by Tom Acitelli
Or this message on Veterans Day of the same year, which showed just how far and wide the movement had reached. It came from someone at Clemson University in South Carolina, which had yet to legalize homebrewing at the state level and which contained no craft breweries as of 1990:
Subject: Ginger Beer/Honey Beer
Does anyone have a recipe for ginger beer or for a honey beer? A friend has recommended that I try both of these, but neither one of us has a recipe. I am fairly new to this hobby, so any general advice would also be appreciated.
*Owens changed the name from Amateur Brewer as both the magazine and the movement became more professionalized.
THE POTATO-CHIP EPIPHANY
Kailua-Kona, HI | 1993-1995
At the annual Craft Brewers Conference in Austin, Texas, in April 1995, Charlie Papazian asked the ballroom of attendees how many were planning or wanted to open a brewery but had not yet done so. Most of the people in the ballroom raised their hands. As we have seen, the craft beer movement was growing across the country, making its way into areas that would have seemed commercially inhospitable—or just plain bizarre, as in the case of Geoff and Marcy Larson’s Alaskan Brewing Company in Juneau. Another such area: the other noncontiguous state.
Cameron Healy grew up in Bend, a small city in central Oregon. His father, Bill, had moved everyone there in the 1950s to run the family furniture store, but Bill soon turned to a new line of work in the windy taluses of the nearby Willamette National Forest by opening a ski resort. Mount Bachelor became one of the nation’s leading ski resorts when it came to technology, with highspeed chairlifts and a computerized ticket system. Cameron Healy worked at the resort until he left Bend to attend the University of Oregon in Eugene. It was there his story became a kind of microcosm of the 1960s. While pursuing a social sciences major, he took up yoga, converted to Sikhism, and changed his name to Nirbhao Singh Khalsa. In the process, the sleepy-eyed Oregonian, with curly hair running from the top of a prominent forehead to just above his collar, swore off alcohol and simplified his life, tilting it to revolve around the yoga commune. How to help pay for that commune, however, and yet not compromise its back-to-the-earth ethos? Healy invested $1,000 in a bakery called the Golden Temple, which opened in Eugene in 1972, and produced exactly what you might expect: whole grain breads, granola, and other healthy, natural foods of a sort that seemed novel in an America with an increasingly homogenized cuisine.
After a year and a half, Healy donated the bakery to the commune and moved on to his next venture, one as crunchy as the last but savvy. He knew he and his compatriots would age, a wave of baby boomers growing old with ideals and practices picked up in college towns like Eugene throughout the nation. Those practices would need to be serviced and those ideals respected; and both would have to be done in a convenient, uncomplicated way as the baby boomers traded “Get Clean for Gene” pins and George Harrison LPs for bourgeois respectability in car-dependent communities. Healy started a natural food distribution company out of Salem, Oregon, that grew by 1978 into a natural-food manufacturing concern called the N. S. Khalsa Company. The company, which started with a $10,000 bank loan and with Healy selling roasted nuts, trail mixes, and cheeses to outlets along Interstate 5 out of an old van, grew by the late 1980s into one of the most successful natural-food brands in the country. Its signature became the potato chip, and it’s through that, unbeknownst to the teetotaling Healy, that his story began to intertwine with the craft beer movement.
Americans loved their potato chips, Healy knew, and, through a wave of consolidations that saw smaller firms gobbled up by larger ones, most were produced through a handful of companies by the 1980s. The largest potato chip producer in the United States, Frito-Lay, was formed by the merger of two different firms and grew to forty-six production plants by the time of its own 1965 merger with Pepsi-Cola to form PepsiCo. While their nineteenth-century predecessors might have been produced by hand one slice at a time—the potato chip was said to have been invented by a chef at a Saratoga Springs, New York, resort—those of the late twentieth century were anything but. The chips produced in Frito-Lay’s dozens of plants were deep-fried by the hundreds per minute, laden with trans fats, heavily salted, and sealed in cellophane bags for shipment to all corners of the country. Americans inhaled them; potato chips reigned as the nation’s top snack food by the end of the 1980s, with sales growth twice that of any other. But consumers had little idea of the chips’ origins and couldn’t care less about what obtuse ingredients preserved them on their journeys to supermarket shelves and vending machines. If I could create a distinctive-enough product, Healy thought, there would be a mystique about them.
