A Brief History of Beer in America

The craft beer industry in the United States continues to experience significant growth, with an impressive count of nearly 7,500 craft and macro breweries across the country. In 2018, the Brewers Association revealed that the beer market itself was valued at $114 billion, but its impact extends far beyond monetary value. In a recent report titled "Beer Serves America," released by the National Beer Wholesalers Association (NBWA), the substantial economic influence of the beer industry on the overall economy was highlighted.

According to the NBWA report, the breweries directly employ approximately 70,000 individuals, while an estimated 2.1 million jobs are indirectly connected to the brewing industry in various capacities, such as bartenders and distributors. Remarkably, the beer industry alone accounts for 1.6% of the entire U.S. gross domestic product (GDP), contributing a staggering $328 billion annually. To put this into perspective, in 2018, Denmark's GDP stood at just slightly higher, amounting to $352 billion.

However, the current flourishing state of the beer industry is not without its historical context. Throughout the evolution of beer in America, there have been periods where the fortunes of the industry were intertwined with the prevailing culture of the time. Initially, brewing beer was not merely a pastime but a vital necessity for early communities.

Commercial Brewing Arrives In North America, 1632

The establishment of the first commercial brewery in the United States can be traced back to New Amsterdam, which is now known as New York City. Situated on Brewer Street, present-day Stone St., this brewery was set up in the early 17th century by the Dutch West India Company. The Dutch had received orders to develop the area as a Dutch settlement, and they were pioneers in efficient trade practices.

During that time, commercial brewing was not yet widespread. Brewing beer was primarily done on an individual basis, with each person making their own brew. Therefore, there was no immediate need for a separate entity to handle the brewing process. However, the Dutch, known for their trading prowess, recognized the advantages of centralizing beer production. They had previously fortified wine to increase its transportability, intending to dilute it with water upon arrival at its destination. Establishing breweries ensured that the few hundred settlers on the island could focus on developing the land without the added burden of brewing beer.

As the population expanded and settlers ventured deeper into the new world, breweries gradually emerged throughout the country. These breweries served multiple purposes. Initially, when settlers arrived in a new location, they would brew beer on their own. Most new structures included space for brewing, but the practice of homebrewing posed significant dangers, including the risk of fires when boiling ingredients. By having separate breweries, homes became safer, and the establishment of breweries also provided an economic boost to the area.

In many settlements, breweries and taverns were among the first buildings to be constructed. They served as focal points to attract people to established areas or encourage travelers to venture into new territories. The presence of commercial breweries played a crucial role in facilitating the growth and expansion of the colonies beyond coastal regions and deeper into the uncharted lands of the new world.

Drinking Beer In The Colonial Era (17th And 18th Century)

The establishment of commercial breweries in the early days was a challenging endeavor. Brewing beer at home was a common practice, as it was considered a lighter alternative to other alcoholic beverages like rum, wine, and whiskey. The beers consumed in the colonies typically had a relatively low alcohol content, usually not exceeding 3% or 4% ABV. In fact, "small beers" were popular among women and children, which were brewed using the leftovers from stronger batches to create a weaker beer with an alcohol content of less than 1% ABV. These small beers were deemed safer to drink than water during that time.

Although colonists consumed more beer per capita than we do today, the beers they consumed were either what we would consider session beers in terms of strength or nearly non-alcoholic in their weakest form. If people desired higher quality beer, they often had to rely on trade with England. Ales and porters imported from England were of superior quality but came at a significantly higher cost compared to locally available options. Rum, which was cheaper and more potent, gained popularity among drinkers. Cider, made from the abundant apple and peach trees in the region, was also a favored choice. In addition, inexpensive wines obtained through trade provided another attractive alternative for drinkers.

As the Revolutionary War approached, obtaining beer from England became increasingly difficult. Even if people managed to acquire it, true patriots were committed to consuming only locally brewed beverages, distancing themselves from anything originating from across the pond. Several of the founding fathers were involved in starting their own breweries or supplying materials to support beer production, emphasizing their dedication to promoting domestic brewing.

