Source: Beverage Industry, May , 19.
Although entrepreneurs and beer enthusiasts began hundreds of new breweries during this period, most of them were very small, with annual production levels of between 5,000 to 100,000 barrels annually. Reflecting their small size, these new firms were nicknamed microbreweries. Collectively, microbreweries have grown to account for approximately 5-7 percent of the total beer market.
Microbreweries represented a new strategy in the brewing industry: rather than competing on the basis of price or advertising, they attempted to compete on the basis of inherent product characteristics. They emphasized the freshness of locally produced beer; they experimented with much stronger malt and hop flavors; they tried new and long-discarded brewing recipes, often reintroducing styles that had been popular in America decades earlier. Together, these breweries have had an influence much greater than their market share would suggest. The big three breweries, Anheuser Busch, Miller, and Coors, have all tried to incorporate ideas from the microbrewery movement. They have introduced new marquee brands intended to compete for some of this market, and when this failed, they have bought shares in or outright control of some microbreweries.
A final dimension of the brewing industry that has been changing concerns the emerging global market for beer. Until very recently, America was the biggest beer market in the world: as a result, American breweries have not historically looked abroad for additional sales, preferring to expand their share of the domestic market.[5] In thes, Anheuser-Busch began to systematically evaluate its market position. While it had done very well in the U.S., it had not tapped markets overseas; as a result, it began a series of international business dealings. It gradually moved from exporting small amounts of its flagship brand Budwesier to entering into licensing accords whereby breweries in a range of countries such as Ireland, Japan, and Argentina began to brew Budweiser for sale in their domestic markets. In , it established its first breweries outside of the U.S., one in England for the European market and the other in China, to service the growing markets in China and East Asia.[6]
While U.S. breweries such as Anheuser-Busch have only recently begun to explore the opportunities abroad, foreign firms have long appreciated the significance of the American market. Beginning in the late s, imports began to increase their market share and by the early s, they accounted for approximately 12 percent of the large U.S. market. Imports and microbrews typically cost more than the big three&#;s beers and they provide a wider range of flavors and tastes. One of the most interesting developments in the international market for beer occurred in when South African Breweries (SAB), the dominant brewery in South Africa, and an active firm in Europe, acquired Miller, the second largest brewery in the U.S. Though not widely discussed in the U.S., this may portend a general move towards increased global integration in the world market for beer.
Annotated Bibliography
Adams, Walter and James Brock, editors. The Structure of American Industry, ninth edition. Englewood Cliffs, New Jersey: Prentice Hall, .
Apps, Jerry. Breweries of Wisconsin. Madison, WI: University of Wisconsin Press, . Detailed examination of the history of breweries and brewing in Wisconsin.
Baron, Stanley. Brewed In America: A History of Beer and Ale in the United States.
Boston: Little, Brown, and Co, : Very good historical overview of brewing in America, from the Pilgrims through the post-World War II era.
Baum, Dan. Citizen Coors: A Grand Family Saga of Business, Politics, and Beer. New York: Harper Collins, . Very entertaining story of the Coors family and the brewery they made famous.
Beverage Industry (May ): 19-20.
Blum, Peter. Brewed In Detroit: Breweries and Beers since . Detroit: Wayne State University Press, . Very good discussion of Detroit&#;s major breweries and how they evolved. Particularly strong on the Stroh brewery.
Cochran, Thomas. Pabst Brewing Company: The History of an American Business. New York: New York University Press, : A very insightful, well-researched, and well- written history of one of America&#;s most important breweries. It is strongest on the years leading up to Prohibition.
Downard, William. The Cincinnati Brewing Industry: A Social and Economic History. Ohio University Press, : A good history of brewing in Cincinnati; particularly strong in the years prior to Prohibition.
Downard, William. Dictionary of the History of the American Brewing and Distilling Industries. Westport, CT: Greenwood Press, : Part dictionary and part encyclopedia, a useful compendium of terms, people, and events relating to the brewing and distilling industries.
Duis, Perry. The Saloon: Public Drinking in Chicagoand Boston, -. Urbana: University of Illinois Press, : An excellent overview of the institution of the saloon in pre-Prohibition America.
