by Tom Acitelli
Things were moving farther and farther from the point where anyone could remember America as not the world’s innovator in beer and brewing. At the same time, though craft beer’s market share still paled against Big Beer’s, the segment’s reach was growing as the wider industry’s was shrinking. For three years in a row, beginning in 2009, the wider industry sold fewer barrels of beer; at the same time, craft beer sales were growing by double digits. In 2011, the nation’s 1,063 brewpubs and 877 craft breweries sold 13 percent more beer than the year before, while the entire industry’s sales were down more than 1 percent, similar to a drop in 2010. As for market share, it was 5.7 percent by volume in 2011, an almost 50 percent increase from three years before. The healthy growth meant more jobs than ever before in American craft beer (an estimated 103,585) and more breweries operating in the United States than at any time since the 1880s (and more than in any other country). “The smaller brewers’ activity,” the Wall Street Journal noted right before New Year’s Day 2012, “is a bright spot in an economy still struggling to kick manufacturing and construction into higher gear.” It was a role the movement was familiar with, one that stretched once again the definition of a “craft brewer.”
On December 20, 2010, the Brewers Association changed the definition of a craft brewer by raising the amount that one could produce annually from two million barrels to six million. That was the new “small”; the terms “independent” and “traditional,” heralded by Maytag in the 1960s, remained intact. While some complained it was a sop to the association’s larger members, which were quickly closing in on two million barrels a year, others said it was a sign of the times. “A lot has changed since 1976,” said Nick Matt of F. X. Matt, who chaired the board that voted in the change. “The largest brewer in the United States has grown from 45 million barrels to 300 million barrels of global beer production.” (The 1976 nod was to the Henry King-backed tax change that helped ease costs considerably for smaller brewers.)
The definition change reflected the Brewers Association’s efforts, under new COO Bob Pease, to change the law itself to move the annual cap to six million barrels and to halve the tax rate on small brewers from seven dollars per barrel on the first sixty thousand barrels.* As it was, the definition swept together every iteration of commercial brewing in America outside of Big Beer, from the likes of Boston Beer and Sierra Nevada to the smallest licensed operations, nanobreweries, which were now popping up and which were, with their small batches, homebrewer founders, and self-distribution locally, a throwback to the movement’s earliest days.†
Perhaps nothing stamped the ubiquity of the craft beer movement in the new century’s second decade than the nation’s very officialdom. In April 2010, the 111th Congress passed a resolution in praise of American Craft Beer Week, citing the movement’s contributions to the economy and to the national palate by championing “historic brewing traditions dating back to colonial America.” The week itself, started by the Brewers Association, dated from 2006, when Congress passed a similar resolution. Satirist Stephen Colbert spoke of the gravity of the milestone on his Comedy Central show, which reached more than 1.2 million viewers four nights a week: “This isn’t one of those fake holidays, like Grandparents Day or Women’s History Month—no, this is officially sanctioned by Congress as of 2006!” And, in February 2011, for Super Bowl Sunday, President Obama and the first lady served a honey ale made by the White House Mess using the fruits of a beehive on the mansion’s grounds—the first time brewing had ever been done at the White House in its 210-year history.
*That sixth episode never aired in the United States, though it was broadcast in other parts of the world.
†Pete Slosberg beat everybody. His Beer for Pete’s Sake was published in 1998.
*The tax law change would also institute a new rate of sixteen dollars per barrel on beer production above sixty thousand barrels up to two million barrels. Only breweries making no more than six million barrels would be eligible. It had, as of June 2012, yet to pass Congress.
†There may have been as many as eighty-four American nanobreweries in operation by June 2012. They were defined almost entirely by size—no more than a couple of barrels produced at a time.
