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Tapping into American Craft Beer

“Tapping into American Craft Beer” by Laura Latterman (Acuña) dated 05/13/2015

Tapping into American Craft Beer

April 7, 2015 was the 82nd anniversary of the failure of the Noble Experiment. The repeal of Prohibition by the 21st Amendment is now celebrated unofficially as National Beer Day across the United States in honor of the government’s hindsight. This year, National Beer Day fell on a Tuesday and when I got home from work and the condo smelled sweet, rich and heady. As I closed the door and greeted our cats, I asked my fiancé what he was making for dinner. Rick answered triumphantly, “Beer!” That wonderful aroma was not spiced chicken and baking bread, instead it was freshly steeped barley and a tinge of spicy hops. Rick, using a homebrewing kit from a local microbrewery he’d gotten for Christmas, was celebrating the end of temperance with the time-honored tradition of making beer. Assuming the process it turns out to be a success; we should be enjoying fresh homemade craft beer in late May.

Beer. The social lubricant whose praises are quoted from the juxtaposed mouths of both American forefather Benjamin Franklin and the modernly virtual Homer Simpson. It is not just a beverage; it has become an American pastime. A suds enthusiast can purchase beer at restaurants, amusement parks, event venues, supermarkets, gas stations, convenience stores, and of course liquor stores; in fact, some states even have drive-through liquor stores, fondly referred to as brew-thrus or beer-barns. The more industrious hop-head, such as my fiancé, can buy brewing supplies, take classes or watch how-to videos on YouTube.com, and brew their own beer at home. Tourists can purchase travel guidebooks or join tours of local breweries throughout different counties and states. Americans love beer and make it readily available at every turn.

At home, Rick’s new brewing diversion is born out of our mutual love of craft beers. At least once a month, we can be found lost in our local the Whole Foods Market, who touts their beer department as being “stocked by a group of merry revolutionaries dedicated to liberating civilization from the clutches of boring beer” – Much more noble-sounding than Prohibition in my opinion, yet today’s variety of American craft brews is deceiving. It does not accurately reflect the struggle and near decimation of the microbrewery. The failure of Prohibition left its mark, not only on the Constitution, but on the landscape of the American brewing industry. Quite appropriately, though, it was Rick’s same hobby that saved the microbrewery industry from becoming a mythical history lesson.

The Age of Brews

One upon a time, the 1800’s more or less, an American in need of a frothy beverage would head into town to visit the local brewery to quench his thirst. Breweries were abundant and small – they were what the Brewers Association, an organization dedicated to protecting the interests of craft brewers, would consider microbreweries in today’s terms. Beer was consumed locally and publically, much to the enjoyment of the populace, and guaranteed to stay local as the natural bacteria in the beer made sure the beverage would spoil before it could be transported any great distance.

Meanwhile in Europe, Bacteria were also spoiling wine, something the French could not endure. According to my Encyclopedia Britannica, in 1864, Louis Pasteur, at the behest of Emperor Napoleon III, developed the process of pasteurization to kill off the bacterial buzz-killers. In the States, the self-admittedly innovative Anheuser-Busch brewery (just take a peek at the Our History section on their website) was the first American company to apply the pasteurization process to their beers. Now breweries that could afford to employ the process could ship nationally, allowing their beers to be consumed far from their hometown tanks. While the more industrious larger breweries sought out the American dream in terms of wealth and reach, the smaller community breweries set their sights on more easily attainable in-town profit goals and were happily brewing at status quo.