Eckhardt, Fred. The Essentials of Beer Style. Portland, OR: Fred Eckhardt Communications, : A helpful introduction into the basics of how beer is made and how beer styles differ.
Ehert, George. Twenty-Five Years of Brewing. New York: Gast Lithograph and Engraving, : An interesting snapshot of an important late nineteenth century New York City brewery.
Elzinga, Kenneth. &#;The Beer Industry.&#; In The Structure of American Industry, ninth edition, edited by W. Adams and J. Brock. Englewood Cliffs, New Jersey: Prentice Hall, : A good overview summary of the history, structure, conduct, and performance of America&#;s brewing industry.
Fein, Edward. &#;The 25 Leading Brewers in the United States Produce 41.5% of the Nation&#;s Total Beer Output.&#; Brewers Digest 17 (October ): 35.
Greer, Douglas. &#;Product Differentiation and Concentration in the Brewing Industry,&#; Journal of Industrial Economics 29 (): 201-19.
Greer, Douglas. &#;The Causes of Concentration in the Brewing Industry,&#; Quarterly Review of Economics and Business 21 (): 87-106.
Greer, Douglas. &#;Beer: Causes of Structural Change.&#; In Industry Studies, second edition, edited by Larry Duetsch, Armonk, New York: M.E. Sharpe, .
Hernon, Peter and Terry Ganey. Under the Influence: The Unauthorized Story of the Anheuser-Busch Dynasty. New York: Simon and Schuster, : Somewhat sensationalistic history of the family that has controlled America&#;s largest brewery, but some interesting pieces on the brewery are included.
Horowitz, Ira and Ann Horowitz. &#;Firms in a Declining Market: The Brewing Case.&#; Journal of Industrial Economics 13 (): 129-153.
Jackson, Michael. The New World Guide To Beer. Philadelphia: Running Press, : Good overview of the international world of beer and of America&#;s place in the international beer market.
Keithan, Charles. The Brewing Industry. Washington D.C: Federal Trade Commission, .
Kerr, K. Austin. Organized for Prohibition. New Haven: Yale Press, : Excellent study of the rise of the Anti-Saloon League in the United States.
Kostka, William. The Pre-prohibition History of Adolph Coors Company: -. Golden, CO: self-published book, Adolph Coors Company, : A self-published book by the Coors company that provides some interesting insights into the origins of the Colorado brewery.
Krebs, Roland and Orthwein, Percy. Making Friends Is Our Business: 100 Years of Anheuser-Busch. St. Louis, MO: self-published book, Anheuser-Busch, : A self-published book by the Anheuser-Busch brewery that has some nice illustrations and data on firm output levels. The story is nicely told but rather self-congratulatory.
&#;Large Brewers Boost Share of U.S. Beer Business,&#; Brewers Digest, 15 (July ): 55-57.
Leisley, Bruce. A History of Leisley Brewing. North Newton Kansas: Mennonite Press, : A short but useful history of the Leisley Brewing Company. This was the author&#;s undergraduate thesis.
Lender, Mark and James Martin. Drinking in America. New York: The Free Press, : Good overview of the social history of drinking in America.
McGahan, Ann. &#;The Emergence of the National Brewing Oligopoly: Competition in the American Market, -58.&#; Business History Review 65 (): 229-284: Excellent historical analysis of the origins of the brewing oligopoly following the repeal of Prohibition.
McGahan, Ann. &#;Cooperation in Prices and Capacities: Trade Associations in Brewing after Repeal.&#; Journal of Law and Economics 38 (): 521-559.
Meier, Gary and Meier, Gloria. Brewed in the Pacific Northwest: A History of Beer Making in Oregon and Washington. Seattle: Fjord Press, : A survey of the history of brewing in the Pacific Northwest.
Miller, Carl. Breweries of Cleveland. Cleveland, OH: Schnitzelbank Press, : Good historical overview of the brewing industry in Cleveland.
Norman, Donald. Structural Change and Performance in the U.S. Brewing Industry. Ph.D. dissertation, UCLA, .