“THE ALBION BREWERY”
Sonoma, CA; Denver | 2011-2012
The Vineburg Deli & Grocery comes up suddenly on Napa Road in Sonoma County. By the time you reach it, you’re more than fifteen miles east of the 101 and nearly a mile from downtown Sonoma, worlds past the Golden Gate and well into the bucolic blur of one vineyard after another. From your perch on two-lane roads, heading northeastward, you see the rows of grapes punctuated by warehouses and small houses, with hardly any souls appearing to be in or about them. Then a plastic yellow sign says the deli’s straight ahead on the right. You find it just behind a surprisingly crowded gravel parking lot, before Napa intersects with Eighth Street East—right along a vineyard and before another. This is wine country undoubtedly, though every few weeks at the Vineburg counter someone asks directions to “the Albion Brewery.”
More than thirty years had passed since Jack McAuliffe had his idea for opening a brewery. For seven years, the idea burned bright as a dream come true, inspiring others to follow in his footsteps and loosing the American craft beer movement as it would come to be understood. Then it flamed out rather suddenly in 1982, for reasons even decades on not entirely clear, though evidently having a lot to do with the capital-intensive nature of brewing and the crucible of distribution to a marketplace that still didn’t know what to make of the pale ales and porters. What equipment that could be salvaged from the New Albion Brewery on Eighth Street East, the equipment that McAuliffe, spiderlike and solitary, had rigged into a gravity brewhouse, was disassembled and shipped off to the new Mendocino Brewing Company in Hopland. That’s where McAuliffe ended up for a time, though he left, not content to be a hand on someone else’s ship, and faded from the movement he had done so much to build. Early pioneers like Ken Grossman, Charlie Papazian, and Steve Hindy would remember McAuliffe’s name, although those who arrived in the 1990s and the new century would likely have never heard of him. He worked as an engineer after leaving Mendocino, moving to Nevada at one point and to Squaw Valley, near Fresno, California, where the author Maureen Ogle found him.* Her writing on McAuliffe in the mid-2000s shined a much-deserved spotlight on his contributions.
McAuliffe was sanguine about the newfound fame. Just as visitors who did not phone ahead were apt to have New Albion’s door slammed in their faces, McAuliffe did not like undue attention, especially from a crowd; he wasn’t introspective, wasn’t the kind of person to ask himself “what if.” He could be blunt, though he had a sense of humor about the whole affair. When asked during a question-and-answer segment at the 2011 Craft Brewers Conference in San Francisco why he chose Sonoma for his brewery, McAuliffe replied, “It’s really simple—that’s where I lived!” Still, he knew people would ask those things—people would want to know. He was back in the papers, thirty years after being written about by the New York Times and the Washington Post, back in the trade publications that had grown up since New Albion closed, his legacy for the first time scrutinized in online forums and in social media unfathomable when the brewery was getting snail mail marked simply “The Brewery, Northern California.” In 2007, the Brewers Association bestowed its Recognition Award on McAuliffe, an accolade previously won by the likes of Fritz Maytag, Jim Koch, Michael Jackson, and Bert Grant. He was part of the pantheon; he couldn’t avoid it.
Ken Grossman pours a Jack & Ken’s Ale for Jack McAuliffe at the Sierra Nevada Brewery in Chico. COURTESY OF SIERRA NEVADA BREWING CO.
McAuliffe did enjoy the visit to Sierra Nevada. In December 2009, to mark its upcoming thirtieth anniversary, Ken Grossman’s brewery announced it would be releasing four specialty beers based on collaborations with the titanic figures of the American craft beer movement: Fritz Maytag, Jack McAuliffe, Charlie Papazian, and Fred Eckhardt. The proceeds from sales would g
o to the namesakes’ charities of choice. Brewing day in Chico for the McAuliffe collaboration was in May 2010, and he showed up wearing jeans and a blue, short-sleeved shirt. McAuliffe sipped on a Sierra Nevada Kellerweis, a wheat beer, while a video crew documented his story. More interviews with him and Grossman followed, and, finally, a ceremonial dumping of hops from a white plastic pail into a copper brew kettle took place. About one thousand barrels of Jack & Ken’s Ale, more than twice the annual barrelage of New Albion at its busiest, would hit shelves that July, packaged in elegant winelike bottles capped with caged corks. Later, during a lunch, Grossman brought out some original New Albion bottles—dusty, old longnecks with that label featuring Francis Drake’s Golden Hind and California in the background. McAuliffe looked at it and let himself smile.
