by Tom Acitelli
And it would not be their own. Like Jim Koch and Rhonda Kallman with the Boston Beer Company, Slosberg and Bronder had started out planning to eventually open a brewery, though that was never the main goal. The main goal was liquidity—making a handsome profit. Contract brewing saved them time spent locating a site and the subsequent construction costs, which could have run into the hundreds of thousands in the Bay Area. The realization comforted Slosberg as a homebrewer who wanted to go to the next level. “You don’t have to own your own brewery to make great beer,” he thought. “I guess some people have to hug their very own vessels and pipes every day in order to feel good, but that wasn’t a requirement for us.” It also afforded them the flexibility to keep their day jobs and run Pete’s Brewing in their spare time.
In those six months after the Palo Alto rescue mission, Slosberg and Bronder sought out older regional breweries with excess capacity. They wanted to avoid what had happened with the start-up craft brewery and figured a more established name would give them less of a chance of a sudden emergency phone call. They returned to Bronder’s roots to search, flying to Minneapolis and staying the night at his mom’s. The next day, they drove five hundred miles in a rented Honda to visit different breweries, aware that a decision had to be made soon enough to keep the brand going two thousand miles away in the Bay Area. They were resolute about finding a brewer who took their product seriously and not simply as another brand. One candidate had a big office and a new brewery he named after his Irish heritage. Bronder and Slosberg didn’t like that—too much about the brewer, not enough about the beer. They settled on the August Schell Brewing Company, a family-run concern in New Ulm, southwest of Minneapolis, dating from just before the Civil War. Pete’s Brewing was back on.
NEW YORK MINUTES
Brooklyn; Manhattan | 1987-1988
“Do you know who Milton is?” the snooty voice on the other end of the line asked Steve Hindy.
He did know who Milton Glaser was. He was one of the best graphic designers alive, the hands behind the “I Love NY” logo and innumerable magazine covers. That was why Hindy wanted to talk to him. Could he?
“Absolutely not,” Glaser’s receptionist said. “He doesn’t talk to anyone who just walks in the door.”
It was that kind of year for Hindy and his partner, Tom Potter. They had been trying to start the Brooklyn Brewery since late 1986 and were running into obstacles at nearly every turn. Their plight was a common-enough thing in the craft beer movement but ironic given their locale: the global capital of capitalism. Instead, Gotham threw up problems, not least the real estate costs for the physical brewery itself. The pair decided to start out contract brewing, and, as fellow New Yorker Matthew Reich had done a few years before, they sought out F. X. Matt Brewing in Utica, which meant seeking out F. X. Matt II. Hindy cold-called him one day.
“What makes you think you can sell beer just because you make five gallons on your kitchen stove?” Matt asked him. “My family has been doing this for one hundred years and we are having a very hard time.”
Hindy asked Potter to try. His call was greeted with the same forceful no. Hindy gave it one more try. Matt started into another harangue about the difficulties that even established brands faced. His company was itself at a crossroads as one of the last regional breweries in the nation. It would lose more than $1 million in 1988 and was operating at less than half its potential capacity (which explained the room for contract brewing). Contrast that with the Miller plant eighty miles to the west in Fulton, New York: the Philip Morris division was spending $23 million to rejigger the plant so it could produce 1.5 million barrels annually of Miller’s new hit, Genuine Draft. Big Beer’s marketing budgets had convinced many consumers that brands like Genuine Draft were superior to Matt brands like Matt’s Premium and Utica Club. Moreover, Matt could not compete with lower-priced brands like Old Milwaukee and Milwaukee’s Best for one reason that was very simple (and, to newer brewers like Hindy and Potter, endearing): Matt couldn’t and wouldn’t make beer that cheaply.
It was an ominous situation. The regionals’ market share was shrinking. You could see how this was supposed to end, so why would you jump in now? Hindy pressed on in the phone call. Matt asked him what he did for a living. Hindy explained his time as a foreign correspondent. There was a pause.
“Really?” Matt said. “I always wanted to be a journalist.”
They talked for the next fifteen minutes about the news business and literature—Matt had studied it at Princeton and wrote poetry as a hobby. He was even known to write apologetic verse to consumers in response to those rare complaints about his beer and to carry a copy of Henry James’s novella Daisy Miller, about a romance in Europe, in his breast pocket during walks around the brewery. He invited Hindy and Potter to Utica to discuss contract brewing.