One Hundred Years of Brewing. Chicago and New York: Arno Press Reprint, (Reprint ): A very important work. Very detailed historical discussion of the American brewing industry through the end of the nineteenth century.
Persons, Warren. Beer and Brewing In America: An Economic Study. New York: United Brewers Industrial Foundation, .
Plavchan, Ronald. A History of Anheuser-Busch, -. Ph.D. dissertation, St. Louis University, : Apart from Cochran&#;s analysis of Pabst, one of a very few detailed business histories of a major American brewery.
Research Company of America. A National Survey of the Brewing Industry. self-published, : A well research industry analysis with a wealth of information and data.
Rorbaugh, William. The Alcoholic Republic: An American Tradition. New York: Oxford University Press, : Excellent scholarly overview of drinking habits in America.
Rubin, Jay. &#;The Wet War: American Liquor, -.&#; In Alcohol, Reform, and Society, edited by J. Blocker. Westport, CT: Greenwood Press, : Interesting discussion of American drinking during World War II.
Salem, Frederick. . Beer: Its History and Its Economic Value as a National Beverage. New York: Arno Press, (Reprint ): Early but valuable discussion of American brewing industry.
Scherer, F.M. Industry Structure, Strategy, and Public Policy. New York: Harper Collins, : A very good essay on the brewing industry.
Shih, Ko Ching and C. Ying Shih. American Brewing Industry and the Beer Market. Brookfield, WI, : Good overview of the industry with some excellent data tables.
Skilnik, Bob. The History of Beer and Brewing in Chicago: -. Pogo Press, : Good overview of the history of brewing in Chicago.
Smith, Greg. Beer in America: The Early Years, to . Boulder, CO: Brewers Publications, : Well written account of beer&#;s development in America, from the Pilgrims to mid-nineteenth century.
Stack, Martin. &#;Local and Regional Breweries in America&#;s Brewing Industry, -.&#; Business History Review 74 (Autumn ): 435-63.
Thomann, Gallus. American Beer: Glimpses of Its History and Description of Its Manufacture. New York: United States Brewing Association, : Interesting account of the state of the brewing industry at the turn of the twentieth century.
United States Brewers Association. Annual Year Book, -. Very important primary source document published by the leading brewing trade association.
United States Brewers Foundation. Brewers Almanac, published annually, -present: Very important primary source document published by the leading brewing trade association.
Van Wieren, Dale. American Breweries II. West Point, PA: Eastern Coast Brewiana Association, . Comprehensive historical listing of every brewery in every state, arranged by city within each state.
[1] A barrel of beer is 31 gallons. One Hundred Years of Brewing, Chicagoand New York: Arno Press Reprint, : 252.
[2] During the nineteenth century, there were often distinctions between temperance advocates, who differentiated between spirits and beer, and prohibition supporters, who campaigned on the need to eliminate all alcohol.
[3] The major shippers may have been taken aback by the loss suffered by Lemp, one of the leading pre-Prohibition shipping breweries. Lemp was sold at auction in at a loss of 90 percent on the investment (Baron, , 315).
[4] The Herfinhahl Index sums the squared market shares of the fifty largest firms.
[5] China overtook the United States as the world&#;s largest beer market in .
[6] http://www.anheuser-busch.com/over/international.html
Citation: Stack, Martin. &#;A Concise History of America&#;s Brewing Industry&#;. EH.Net Encyclopedia, edited by Robert Whaples. July 4, . URL https://eh.net/encyclopedia/a-concise-history-of-americas-brewing-industry/
The History Of Beer, quite literally, is the history of human civilization. Some anthropologists believe that man moved away from a hunter&#; gatherer existence to a settled agriculture-based existence largely to grow enough grain to brew large amounts of beer. This appears to be unproven, but the thought that beer would have been a powerful motivation to Neolithic humans would be no surprise. Virtually the entire animal kingdom, from insects to elephants, from fruit bats to monkeys, shows a clear predilection for the consumption of ethanol. It is reasonable to believe that we and other animals evolved according to advantages alcoholic beverages can confer. Fruit, when ripe, gives off an alluring scent that tells animals that it is full of sugar and ready to eat. Ripe fruit can become quite alcoholic when naturally present yeasts begin to consume the sugars. Animals get the benefit of the food value of the fruit, but undoubtedly also find a value in the physiological effects of consuming alcohol. The fruiting plants, in turn, derived the benefit of the animal&#;s actions as a disperser of its seeds. One of the great turning points for ancient humanity was the discovery of a method by which sugar could actually be created and fermented into alcohol in the absence of honey or fruit. This technique was the start of what we now call brewing.
