A Not-So Nefarious History of Craft and Crafty Beer

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It was recently announced that Anheuser-Busch plans to acquire Bend, Oregon’s 10 Barrel Brewery, once again firing up the craft vs. crafty debate. The term “crafty” here is a reference to a big brewery’s attempt at masquerading as a small craft brewery, and it was used most prominently by the Brewers Association in a press release entitled “Craft vs. Crafty: A Statement from the Brewers Association,” which they issued in December of 2012.

In this release, the Brewers Association accused the large brewers of “attempting to blur the lines between their crafty, craft-like beers and true craft beers from today’s small and independent brewers.” Crafty is now a commonly used term amongst the craft beer cognoscenti, especially when one of the big brewers acquires a small craft brewery.

While the craft vs. crafty debate has now reached fever pitch, it has been simmering for 20 years. In fact, the debate started in earnest in 1994, and if you look at the years prior, it is easy to see why we can look to that time as the origin of the craft vs. crafty battle.

Craft Brewing’s Early Successes

Most point to Fritz Maytag’s revival of the Anchor Brewing Company in 1965 as the first craft brewery in the U.S. At the time, Maytag and his brewery were outliers—only a handful of breweries would join him in producing craft beer in the decades to come. It would be many years before the craft beer segment would start to really gain ground in the late ’80s and early ’90s, as Americans embraced affordable luxuries.

In 1987, for example, craft brewing represented only 0.1% of the total beer market (according to “The Market for Craft and Specialty Beer,” a lengthy analysis put together by Find/SVP Publishing in 1997). The category would continue to grow year over year, until in 1994 it had reached 1.3% of the total beer market.

David Edgar, then director of the Institute for Brewing Studies, wrote an article for The New Brewer in 1995 called “Craft Brewing: Fastest Growth in the Industry.” He points out that following “three years of 35 to 40 percent growth, the craft-brewing industry surged by 50 percent in 1994 for a total of 2.5 million barrels sales.” And breweries weren’t closing their doors at a high rate either, though that would come later. In 1994, only seven small breweries closed, and three states—Hawaii, Wyoming and South Carolina—saw their first brewpubs open.

The top 10 craft breweries of the time, as reported by the Institute for Brewing Sciences in 1995, were as follows: Boston Beer Co., Pete’s Brewing Co., Sierra Nevada Brewing Co., Anchor Brewing Co., Redhook Ale Brewery, Hart Brewing Co., Full Sail Brewing Co., Widmer Brewing Co., Portland Brewing Co. and Spanish Peaks Brewing Co.

Anheuser-Busch’s Specialty Brewing Group & Redhook Acquisition

While that 1.3% growth may seem insignificant—especially by today’s standards, when craft beer is nearing 10% of the beer market—the big brewers took notice. In 1994, Anheuser-Busch formed a Specialty Brewing Group that was “dedicated to creating hand-crafted beers” (it’s important to note that the term specialty beer was often synonymous with craft beer at this time).

The first such beer was Red Wolf, a red lager that, in its first year, managed to capture 38% of the burgeoning category of “red beers.” The next year would bring craftier styles like the Michelob Amber Bock and Michelob HefeWeizen, as well as a series of American Originals that were modeled after the beers that Adolphus Busch brewed at the turn of the century. These included American Hop Ale, brewed with American Fuggle and Cluster hops; Faust Golden Lager, an all-malt beer hopped with Cascade and Saaz; a Black and Tan, which was not a blend of beers but rather a straight-forward porter; and Muenchener, an amber lager.

These were initially marketed in test markets like Seattle, Denver, Colorado and Washington before being rolled out to other cities. Of the specialty beers they unveiled in 1995, Michelob Amber Bock was the most popular. It quickly took its place behind Red Wolf as the brewery’s second best-selling specialty beer.

Anheuser-Busch also took aim at two popular regional beers at the time. The brewery’s website in 1996 advertised their Zeigenbock Amber as a “Texas-style bock beer” that was only available in the Lone Star State, and their Pacific Ridge Pale Ale as “the distinctive ale brewed in Northern California exclusively for California beer drinkers.” The former was meant to compete with Shiner Bock, the latter with Sierra Nevada Pale Ale. Pacific Ridge Pale Ale also benefitted from a $2-3 million ad campaign, though the brand did not last for a considerable amount of time.

