journal of a self proclaimed beer connoisseur

In-depth: Beer in North America – Where are we and how did we get here?

Purpose

What I want to do with this article is delve into what the current beer industry and beer scene in Canada and the United States looks like and what some recent and not-so-recent events have done to get us here.

The simple truth is that our countries, compared to European countries, are adolescents in terms of National history but even more so when it comes to beer. The history behind beer and other alcoholic beverages in North America has a profound and pervasive effect on the beer we can easily obtain at our local liquor stores.

I want to get into the difference between macro breweries, micro breweries, and craft breweries and discuss how they simultaneously produce the same product (i.e. beer) but entirely different products. This will touch on issues of economics, greed, corporate responsibilities, and passion for beer.

North American Beer History

I’ll try to keep this section more facts and fewer opinions…if I can.

Bastards

Bastards

The big beer history changing event most of this section revolves around is prohibition. All we really need to know about prohibition for the purpose of this write up is that in the United States and Canada, although not at the exact same times, both prohibited the sale, manufacture, and transportation of alcohol at some point between 1901 and 1933.

In the Unites States prohibition was in place from 1919 to 1933. In Canada prohibition was decided by Province. Prince Edward Island voted in favor in 1901, Alberta and Ontario in 1916, and Quebec in 1919. Quebec almost immediately overturned the decision after intense public outrage (Quebec, I am proud).

The effects of prohibition were that any business that’s primary focus was to produce and sell alcohol was going to be crushed and forced to close. Some businesses survived by cleverly altering their products to be alcohol free – almost prophetically predicting that prohibition would be temporary.

What was lost? Prior to prohibition, in the US alone, there were over 1,400 breweries producing a diverse enough selection of beers to maintain their own place in the market. The beer selection must have been impressive. None of these 1,400 breweries were legal during prohibition and virtually all disappeared. A similar effect occurred in Canada.

For 14 years you couldn’t legally buy beer. The result of this drought was that North Americans lost their discerning taste for and appreciation of craft beer. Over that time I would imagine most forgot what beer even tasted like and many people “of age” after prohibition would have never tried beer.

Following the repeal of prohibition Anheuser-Busch was almost immediately producing and selling their beer again. The roots of Anheuser-Busch (and Miller) are in Germany. The Anheuser-Busch family suffered severe public relation damage when, during World War I, many members of the family opted to stay in Germany and assist the home front against the Allies. I have found relatively little information on the period between this and prohibition but I am going to surmise what I think is likely. I’m not sure if this makes an argument that Budweiser is partly fascist but it was some interesting history I found.

I would think these German-based beer companies would have withdrawn from the North American market during WWI and then, due to prohibition, just stayed away and protected their German-based interests until prohibition was repealed.

When prohibition was repealed in 1933 it was done by amending an existing act to allow for the manufacture and sale of beer that was either 3.2% alcohol by weight or 4% alcohol by volume. What do we call that? Light or “Lite” beer (to be polite).

This certainly was one of the first blows to the future of North American beer quality. Producers were restricted to low alcohol beverages until all restrictions were lifted approximately one year later. Legislation remained in place in many States and the industry was generally structured to favor large brewers.

Next major event was World War II. This effected beer in North American by limiting grain supply through rationing. This forced the big beer producers to begin brewing with adjunct grains and other low cost ingredients like corn and rice which replaced barley grains. These were fermentable grains that could produce “beer” albeit a flavorless shadow of its former barley-based self.

This is what conceived the “American Style Lager” beer style and it was generally perceived by the rest of the world as being low quality and disgusting.

Fast-forward to about the late 1970s when laws were lifted that allowed smaller production breweries to begin getting creative again. We have now seen a few decades of low quality and low alcohol beers having a stranglehold on the market and suddenly options open up.

This is what led to the “craft beer revolution” in the 1980s and onward. We are seeing a revival of that craft beer revolution again.

Difference between Macro, Micro, and Craft Breweries

These classifications and comments are solely my opinion. I haven’t based this on anything official even if that specifically exists. Forget technical – I am going on our common perception as a consumer. I am also going to discuss this in terms of “mindset” or how a company chooses to make the decisions that affect their product.

Macro breweries

These are the giants in the industry. As in most cases, they are giants by systematically and ruthlessly eliminating their competition. They use underhanded tactics and intimidation to create an industry hostile to all other players.

They are huge corporations that focus entirely on profits and their bottom line. Decisions are made based on these considerations. You, as their consumer, are considered only to the extent of them asking the question “can we still convince these people to buy this product if we do this”. The answer to that question is almost always “yes” thanks to their advertising budgets.

They never make decisions based on the quality of their product or for the sake of producing a product to be proud of but always resort to profits. They will use any ingredient available if it is cheaper and can be substituted into their product while fooling the customer.

The staple product they produce is, quite frankly, horrible. Anyone who has tried anything else knows it.

These companies have grown to possess dozens and dozens of brands. The basic business model is to understand and accept that breweries will continue to surface that will offer superior products and gain market share. They will then dip into the virtually bottomless coffers and purchase these companies making them an offer they can’t refuse.

Next they shutdown the production and shift it to an existing facility and continue to slap the well-established brand name on the product. What they don’t often tell you is that they have thoroughly evaluated the production and substituted low cost (and low quality) ingredients where available.

