The Audacity of Hops: The History of America's Craft Beer Revolution (62 page)

Ken Grossman pours a Jack & Ken's Ale for Jack McAuliffe at the Sierra Nevada Brewery in Chico.
COURTESY OF SIERRA NEVADA BREWING CO.

McAuliffe did enjoy the visit to Sierra Nevada. In December 2009, to mark its upcoming thirtieth anniversary, Ken Grossman's brewery announced it would be releasing four specialty beers based on collaborations with the titanic figures of the American craft beer movement: Fritz Maytag, Jack McAuliffe, Charlie Papazian, and Fred Eckhardt. The proceeds from sales would go to the namesakes' charities of choice. Brewing day in Chico for the McAuliffe collaboration was in May 2010, and he showed up wearing jeans and a blue, short-sleeved shirt. McAuliffe sipped on a Sierra Nevada Kellerweis, a wheat beer, while a video crew documented his story. More interviews with him and Grossman followed, and, finally, a ceremonial dumping of hops from a white plastic pail into a copper brew kettle took place. About one thousand barrels of Jack & Ken's Ale, more than twice the annual barrelage of New Albion at
its busiest, would hit shelves that July, packaged in elegant winelike bottles capped with caged corks. Later, during a lunch, Grossman brought out some original New Albion bottles—dusty, old longnecks with that label featuring Francis Drake's Golden Hind and California in the background. McAuliffe looked at it and let himself smile.

A year and a half later, McAuliffe was at the restaurant Marlowe's on the Sixteenth Street Mall in downtown Denver. Boston Beer was hosting a breakfast to announce the winners of its annual homebrewers competition, and Jim Koch was the MC. About one hundred people, including several prominent beer writers like Stan Hieronymus and Jay Brooks, stood or sat about, eating French toast and biscuits and other early-in-the-day fare, all cooked with Samuel Adams beer; the lines for seconds snaked down Marlowe's steps from its top level. Most of the conversation had to do with the thirtieth Great American Beer Festival, which would be winding down that day. Koch stepped up to a microphone to announce the competition winners. Before he did, though, the biggest independent brewer in America wanted to say something.

“I know we have Jack McAuliffe here,” Koch said. He paused, and the restaurant fell silent; murmurs swept the room. The name rang a bell, a loud one. Koch continued: “For those of you who don't know, Jack started the first microbrewery after Prohibition.” He sketched quickly the history of New Albion. “He really served as an inspiration to the rest of us.” The restaurant erupted in applause. McAuliffe stood slowly. He smiled sheepishly, clearly surprised at the homage. “Thank you,” he said softly.

Thank you.

*
McAuliffe eventually moved to San Antonio and, as of late 2012, lives in Lincoln, Arkansas.

I
n June 2012,
Anheuser-Busch InBev announced it would buy complete control of Grupo Modelo, the Mexico City-based maker of Corona, among other brands, in a $20.1 billion deal. One-third of the money would be paid in cash. The deal came a few years after Anheuser-Busch itself was taken over by the Leuven, Belgium-based InBev, maker of Stella Artois, Beck's, and other brands (and itself the result of a 2004 merger between Belgium's Interbrew and Brazil's AmBev). Miller had been controlled by South African Breweries since a 2002 deal with Philip Morris; then, around the same time as the Anheuser-Busch-InBev deal, SABMiller took control of Molson Coors, which—notice a trend here?—was formed in 2005 when the Colorado brewery merged with Molson, out of Toronto. The new MillerCoors was also tasked with brewing the brands of Pabst, and it might have stayed number one in global market share had InBev and its $52 billion in cash not come along.

Anheuser-Busch did not want to be part of this fresh consolidation wave. Instead, the King of Beers had been forced into an endgame not of its choosing. August Anheuser Busch IV, the brewery's forty-four-year-old chairman, with dark eyes and dark hair straight out of central casting, declared in an April 2008 speech to distributors, amid rumors of a takeover, that the brewery his great-great-grandfather had founded would never trade “on my watch.” But it wasn't his family's watch anymore, really. The biggest shareholders were the likes of the British bank Barclays and the investment juggernaut Berkshire Hathaway, controlled by Warren Buffett, and they were quite unhappy with Anheuser-Busch's flat share price over the past several years. Busch found himself conceding the buyout on July 13, 2008, ending 156 years of family control. While the obvious reason was the somnolent share price, investors' pessimism was a factor, too. Few believed that Busch and company could turn things around on their own; they needed fresh blood with fresh capital—damn
any national pride amid a global economy. As one analyst put it in terms any American familiar with the country's manufacturing decline could understand: “Anheuser-Busch would have run the risk of becoming the next GM, where market share in the fifties may dwindle down into the teens.” Why such pessimistic projections? Because of the machinations of Anheuser-Busch's longtime archrival, Miller, and because of those pesky craft brewers. Their market sector was growing, while Big Beer's was not.

In May 2012, just before the summer of the titanic consolidations, the Brewers Association announced that the number of American breweries had surpassed two thousand, all but fifty-one of them craft operations. It was the most American breweries since the 1880s, nearly a half-century before Prohibition. The nation had been flirting with the milestone since at least 2008, and reached it despite the lingering effects of the Great Recession—and the latest wave of consolidation.
*

Most of the characters in this book continue, as of the late summer of 2012, in the roles where last we encountered them. Some, however, have seen changes, some of those quite big.

Don Barkley

Don Barkley left the Mendocino Brewing Company after twenty-five years to become the brewmaster at the new Napa Smith Brewery, which opened in Napa, California, in 2008.

