by Tom Acitelli
Kim Jordan, cofounder of New Belgium, next to the brewery’s bottling line in Fort Collins, Colorado. COURTESY OF NEW BELGIUM BREWING CO.
In general, the survivors of the shakeout, large and small, were showing positive signs for the years ahead. For one thing, certain pre-shakeout dynamics still held. By 2002, the Association of Brewers estimated there were 1,458 craft breweries and brewpubs, about what there had been in the mid-1990s. The majority were brewpubs (999, or just over two-thirds), just like before the shakeout. Of those remaining, most were small, producing far fewer than fifteen thousand barrels annually, with only about forty-five voluminous enough to be considered regional craft breweries. It was like before, with smaller operations dominating the craft beer landscape, some popping up seemingly overnight.
This go-around was going to be different for everybody, however—it had to be. No more trying to grow as fast as possible to every corner of the country; no more throw-it-against-the-wall-and-see-what-sticks mentality; no more get rich quick off hops and malted barley. As John Hickenlooper, the cofounder of Colorado’s oldest brewpub, who would have a more interesting decade than most, explained: “For a while, every Tom, Dick, and Harry got into it not for the love of beer but because they thought they would get rich.” At the same time, there was to be no passivity when it came to making consumers understand that it was about the beer. As David Geary had realized when he started the first craft brewery in New England, quality beer was the price of admission—can’t pay it, and you get tossed eventually. It was a psychological shift of sorts that existed on two levels.
First, beer quality became holy writ. As a result, brewers poured capital into better equipment and better labor, with training at places like UC-Davis, Oregon State, and Siebel more in demand than ever. As a result, by the turn of the century, the United States boasted more modern small breweries than any other nation. With the IPO wave played out, the price wars were over except in a few isolated markets. Craft brewers knew they would never really compete price-wise with Big Beer brands and most imports. They could grab consumers with quality, though. Geoff Larson, cofounder of the Alaskan Brewing Company, put it this way in the spring of 2000: “People ask about growth. Whenever we come to a point of adding equipment or facilities, the primacy driver is increasing the quality of our product…. Cost is a secondary issue for us, because we know we can’t compete on price. We can only compete based on the quality of the product in the glass.” By 2000, Alaskan was growing by double digits again.
The second level of this psychological shift was simpler, and certainly cheaper, yet more profound: the craft beer movement tucked in its shirt and dragged a comb across what was left of its hair. For the Craft Brewers Conference in Cleveland, Ohio, in April 2002, Charlie Papazian put together a slide-show made up mostly of photos from the 1980s. There were not a few hirsute young men in old T-shirts and frayed blue jeans in the photos; Fritz Maytag looked downright anachronistic in his tie. While the rebel element, a certain swaggering insouciance that comes from knowing you took the road less traveled, would remain in the movement and would still be a draw for newcomers, things did get a bit more professionalized. Just as the brewhouses became as a rule more modern, so too did the business sides. Craft beer pioneers found themselves calling and attending more meetings about matters like production efficiencies and sales strategies than they ever might have before. This was partly because there were more people to do other tasks: hiring jumped after the shakeout and rose steadily as the movement once again began to expand.
States and cities for the first time started calculating the economic impact of breweries and brewpubs on their physical landscapes and bottom lines; attention was finally being paid to craft beer as a jobs generator and tourist attraction. This was true in metropolises like New York, where city hall and the chattering classes credited the Brooklyn Brewery with helping shepherd in the real estate renaissance of the surrounding borough, and San Francisco, where Anchor and newer arrivals like 21st Amendment were quickly becoming the last true manufacturers within the city limits. It was also the case in smaller locales like Bend, Oregon, or the Outer Banks of North Carolina, where brewpubs like Gary Fish’s Deschutes and Uli Bennewitz’s Weeping Radish, respectively, might be among the top two or three reasons for even visiting the areas at all.