For example, the largest current beer company, Anheuser-Busch InBev, is the amalgamation of several former giants and a myriad of smaller companies. First InterBrew (Belgium) consolidated with AmBev (Brazil) to produce InBev. InBev then consolidated with Anheuser-Busch to produce Anheuser-Busch InBev (or ABInBev).

Over this series of acquisitions many brands have been acquired. You may be surprised by it. There are too many for me to bother listing. I encourage you to check this link out: http://brookstonbeerbulletin.com/the-big-brewers-brands/ .

Micro breweries

These are breweries that produce on a smaller scale for more local or regional markets. Still focused on profits they have a blended decision making process with an ongoing competition between the quality of their product and the increase in profits.

Looking at ownership these breweries often have investors concerned only with a return on investment. This is the influence that makes these brewers sometimes decide in favor of profit at the expense of quality.

I’m not going to talk a lot about them as they are somewhat of a blend of the other two.

Craft breweries

These breweries are making beer for the love and passion they have for beer. It is absolutely not only about making money to these brewers. These people will most often make their decisions based first and foremost on producing the highest quality beer they can and second on whether or not this is going to increase their profits. Sure, they will make decisions like any other business but at the end of the day they are judging themselves by their product.

In some cases, craft brewers are actually defined as breweries where at least 75% of the ownership is actively involved in the production and brewing of the beer. This means that outside investors focused strictly on return on investment are restricted to 25% or less of ownership. This is far from a majority. It enables the brewery to make all decisions based on what the people brewing the beer think.

They may brew local and on a small scale or larger and ship nationally and internationally. The main differentiating factor is the focus on producing quality beers.

Current North American Beer Industry

The North American beer market is still dominated by light adjunct-grain brewed beers. Budweiser, Miller, and Coors. These three beers and the related companies and variations account for approximately 95% of the beer sales in the United States with the remaining 5% being split up among the remaining breweries. There are about 1,600 other breweries.

They are selling a beer that was produced using the only available ingredients under the absolutely worst conditions – both regulatory and economically – to produce a beer confined within the strict restrictions imposed by a prohibitionist government. They haven’t changed it. This is still the same disgusting beer.

The great success of these companies is due to their business acumen and understanding of how advertising can maintain consumer opinion. They are also cutthroat. These companies will bribe, extort, and manipulate anything and anyone they can to protect their interests. And with revenues in the billions and billions they can afford a lot of that.

The distribution system in the United States was setup after prohibition to maintain segmented control of the industry. The sad truth is the big companies have used their influence to seize control of the distribution system. They now have the power to restrict other producers (i.e. craft brewers) from distributing their products under fair economic conditions.

Craft brewers are not allowed to handle their own distribution – it must be done through the regulated companies that are ultimately controlled by the big beer companies. This obviously makes it very difficult for craft brewers to find a place in retailers across the country.

A lot of this boils down to the “status quo”. Light beer has dominated since prohibition was lifted and companies built up large empires in the intervening years until craft brewers could feasibly operate.

In terms of the age of breweries all North American brewers are basically infants. The earliest craft breweries started in the 1980s and are practically still fetuses when you compare to the breweries found in Europe. Many breweries have been around since the 1200s, 1300s, and 1400s. The accepted “oldest operating brewery” in the world is Weihenstephaner in Germany. They have documentary evidence of operations dating back to 768 and have evidence of a license to produce beer granted in 1040.

This makes a difference in age of about 980 years or 1,212 years, depending on how much of a stickler you want to be.

Consumers are starting to realize that the beer they have been drinking for decades is really not much of a beer at all. Whether it is through travel experiences, friends who have been converted, or their own curiosity many people are starting to catch on to the craft beer world.

It is shocking this is taking so long because you can obtain this craft beer (which is not even comparable to the crap that macro brewers produce) for comparable prices. Sure, you can spend a lot of money on specialty beers but to find an easy to drink, good tasting, and high quality craft beer at reasonable prices is not difficult. Grab some Dogfish Head IPA, Anchor Steam Beer, Sierra Nevada, New Belgium, Stone, Deschutes, etc. At least some of these are bound to be available near you.

If you found my website or have read this far in the document you are probably already on the right path and cheering my rant along. If so, send this link to a friend who keeps drinking the same old stuff.

I want to challenge anyone who reads this or anyone that you can get the message to: stop allowing advertising and the suits in offices to dictate what beer is good and what you like in beer. Decide this for yourself – go out and try new beers and be honest with yourself regarding your opinions. I have confidence if beer consumers begin to do this we will see a surge in craft brewing. You may not like what I like – but that is the beauty. It will create conditions where diverse options are valued and available.

Macro Beer Culture

Macro Beer Culture

If you still choose Bud, Miller or Coors after that then by all means continue drinking it. Just enjoy waking up surrounded by empties, funnels, and with a giant penis scribbled on your face.

I don’t believe – nor want – the giants to be entirely toppled. There will always be a (large) market for that crap. I would just like to see the barriers to competition collapse sufficiently that craft brews become readily available everywhere. There are certainly many Canadian and American beers I’d love to try and currently can’t due to distribution restrictions.

Maybe we can’t convince the government to stop playing favorites and accepting millions in donations from the big beer companies to implement regulations but we can direct our measly few bucks to a brewer that has earned it by putting our interests and the interest of quality beer first. Ask yourself if this brewer is passionate about the quality of the beer they produce because if they are (and you give a shit about beer yourself), you will taste the difference.

Even if it doesn’t change anything life is too short for you to miss out on good beer.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s