It has been more than 50 years since home-appliance heir Fritz Maytag rescued the flailing Anchor Brewing Co. of San Francisco and unwittingly spawned the modern American craft beer movement. From that one brewery that Mr. Maytag saved in 1965 — it was the last of its kind then — more than 3,500 craft breweries have grown up. Yet, despite titanic growth in the sector, these smaller breweries have amassed a national sales-market share of around just 15 percent.
The vast majority of U.S. beer drinkers still knock back Bud, Miller Lite and their macro brethren. Is there any hope that more flavorful India pale ales, Oktoberfests and stouts will dethrone them?
There is. It can be found in the example of American fine wine.
Pink Chablis: The Wine Drinker’s Bud Light
If consumers wanted rounder, drier wines made from the likes of Chardonnay and Cabernet Sauvignon, they invariably bought French — or, in a pinch, Italian. A small handful of U.S. wineries made bottles from grapes like that, but their sales were minuscule.
No, the American wine benchmark was Pink Chablis, a wine that E&J Gallo, the nation’s biggest winery, introduced in 1965. Gallo never listed the grapes used, and the concoction tasted like a cross between Kool-Aid and spiked punch. It sold phenomenally.
Then, the year after Gallo foisted Pink Chablis on the public, Robert Mondavi started his eponymous winery, the first significant new one in Napa Valley since Prohibition, and things began to change. The indefatigably gregarious Mondavi, who died in 2008, proved a remarkable salesman for higher-quality wine in general, never mind his own brands, which included a highly acclaimed Cabernet Sauvignon.
A grape such as Chardonnay was not even among the top five most grown wine grapes in California in the early 1970s. Now Chardonnay is the most popular wine style in the U.S.
A shift in national taste helped him immensely. For a variety of reasons, including a generational changeover — those rebellious baby boomers didn’t care for the drinks of their parents — and a rise in the number of wineries specializing in European styles such as Cabernet Sauvignon, Americans started drinking more drier, finer wines and far fewer of the ones made from Carignan and its ilk.
A decades-long preference reversed itself. Wineries throughout the land saw the sales writing on the wall and gradually shifted their production. Newcomers never even considered making anything else.
A thumping victory over the long-hegemonic French in a 1976 blind tasting that came to be called the Judgment of Paris only solidified the rise of American fine wine. As did a bounce in wine coverage among trade and consumer media: A New York Times reporter named Frank Prial became the newspaper’s first regular wine critic in 1972, for instance, and Wine Spectator, Wine Enthusiast and Wine Advocate all launched before the decade’s end.
Today, it seems as if the likes of Merlot and Barolo have always dominated the U.S. wine marketplace — which, incidentally, has become the biggest in the world, belting the French from that perch in 2014. Yet a grape such as Chardonnay was not even among the top five most grown wine grapes in California in the early 1970s. (Carignan was.) Now Chardonnay is the most popular wine style in the U.S.
If You Can’t Beat ’Em, Buy ’Em
A similar taste shift is under way in beer. American craft beer sales volume grew annually nearly 18 percent in 2014, according to the Brewers Association trade group. That was well ahead of the anemic 0.5 percent growth of beer sales overall.
The last time craft beer grew this steadily was in the 1990s. The sector went bust toward the end of that decade as too many entrants flooded the market with too much iffy beer. Around one-third of the craft breweries in the U.S. closed.
There is no sign of such a slowdown this time. The quality is uniformly good, and the support is there: in trade, consumer, and social media; in massive festivals (the Great American Beer Festival in Denver every autumn is the world’s biggest beer-tasting festival); even in the White House — President Obama in 2011 became the first president to homebrew there when staff made an ale flavored with honey from a hive on the mansion’s grounds (and using a kit the president bought himself).
Big Beer operations have adopted an “If you can’t beat ’em, buy ’em” approach to a craft beer sector they’ve long either ignored or clumsily imitated (see Coors’ Blue Moon).
Make no mistake: Craft beer faces huge challenges. The rising price of hops, beer’s all-important bittering agent, has many smaller players concerned. The vast majority of craft brewers are those smaller players, too, churning out fewer than 15,000 barrels a year. Their margins are often razor thin.
There has also been a lot of infighting between craft brewers lately, including legally, over things such as images and slogans. Accusations that some craft brewers were illegally paying Massachusetts bar owners to carry their beers rocked the normally collegial New England craft beer scene earlier this year.
Finally, Big Beer operations have adopted an “If you can’t beat ’em, buy ’em” approach to a craft beer sector they’ve long either ignored or clumsily imitated (see Coors’ Blue Moon). Anheuser-Busch InBev, the nation’s biggest brewer, bought Chicago’s Goose Island in 2011, Bend, Oregon’s 10 Barrel and Long Island’s Blue Point in 2014, and Seattle’s Elysian and Los Angeles’s Golden Road this year. Just this summer, MillerCoors acquired a majority stake in St. Archer’s out of San Diego, and Lagunitas, the fastest-growing craft brewery in the U.S., signed a 50-50 partnership with Heineken.
That trend in itself, though, whatever it might mean for the industry, shows where beer is headed taste-wise in America. Lagunitas’ founder and chief, Tony Magee, bragged on social media that his deal with the much larger Heineken only means more Lagunitas IPAs et al on the shelves in more places.
Far from the end of craft beer, the recent Big Beer rigmarole and craft infighting, not to mention the rapid expansion of some craft operations, is the salvation for craft beer stylistically. It’s all going to get so much tastier from here on out for consumers.
Budweiser and Miller Lite appear destined to be shunted to the sides of the beer aisle — and sooner than many think. It’s taking a while — more than half a century now — but just look at Chardonnay.
Tom Acitelli is the author of The Audacity of Hops: The History of America’s Craft Beer Revolution and the new fine-wine history, American Wine: A Coming-of-Age Story. Get at him on Twitter: @tomacitelli.