The Brewers Association kept a solid record of American breweries noting 4,131 breweries, large and small, in 1873. But, in 1920 that number plummeted to zero when the “Noble Experiment” was enacted. The U.S. government ratified the 18th Amendment to the Constitution mandating a nationwide Prohibition on all alcohol. The booming beer industry dried up over night. President Herbert Hoover is often quoted on the intention of Prohibition as “a great social and economic experiment, noble in motive and far-reaching in purpose,” but those lofty goals fell flat. The larger breweries, such as Anheuser-Busch, Miller and Coors, had the finances and facilities to keep themselves afloat during the dry years by making sodas, ice creams, cereal drinks, and even non-consumables. (The Museum of American Finance highlighted Anheuser-Busch’s creative foray into truck bodies and commercial refrigeration units in their 2012 Winter issue of Financial History Magazine, marking the 150th anniversary of the St. Louis brewery where the truck bodies and refrigerators were produced during the enforced temperance.) The local small breweries, however, lacked the bankrolls and industrialization needed to stay alive and most closed their doors.

Thirteen years later, Americans witnessed a rare event: the U.S. Government admitted their mistake! The 21st Amendment repealed Prohibition on April 7, 1933 and the sale of beer was decriminalized. The repeal of Prohibition was a mild and short-lived reprieve from the reality of the Great Depression, already painfully felt for four years. Of the local town breweries that had not succumbed to bankruptcy, only a few managed to get their feet back up under them in the midst of such a financial hell-storm. The average drinker just couldn’t afford the luxury of beer and the local brewers could not afford to keep their doors open. At the beginning of World War 2, the close of the Great Depression, there were only 672 breweries open in America.

The next few decades of American beer culture saw exponential growth for the major beer companies, Anheuser-Busch, Miller and Coors, who came to be known by industry professionals and the media as The Big Three. The Big Three macrobreweries figured out how to make generically palatable homogenous beers, cheaply and efficiently. They benefitted from wartime with brewing and shipping contracts for the troops overseas. After the war, The Big Three took advantage of the mass distribution made possible by the aluminum can and began dominating the market.

I recently spent a lovely afternoon appropriately drinking a craft beer while watching Anat Baron’s 2009 documentary entitled Beer Wars. In her film, Anat shared a clip from a NBC television news real from May 10, 1978, in which the narrator can be heard saying, “The Great American Beer War: A battleground of corporations, careers and cash. Since 1970, 35 local beers have been killed off, driven out of business, or bought out by the giants. Gone forever.” While I cannot fault The Big Three for their success, that success does not mean a better product. McDonalds, Walmart and Justin Bieber all prove the same point: with enough marketing and market leverage, you can sell anything. The Big Three evolved into corporations focused on profit margins instead of flavor and quality – beer was no longer a craft to be honed; it was a business, tasteless and steeped in sameness – and the microbrewery had disappeared into the background.

Homebrewed Revolution

Jim Koch, a sixth-generation brewer and founder of Samuel Adams Brewery, was caught on film in 2009 reflecting on what it was like to have lost the craft beer: “All we knew about beer was from Budweiser; it’s as if all we knew about food was from McDonalds.” How could American’s know what they were missing out on if it were not even an available option? Americans yearning for fuller flavored beers, seeking heady hops and toasted barley, had only light lagers available to them. Well, as the saying goes, if you want a thing done well, do it yourself. Enter the homebrewer.

It was the homebrewers of the late 1970’s, an era of self-expression and experimentation (precisely how my mother fondly refers to the decade of her teens years), that breathed life back into the American brewing culture. Fermented fans, like Mike Koch, with a passion for their fandom and hobby discovered that they could brew their own beer at home. This was the spark that breathed life back into the microbrewery, a spark that hobbyists such as my fiancé, continue to rekindle and stoke daily. Beer hobbyists, homebrewers looking for creativity and diversity in their favorite beverage, collected and tested recipes, sunk their savings in brewing equipment, and convinced their friends and family to invest in the revival of the artisanal beer heritage of America. The number of microbreweries began to climb and nearly 81 years after the repeal of Prohibition, the number of breweries in the United States reached 3,464, of which 3,418 were reported by the Brewers Association as craft breweries – The microbrewery was saved.

