The Audacity of Hops: The History of America's Craft Beer Revolution (46 page)

Chris Hansen, who would the following decade attain a sprinkle of television immortality as the host of the
Dateline
spinoff
To Catch a Predator,
about confronting would-be sex offenders on-camera, gave his own voiceover as more images of exotic taps and glasses washed across the screen. His rollout was interspersed with further critical pronouncements from patrons and bartenders.

Hansen:
The selection is mind-boggling—Seismic Ale and Earthquake Pale, Red Fox or Goat's Breath Bock?

Bar patron:
It's got that dark, malty kind of full-bodied taste.

Hansen:
They're called craft brews, or microbrews, because, we're told, the beer is carefully crafted one small batch at a time.

Viewers then met Jim Koch. They heard about the Boston brewery and about Koch's patrilineage: “Every oldest son in my family has been a brewmaster for a century and a half.” Hansen told the audience of the success of Samuel Adams—the sales, the medals—and of Koch's dedication to the craft of brewing:
“Koch says he still samples every batch his company brews, and he wasn't shy about doing so during our visit.”

It all sounded so commendable and complimentary, not only to Koch's Boston Beer Company but also to the entire craft beer movement. This
Dateline
segment looked as if it could end up being the biggest single platform the movement ever had to reach the nation, to tell the populace of this manufacturing and culinary triumph, of this return to local craftsmanship using wholesome ingredients and traditional recipes. This looked to be a moment not just for craft brewers and their fans—it looked to be one for craft food producers, period.

However, any craft beer aficionado who might have tuned in—indeed, any viewer who heard Stone Phillips's incredulous questions about craft beer during the introduction—had to have known what was coming. It was as if NBC had painted a big, red bull's-eye on Jim Koch's back. Hansen, after the laudations:

[T]he bottle invites you to come visit their small traditional brewery in Boston. So we did, and found a small brick building, a photo tribute to previous generations of Koch brewers, and, just as you see in the Sam Adams commercials, the small copper kettles and equipment used to brew the beer. But there's one small problem with this picture: At least 95 percent of all Sam Adams beer isn't brewed here—or anywhere even near Boston, for that matter.

Shots now of other, much less bucolic breweries.

It's brewed here, at the Stroh's Brewery in Lehigh Valley, Pennsylvania. Here, at Genesee in Rochester, New York. And at several other large industrial breweries throughout the country. And while it may be handcrafted one single batch at a time like the bottle says, each single batch is brewed in a kettle that can hold up to one hundred to two hundred thousand bottles of beer. That's right—the Sam Adams you buy in the store was likely brewed in the same place as more humble and less expensive brands, like Old Milwaukee, Stroh's, or Little Kings. And Sam Adams is far from alone. Many of the expensive boutique beers that promote themselves as “handcrafted” or “microbrewed” are actually made in larger commercial breweries like this one; it's called contract brewing.

The boom was lowered. Craft brewers of whatever size or stripe would never forget the
Dateline
segment. On it plunged with its blazing indictment of contract brewing, an indictment that grew throughout the segment to tarnish the entire craft beer movement. If Samuel Adams Boston Lager was brewed in Pittsburgh and it was the bestselling American craft beer brand on earth, then where was any bottle of craft beer brewed? It was all enough to make a consumer stare at the beer in his hand and then back at Chris Hansen, wondering what the extra buck or two per six-pack was really worth. The worst thing about it all was who NBC presented as the aggrieved party, the victim of these dastardly small-scale brewers and their deceptive marketing: Big Beer. Anheuser-Busch in particular put itself forward as a source for NBC.

Hansen:
Francine Katz is the vice president of consumer awareness at Anheuser-Busch, the biggest beer maker in the world, one of the nation's biggest television advertisers, and a brewer that's hopping mad about a lot of the so-called boutique beers.

Katz, brandishing a bottle:
This one says that it was brewed and bottled by Pete's Brewing Company, St. Paul, Minnesota, but Pete's doesn't own a brewery in St. Paul, or anywhere; Stroh's made that beer.

Hansen:
Pete's Wicked Ale is the second hottest-selling microbrew in the US. Anheuser-Busch manufactures some ninety million barrels a year?

Katz:
Mm-hmm.

Hansen:
Forty-five percent of the market? Why are you so concerned about what little Sam Adams is doing or little Pete's Wicked Ale?

