The ice age of American brewing
How Prohibition killed the first wave of craft beer in the USA
Monday 20 May 2019
This article is from
Maine, New England
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On a hot Saturday afternoon, driving through the South Valley of Albuquerque, New Mexico, I rolled down the car window and hoped to feel a cooling breeze against my face. By the roadside was a Dairy Queen restaurant, which was unbelievably open despite sporting a sign that looked as though it was last updated in the 1960s. A thick layer of dirt coated the edges and the colours were faded. The states in the mountain west are full of sights like this; tired cafes and restaurants which seem frozen in time. They can often be a pleasant hark back to the past, but their unchanging state is also a poignant and sombre reminder that they have not been deemed worthy of ongoing investment. And yet, despite this slow fading, some businesses seem to be just too sticky with customers to bite the dust once and for all. I guess ice cream is the kind of commodity that has enough people coming back for more to keep the lights on - which was just as well for the brewers who were plying their trade across the country in the early 20th century.
Take Yuengling, for example; a Pennsylvania-based brewery dating back to 1829, making it the oldest in the entire country. Back in 1828, David Yuengling arrived from Wuerttemberg in Germany and settled in quiet Pottsville, 100 miles northwest of Philadelphia. He founded the Eagle Brewery the following year. The brewery name was later changed to D G Yuengling and Son. Today, the business is famed partially for their innovative navigation of the Prohibition years by switching to production of less intoxicating products, including ice cream.
The 18th Amendment to the US Constitution placed a nationwide ban on the production, transportation and sale of “intoxicating liquors”. Once this was ratified, Congress passed the Volstead Act, which provided the federal enforcement of Prohibition. The Volstead Act declared that liquor, wine, and beer all qualified as intoxicating liquors and were therefore prohibited. In order to ensure that his business could stay profitable during this period, Yuengling constructed a dairy across the road from the brewery. Even once they were back in the beer business after Prohibition was lifted, the company continued to produce dairy goods until 1985. At this time, the frozen dessert branch of the business ceased because none of the children of its then president, Frederick “Fritz” Yuengling, were in a position to take over the company. However, Yuengling ice cream saw a revival in 2014 when David Yuengling, Fritz’s son, left behind a 30 year technology industry career to breath fresh life into the family ice cream brand.
Anheuser-Busch also entered the ice cream market during the Prohibition years, and since the company owned a fleet of refrigerated vehicles, it was well-equipped for its new challenge. During Prohibition, the business utilised mechanical refrigeration and refrigerated railroad cars for transporting its new ice cream products. In addition to ice cream, Anheuser-Busch also produced Bevo; a non-alcoholic malt beverage. This became the most popular brand of ‘near beer’ and was sold in twenty countries. These measures helped Anheuser-Busch to see out the Prohibition years with great success, and come out strong on the other side. The company agreed upon an acquisition deal with InBev in 2008. Currently, AB InBev is the world’s largest brewer.
The innovation of Yuengling and Anheuser-Busch during what could have been a disaster is an apt example of the notoriously plucky American entrepreneurial spirit if ever I’ve seen one, and they weren’t alone. Wisconsin-based Pabst Blue Ribbon began producing cheese, and sold off the venture to Kraft at the end of Prohibition in 1933. Coors started a ceramics business, which unbelievably makes more money today than their beer brand. According to a 2015 Forbes article, CoorsTek is the world’s largest manufacturer of engineered ceramics, with sales of $1.25 billion. In each of these cases, the companies truly made lemonade with the lemons that legislation had thrown them, and pretty damned tasty lemonade at that.
As I read about the unlikely entrants to the ice cream industry, I began to wonder if there were any similar examples in my neck of the woods. Sure enough, I discovered the Southwestern Brewing and Ice Company. At the start of the 20th century the business was among Albuquerque’s largest employers, and distributed its flagship Glorieta Beer across the Southwest. When the company was forced out of the brewing business, its ice-making operation stayed active for much of the rest of the century.
The untold personal stories lost in the depths of time have always been the ones that have fascinated me the most. The toils of non-essential individuals are rarely well recorded, and so the tales of their motivations and challenges frequently fade without a trace. I often think about what it might have been like to be on the staff in businesses like Southwestern Brewing and Ice Company, perhaps as a new brewer at the very beginning of an exciting new beer-crafting career. Did these people throw themselves into their new ice production vocation with the same gusto, or did they leave the business and find something entirely different to do? And did any of them return to the world of brewing years later, after the lifting of Prohibition, or was their brief dalliance with malt and hops destined to be just a fleeting endeavour?