Uli Bennewitz

Uli Bennewitz's Weeping Radish Farm Brewery now unfolds over twenty-four acres near Grandy on the Outer Banks of North Carolina. It is a veritable locavore paradise, with a master butcher, fourteen acres for raising produce and chickens, the brewery, and a “Goodness Grows in North Carolina” section in its retail store. For Christmas 2011, Weeping Radish produced the first-ever commercial beer made entirely from North Carolina-grown ingredients.

Sam Calagione

Ever the movement's biggest rock star, Dogfish Head CEO and president Sam Calagione saw the last decade close with perhaps the briskest growth of any
craft operation in the world. With this increased demand, though, has come the need to pare distribution. So the brewery ceased distribution in Rhode Island, Tennessee, Indiana, and Wisconsin.

Dogfish Head was not alone. Other craft breweries, including Avery Brewing in Boulder and Allagash Brewing out of Portland, Maine, announced distribution cuts in 2011 and 2012. While the moves invoked comparisons to the pullbacks after the late-1990s shakeout, the two were different. After the shakeout and the drop in demand for craft beer that it sparked, brewers refocused on markets closest to home. In 2011 and 2012, the reason was, as in the case of Calagione's operation, much more enviable: they could not meet demand without either contract brewing or even altering recipes to speed up and cheapen production.

Jeremy Cowan

Jeremy Cowan remains the CEO of Shmaltz Brewing. At the 2012 Craft Brewers Conference in San Diego, he told the beer writer John Holl he would be opening a seven-barrel brewery in Brooklyn.

David Geary

David Geary, president of D. L. Geary Brewing, heads what is now not only the oldest craft brewery in New England but also the oldest east of the Mississippi.

Bert Grant

Bert Grant died in July 2001 at age seventy-three, six years after selling control of his brewpub. Yakima Brewing and Malting changed ownership one more time before finally closing in late 2005.

Ken Grossman

In January 2012, Ken Grossman, Sierra Nevada's CEO and president, was joined by North Carolina governor Beverly Perdue, as well as by his son Brian and Stan Cooper, the company's logistics manager since 2005, to announce that Sierra Nevada would open a second brewery—and its first outside of Northern California—in the Tar Heel town of Mills River, about twenty miles south of Asheville. The town (population eleven thousand) shares much with Chico, California, in its crunchy remoteness, but Perdue and other local
leaders hailed the economic benefits of having the three-hundred-thousand-barrel brewery. It is expected to start brewing in early 2014, with Brian Grossman and Cooper as comanagers.

Kim Jordan

In April 2012, Kim Jordan, CEO of New Belgium, was joined by North Carolina governor Beverly Perdue to announce the company's second brewery—on the banks of the French Broad River in Asheville, about eighteen miles north of the new Sierra Nevada. New Belgium's decision was, like Sierra Nevada's, hailed as an economic boost to the area. Interestingly, the estimated 154 jobs at the brewery will pay an average of $50,000 annually—or more than 40 percent more than the surrounding area's median—making craft brewing one of the more desirable occupations in western North Carolina. The four-hundred-thousand-barrel brewery is expected to start producing in early 2015.

Greg Koch

Koch remains the CEO of Stone Brewing, now the largest craft operation in the Southwest, and Steve Wagner is still president and brewmaster. In July 2012, the brewery opened its third retail store, including a tasting room for thirty and a patio for one hundred, in Oceanside, California, about forty miles north of San Diego.

Jim Koch

Koch stepped down as CEO of Boston Beer in 2001 but remains chairman and controlling shareholder. (Martin Roper, the company's COO and an executive there since the early 1990s, succeeded him as chief.) Koch's father, Charles, who had served on the brewery's board, died in June 2011 at age eighty-eight.

InBev's 2008 takeover of Anheuser-Busch left Boston Beer for a time as the largest independently owned American brewery.
*
Asked during a spring 2012 interview, in a tasting room at the Boston Beer brewery in Jamaica Plain, if he harbored any ill will toward Augie Busch and his company for the attempts to put him out of business, the normally loquacious Koch turned quiet. Noise from a raucous brewery tour seeped through the tasting-room door. No, he didn't. Why should he? “I'm still here,” Koch answered slowly, a wry smile emerging. “And he's …”—he dragged out the next words—”all gone.”

Michael Lewis

Michael Lewis became professor emeritus at the University of California at Davis in 1995, and retired from heading its brewing curriculum. In 2008, the university, using monies donated by the brewing industry, created an endowed fund in his honor.

Tony Magee

Tony Magee continues to fight the good fight against “the tyranny of fast growth,” although the struggle is not quite so existential anymore for his Lagunitas Brewing. In April 2012, he announced that Lagunitas would open its second brewery the following year, in Magee's hometown, no less—in an old steel factory in Chicago's Douglas Park neighborhood. He made the announcement over Twitter.

Vijay Mallya

The flamboyant billionaire's United Breweries, a division of the UB Group, is still the majority owner of Mendocino Brewing in the Bay Area and Olde Saratoga Brewing Company in Upstate New York. He has, as of this book's publication, yet to make the direct assault on Big Beer that he talked about that summer day in 1997 on his yacht off the shores of Manhattan.

F. X. Matt II

F. X. Matt II died in January 2001 at age sixty-seven. He had stepped down as brewery president in 1989 and was succeeded by his brother Nick, who is now the chairman and CEO. F.X.'s son Fred is the brewery's president.