As best we are able to determine, brewing emerged more than 5,000 years ago in the grasslands of southern Babylonia, between the Tigris and Euphrates Rivers. Rich alluvial soils supported wild grain plants, and the people there gathered them for food &#; and to make beer. How was the discovery made? It is impossible to be sure. But grain left out in the rain will sprout, essentially starting the malting process and developing enzymes inside the seeds. Someone coming upon a sprouting grain store probably hurriedly went to make bread out of the grain before all of the nutritious starch was lost to the growing plants. Upon heating, the starches, now full of enzymes, liquefied into sugars. And once people had sugars, they knew what to do with them.
Soon the Sumerians settled upon the plains, creating a civilization, the world&#;s first, in Lower Mesopotamia. See sumer. They began to grow the grains, making them into a form of bread called bappir. In the oldest written recipe known to archeologists, they praised the goddess Ninkasi, whose name means &#;lady who fills the mouth.&#; Brewer to the gods, Ninkasi taught mankind to make beer too, which they called kas. In a hymn to the goddess, they described her as &#;the one who waters the malt set on the ground &#; you are the one who bakes the bappir-malt in the great oven&#;. You are the one who soaks the malt in a jar &#; the waves rise, the waves fall.&#; Finally Ninkasi is the one who &#;pours the fragrant beer in the lahtan-vessel, which is like the Tigris and Euphrates joined.&#; The resulting sugary bread was soaked in water, spontaneously fermented, and then strained. And so beer became part of the day-to-day life of mankind. Beer was healthy, pleasantly mood-altering, and full of nutrients and calories, and to obtain it, people created settled agriculture. At Godin Tepe, in the Zagros Mountains of modern Iran, the evidence remains. Shards of pottery from the Sumerian era are studded with calcium oxalate, a deposit from grain also known as &#;beer stone.&#; The Sumerian written character for beer is a pictogram of a type of jar, wide at the base and narrowing at the neck. Any homebrewer today would recognize it.
The Babylonians eventually conquered Sumer, and one of the benefits was the adoption of the superior beer-making skills of the people they had vanquished. The Babylonian king, Hammurabi, promulgated laws about just about everything, including beer, which he categorized into 20 different varieties. See law.
The beer culture of Sumer also made its way into Egypt. According to Dr Delwen Samuel, who did pioneering work at the Department of Archeology at the University of Cambridge, brewing was well established in the Egyptian predynastic period. By the early Dynastic period, &#; bce, it had become an important part of Egyptian culture. Eventually beer, far healthier than water, became the everyday drink of the Egyptian people, from Pharaoh to the lowliest peasant. Great grain stores were built, and the Egyptian economy was underpinned by bread and beer. The god Osiris held in his hands the very stuff of life&#;fertility, death, resurrection, and the brewing staff. Depictions of people drinking beer from jars through long straws cover the insides of Egyptian tombs. We still have the beer-drinking straws of potentates, handsomely inlaid with gold and lapis lazuli.
When the Greeks arrived in Egypt, they were unimpressed by beer, which they called zythos, referring to its foaminess. Preferring wine, they thought of the sprouted malt as a form of rotted grain and disdained the drink the Egyptians derived from it. It was not that the Egyptians did not know wine, but growing grape vines, in many parts of Egypt, was not nearly so easy as growing grain, and Egypt could grow enough grain to feed itself and still have some left for export.