He set about in 1982 crafting some more natural potato chip prototypes in his home nut roaster using only Oregon-grown potatoes. The chips found a market: N. S. Khalsa’s sales hit $3 million within two years of those first home batches, mostly because of what it called its all-natural potato chips, made with local spuds, no trans fats, and, eventually, all organic ingredients. It was certainly different from what consumers were used to in a snack food, though it was not without its pratfalls. The small batches didn’t always work out taste-wise, and Healy’s company found itself pulling some bags from shelves because the quality was bad. Gradually they reached the upper end of the manufacturing learning curve, turning out consistently good batches that found their ways first into natural-food stores and then into other retailers—and without having to buy shelf space. The sales of Kettle Foods (the company changed its name in 1988) were largely due to word of mouth, consumers nudging one another about this curious addition to an American staple. The company opened plants in Ohio, Ireland, and England, and, in 1993, it scaled a personal summit for a Healy: revenues beat those of his father Bill’s ski resort. Cameron Healy started looking around for something else to do.
Luckily, he had started drinking again. A 1987 trip through northern Europe introduced him to Belgian beers in particular, and he had long been familiar with the American craft beer brands on the West Coast. Here was a whole segment of an industry that seemed to approach its production the same way he had approached the production of potato chips and other foodstuffs since the 1970s; it even had the same mystique about it. Craft beer brands had colorful owners and local foci in their production. Not only that, but also just about every brand, even the contract brewers, chose to anchor their imagery to their localities and to stress the craftsmanship, the natural ingredients, the wholesomeness of their ingredients. Healy started assembling a business plan for a craft brewery. His son, Spoon Khalsa, had the perfect spot: Hawaii’s Big Island. Father visited son there over Thanksgiving 1993 to kick the entrepreneurial tires all over again.
The state did have a brewing history that stretched back to the early nineteenth century with the arrival of the first Europeans; but any breweries it had going were wrecked by Prohibition in 1920 as surely as it wrecked breweries on the mainland. A handful of breweries reemerged after Repeal; the Hawaii Brewing Corporation’s new location at Kapiolani Boulevard and Cooke Street in Honolulu, which opened in May 1934, was the first brewery to be completely constructed west of the Rockies post-Prohibition. The brand it produced, Primo, however, became the last one standing in Hawaii by the 1960s—and it was made under the aegis of Chicago-based Schlitz. On May 15, 1979, Schlitz shipped the last cases of Hawaii-brewed Primo and transferred production to a plant in Los Angeles; the moves marked the end of commercial brewing in the state.
Aloysius Klink and Klaus Haberich brought brewing back to Hawaii in the summer of 1986 with their Pacific Brewing Company’s Maui Lager, proudly brewed according to the strictures of the German beer purity law, the Reinheitsgebot. Their beer was a hit. The brewery sold more than four thousand barrels annually after its first year, including in California, and garnered regular media attention that could not resist noting the barley, hops, and yeast came from Belgium, Germany, and Canada, while the water was Hawaiian. Still, Pacific Brewing collapsed in late 1990.
It seems to have vanished without much of a trace, its closure likely due at least in part to shipping costs, including distribution to and on the mainland.
This was the situation facing Cameron Healy and Spoon Khalsa when they launched the Kona Brewing Company. It was a potential consumer goldmine—Resorts! Luaus! Tourists, locals, more tourists!—though isolated geographically, even more so than the Larsons’ Alaskan Brewing Company. Healy saw opportunity in this isolation. Hawaii had no commercial breweries after Pacific Brewing; here was an opportunity to repeat the successful formula of the potato chips: craft on a small scale a foodstuff that can appeal to those looking to pivot away from its mass-produced versions and to enjoy something with local roots. It was a chance to try out the locavore approach with no real competition. Healy believed they had the winds at their back.