David Geary of D. L. Geary in Portland, Maine, with US senator Susan Collins. Elected leaders began regularly touting craft brewers as job creators in the new century. COURTESY OF HOLLIE CHADWICK
The resiliency was there; it was bolstered not only by the awareness of having run a gantlet to emerge on the other end stronger and more confident but also by the return of healthy sales growth. Would it last, though? Or was it just another start of a climb to a peak and the cliff right afterward? The keynote speaker at the 2002 Craft Brewers Conference was Michael Jackson. His goatee and curls were more salt than pepper now, the spread around his middle showing the effects of the occupational hazards of his decades of work. He had been traveling again and again to America since the 1970s to study its beer, to give pep talks to its brewers, to all but plead with its consuming public. For all that, he was an endearingly revered figure in the movement, perhaps only matched in regard by Fritz Maytag and Fred Eckhardt. As a critic, as a seer of trends in the global beer world, Jackson had no peer.
His Cleveland speech, then, is worth quoting at length, as it was a truncated history of what had just happened and what could happen. He began by noting the acquisition of Beck’s, Germany’s biggest export brewer, by the already-large Belgian concern Interbrew as well as the growth of Denmark-based Carlsberg and Netherlands-based Heineken into other markets. For that matter, Coors had snapped up the iconic Bass brand in Britain that February. And Jackson could not avoid mentioning the pending merger of South African Breweries and Miller, a deal that would close in July for $3.6 billion and create in SABMiller the world’s second-biggest brewery behind—you guessed it—Anheuser-Busch. The two breweries would immediately set about divvying up the global beer map as if playing Risk, competing for companies as varied geographically as Romania, Italy, and China (Jackson noted, too, that SAB already controlled Pilsner Urquell out of the Czech Republic, famed for its archetypal pilsner). The two breweries would also reignite their decades-old tradition of attacks, with Anheuser-Busch, for instance, buying a full page in USA Today to remind consumers that Miller was now “South African owned” and Miller taking a full page in the New York Times to declare its archrival “the Queen of Carbs.” To Jackson, such cattiness represented a boon to American craft beer, a way of creating fresh consumers if only the sector seized the opportunity:
This notion of the global brewers’ fallout benefiting the craft brewer may seem Pollyannaish, but it has already been evident in the Nordic and Baltic countries. Having never quite hacked North America, Carlsberg has been building a dominant position in these countries. In precisely the same period, Denmark has gained a beer movement, with an annual festival and a crop of new products. With the exception of Anheuser-Busch, which has grown organically, the biggest brewers have sought growth by acquisition. Breweries available for sale are usually big but less successful. Thus groups consolidate overcapacity. They then close breweries, centralizing production in fewer plants and lengthening the road to market at a time when preservatives and other additives are under scrutiny by the consumer. The growth to global from national ambition also lowers the common denominator of flavor. This is already so low that many young consumers see aroma and flavor as being faults, distractions on the path to feeling drunk. The same follows for super-premium vodkas and gins….
The big brewers made some very good specialty beers for a time, in an effort to benefit from the success of the micros. Their head brewers knew what they were doing, but the cost accountants and marketing people could not think micro.
For them it seems to have been the road not taken. They chose “beer as soda pop.” Craft brewers are “beer as wine.” That is the road we must t
ake. We must stick to it, and climb higher along the way.
We have come a long way already. When I started writing about beer, there were fewer than fifty brewing companies in the US….
There are now more breweries in the US than in any other country, including Germany: about 1,500 make beers in more than fifty styles, many more authentic than the European originals upon which they are modeled. This is a remarkable achievement, an astonishing success story. Why don’t we tell the story? Were we distracted by the opportunists who came into the business when it was being hyped by Wall Street? Remember them? “Mr. Jackson, I don’t know much about brewing, but I know that Americans enjoy a beer like Budweiser.” I would point out to them that someone had already noticed that market, a man named Busch. They were all going to overtake A-B in two, three, or four years. They’ve all gone now, telling the world that they got out just in time. It is their absence that makes this such a pleasant conference….