The Egyptians brewed from several grains, including barley and the ancient wheat type, emmer. Texts make mention of many types of beer, some of them clearly designated for ceremonial purposes. They had &#;dark beer,&#; &#;sweet beer,&#; &#;thick beer,&#; &#;friend&#;s beer,&#; &#;garnished beer,&#; and &#;beer of the protector.&#; The gods who guarded the shrine of Osiris partook of the &#;beer of truth.&#; For funerary purposes, they needed a beer that would last until the afterlife and provided tombs with &#;beer that does not sour&#; and &#;beer of eternity.&#; Massive breweries were built, and both grain and beer were offered in payment for common labor. It is worth noting that brewing was largely the work of women, a tradition that lasted throughout various civilizations until the end of the Middle Ages.
In 332 bce, the Greeks, led by Alexander the Great, took control of Egypt. Brewing continued apace, but the Greeks, seeing beer as the drink of their rivals and of the conquered, largely disdained it. By the Hellenistic period, Egypt exported beer out of the city of Pelusium, at the mouth of the Nile, to Palestine and beyond. The tax inspectors arrived, carrying titles such as &#;Inspector of the Breweries&#; and &#;Royal Chief Beer Inspector.&#; Alexander&#;s reign as Pharaoh lasted less than a decade, but Egypt was ruled by the Ptolemys until the naval battle at Actium in 31 bce, after which Cleopatra and her lover Marc Antony took their lives. Egypt became a Roman province.
Ancient Greece and Rome, with plentiful stores of wine, never truly took to beer. But as Rome ranged out from its own lands and sought to build an empire, they made their way over mountains and found on the other side fierce people, often ready for a fight and fortified by beer. Pliny, in his Natural History, noted that &#;the populace of western Europe have a liquid with which they intoxicate themselves, made from grain and water. The manner of making this is somewhat different in Gaul, Spain and other countries, and it is called by different names, but its nature and properties are everywhere the same. The people in Spain in particular brew this liquid so well that it will keep good a long time. So exquisite is the cunning of mankind in gratifying their vices and appetites that they have invented a method to make water itself produce intoxication.&#;
In the south of present Germany, the Romans encountered the Celts, and in the north they found the Germans, who had followed the Celts into Western Europe out of Asia. These tribes, unlike the Romans, were largely illiterate, but they were fairly proficient at making beer. The nomadic Germans eventually drove the Celts out, across the English Channel into Britain. The Germans and assimilated Celts settled into a network of powerful city-states between the 6th and 7th centuries ce. Slavic tribes settled to the east. As the Roman Empire finally crumbled with the abdication of the last Roman emperor in 476, the Romans, Germans, and Slavs assimilated into each other&#;s cultures, and Western Europe took on Roman Catholicism. Monasteries were set up and became places of learning. To sustain themselves and provide hospitality for weary travelers, the monks established breweries.
During the 500 years of the Dark Ages, from 500 to ce, brewing continued, but largely without advancement. The light of civilization shone most brightly inside the monasteries, but the monks kept their beer to themselves.
Copper smelting had been used since the Bronze Age, but until now, brewing kettles in Europe had largely been small vessels, suited for households. Now settled into larger communities, Europeans started to build breweries on a scale that had not been seen since the days of ancient Egypt. Breweries moved out of kitchens and into purpose-built facilities, with malting facilities, mashing vessels, fermentation areas, and staffs of trained workers. Coopers made barrels for storage. The flavoring for beer was usually a blend of herbs called gruit, but in some areas the hop was used too. By the early 800s, the monks of the monastery of St. Gallen in Switzerland had built the first full-scale brewing operation in Europe, in many ways hundreds of years ahead of its time. The brewery&#;s floor plan, drawn up in 820, would be essentially recognizable to any modern brewer. See st. gallen.