Assuming each brewery produces approximately five different beers a year (a very conservative number, as most microbreweries brew smaller batches of beer, frequently changing styles and flavors throughout the year), the average beer drinker has easily over 17,000 brewed drinking options in America. This diversity and growth has yet to slow. With the growing popularity in supporting one’s local economy, there has been an insurgence of spending on micro/craft brewed beer in the past four years mirrored by the national addition of 1,000 breweries between 2010 and 2014. In my home of Orange County, CA, I can name five breweries off the top of my head that opened in just the past 18 months: Artifax in San Clemente, Barley Forge in Costa Mesa, Bottle Logic in Anaheim, Four Sons in Huntington Beach, and The Good Beer Company in Santa Ana. This growth, however is not without its drawbacks.


It’s a warm, heady smell, reminiscent of freshly baked bread, like slices of sourdough toasting for breakfast, then there is this slightly dirty, earthy smell of bark, pine needles and old lemons, the finishing notes are of an antiseptic cleanliness – quite the combination of odors. This is what it smells like to walk into a working brewery. The first smell, the scents of yeast and toasted grains, means they are actively brewing; cooks working in the beer kitchen. The juxtaposed smells of earth and sanitation are constants. Breweries have to maintain strict cleanliness standards for quality and safety reasons, sometimes giving a brewery an austerely hygienic appearance and smell. As for the distinctly earthy aromas that tend to permeate a facility, those are hops.

Hops, or Humulus Lupulus, is one of only two genera of the plant family Cannabaceae, according to the Natural Resources Conservation Service, and shares some of the same aromatic features of its hemp cousin, Cannabis. Hops come in many varieties with unique flavors and scents ranging from bitter pine to earthy vegetation to floral and citrus nuances, often with a sour skunky smell. These beer building blocks grow as green little cones on vines throughout the world, but in the United States they are cultivated mainly in the Pacific Northwest with the USDA reporting 79% farmed in Washington state alone. In recent years, the demand for these hops has grown, but the crops have not.

According to the USDA’s 2014 National Hop Report, hops crop yields from 2013 to 2014 increased just over 2.5% with 69,246,100 lbs. in 2013 and 70,995,900 lbs. in 2014. Meanwhile, the number of U.S. breweries grew 18.6% in the same timeframe with 3,464 breweries operating in 2014 versus 2,917 in 2013. The demand for the pinecone-shaped flowers is growing and there is concern over the ability of the farmers to meet it; there is only so much land for farming.

While we are potentially experiencing a hops drought, there is a very realistic water drought – A reality strongly felt in my native Orange County, CA. With all recent the concern over water shortages on the West coast, I have to stop to ponder if investing in such a water-based product is a wise decision. Although water conservation and efficiency is important to a brewer’s business model, some brewers are looking further than their bottom lines. In 2014, Oregon’s Clean Water Services, a water resources management utility covering the Tualatin River Watershed region, and the Oregon Brew Crew homebrewing group held a homebrewing competition where brewers had to use 30% effluent (reused/reclaimed) water in their contest submission. The Pure Water Brew Challenge successfully showed that there is more than enough water available for brewing, so long as the water treatment plants were available and local laws were adjusted to allow the human consumption of reclaimed water.

Last month, the Oregon Health Authority approved Clean Water Services to continue the limited production of beer from treated wastewater and the 2015 Pure Water Brew Challenge was recently announced. Jokes about toilet beer and prison wine run through my mind, and social media and online news sites are abound with potty humor regarding the competition. The reality is that the growing demand of beer, more specifically craft beer, means more usage of resources; the American brewing industry needs to hop to it with crops growth and start tapping into alternative sources of water.