The Specialty Brewing Group’s website, which can still be accessed using the Internet Archive’s Wayback Machine, had information about all of these beers as well as others that they imported, like the Carlsberg line. A page on the site was devoted to the Elk Mountain Hop Farm, from which grew the aroma hops used in Elk Mountain Amber Ale and Elk Mountain Red. If this hop farm sounds familiar to you, it’s because there was a glut of recent coverage about the farm after Goose Island Brewery—which was acquired by Anheuser-Busch in 2011—invited a host of beer writers to come tour the field over the summer of 2014.

Another interesting feature of the website was its “Ask The Brewmaster” page, through which Steven Michalak and Mitch Steele, brewers of Anheuser-Busch’s specialty lines, would answer questions sent in by the site’s visitors. Ironically, Steele is now the brewmaster at San Diego’s Stone Brewing Co., which often decries industrial brewers and their “fizzy, yellow beer” (more on Steele later).

In 1994, the same year that Anheuser-Busch formed the Specialty Brewing Group, it also acquired a 25% ownership stake in Redhook Ale Brewery. Redhook was already one of the largest regional craft breweries in the country in terms of production, and the deal with Anheuser-Busch allowed them to go “from 21 states at the end of September 1995 to 47 states at the end of September 1996” according to The Market for Craft and Specialty Beer.

Miller Brewing Co.’s Reserve Line and Specialty Group

Like their rivals at Anheuser-Busch, Miller Brewing Co. also entered the specialty beer market in the early ’90s. In 1993, Miller introduced a Miller Reserve family that included Miller Reserve Lager and Reserve Light as the line’s original beers. A Reserve Amber Ale came shortly thereafter, and then in February of 1994 the brewery introduced the Miller Reserve Velvet Stout, which, according to a press release, was “brewed in the tradition of the great English and Irish stouts.”

It seems Miller didn’t commit to any of these beers for very long. While I can’t find anything from the brewery announcing the line’s cessation, I did find the following question and answer in the Ask the Brewmaster section of Anheuser-Busch’s Specialty Brewing Group website.

Q&A Miller Reserve Line.png

Miller didn’t give the Reserve Line much time in the market, perhaps after realizing that craft or specialty beer drinkers didn’t want to drink something with the Miller brand. As Philip Van Munching noted in his 1997 book Beer Blast: The Inside Story of the Brewing Industry’s Bizarre Battles for Your Money, the problem with big breweries offering new labels was that “some consumers will have pre-conceived notions about anything you sell.”

So it was, that in 1995, they too set up their own subsidiary called the American Specialty and Craft Beer Co. Just a year after Budweiser’s deal with Redhook, Miller incorporated three craft breweries under this umbrella company: the Celis Brewery, which is now defunct; the Shipyard Brewing Company, which it sold off in 2000; and the Jacob Leinenkugel Brewing Co., which it actually purchased in 1988 and still owns.

Through the language used on the American Specialty and Craft Beer Co.’s website, it was clear this new subsidiary wanted to distance itself as much as possible from its parent company. The “What We Do” featured the following text:

“When it comes to actually brewing beer, we don’t (except maybe at home). We may stir the pot of ideas, but it’s strictly hands off the hops. Our goal is to make it a little easier for our partner brewers to make and sell the same beer they’ve always made, and get it into the hands of more people who will enjoy it. Our partnerships are forged with small, local breweries that have made a name for themselves in their home markets. These breweries and their beers are the real heroes at American Specialty & Craft Beer Company. Each was chosen for its exceptional brews, and each pledged to continue making the beer that brought them their cult-like fame.”

They had tried their own hand at brewing craft beers and failed, so the next step was to acquire brewers that had already established themselves. Leinenkugel and Celis certainly had, and though Shipyard opened just a year prior to being acquired by Miller, the brewery had seen a 211% growth from 1994 to 1995. In the same year that Shipyard reached a “strategic alliance” with Miller, the Institute for Brewing Studies ranked them as the 18th largest craft brewery in the country.

Yet Miller hadn’t yet given up on brewing its own specialty beers entirely. It was around this time that the company started producing Red Dog and Icehouse under the Plank Road Brewery name. And the brewery was just that—a name. Though it referenced Frederick Miller’s original brewery, both Red Dog and Icehouse were produced by Miller. Both beers initially sold well for the brewery. As Van Munching noted in Beer Blast, these beers benefitted from “the cost-efficiencies of mass production and real distribution clout—without any of the potential drawbacks associated with being called a Miller brand.”

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