THE BREWPUBS BOOM
Denver; Palo Alto, CA | 1993-1995
Cameron Healy and Spoon Khalsa’s Kona Brewing Company launched operations in an old newspaper pressroom in Kailua-Kona, on the western edge of Hawaii’s Big Island, in the spring of 1994; its first beers, Pacific Golden Ale and Fire Rock Pale Ale, rolled out in (mostly) kegs and bottles on February 14, 1995. Healy brought in Mattson Davis from Portland, Oregon, as the CEO and president within two years, and the brewery enjoyed steady though modest growth with three thousand barrels produced in 1997. It didn’t make a profit for the first few years and had to battle a state government that taxed brewers like they were going out of style (which, of course, they had been): Hawaii charged brewers ninety-two cents for every gallon of beer produced. Kona would not move into the financial clear until it entered the brewpub business late in the decade. That also meant tangoing with the state, which capped production for brewpubs at five thousand barrels annually.
Brewpubs were very much in vogue by then nationally. In 1993, 70 brewpubs opened; in 1994, 101 (only six closed); and more than 360 were in operation by the spring of 1995, besting the number of craft breweries by more than three to two. These numbers were helped in no small part by legal changes in big states like Florida and Texas,* and the ranks now included legendary pioneers like Bill Owens’s Buffalo Bill’s in Hayward, California; Bert Grant’s in Yakima, Washington; and the Mendocino Brewing Company’s Hopland off Highway 101 north of San Francisco alongside appendages of the most notable early standalone breweries. Not least among these was Ken Grossman’s Sierra Nevada, which opened a brewpub next to its new Chico, California, brewery in 1989 that quickly became popular not only with the locals but also with hikers, bikers, and sundry fellow travelers venturing north from San Francisco.
However prolific brewpubs might have become, they were still new enough in some places to produce firsts, just like breweries. John Hickenlooper was a Colorado geologist who had just gotten laid off from an oil company—with two years’ severance—when he visited his brother in Berkeley, California; they went to the Triple Rock Brewery and Alehouse on Shattuck Avenue, a brewpub started in March 1986 by two brothers in their mid-twenties, John and Reid Martin, who had to first convince even America’s arguably most liberal city that what it considered a factory was not a bad thing for the downtown area. Hickenlooper was blown away by the beer and returned to Denver with the idea of opening the Mile High City’s first brewpub. The Wynkoop Brewing Company opened in October 1989, after Hickenlooper and his partners raised $575,000 through a bank loan and investors (including an aunt in Scotland, who put up $10,000). The brewpub at Eighteenth and Wynkoop Streets helped transform a gritty area of Denver into a fashionable enclave, and inevitably became a major tippling point every time the Great American Beer Festival came to town.
Finally, there was the phenomenon of the brewpub chain. The idea of a restaurant serving beer that it brewed on-site was novel enough in the decade before, but now it had been proven time and again in different locations by owners of different temperaments and levels of business savvy. Frank Day saw an opportunity to take it up a notch. Day was a Harvard MBA and former Chicago ad man who started in the food-and-drink business with a run of popcorn concessions in the Midwest. He eventually grew a chain of pizza parlors specializing in Chicago deep dish and then tried brewpubs with the Walnut Brewery and Restaurant, which opened in Day’s adopted Boulder (he was born in Denver), in 1990. The following year, he and his partners took over the struggling Boulder Brewing Company.
The ballyhooed brewery that began in 1979 in the converted goat shed on Al Nelson’s farm was by 1990 on its sixth ownership group in five years. Nelson, Stick Ware, and David Hummer’s decision to turn to venture-capital money had saved the brewery and paid back original investors; it also unleashed a romping ride through craft beer’s growth spurt, where the brewery increased capacity to keep up with demand. Its profit margins ultimately suffered—it was the “tyranny of fast growth” that Tony Magee described in his own experience with Lagunitas in California. In 1990, $2 million in debt, Boulder Brewing declared bankruptcy, and Day and his partners, including Boulder city councilman (later mayor) Bob Greenlee, stepped in. Under the direction of Gina Day and Diane Greenlee, Frank and Bob’s wives, they changed the name to the Boulder Beer Company, went private, and added a restaurant to make it the city’s first brewpub.