Hindy and Potter devised the recipe with a brewing consultant named William Moeller, who had recently taken early retirement from Christian Schmidt and Sons, the last brewery to close in Philadelphia. Moeller, whose grandfather had been a brewer in Brooklyn at the turn of the century, saw the venture as a refreshing change. “For thirty-five years,” he told Hindy and Potter, “I have listened to brewery owners tell me to make a beer cheaper and faster. This is the first time in my career that an owner has ever asked me to make the best damn beer I can make.” They leafed through Moeller’s grandfather’s notebooks, fiddling with different combinations over a two-month period in Moeller’s Boyertown, Pennsylvania, basement, before settling on a recipe. Moeller would take it to Utica and, in a departure for Matt, would be on hand when the initial batches were made.
Hindy and Potter raised $300,000 from a variety of sources in 1986 and 1987: lawyers, bankers, friends, relatives, even low-paid journalists that Hindy had known in his soon-to-be former life (the two would both turn full-time by the end of the year, though Hindy returned briefly to Newsday during the first Gulf War in 1991). They hit their goal at an unimaginably lucky moment: right before the stock market crash on October 19, 1987. The market lost more than 20 percent of its value in that single day, taking investor confidence down with it.
Hindy and Potter also paid for services through stakes in the company—Bill Moeller got one, for instance. So did Milton Glaser. Hindy finally got through to the graphic-design legend, approaching the end run around the receptionist as a dogged reporter chasing a scoop. Glaser got the concept immediately, more than Hindy or Potter, really. Beer in Brooklyn. Brooklyn beer. Brooklyn. Brooklyn, New York. America’s fourth-largest city. The Borough of Kings. Known worldwide. A brand in itself. Hindy and Potter had pitched the iconic imagery of the borough, including the Brooklyn Bridge and even the Brooklyn Eagle, a newspaper once edited by Walt Whitman. Instead, Glaser went with a simple yet elegant B—no cheesy graphic, just the perception of Brooklyn, what it meant to people. His clients were underwhelmed when he unveiled it. “Don’t say a word,” Glaser said. “Take this home and show it to your wives. Put it on the counter in your kitchen and live with it for a while.”
The first cases of Brooklyn Lager, with Glaser’s design, were delivered to the company’s first five accounts on March 30, 1988. By June there were 150 accounts, and a fanfare-filled delivery of the first bottles to Manhattan via water taxi was planned for August. Hindy and Potter had rented space in an old warehouse formerly used by the Hittleman Brewery, one of the dozens of breweries that had once dotted Brooklyn. It was on Meserole Street, which used to be known as Brooklyn’s Brewers Row—and would be again.
The Brooklyn Brewery debuted just as the brewery portion of Matthew Reich’s beautiful New Amsterdam brewpub on Manhattan’s West Side closed. Reich, not yet forty, was the acknowledged pioneer of contract brewing— Hindy and Potter sang his praises, along with Jim Koch (even F. X. Matt, a hard man to impress, would tip his hat to the newcomer). The expense of a physical brewery in a large metropolitan area, however, proved too high. Construction costs ran hundreds of thousands of dollars over budget; and then operatin
g a restaurant alongside the 110-barrel brewery took a toll, even as New Amsterdam reached fifteen thousand barrels in annual sales and distribution in twenty-two states (far better than what Reich reached for in his original business plan). It was a New York minute rendered ironic. “How long do you think it takes to unload a truckload of malted barley in New York City?” Reich asked Hindy after the two had become friends. “It takes a lot longer than it does anywhere else.” Plus, the venture-capital firm backing him scored big on another investment (a railroad) and had no desire to extend more credit for his concern. Reich sold the restaurant portion of the old brewpub in 1989, and though New Amsterdam continued as a brand contract brewed once again out of F. X. Matt, its outer-borough rival would soon eclipse it as New York City’s most famous beer.* That rival’s ascension was not only notable for its location, although plunking a craft beer flag atop the summit of American media and finance didn’t hurt the movement. More important, the Brooklyn Brewery would place itself at the vanguard of the wider public’s understanding of craft beer. And not a moment too soon, it would turn out. The number of craft breweries and brewpubs was about to balloon, upending the entire industry in the process. Things were about to get very interesting and very messy.
*The restaurant portion of the New Amsterdam brewpub went out of business, too, shortly after the 1989 sale.
THE REVOLUTION, TELEVISED
San Francisco; Cleveland; Chicago | 1987-1990
Regal trumpets blare; goblets, flutes, steins, chalices, mugs, and bottles rush past with beer brands from England, Belgium, West Germany, Czechoslovakia, the Netherlands, and America emblazoned on their glass. A man’s hand reaches down to cradle the last vessel in the pantheon; he brings the beer inside it, a Trappist ale, to his nose and then to his lips. The music shifts to ragtime jazz. Episode two of Michael Jackson’s series The Beer Hunter can now begin.
