Looking Back At the Future of Brewing. Part 4 of 5

Part One — Part Two — Part Three — Part Four — Part Five

Prior to 1980, American beermakers, whether Big Guys or Little Guys, sold essentially the same kind of beer: American-style lagers brewed with barley plus an adjunct like corn or rice. That’s not a criticism, by the way; just a statement of fact. (Yes, many of the small brewers, including Fritz Maytag, made an all-malt brew, but their markets were minuscule.)

So when brewers squared off against each other in, say, 1960 or 1970, they were all selling more or less the same beer and competing for the same audience of drinkers.

But in the 1980s, in a weird coincidence, two unrelated factors collided.

First, most of the remaining small mainstream brewers players fell by the wayside (thanks to a devastating battle between Miller and Anheuser-Busch).

Second, a new wing of brewing emerged. The “craft” beermakers (or micro-brewers, as they were called then) were small and they wanted to make different kinds of beer, like ale, porter, stout. Even their lagers were different: the micro-brewers used malt only; no adjuncts.

Put another way, the new guys aimed at a different audience of beer drinkers, and beer was no longer interchangeable. The industry structure didn’t change, nor has it since then. It still consists of a tiny number of giant brewers and a giant number of tiny brewers. A-B still sells most of the beer in the US and most beer sold is still made with adjuncts.

But that single difference between now and then — varied beer styles — makes it hard to predict how the InBev acquisition will affect American brewing. Yes, space is available on some distributors’ trucks. Yes, some craft brewers will seize the moment and try to parlay that space into bigger markets, higher sales, bigger brewvats. But when they do, they’ll butt heads with other craft brewers making the same move. And things could get, well, ugly.

“Nah,” you say. “Won’t happen. Those craft brewers are nice guys. They share recipes and hang out together. Craft brewing is one big love fest.”

Maybe. Maybe not. But it’s worth noting that back in the ’60s and ’70s, that’s what “small brewers” used to say about themselves. And then came Merger Mania and some of those Little Guys became Big Guys and, hey, all of a sudden the Little Guys were mourning the loss of the good ol’ days when beermakers were one happy family and whatever happened to industry collegiality and isn’t it a shame?

So back to where I started: Is the craft brewing fundamentally different from its historical predecessors? Has the “craft” industry altered brewing’s dynamics? Are old historical patterns irrelevant? I don’t know. But here’s a thought: Dick Yuengling might be the smartest guy in brewing, and it’s possible that his success can tell us about where the industry is going.

More next time.

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