“Everybody knows about microbreweries,” someone said at this conference. No, they don’t. I have even met people in Seattle or Portland, Oregon, who are unfamiliar with the phrase “microbrewery.” Far more are familiar with the phrase, but unsure what it means. Or whether it is a good thing. Some people still get a bit giggly about having been to a brewpub, as though it were somehow not “normal” beer. Would they feel the same way about visiting a cook-from-scratch restaurant as opposed to a McDonald’s?
We understand the differences because we love, live—and no doubt breathe—beer. It is easy to forget that not everyone shares our passion…. As a young television producer, I persuaded James Baldwin and Norman Mailer to appear on a program. Thrilled with achievement, I asked an aunt what she thought of the program. “I liked the black man,” she said, “but that feller with the curly hair was a bit of a loudmouth.” The names James Baldwin and Norman Mailer had meant nothing to her. We have to allow for the fact that millions of people drink without thinking, as though they were sleepwalking, but could be awakened to the pleasures of good beer.
Jackson did not need to spell it out for his audience: however it looked now, future growth was not a given.
*The partnership between Brooklyn Brewery and the subdistributor, SKI, would end acrimoniously within a couple of years as the brewery moved to sever the partnership so it could sell both its New York and Massachusetts distribution companies. Per Hindy and Potter, Beer School, 233-254.
*An investment firm would acquire Gordon Biersch and Rock Bottom in November 2010 and merge them under a firm chaired by Frank Day.
STILL THE LATEST THING
Guerneville, CA; Oklahoma City, OK; Houston | 2002-2005
By all rights, given what we know now, Vinnie Cilurzo’s decision in May 1994 should have caused the heavens to open and a ray of deific light to bathe his plastic fermentation tank. As it was, nothing much happened; Cilurzo’s decision produced a pretty decent beer. What was the decision? To double the hops and to up the malt a bit in a pale ale recipe he had. Why? To cover any off-flavors in a batch that simply had to work. Cilurzo, a twenty-four-year-old with close-cropped brown hair and big, almond-shaped eyes, was one of three partners and the brewmaster for a new, four-thousand-square-foot brewpub called the Blind Pig, the name a play on Prohibition-era bootlegging, in Temecula, California, about sixty miles north of San Diego. He didn’t have much experience brewing at the professional level, though he had known for a while that he wanted to be a brewer. He had grown up around wine—his parents owned a winery nearby with nearly two dozen peacocks—and he had homebrewed in college as well as in the winery’s basement. He hopped around Europe, including an illuminating spell in Belgium, and worked at his parents’ winery before embarking on what would become the Blind Pig with $160,000 from investors.
The brewpub launched with three beers: the obligatory pale ale, a golden ale, and a seasonal, the Blind Pig Inaugural Ale. This last one was where Cilurzo’s decisional alchemy came in. The equipment was secondhand, thanks to Electric Dave down around the Mexican border. Electric Dave was Dave Harvan, a one-time electrician who blew into the former mining community of South Bisbee, Arizona, in an old Volkswagen van in the late 1970s. Ten years later, off State Route 92, off an unmarked road and through a tunnel made of corrugated metal, in a part of the Old West where mounds from the old mines gave the landscape an apocalyptic feel, Harvan started the first craft brewery in Arizona since Prohibition.
The Grand Canyon State’s brewing history reflected the larger national changes, especially when it came to consumer tastes. The only Arizona brewery to make it out of Prohibition for any length of time—eight tried—was the Phoenix-based Arizona Brewing Company. It shed consumers, however, as its home city’s population boomed after World War II; then as now the Phoenix region was one of the nation’s fastest growing. The newcomers brought with them tastes for the homogenized Big Beer brands they’d grown accustomed to elsewhere, and the Arizona Brewing Company was acquired in 1964 by Canadian conglomerate Carling. The Phoenix brewery closed in 1985; one of the fastest-growing states in the union was without any semblance of local beer.