In the early s, Hildegard von Bingen established the Benedictine nunnery of Rupertsberg, near the town of Bingen on the river Rhine. Later known as St. Hildegard, she wrote a number of books, including the natural history text Physica Sacra. In it, she described the hop as a particularly useful plant, one that was excellent for physical health and preserved all sorts of drinks. Over the s, much of Europe&#;s beer was transformed by the use of hops. The Catholic Church, which was making a fair amount of money selling gruit, resisted mightily. But the hop evaded the reach of the Church and began to grow deep roots. Soon central Europe grew into a brewing powerhouse. Ordinances were promulgated to protect grain supplies and beer purity, from Augsburg in , from Paris in , and from Nuremberg in . These were early forerunners of the now famous Reinheitsgebot of , Germany&#;s much vaunted &#;Beer Purity Law.&#; By the mid-s Hamburg became the leading brewing center in the world. By , 475 of Hamburg&#;s 1,075 manufacturers were making beer. Their techniques were now far advanced over those of any rivals and in they sent a full 133,000 hl of beer out of the city. On the backs of the brewers, the Hanseatic League, which had been founded by wealthy merchants from Lubeck and Bremen in , grew powerful. The Thirty Years War, from to , ushered in nearly a century of misery and death in Europe. Warfare raged across the continent, and the population was halved by violence, disease, and starvation. European brewing moved back inside the home. Commercial breweries revived only in the s, with brewers guilds well established throughout central Europe, charged with protecting the interests of a once again increasingly powerful clan of merchants.
In Britain, hops had not yet arrived, but gruit-flavored beer had long been the drink of the people. See gruit. When Julius Caesar arrived in Kent in 55 bc, of the people he found there he noted, &#;They had vines, but use them only for arbors in their gardens. They drink a high and mighty liquor &#;, made of barley and water.&#; Wine certainly arrived in England early, first with the conquering Romans and later with the Normans in . As the Normans assimilated into British society, the upper echelons brewed beer, but kept the Norman taste for wine, and British society separated into a wine-drinking upper class and the beer-drinking masses. Brewing remained a cottage industry though the Middle Ages and was once again dominated by women. By the s, an Assize of Bread and Ale was promulgated, regulating the price and quality of both. Fines for breaking the rules essentially became a form of licensing system, and the records of the fines paid by brewing households allow us to trace the development of brewing families in Britain over generations. See britain.
Although brewing was a household skill expected of all medieval women, some women, known as alewives, began to set up small commercial operations on a part-time basis. Sometimes they were allowed to open alehouses, and their incomes would provide them with a rare measure of independence. It was virtually the only honest independent work that women were allowed, and they took advantage of it at every opportunity. See women in brewing. After the Black Plague struck England in &#;, demand for ale rose, and female brewers became better established. Soon, however, men and the demands of commerce would conspire to wrest the brew kettle from women&#;s hands.
As hopped beer spread throughout Europe, the preservative effects of the hops meant that beer could be kept longer. Now beer could be made in greater quantities and stored, as opposed to being drunk within a matter of days. Storage and larger facilities required money to build, and women had less to invest with than men did. Slowly, but surely, men began to build larger brewing operations and force women out of their own businesses and into employment in the new breweries. Hops moved into England in the s, and although many people clung to unhopped ale for more than a century, British beer was largely hopped by the mid s.
So, in the morning, after we had called upon God for direction, we came to this resolution: to go presently ashore again and to take a better view of two places which we thought most fitting for us. For we could not now take time for further search or consideration, our victuals being much spent, especially our beer, and it now being the 20th of December.
And so, in the words of William Bradford, landed the Pilgrims on Cape Cod, Massachusetts, in the small cargo ship Mayflower in . European-style brewing was soon underway on the American continent, but often with whatever could be found or grown. By , the English Quaker John Fenwick arrived to found the town of Salem, New Jersey, and noted that his fellow settlers &#;straightaway busied themselves in erecting breweries for manufacturing beer for common drink.&#;
As colonial cities grew during the s, so did breweries. City breweries brewed the same sort of beers as were found in England during that time, often supplementing malt with other sugars, such as molasses. Farmhouses brewed with barley malt, wheat, corn, pumpkins, peas, and spices. See pumpkin ale and brewing in colonial america.
In the meantime, the Industrial Revolution in England was giving rise to a recognizably modern brewing industry. As London boomed, dark porter beer fueled the city, and the city fueled the breweries. Brewed from brown malt, heavily hopped, and matured for months, porter beer lasted well enough to be distributed throughout London&#;s thousands of pubs. The erection of enormous porter vats gave brewers the ability to blend large amounts of beer and achieve some level of reliability. The English brewers were voracious in their search for new technologies. In , only 8 years after American independence, Henry Goodwin and Samuel Whitbread installed a coal-fired steam engine in their London brewery. Twenty years later, indirect kilning of malt was combined with the use of thermometers to produce a regular supply of pale malts. Soon, porter brewing eschewed inefficient brown malts, productivity increased, and India pale ale shipped out to Calcutta in huge volumes. See industrial revolution.