A year and a half later, McAuliffe was at the restaurant Marlowe’s on the Sixteenth Street Mall in downtown Denver. Boston Beer was hosting a breakfast to announce the winners of its annual homebrewers competition, and Jim Koch was the MC. About one hundred people, including several prominent beer writers like Stan Hieronymus and Jay Brooks, stood or sat about, eating French toast and biscuits and other early-in-the-day fare, all cooked with Samuel Adams beer; the lines for seconds snaked down Marlowe’s steps from its top level. Most of the conversation had to do with the thirtieth Great American Beer Festival, which would be winding down that day. Koch stepped up to a microphone to announce the competition winners. Before he did, though, the biggest independent brewer in America wanted to say something.
“I know we have Jack McAuliffe here,” Koch said. He paused, and the restaurant fell silent; murmurs swept the room. The name rang a bell, a loud one. Koch continued: “For those of you who don’t know, Jack started the first microbrewery after Prohibition.” He sketched quickly the history of New Albion. “He really served as an inspiration to the rest of us.” The restaurant erupted in applause. McAuliffe stood slowly. He smiled sheepishly, clearly surprised at the homage. “Thank you,” he said softly.
Thank you.
*McAuliffe eventually moved to San Antonio and, as of late 2012, lives in Lincoln, Arkansas.
Epilogue
MORE THAN EVER
2012
In June 2012, Anheuser-Busch InBev announced it would buy complete control of Grupo Modelo, the Mexico City-based maker of Corona, among other brands, in a $20.1 billion deal. One-third of the money would be paid in cash. The deal came a few years after Anheuser-Busch itself was taken over by the Leuven, Belgium-based InBev, maker of Stella Artois, Beck’s, and other brands (and itself the result of a 2004 merger between Belgium’s Interbrew and Brazil’s AmBev). Miller had been controlled by South African Breweries since a 2002 deal with Philip Morris; then, around the same time as the Anheuser-Busch-InBev deal, SABMiller took control of Molson Coors, which—notice a trend here?—was formed in 2005 when the Colorado brewery merged with Molson, out of Toronto. The new MillerCoors was also tasked with brewing the brands of Pabst, and it might have stayed number one in global market share had InBev and its $52 billion in cash not come along.
Anheuser-Busch did not want to be part of this fresh consolidation wave. Instead, the King of Beers had been forced into an endgame not of its choosing. August Anheuser Busch IV, the brewery’s forty-four-year-old chairman, with dark eyes and dark hair straight out of central casting, declared in an April 2008 speech to distributors, amid rumors of a takeover, that the brewery his great-great-grandfather had founded would never trade “on my watch.” But it wasn’t his family’s watch anymore, really. The biggest shareholders were the likes of the British bank Barclays and the investment juggernaut Berkshire Hathaway, controlled by Warren Buffett, and they were quite unhappy with Anheuser-Busch’s flat share price over the past several years. Busch found himself conceding the buyout on July 13, 2008, ending 156 years of family control. While the obvious reason was the somnolent share price, investors’ pessimism was a factor, too. Few believed that Busch and company could turn things around on their own; they needed fresh blood with fresh capital—damn any national pride amid a global economy. As one analyst put it in terms any American familiar with the country’s manufacturing decline could understand: “Anheuser-Busch would have run the risk of becoming the next GM, where market share in the fifties may dwindle down into the teens.” Why such pessimistic projections? Because of the machinations of Anheuser-Busch’s longtime archrival, Miller, and because of those pesky craft brewers. Their market sector was growing, while Big Beer’s was not.