Katz:
This comes down to honesty and truth in labeling. You know, I'm not going to stand here and tell you that we don't want to sell beer. All we're saying is, ‘Hey, guys, let's agree on some basic rules of honesty, let's be truthful on our labels.'

Hansen then returned to Koch for a classic clinic on gotcha journalism, though he had yet to unsheathe his sharpest weapon.

Koch:
Sam Adams beer is brewed by Boston Beer Company. We select the ingredients; we select the recipe; we are the brewer.

Hansen:
But the guys actually brewing the beer don't work for you.

Koch:
The people brewing beer are brewing it under our supervision and our direction. They do exactly what we ask them to do.

Hansen:
But don't you think you create the image in people's minds that Sam Adams is brewed right here in this quaint Boston brewery, when, in fact, it's farmed out all over the country?

Koch:
We don't lie to them.

Hansen:
Well, it doesn't sound like it's being completely honest, either.

Koch:
We tell them who brews the beer. If Julia Child comes to your house, brings her own ingredients and her own recipe, goes into your kitchen, and makes dinner for you, who made dinner, you or Julia Child?

Koch, the nation's biggest craft brewer, came off looking defensive, a little sad even. Anheuser-Busch, the world's biggest brewer, came off looking concerned for the consumer, a dipsomaniacal Ralph Nader. As Katz put it seconds later regarding craft beer packaging: “There's enough on this label to be a small novel; certainly, there's enough room to tell beer drinkers the truth.” She did not stray off-message when Koch argued to Hansen that Anheuser-Busch's concern for consumers was nothing more than a pose in the face of a craft beer segment growing then by double digits. “This doesn't come down to the issue of competition,” Katz retorted. “It doesn't come down to whose beers are better. I can't think of why asking a beer producer to be honest about who's making the beer could be in some way being a bully.”

Hansen then went on to cite a federal tax credit that encouraged smaller brewers to expand, which, he said, was available to contract brewers as well. Craft brewers at this point were able to take advantage of not only this credit for purchasing equipment but also a lower tax rate of seven dollars per barrel up to the first sixty thousand barrels if they brewed no more than two million barrels a year (which everyone then did). Individual states, too, might have fairly generous tax breaks for expanding smaller brewers compared to those for Big Beer. It was something, Hansen explained, that peeved Anheuser-Busch, as well as competing craft brewers. That was because the tax breaks were meant, according to Hansen, for craft brewers who had started capital-intensive physical operations. He introduced Gary Fish, founder of the Deschutes Brewing Company in Bend, Oregon, amid scenes of a busy pub.

Hansen:
Fish founded the Deschutes brewpub and restaurant in 1988,
putting his and his family's financial future on the line to make it happen. He expanded successfully, building a brewery from the ground up. And, today, the Deschutes name is popular throughout the Pacific Northwest. Deschutes and thirty other small brewers from Oregon have sided with Bud in the battle over truth in labeling.

Fish:
Microbrewery is a—is a noun. To me, it means something.

Hansen then showed viewers the label on a bottle of the Boston Beer-backed Oregon Ale and Beer Company, explaining that it was brewed under contract by Stroh's.

Hansen to Fish:
How do people out here in Oregon involved in craft brewing react when they look at a bottle of Oregon Ale and it says “microbrewed” on the label?

Fish:
I think they feel patently offended.

There it was: the tetchiness of the American craft beer movement that had swelled over the last few years. The rancor, the worries, the mistrust—it had all spilled onto a national, prime-time stage. But who had set the stage?

Jim Koch watched the episode with his kids back in Newton, Massachusetts, just outside of Boston, after watching the Yankees beat the Orioles 6 to 4 to secure their first World Series spot since 1981. He had kind of known what was coming. His last client at the Boston Consulting Group twelve years ago before he left to do beer full-time was General Electric, and GE owned a majority stake in NBC. Koch, following his interviews with Hansen and before the episode aired, contacted an old friend within NBC to try to get a read on what to expect from the final cut.

“Is it going to be objective?” Koch wanted to know. “Is it going to be negative?”

“It's going to be negative, Jim,” his friend replied.