Bavarian brewers, in a skilled display of industrial espionage, stole the secrets of pale malting technology from the British. They then used that secret to take over the world of brewing. Bavarian brewing had been different for centuries. Duke Albrecht V of Bavaria, seeking to protect the populace from spoiled beer, forbade summer brewing in . Brewers made the last beer of the season in the late spring, and it needed to last months until the autumn. Seeking to make beers that could survive the summer heat, brewers had been fermenting their beer in underground caves dug deep into hillsides. Down into the tunnels they dragged ice, hand cut from frozen lakes in winter, to keep the beer cool throughout the year. Over time, their beer, and the yeast that was fermenting it, changed. One species of yeast stepped forward under the cold temperatures whereas another receded. The lager yeast, so named after the German word &#;lagern,&#; meaning &#;to store,&#; was able to ferment at low temperatures, outcompete spoilage organisms, settle the bottom of the fermenting vessel, and, after a few months of aging, produce a beer that could last much longer than other beers. By , Bavarian-born John Wagner, using yeast he brought with him from his homeland, was brewing lager beer in a hut next to his Philadelphia home.
Back in Bavaria, in , the first light amber beers emerged from the Spaten Brewery in Munich and from Anton Dreher&#;s brewery in Vienna. Only 2 years later the Bavarian brewer Josef Groll, working at a brewery in the Bohemian city of Plzen, produced the first golden lager beer, the pilsner. See dreher, anton, spaten brewery, and vienna lager. Soon, a new railroad network was bringing the sparkling new beer to cities far from Bohemia. Industrialized glass making brought affordable glassware to people previously used to crockery mugs, and the bright golden pilsner beer was made that much more appealing. The introduction of Carl von Linde&#;s ammonia-based mechanical refrigeration technology freed lager brewing from a dependence on natural ice. See linde, carl von. By beer could be brewed anywhere there was a decent water supply and at any time of year. Essentially Bavarian styles of beer were soon brewed from Brazil to Tanzania, sweeping ales from most of the world map. England and Ireland held firm against the tide, as did the Rhineland with its kölsch and altbier, and, very quietly, so did tiny Belgium. Keeping fast to its centuries-old traditions of spontaneous fermentation, Belgium kept alive an ancient brewing style, while inside its Trappist monasteries, elegant new permutations of the brewer&#;s art were conjured by silent craftsmen in robes. See altbier, kölsch, and trappist breweries.
Throughout Europe and the United States, breweries built great empires of commerce in the late s. Britain built its fortunes on ales, whereas central Europe, Scandinavia, and America focused on lagers. By , three of Japan&#;s current top four brewing companies were already well established. Two world wars brought changes to breweries everywhere, but soon one great brewing nation was to leave the trade entirely. Although American lager had already diverged from its European roots, using a proportion of rice and corn to replace malt, it was the 13-year &#;noble experiment&#; of Prohibition, from to , that changed American beer for the next 60 years. See prohibition. When brewing re-emerged from the underground economy in and America&#;s breweries came back to life, the beer was different. Beer had been gone a long time, and the world had changed. Commerce, technology, and advertising converged to produce the modern American mass-market beer, a technically impressive product with far less flavor than its ancestors. The new beer took its place on shelves next to sliced white bread in plastic bags and slices of &#;cheese food product,&#; foods apparently impervious to time itself. Americans were happy enough with the new beer, but once they started traveling, they soon realized that they had been missing something.
The s and s saw a time of renewal, first in England&#;s new microbreweries and then in the American West. American craft brewers, inspired by Europe&#;s great traditions, primed by years of experimentation in their own kitchens and believing that brewing can be a jazz-like art form, today spread a gospel of full flavor and creativity in beer.
For more information, please visit industrial brewing equipment.