Those brewers determined to hold on until they could legally make beer again might have had a long wait for their time in the sun, and for many of them it likely never happened. According to data from the Brewer’s Association, America’s brewery count stood at more than 4,000 in 1873. By 1935, two years after the lifting of Prohibition, 766 breweries had resumed operations; a mere ghost of the scale of brewing in the pre-Prohibition USA. For every brewery active a decade before the onset of Prohibition, less than half sprung back to life as soon as regulation allowed. It took until 2015 for the USA brewery count to match the previously recorded highs set in 1873.
On April 7 1933, President Franklin D. Roosevelt’s signature repealed the Volstead Act, legalising 3.2% abv beer and clearing the way for the complete repeal of Prohibition later in the same year. August Busch Sr marked this momentous day for his trade with two antique Anheuser-Busch wagons, pulled by an eight-horse hitch of Clydesdales; a less than subtle display. But the return to form of the industry at large was still some way off. Thirteen years of banned alcohol sales led to a long-lasting slump in the opening of new brewing businesses.
There are a few different factors which account for the beer industry’s sluggish return to form. Pre-Prohibition, since the transportation of beer was often not possible (prior to refrigeration and pasteurisation) most beer was consumed purely locally. Brewers who were attempting to kick-start their businesses again in the 1930s were adapting to a very differently shaped market than the one that they had left more than a decade prior. The growing ubiquity of home refrigeration was a big part of this. In the early 1930s, less than 10% of American households owned a mechanical refrigerator, compared with almost half by the end of the decade. This meant that by the time brewers could start producing their wares legally again, a substantial proportion of the American population had the means to keep beer cool at home. When this is considered alongside the innovation of canning, another contemporary development, the trend was firmly towards drinking alcoholic beverages at home, rather than in bars. For some brewers, the capital investment of canning lines was prohibitive. All across the country, cash-strapped breweries without the means to transport and package their beer were forced to close down.
There’s another explanation for why small-scale craft breweries and taprooms took several decades to establish themselves. When we look at the range of styles and experimentation in breweries in the USA today, and follow the story of some modern-day brewing stars back through the ages, the pattern is that many of them started as hobbyists. This is a trend I’ve observed during conversations with tap room owners all across the country; that they began brewing at home to explore their love for crafting different flavour profiles, as opposed to just for profit. It’s rare to find a new brewery opening which doesn’t have an avid homebrewer in the core team.
It took until 1978 for the federal legalisation of homebrewing; a move carried out by President Jimmy Carter. Since regulation of alcohol is left to the individual states, the state-by-state laws regarding homebrewing could still vary widely. For example, some states limit the consumption of homebrew solely to the residence where it was brewed, while others allow for transportation of homebrew to events at other locations. The connection between the ease of homebrewing and the rate of entry to the local commercial beer industry can be clearly observed. The last two states to legalise homebrewing were Mississippi and Alabama. As of 2017, Mississippi had only 12 breweries; fewer than any other US state (tied with North Dakota).
For other parts of the country, where more liberal regulation at the state level was in place back in 1978, this meant that the new craft brewing stars could be truly free to start tinkering away in their garages. The next few years gave rise to some key talents who would become household names in the decades to come. Home-brewers Ken Grossman and Paul Camusi were two Californians early to the party to start their own business in 1979; they called it Sierra Nevada. Across the country in Michigan, Larry Bell was working in a bakery, where his interest in yeast and fermentation was piqued. By 1983 he had opened a homebrew store: Kalamazoo Brewing. It was another two years until he first sold beer commercially. Today, Bells Two Hearted Ale is rightfully one of the best-loved exports from the Midwest.
I long to know what the brewery landscape of the USA might have looked like today if it were not for the 18th Amendment; I like to imagine the beers I might have tasted and the brewers descended from other brewers that I might have spoken to in an alternative unravelling of history. But that’s a different timeline that wasn’t to be, which could only have been realised at the expense of all the wonderful beers I’ve already tasted across the USA. Today, there are more than 6,000 US breweries, smashing the highs recorded more than a century ago. I settle my thoughts with the notion that perhaps it was the struggle of the mid 1900s that created the melting pot of untapped potential that we saw later in the century, bubbling to the surface, waiting for just the right moment to explode.
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