How a Teetotaler Unleashed America's Craft Brew Revolution

Beer Flight
America's craft brew industry is booming. Domestically produced styles like India pale ale, American wheat beer and imperial stouts are so popular that they're even making an impact in strongholds of traditional brewing like Germany. And it all may be thanks our 39th president, Jimmy Carter.

According to the Brewers Association, an industry organization for craft beer producers, there are now 3,040 independent breweries in the U.S. Based on an 1880 Internal Revenue Service report that counted 2,830 ale and lager breweries -- down from a high of 4,131 in 1873 -- that puts craft brewing at a 135-year high mark.

U.S. consumers drink more than $200 billion in beer annually, and 90 percent is brewed, distributed or otherwise controlled by just two companies: Anheuser-Busch InBev (BUD) and MolsonCoors (TAP).

Small and regional breweries now account for 6 percent of all beer sales, a number that doesn't seem that big, but one that has been steadily climbing since the '90s – while the big brewers' numbers have been declining. Craft beer production is even effecting the economy. In 2012, the latest year for which data is available, craft breweries contributed $33.9 billion to the economy. The industry provided 360,000 jobs -– including 108,440 at breweries and brewpubs.

Bier Ist Gut

Thanks to the craft beer movement, American beer, long derided as weak and watery by Europeans, is starting to not only get respect across the Pond, but is surpassing long-established brands in terms of interest.

In Germany, long the considered to set the gold standard for beer brewing, craft breweries and distributors are now holding tasting events, introducing the local population to more complex flavors and styles.

This is a welcome change for some Germans, who have become increasingly bored with the traditional mild lagers that make up more than 50 percent of beers sales. While the average consumption of domestic beer has dropped by one-third since 1995, during the same time, imported beer sales have almost tripled.

"It's easy to get decent beer in Germany. We call it boredom on a high level," says Dirk Hoplitschek of Berlin, who founded a beer-rating site designed to raise interest in non-German beers.

Regarding craft brews, he says, "The United States has a 30-year head start. People are traditional here. Maybe it will be a bit slower, but it will happen."

1978 Law Changed the Landscape

In fact, it's a 36-year head start. The current bounty of craft breweries goes back to 1978, when President Carter signed into law H.R. 1337, the relevant part of which "Allows any adult (formerly only heads of families) to produce wine and beer for personal and family use and not for sale without incurring the wine or beer excise taxes or any penalties for quantities per calendar year of: (1) 200 gallons if there are two or more adults in the household and (2) 100 gallons if there is only one adult in the household."

The law in essence legalized the homebrewing of beer and enabled a generation of hobbyists to experiment and produce specialty batches without fear of prosecution. One of those homebrewers was Jim Koch, who later founded Boston Beer (SAM), and who is considered by many to be the godfather of craft brewing in the U.S.

Koch came from a long line of brewmasters and had brewed beer with his father at his home when it was still illegal. In 1984, after it was lawful, Koch whipped up the first batch of what would become his company's signature beer, Sam Adams Boston Lager, in his kitchen.

Other home brewers began to improve their beer recipes, expanding first into brewpubs and then full-scale breweries. Now there is a second generation.

Ironically, though Carter's action can be seen as the beginnings of a craft brewing renaissance in the U,S., he was a teetotaler. He had all the alcohol removed from the White House, Air Force One and Camp David.

The Lund Loop is a free once-weekly curated slice of what I am writing, reading, and hearing about in finance, tech, music, pop culture, humor and the good life. But not sports or knitting ... ever!

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During my years in brewing folks always asked what is the best beer to buy. I would tell them the best beer is the one they like that is the cheapest. There is no correlation between cost and least not from an ingredients or alcohol stand point with the large brewers.

July 22 2014 at 7:43 PM Report abuse rate up rate down Reply

A lot of this stuff is way overpriced. A lot of this stuff tastes like you would think goat pee would taste. It will take some time for people to even think about changing their regular brew ----some of us will not pay ten or twelve dollars for six out the door. I have noticed the younger people really enjoy the new brews and I wish them the best. I will stay with my Genesee Cream Ale which after forty years of Stroh's and Busch tastes just fine.

July 22 2014 at 5:21 PM Report abuse rate up rate down Reply

The shame is that what is now being brewed and called beer, should be identified as a flavored malt beverage. In Germany there are purity laws for Beer they say that is can only and I stress only, contain water , malt barley and hops that's it.
The ingredients added today are terrific at hiding off flavors being produced by quasi brewers. The folks who call themselves brew masters are not much more than a line cook following a printed recipe. At one time to be a member of the Master Brewers Association of the Americas required a minimum of ten years of practical experience and a technical or hands on background and the recommendation of another Member.
I am a fourth generation Brewer and have worked every position in a brewery as well as being a Member of the Master Brewers association. I had the pleasure to work for Ballantine, Pabst, and Miller and have seen just about every aberration of the brewing process and the resultant taste defects, but I cannot abide with the what today is being hailed as a superior product, not with the many taste adjuncts being added. Just the fact that the bitterness units are so high due to the heavy use of hops is enough to mask most of the off flavors these modern so called "brewmasters" are brewing. In the old days when a brewery had problems they would increase hop values to try and mask it, Ballantine was noted for this. It is amazing that so many folks are drinking the cool aid and contenting themselves that these over priced products are really beer, and because they cost so much they must be superior......hogwash. I Folks should realize that the processing facilities of many craft brewers are not even as large as the quality control labs in real breweries.
Mistakes get made in the brewing process, large brewers can afford to pull the plug on a tank and dump it, smaller brewers cannot afford that so where does it go.....I wonder.

July 22 2014 at 5:12 PM Report abuse rate up rate down Reply

Remember Billy beer? I'm sure the law that he signed into law was meant to help his brother Billy Carter.

July 22 2014 at 3:32 PM Report abuse rate up rate down Reply

If I was a drunken alcoholic, I would make my own booze to beat the taxes.

July 22 2014 at 12:15 PM Report abuse rate up rate down Reply