German Lagers, And Anheuser-Busch, Change The Way We Drink - 1879

During the mid-19th century, St. Louis emerged as a thriving destination for German immigrants coming to America. With this influx of Germans, the city experienced a significant surge in breweries, with many focusing on the production of lagers. Prior to the 1840s, lagers were virtually nonexistent in the United States, mainly due to the challenges of transporting the specific strain of yeast responsible for fermenting lagered beer, known as Saccharomyces pastorianus, across the Atlantic Ocean. However, as advancements in ocean travel resulted in faster journeys, German immigrants were able to bring over strains of this yeast to America, and they were eager to do so.

St. Louis witnessed the establishment of numerous new breweries, including a modest venture run by Eberhard Anheuser, a soap and candle maker. While Anheuser's business was doing reasonably well, it experienced a significant boost when his son-in-law, Adolphus Busch, joined him in managing the brewery. Adolphus had ambitious plans to create a national brand, even during a time when beer consumption was predominantly local. He recognized the potential of emerging technologies to achieve this goal. The inherent stability of lager beer made it suitable for long-distance transportation as long as it remained adequately chilled. To facilitate this, Adolphus invested in refrigerated rail cars, allowing the brewery to expand its reach beyond Missouri. These rail cars would be refreshed at ice houses located near the rail yards. Furthermore, the introduction of pasteurization enabled Anheuser-Busch to distribute their product across the nation, from coast to coast.

Capitalizing on these technological advantages, Anheuser-Busch became the first brand to achieve national availability, notably with their flagship beer, Budweiser. This success inspired competitors to follow suit, gradually expanding their reach across the country. Anheuser-Busch also acquired breweries in different parts of the nation, making it easier to ship their beer to destinations further west. The combination of technological innovation and strategic expansion solidified Budweiser's prominent position in the market and stimulated the growth of other national beer brands.

The Impact Of Prohibition (1920 - 1933)

Among the various alcohol industries affected by Prohibition, the beer industry endured one of the most severe blows. While alternative legal markets were created for spirits through loopholes such as prescriptions, the wine industry had sacramental wine and allowances for home production, and ciders benefited from agricultural support and the natural fermentation process, the beer industry struggled to find comparable avenues for survival. Even though there were some medicinal prescriptions written for beer, they were insufficient to sustain an industry that had thrived just a decade prior.

During the thirteen years of Prohibition, only a little over 40% of the 1,356 breweries that existed in the mid-1910s managed to continue operating. The surviving breweries had to employ innovative strategies to stay afloat. They were limited to brewing less than 1% beer, and while some attempted to do so with varying degrees of success, others turned to producing malt extract for bakers and the food industry. However, if exposed to yeast and water, the malt extract could unintentionally result in the production of beer. Leveraging their refrigeration equipment, many breweries transitioned into the dairy industry, manufacturing cheese or ice cream. Despite these efforts, Prohibition, coupled with the challenges posed by the Great Depression and both World Wars, dealt a significant blow to the beer industry, one from which it did not begin to recover until the late 1970s.

By that time, there were only around 100 breweries remaining in the United States, predominantly owned by a small number of large companies. The beer industry's resurgence was a slow and gradual process, marked by a resurgence of craft breweries and a renewed appreciation for diverse beer styles and flavors. The impact of Prohibition had left a lasting legacy on the industry, shaping its structure and dynamics for decades to come.

The Return Of Homebrewing (1977-1978)

By the 1970s, the beer landscape in the United States was dominated by lagers, with only a few exceptions. Anchor Brewing Company in California had revived steam beer at the beginning of the decade, and in 1976, New Albion Brewing was established by a Navy veteran in Sonoma, CA. Upon his return from service, he was disappointed to find that America lacked the beer diversity enjoyed in Europe. New Albion Brewing inspired a generation of young brewers like Jim Koch, Ken Grossman, and Sam Calagione, who went on to found independent breweries such as Samuel Adams, Sierra Nevada, and Dogfish Head, respectively. These pioneers began brewing and reviving long-forgotten styles such as porters and ales, even though they couldn't experiment with recipes at home because homebrewing remained illegal until 1978.