And it does, with sweeping shots of the San Francisco Bay and of Jackson walking resolutely amid hilly streets with cable cars, on his way to a festival with almost two hundred beers on tap. We see tables with banners and wares from Sierra Nevada, Boston Beer, and the Mendocino Brewing Company. We see the taps running, the glasses passed, brimming with beer. “They come from a generation of tiny breweries,” Jackson’s voice explains over the images to British viewers back home watching Channel 4 and American ones watching the Discovery Channel, “that have sprung up all over America in the last decade.”
With his rumpled suit, owl glasses, salt-and-pepper goatee, and circlet of unkempt curls, Jackson looked like anyone’s favorite English professor. He wandered amid the festival floor and confronted for his audience a resurgence in brewing and interest in beer unlike anywhere else in the world. “To a Beer Hunter, America’s Northwest beckons like a new frontier, and Americans are beginning to discover that there’s more in the kingdom of beer than a standard six-pack from the supermarket.” Festival-goers smilingly explained the libations in their sampling glasses for the charming, curious beer bard from Yorkshire: a lager by way of Santa Cruz, California; an extra special bitter from Hood River, Oregon; an amber ale from Mendocino County in California.
The episode aired on the Discovery Channel on August 30, 1990. It showed an American craft beer movement in seemingly full and unstoppable bloom. The movement certainly appeared so on a macro level. It was in the midst of a four-year run that would see the number of craft breweries and brewpubs increase tenfold. The stories of the entities’ origins—and their geographies— were becoming ever more diverse, the plausibility of their individual success more and more assured. Americans were catching on and catapulting craft beer sales.
Or so it seemed. Scratch a little bit, and we see that none of the above was really true. Of the more than 120 craft breweries and brewpubs in the United States, about half were along the West Coast and one-third were in California. For all the growth in numbers through the 1980s, one in four beers sold in the country came from Anheuser-Busch, and other Big Beer rivals like Coors absorbed most of the rest of the market share. Brewpubs were illegal in nearly half the fifty states. Craft sales as a percentage of overall American beer sales could be measured in the very low single digits, whether they came from retailers or from taps steps away from the kettles and tuns (brewpubs made up the majority of newer operations). Craft breweries and brewpubs produced an estimated 120,000 barrels in 1988 and 180,000 in 1989, according to the Association of Brewers, the trade organization for the smaller operators that emerged out of Charlie Papazian’s American Homebrewers Association and became the go-to media source on craft brew statistics. It was all so many specks on Big Beer’s windshield.
Jackson was unequivocally correct that “the kingdom of beer” now had many more mansions and that many of these new houses were distinctly American. Jackson was also spot on that America remained a “new frontier”—enough so that fresh ventures nearly a quarter-century into the movement could still claim pioneering “firsts” on their entrepreneurial CVs. These included the Samuel Adams Brewhouse, a brewpub co-owned by Jim Koch that was the first brewery in Philadelphia since Christian Schmidt’s closed in 1987 (a contract operation called Dock Street, which brewed its beers through F. X. Matt in Utica, New York, and would grow into a full brewpub off Logan Square by 1990, was started in Philly in 1986 by former pastry chef and restaurant manager Jeffrey Ware). The Samuel Adams Brewhouse, under brewmaster Jim Pericles, opened in December 1989 with three beers: a lager called Ben Franklin Gold, Poor Richard’s Amber, and George Washington Porter.
An earlier first on the other side of the continent was the Hood River Brewing Company, started in Hood River, Oregon, right across the Columbia River from Washington State, by Jerome Chicvara, Meg Roland, Irene Firmat, and partners. It became the first craft brewery in Oregon to bottle its beer for sale. Chicvara, who worked for a distributor selling beer, had wanted to contract brew what he called Sasquatch Ale. Finding no breweries willing to do it, he set about raising $50,000 from thirty-three people, mostly relatives, as well as another $150,000 from one of the state’s economic development engines, and he opened a physical brewery in an old fruit-canning warehouse. Homebrewer David Logsdon, who owned a laboratory in nearby Parkdale that made, among other products, yeast cultures for wineries, devised Hood River’s flagship beer, Full Sail Golden Ale, with the first kegs released in the late spring of 1987 and the first bottles shortly before Thanksgiving.