The Walnut and Boulder Beer served as catalysts for what many of the same investors opened next: the Rock Bottom Restaurant and Brewery. Located thirty miles southeastward in Denver, it opened in November 1991 in nine thousand square feet of the first floor of Prudential Plaza, off the Sixteenth Street Mall, and quickly became a major hangout. Lines queued out the door; there were even crowds on Sunday nights. Inside, patrons could see jazz bands and brew kettles simultaneously, and bartenders put on their own show, with twirling glassware and trivia centered around the five beers overseen by Mark Youngquist, the brewmaster brought in from the BridgePort Brewing Company in Portland, Oregon (the red ale was a particular hit). It was a party as much as a restaurant-brewery. Revenues soon exceeded $1 million annually; the formula seemed invincible. Plans were soon made to expand nationwide. The Rock Bottom in Houston, Texas, would have twice as many seats as the original in Denver; Portland, Oregon, and Minneapolis were early additions, too; four more Rock Bottoms were slated for 1994 and at least three more for 1995.
Rock Bottom was at the vanguard of a brewpub-chain trend. Jon Bloostein, a one-time Wall Street investment banker, spent $2 million renovating an old kayak store in Manhattan’s Union Square and another $250,000 on brewing equipment to open Heartland Brewery in 1995. That a brewpub would be part of the city’s mid-1990s gentrification under the Giuliani administration struck nobody as unusual. The New York Times mentioned Heartland, which would grow to seven brewpubs in the city, in the same breath as the neighborhood’s Barnes & Noble, the incoming House of Blues nightclub, and the regular farmers market in Union Square that featured local produce from New Jersey and Upstate New York.
Hops Bistro and Brewery had four locations in California and Arizona by the spring of 1995, including in San Diego and the original eighty-five-hundred-square-foot spot in Scottsdale, Arizona. A similarly named though different operation, Hops Grill and Bar, had nine in Florida. The latter, which would grow into the largest brewpub chain in the country, was started by David Mason and Tom Schelldorf, two restaurant executives who logged time at the Steak and Ale chain, founded by the man behind Bennigan’s. Wynkoop’s John Hickenlooper was said to be involved in a total of eleven brewpubs, including ones in Nebraska, Kansas, and Oklahoma.
Gordon Biersch Brewing started in an old theater in downtown Palo Alto, California, in 1988. Dan Gordon had worked in restaurants since he was fifteen, and Dean Biersch had studied brewing in Munich before internships at the Spaten Brewery there and Anheuser-Busch back home. The pair’s idea was a knockout almost from the get-go; the venture grew to five locations in under eight years, including Hawaii’s first brewpub, which opened in late 1994 with expectations of as much as $7 million in revenue annually.
It was that kind of business—its g
rowth seemed to have no end in sight, and financial expectations were high from opening day. And why not? The beer produced could be sold at a considerable markup: pints selling out front for three to four dollars each could be made in the back for twenty cents. The model was not without its critics. The kitsch came in for tongue-clucking, with comparisons to the faux Irish bars that had begun springing up nationwide starting in the 1970s; like those, with their O’s and Mc’s in the names and the beer-brand mirrors on the walls, the brewpub chains seemed at times a tad too formulaic: slightly higher-end bar food, a little music, and the beer. Comparisons to other chains like Chili’s and Red Lobster in the trade media that were meant to be favorable were instead taken as warnings of what Larry Baush, publisher of the Pint Post newsletter out of Seattle, called the “McDonaldization of brewpubs. I think that’s the real danger to the whole brewpub sector, especially if we see the restaurant chains get into it, and there’s definite interest in that.”
But the focus on the beer was undeniable and redeeming, regardless of the decor and the sound system. These chains, like other lone brewpubs, produced some of the nation’s most celebrated and coveted beer. Most important, they provided perhaps millions of Americans with their first encounters with craft beer. Rock Bottom’s four-hundred-seat Houston location alone could whet the palates of more consumers in a month than most craft breweries could in a year through their tours and tastings. Still, the restaurant chains were circling; so were the investment bankers. Like with standalone craft breweries, the business of brewpubs seemed too sure a thing to leave alone.
*Texas joined forty-four other states and DC in legalizing brewpubs.
SUDS AND THE CITY