Love at First Pint

What is it that drives someone (me) to spend $13.00 (yes, I’ve spent that) on a six- or four-pack (in my case on one bottle) of craft beer, instead of $6.00 on a six-pack of mass produced brews? The American consumer is being romanced by the specialization, creative names, and most importantly unique flavors of craft beers. According to a 2014 study in the Agricultural and Resource Economics Review, Gabrielyan, McCluskey, Marsh and Ross, professors at Washington State University, found that Americans shared a “Willingness to Pay for Sensory Attributes in Beer,” as the article was named, and that as they “find beers that match their ideal concept of taste, they will be willing to pay a premium for them.” To which, I can attest – One of my favorite beers, Tank 7 Farmhouse Ale from Boulevard Brewing Company out of Kansas City, MO, can only be found locally in 750 mL bottles with a price tag often over $11.00.

This past December, Rick, the new fiancé/then boyfriend, popped the proverbial question and we celebrated by going out to dinner for steaks and $15.00 bottles of beer. Splurging on the fancy craft brews seemed more appropriate for us than sharing a single bottle of mediocre champagne. While we share a love of microbrews, we have different tastes, so Rick had a double India pale ale, while I had a seasonal saison. Not quite done celebrating, we decided to have our nightcap at Bottle Logic Brewery in Anaheim, CA. Craft beer and our relationship have gone hand in hand in from the start. On our first date, we met at The Yard House restaurant and discussed our favorite beers over freshly poured draughts. For us, birthdays are microbrewery tours, vacations are craft beer festivals, new towns require local brewery searches on Yelp.com, and grocery shopping becomes meticulous once the beer isle pops up.

When it came time to start planning our wedding, I could think of no better central idea than craft beer. Rick and I will be wed on September 19th, the first day of Oktoberfest 2015. We will have locally brewed beers on tap, bouquets and boutonnieres made of hops and dogwood blossoms, beer-infused cupcakes, framed engagement photos of us at our favorite breweries and festivals, and a brewery tour bus as our wedding shuttle. For Rick and me, it was love at first pint, and while that is our wedding theme, I see the same sentiment mirrored in the beer-drinking culture of the U.S.

In fact, according to a global survey report entitled “Millennials and the New Era of Food, Wine & Beer Festivals” recently released by the online event ticketing company Eventbrite, beer festivals beat out wine and food festivals as the most attended type of festival and as the festival type that attendees were willing to spend the most money on ($36-$50 per ticket). The modern American is seeking the unique flavors and creativity behind craft beer and they are willing to pay for it. They want to fall in love at first pint and it’s the craft brewers who are playing matchmaker.

Drink Local

The consumer – the local – is the key to keeping microbreweries thriving. The neolocalism movement, discussed by Schnell & Reese in their 2014 study on “Microbreweries, Place and Identity in the United States,” is summarized as a desire to re-connect with the local community and it’s this movement that is keeping Americans engaged with their hometown breweries. In some ways by choosing a microbrew, as opposed to a mainstream domestic beer, the consumer is acting out in protest against the macrobrews in an anti-establishment/anti-mass production toast – Screw the system, cheers! In other ways it’s an idea of customization, the thought that the microbrewery makes the only beers you enjoy for you, producing a relationship between the consumer and the brewer. And, by combining both these ideas in public, you get a group of people all enjoying the same ideals and personalized beer creating what those Washington State University professors dubbed a “we-feeling.”

We. Us. You and me and that person over there. We, together, drink beer. And by doing so locally, we create a community. We are locals, we drink craft beers, and we are proud. The Institute of Research on Labor and Employment (IRLE) at University of California, Berkeley hosts a working paper entitled “Bottle Revolution: Constructing Consumer and Producer Identities in the Craft Beer Industry?” in which they observed that by knowing more about obscure beers, craft beer drinkers label themselves experts and “moral entrepreneurs.” Together, we know beer. We are beer snobs. That elitist image is embraced, not only by the drinker, but by the brewers themselves, such as with Escondido, CA’s Stone Brewing Company and their tip-of-the-hat with their Arrogant Bastard Ale.