There was also the Great Lakes Brewing Company, founded by brothers Patrick and Daniel Conway in late 1986. Patrick Conway had studied abroad in the early 1970s in Rome; from that base he had soaked up the pub and brewery culture of West Germany, Belgium, and Britain. The brothers raised money and supplies throughout 1987 and early 1988 and opened in September of that year Cleveland’s first brewery since Christian Schmidt and Sons closed in 1984. The city had once hosted as many as eleven breweries after Prohibition and nearly thirty in the decade after the Civil War. The Conways’ one-thousand-barrel, 140-seat brewpub at the 120-year-old Market Tavern building near downtown also signaled the first craft brewery in the Buckeye State entirely. Thaine Johnson, a brewer at the shuttered Christian Schmidt, was coaxed out of retirement to oversee the production of three initial beers retailing at $2.20 a glass, including an amber ale named after Clevelander Eliot Ness, best known for enforcing (or trying to, at least) Prohibition.
There was also the Connecticut Brewing Company, a contract operation started by John Foley, a twenty-six-year-old Wall Street bond trader and friend of Mass. Bay Brewing Company cofounders Rich Doyle and Dan Kenary. His Nathan Hale Golden Lager, a recipe culled from the state’s pre-Prohibition era and brewed through the Lion Brewery in Wilkes-Barre, Pennsylvania, became the first craft beer based in Connecticut; it hit shelves and bars in the winter of 1989.
There was also Deschutes Brewing Company, a brewpub started by Gary Fish, who grew up in the California wine business and started in the restaurant industry as a dishwasher in high school and a waiter in college. He relocated
from a restaurant in Salt Lake City to start a brewpub in Bend, Oregon, with John Harris as brewmaster in June 1988 (Harris would later move to the Hood River brewery that became known as Full Sail).
In Vermont, Long Trail Brewing Company joined Stephen Mason, Stephen Israel, and Alan Davis’s Catamount Brewing. Specializing in German-style beers, Long Trail was started by Andy Pherson in the fall of 1989 in the impossibly small town of Bridgewater Corners—the brewery joined a general store and a post office as the main commercial ventures. Across the country, in Palo Alto, California, Dean Biersch and Dan Gordon, who had spent five years studying brewing in Munich, were into their second year of running Gordon Biersch Brewery Restaurant, a 185-seat brewpub carved from an old theater; the pair talked openly of turning the concept into a chain. And on the central Oregon coast, the Rogue River Brewing Company, founded by Jack Joyce, Bob Woodell, Rob Strasser, and Jeff Schultz (Schultz was Woodell’s accountant and a homebrewer), was in its first year at a new location. The company’s initial brewpub in Ashland, a sixty-seater with a ten-barrel system in the basement, proved too small, so they moved the business 270 miles northwestward to Newport. The new brewpub opened in May 1989 with John Maier, a Siebel Institute graduate and former assistant brewer at Geoff and Marcy Larson’s Alaskan Brewing Company, as brewmaster.
A year and a half before that, Sierra Nevada had completed what may have been a first in the movement as well: a major expansion by a physical brewery involving at least one conventional loan source. In part with funding from Bank of America, Ken Grossman and Paul Camusi’s concern opened a twenty-five-thousand-square-foot brewery on East Twentieth Street in Chico, California, and, in 1989, added an adjoining twenty-seven-hundred-square-foot brewpub. The complex featured a beautiful, light-drenched, cavernous, one-hundred-barrel brewhouse capable of producing sixty thousand barrels annually under the direction of brewmaster Steve Dresler, though the founders doubted the company would ever reach that capacity. For now, it was simply satisfying to have undergone such a growth spurt after shakeouts in the wider industry. Grossman was especially pleased his brewery did not need to sell its soul to grow—the decision to open later rather than leap in during the late 1970s had made a difference. So had a cover story in the San Francisco Examiner Sunday magazine. On May 25, 1986, readers throughout the Bay Area awoke to a big, blocky headline, THE BEER THAT’S MAKING CHICO FAMOUS, and a photograph of Camusi and Grossman that absorbed the magazine’s entire cover. They were out in a sown field, the California sky stretching away toward the horizon, the two young men in jeans, T-shirts, and sneakers, sitting atop boxes of beer, stacked kegs beside them, their hair unkempt, a bearded Grossman holding a half-full glass, Camusi holding a bottle, the craftsmen taking a breather—clip the photo and the two could literally be the poster boys of the craft beer movement to that point. The subsequent story by Michael Castleman, which covered Sierra Nevada’s history and hinted at the expansion to come, helped immensely in getting their brands into more hands than any West Coast brewery in the second or now third wave.