He broke it down for Koch like this: Anheuser-Busch was one of NBC's biggest advertisers. It had bought, for instance, 175 commercials for the Olympics in Atlanta the summer before. It wasn't that
Dateline
lacked journalistic standards, but any segment, with just about any set of facts, could be slanted as the show wanted it. Besides, GE management was not wont to interfere with the editorial side of the network, so what was any segment subject like Koch to do? Phone calls and worrying was not going to get him anywhere. Sit tight. “It's not going to be malicious,” the friend tried to reassure him.

Unspoken between Koch and his friend was another possible cause of the segment's slant, one brought up by Chris Hansen in a quick aside: “Anheuser-Busch makes Red Wolf, a specialty lager, and identifies itself as the brewer on the label. Anheuser-Busch is also a minority investor in another specialty beer, Redhook, along with a subsidiary of NBC's parent company, General Electric.” Anheuser-Busch and GE were in bed together on Redhook. This would be the same Redhook that Koch had vociferously denounced for its 1995 deal with Anheuser-Busch, which he had called “a declaration of war” by Big Beer and had analogized to the original
Star Wars
trilogy, with Budhook—Koch's nickname—in the role of the evil empire. There was never any clear indication that Redhook, GE, or Anheuser-Busch put a journalistic hit on Koch and the larger craft beer movement, and Anheuser-Busch denied the implication. The interconnectivity was undeniable, though. It appeared the chickens were coming home to roost, and on a national scale.

It wasn't just the
Dateline
segment, either. Around the same time, Anheuser-Busch, along with more than two dozen Oregon brewers, petitioned the federal Bureau of Alcohol, Tobacco, and Firearms (ATF) to force smaller breweries to put on their labels who made the beer and where, a requirement similar to one already enforced for other foodstuffs and household products like cosmetics and medicines (beer had no nutritional value, the thinking had gone since Repeal, so best to avoid things like ingredients and origins on the labels lest the public think otherwise). The petition was seen as an assault on Boston Beer in particular, which countered with a petition of its own asking the ATF to require sell-by or best-before dates on beers as well as where they were brewed (something Boston Beer had been doing on its own since 1989). Beer has a relatively short shelf life as opposed to, say, wine, and the implication was that Big Beer brands routinely arrived in front of consumers old and spoiled, owing to the volumes made and the distances shipped.
*

Boston Beer also asked the feds to please define what a craft brewery or microbrewery was. Since the second wave of openings in the early 1980s, the unofficial handle promoted by the Association of Brewers, critics, and brewers themselves was any brewery or brewpub making up to fifteen thousand barrels annually; the rest were regional breweries or craft regional breweries or regional craft breweries. The public at large might also take “craft brewery”
and “microbrewery” to mean any operation that wasn't one of the Big Four—Anheuser-Busch, Miller, Coors, and Stroh's—that controlled nearly 90 percent of the market. This semantic confusion was part of the reason for the recriminations. For its part, Charlie Papazian's Association of Brewers, which had with seeming ease been able to define more and more styles for the Great American Beer Festival, was working on an official definition of a craft brewer, and it looked like it could not come soon enough.

Around the same time as the
Dateline
segment, Anheuser-Busch launched a television, radio, and print ad campaign that further clouded things for consumers. The ads were merciless: “Why does Sam Adams,” asked one, “pretend to come from New England when the truth is, it's brewed by contract breweries around the country?” Another all but called Koch a liar: “Time to stop tricking beer drinkers, Jim.” And another went for the jugular on the all-important issue of price: “If Samuel Adams is made at the same contract breweries that churn out cheap, blue-collar beers, why does Sam Adams cost so much more than these other products?” Anheuser-Busch also targeted Pete's Brewing as well as, interestingly enough, its longtime archrival Miller in the ATF petition and the ads. Without a hint of irony, considering its own myriad forays into phantom crafts in the last few years, Anheuser-Busch called on Miller to come clean about its Plank Road Brewery, the supposed rustic brewhouse behind its popular Icehouse and Red Dog brands since 1993. With an almost audible sigh to any reporter who read it, Miller felt compelled to release this statement in early 1996 regarding its competitor's calls for full disclosure: “The Plank Road Brewery, the original name of the brewery established by Frederick Miller in 1855, is a separate division of Miller Brewing Company. Plank Road beers differ from Miller in both style and taste. Plank Road's relationship with Miller is well established and well documented. We view it as most unfortunate that the industry leader is looking to use a government agency to stifle competition.”