Enter Harvan in 1987 with a tie and some wingtips he got at the Salvation Army to personally lobby state officials to follow the growing trend of legalizing small breweries and brewpubs. The state did just that, authorizing operations that produced a minimum of ten thousand barrels annually. Chicago transplants Joe and Addie Mocca opened the state’s first brewpub in the spring of 1988, Bandersnatch, in downtown Tempe, with another partner, making it a popular hangout for students at nearby Arizona State University. Soon after, with $25,000 from investors, some of them teetotalers by necessity, Harvan began producing beer in his South Bisbee garage with a seven-barrel brew-house he rigged himself that included plastic fermentation tanks. A reporter who made the trip out described the brew as having “a rich, slightly intoxicant quality to it, full-bodied, lacking the watery blandness characteristic of macrobreweries.” Harvan happily drank at least six bottles’ worth a day and self-distributed the rest in kegs with his white Dodge pickup for seventy-five dollars each. An arrest for marijuana smuggling soon put Electric Dave temporarily out of business—he would reopen on the same small scale in 2000—and his equipment in the hands of other brewers, including Vinnie Cilurzo at the Blind Pig.
Cilurzo called the seasonal he crafted from Electric Dave’s equipment a “double IPA.” It was about 6 percent alcohol by volume and ninety-two IBUs in bitterness—that is, it was about the same alcohol content as Anchor’s landmark 1975 Liberty Ale but more than twice as bitter. What had seemed a curiosity not even a generation ago was coming into its own as a distinct style. As we’ve discussed, the so-called West Coast style was already largely defined by its bitterness; Ken Grossman’s Sierra Nevada Pale Ale might be the archetype, with Fritz Maytag’s Liberty Ale the urtext. But what Cilurzo had crafted was so much more bitter that in time his creation, along with those from a handful of other brewers on the West Coast and elsewhere, would redefine the style. Bitterness became almost a badge worn by consumers who had a jones for it: they were hopheads and proud of it.
Whether Cilurzo’s moniker, double IPA, constituted a brand-new, distinct beer style remains an open question. The first mainstream-media reference to “double India Pale Ale” or “double IPA” did not appear to have come until nearly a decade after Cilurzo’s first batch. The reference was to a Double IPA Festival in February 2002, hosted by Victor and Cynthia Kralj, owners of a pub and beer garden in downtown Hayward, California, called the Bistro. IPAs had to be at least ninety IBUs to enter. The following year, the Great American Beer Festival added a category called “Imperial or Double India Pale Ale,” as official an acknowledgment as brewers of double IPAs could get. (The Pizza Port brewpub chain out of San Diego, California, would win the first gold and silver medals in the category.)
Cilurzo would gain his widest audience for hoppier beers after the Blind Pig, which, like so many other brewpubs and breweries of the era, went out of business
in the late 1990s. He then connected with the Russian River Brewing Company in Guerneville, California, about seventy-five miles up Highway 101 from San Francisco. The fifteen-barrel brewhouse opened in May 1997 within the Sonoma County vineyard of its owner, Korbel Champagne Cellars. The company used Centennial and Cascade hops grown on the vineyard in its beer, which was served out of a new on-site restaurant and to local retailers.
Korbel was not the first vintner to segue into craft beer. Charles and Shirley Coury at the short-lived Cartwright Portland and Richard and Nancy Ponzi at BridgePort Brewing, both in Portland, Oregon, had pioneered that pivot at least fifteen years before. Others followed, including up and down California’s esteemed wine country. Along with Korbel in Sonoma, there was the Sonoma Mountain Brewery, opened a couple of months after Russian River Brewing and owned by the Benzinger family, which had made its name in California wines. Downstate, in Santa Barbara County, there was the Firestone Walker Brewing Company. Brothers-in-law Adam Firestone and David Walker spent months studying brewing at UC-Davis and started the brewery in 1996 on the Firestone family’s vineyard in Los Olivos (the family had actually crafted a nonalcoholic beer as far back as the late 1980s). Almost as a nod to an adjective now beloved by beer geeks and wine snobs alike, Firestone Walker was known to ferment its ales in sixty-gallon oak barrels, which could leave—wait for it—an “oaky” taste.