The aftermath of Prohibition still had lingering effects, including a tax code provision that restricted homebrewing to the head of the household, allowing for only 200 gallons per year and subject to taxation. However, in H.R.1337, the 95th Congress (1977-1978) amended this provision, granting any adult in a household the ability to brew beer tax-free. This change in legislation led to a surge in homebrewing as enthusiasts began exploring craft beer, unearthing recipes, and experimenting with their creations among friends and family.

It is no coincidence that the craft beer industry experienced exponential growth in the early 1990s, with the number of breweries nearly tripling to 286 by 1990. Ales, with their diverse flavors and brewing advancements, became the driving force behind the craft beer boom. After decades of lager dominance, beer drinkers were eager for something new. Ales offered easier brewing and monitoring processes, providing a quicker return on investment for new breweries seeking capital. While many craft breweries have recently returned to brewing traditional lagers, it was not until the last five years or so that they began gaining traction. Established breweries like Samuel Adams, Great Lakes Brewing Company, Brooklyn Brewing, and Oskar Blues have included lagers in their lineup for years, alongside their ales, earning multiple awards for their offerings, including at events like the NY International Beer Competition held every February. The ability for craft brewers to practice their craft without fear of legal repercussions served as a catalyst for the craft beer boom, although an underground network of brewers sharing recipes also played a significant role.

Craft Brewing Takes America (2010 - Today)

Today, many of the craft beers enjoyed by enthusiasts around the world have humble beginnings in basements or garages, as homebrewers find whatever space they can to pursue their passion for brewing beer. The aforementioned breweries, including Great Lakes Brewing Company, Samuel Adams, and Anchor Brewing Company, utilized the remnants of the old beer industry to fuel their innovations. Great Lakes Brewing Company transformed a 19th-century building that once housed a brewery into their headquarters, subsequently expanding into other buildings and revitalizing the Ohio City area of Cleveland. Samuel Adams, during their expansion into the Midwest, acquired an old brewery in Cincinnati to establish their new operation. Even Anchor Brewing Company, which paved the way for the resurgence of craft brewing, started in an abandoned brewery. Craft breweries not only revitalized the industry but also rejuvenated run-down areas of cities, contributing to the development of vibrant communities (read about breweries in abandoned churches).

This community of brewers has had a significant impact on the industry, as craft beer continues to experience growth in various metrics, as stated in the Brewers Association's Annual Growth Report. Craft beer demonstrated gains across the board in 2018, with a 4% increase in production volume and a 7% increase in its share of total revenue. According to data from the Brewers Association, the number of barrels brewed quadrupled between 2008 and 2018.

Recognizing the importance of craft beer to communities, the Brewers Association developed a seal to inform consumers when they are purchasing a craft product. This initiative arose as larger corporations began acquiring craft breweries to remain competitive in the market. In an age where access to information and transparency about production processes influence consumer choices, craft beer drinkers place emphasis on the beer they consume. Supporting small and independent businesses matters, and there is a renewed emphasis on drinking locally, reminiscent of the early days of English brewing in the New World.

Despite the encroachment of the hard seltzer industry, this era will be remembered as a pinnacle in the history of beer. The variety of beers available to the public is at an all-time high, bringing us almost full circle to the brewing practices of the 17th century. Today, the majority of the beer we can purchase is locally made by professional brewers right in our neighborhoods. Microbreweries are once again becoming gathering places where people can share stories, enjoy a pint with friends, and savor the camaraderie of the craft beer community.

Let's raise a glass to celebrate how far we have come and the exciting prospects that lie ahead for the beer industry!