In May 2012, just before the summer of the titanic consolidations, the Brewers Association announced that the number of American breweries had surpassed two thousand, all but fifty-one of them craft operations. It was the most American breweries since the 1880s, nearly a half-century before Prohibition. The nation had been flirting with the milestone since at least 2008, and reached it despite the lingering effects of the Great Recession—and the latest wave of consolidation.*
Most of the characters in this book continue, as of the late summer of 2012, in the roles where last we encountered them. Some, however, have seen changes, some of those quite big.
Don Barkley
Don Barkley left the Mendocino Brewing Company after twenty-five years to become the brewmaster at the new Napa Smith Brewery, which opened in Napa, California, in 2008.
Uli Bennewitz
Uli Bennewitz’s Weeping Radish Farm Brewery now unfolds over twenty-four acres near Grandy on the Outer Banks of North Carolina. It is a veritable locavore paradise, with a master butcher, fourteen acres for raising produce and chickens, the brewery, and a “Goodness Grows in North Carolina” section in its retail store. For Christmas 2011, Weeping Radish produced the first-ever commercial beer made entirely from North Carolina-grown ingredients.
Sam Calagione
Ever the movement’s biggest rock star, Dogfish Head CEO and president Sam Calagione saw the last decade close with perhaps the briskest growth of any craft operation in the world. With this increased demand, though, has come the need to pare distribution. So the brewery ceased distribution in Rhode Island, Tennessee, Indiana, and Wisconsin.
Dogfish Head was not alone. Other craft breweries, including Avery Brewing in Boulder and Allagash Brewing out of Portland, Maine, announced distribution cuts in 2011 and 2012. While the moves invoked comparisons to the pullbacks after the late-1990s shakeout, the two were different. After the shakeout and the drop in demand for craft beer that it sparked, brewers refocused on markets closest to home. In 2011 and 2012, the reason was, as in the case of Calagione’s operation, much more enviable: they could not meet demand without either contract brewing or even altering recipes to speed up and cheapen production.
Jeremy Cowan
Jeremy Cowan remains the CEO of Shmaltz Brewing. At the 2012 Craft Brewers Conference in San Diego, he told the beer writer John Holl he would be opening a seven-barrel brewery in Brooklyn.
David Geary
David Geary, president of D. L. Geary Brewing, heads what is now not only the oldest craft brewery in New England but also the oldest east of the Mississippi.
Bert Grant
Bert Grant died in July 2001 at age seventy-three, six years after selling control of his brewpub. Yakima Brewing and Malting changed ownership one more time before finally closing in late 2005.
Ken Grossman
In January 2012, Ken Grossman, Sierra Nevada’s CEO and president, was joined by North Carolina governor Beverly Perdue, as well as by his son Brian and Stan Cooper, the company’s logistics manager since 2005, to announce that Sierra Nevada would open a second brewery—and its first outside of Northern California—in the Tar Heel town of Mills River, about twenty miles south of Asheville. The town (population eleven thousand) shares much with Chico, California, in its crunchy remoteness, but Perdue and other local leaders hailed the economic benefits of having the three-hundred-thousand-barrel brewery. It is expected to start brewing in early 2014, with Brian Grossman and Cooper as comanagers.
Kim Jordan
In April 2012, Kim Jordan, CEO of New Belgium, was joined by North Carolina governor Beverly Perdue to announce the company’s second brewery—on the banks of the French Broad River in Asheville, about eighteen miles north of the new Sierra Nevada. New Belgium’s decision was, like Sierra Nevada’s, hailed as an economic boost to the area. Interestingly, the estimated 154 jobs at the brewery will pay an average of $50,000 annually—or more than 40 percent more than the surrounding area’s median—making craft brewing one of the more desirable occupations in western North Carolina. The four-hundred-thousand-barrel brewery is expected to start producing in early 2015.