Other breweries focus on the locale instead of the local by naming their beers after landmarks and community traditions. Tustin Brewery in Tustin, CA names the majority of their beers after their hometown including Red Hill Red, named after the area and street, Old Town IPA, supporting Tustin’s historic downtown district, and Blimp Hanger Porter, denoting the visually iconic WWII era blimp hangers on the edge of town. Some breweries garner support by appealing their shared interests through themed breweries (such as sci-fi brewery Bottle Logic), kitchy or tongue-in-cheek beer names (Belching Beaver Brewery), pop-culture references (like Oskar Blues’ Mama’s Little Yella Pils) and artistic labels (do yourself a favor and Google image search for Odell Brewing Co.). All these ploys are honest attempts at expression on the part of the breweries and identified with by the drinkers. As a craft beer drinker I applaud the creativity and constantly seek out what is new. Anat Baron captured a quote from Dogfish Head Brewing Company’s founder, Sam Calagione, that I feel sums up much of the uniqueness of the microbrewery: “If it’s already been done then it’s not really something we’re interested in doing.”

Breaking the Seal

No matter my love for or the popularity of craft beers, they are not the end all and be all of the beer market. The domestic macrobreweries still hold the lion-share of the market, with craft beers topping out at 11% in 2014. While that percentage is small, it is still significant considering that while the overall beer market only grew 0.5% from 2013, the craft market grew a solid 17.6%. Based on these numbers from the Brewers Association, I’d have to surmise that while Americans are not drinking much more beer than usual, the beer they are increasingly more likely to drink is produced by a craft brewery. My own refrigerator stands as a testament to those stats, for although we have a 12-pack of Bud Light, we also have a variety case of microbrews from Mission Brewery in San Diego, CA.

Beer. The social lubricant whose praises are quoted from the juxtaposed mouths of both Benjamin Franklin and Homer Simpson. It is not just a beverage; it has become an American pastime. In truth, suds enthusiast can purchase craft beer directly from breweries, at restaurants, amusement parks (Disney’s California Adventure caries craft beer from Karl Strauss Brewery.), event venues, supermarkets, gas stations (I once filled up at a gas station run by a brewing company in Temecula, CA.), convenience stores, and of course liquor stores; in fact, some states even have drive-through liquor stores, fondly referred to as brew-thrus or beer-barns. Americans are falling in love with craft beer and making it readily available at every turn.

That popularity and growth is a double-edged sword for the microbrewery, for if they were to waiver from the ideals that have made them such a specialty, their consumers would be the first to call them on it. Voicing one of many genuine concerns for small brewers, Tremblay and Tremblay’s 2011 review in The Economics of Beer noted, “The irony is that as successful micros grow, they lose their ties to local communities and could no longer be called microbreweries.” In a large scale homogenized environment it is not economical to cater to the specific desires of individual customers when the larger percentage of consumers are happy with the status quo. Why brew beer just for Joe, when Dan, Jose, and Quan are okay with the beer made for everyone? To explain just that, the Berkeley IRLE applied the concept of resource partitioning theory to the modern beer industry. The theory allows that as “specialists,” microbrewers have honed and crafted what their consumers deem to be the ideal imagining of beer: craft beer, or as I like to think of it, the god beer. When a macrobrewery tries to present a craft beer, such as Coors with Blue Moon – a branding deception that the average consumer is often unaware of – the beer snobs will recognize it as an imposter and protest it as a false idol. In an environment where your consumers are beer-drinking zealots, authenticity and identity are critical.

That identity and authenticity lie in handmade craft beer. The keyword there is craft. It is a skill, an art, a creation, a profession, and connection to our past. Craft beer is steeped in American history. It is a both a way to embrace our past and to look forward to the future of brewing. Innovations will continue as hurdles are overcome and the local microbrew aficionado will continue to feed their local economy. And here, in Orange County, CA, two hopheads will be wed in September, honoring the grand craft brewing culture of the U.S. with a toast during their vows.



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