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Great American beers
The nation's small brewers prove that the revolutionary spirit is alive and well.
July 2, 2004: 4:45 PM EDT
By Gordon T. Anderson, CNN/Money staff writer

NEW YORK (CNN/Money) - As America toasts its founding, pause to consider beer's role in the history of the Republic.

The Pilgrims, for example, chose to land at Plymouth Rock in part because they were out of beer, as John Alden noted in his log of the Mayflower.

William Penn, George Washington and James Madison all brewed at home. Samuel Adams, famously, did it for a living. (Click here for Washington's homebrew recipe.)

The Boston Tea Party was planned over beer at the Green Dragon tavern, and Thomas Jefferson composed the major parts of the Declaration of Independence at the Indian Queen tavern.

And when the Constitution was being written in Philadelphia, the conventioneers adjourned nightly at the City Tavern, mindful of Benjamin Franklin's observation that "beer is proof that God loves us and wants us to be happy."

If the Founders saw that beer could forge a revolution, modern Minutemen are forging a revolution in the beer itself. These days, small U.S. brewers are battling foreign and domestic foes -- with surprising success.

Outpacing the imports

About 25 years ago, a few entrepreneurs in northern California had a radical notion: American beer didn't have to be bland and tasteless, the mass-marketed swill that the writer William Least-Heat Moon later described as "liquid air."

One pioneer was Anchor Steam, a brewery founded in the 19th century but rejuvenated to greatness after washing-machine heir Fritz Maytag bought it in the 1970s.

Soon, small breweries began opening everywhere. By the 1990s, America was awash in microbreweries and brewpubs.

Hundreds opened, poorly capitalized and often run by owners with heads for romance not numbers. The wave of bankruptcies and closures that came at the end of the decade was, in retrospect, predictable.

But guess what: the craft brewing business is back on track.

There are now more than 1,400 craft breweries in the United States. Nearly 1,000 of those are brewpubs (restaurants that make their own beer), with 440 microbreweries and regional specialty breweries.

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Paul Gatza, director of Association of Brewers in Boulder, Colo., divides the beer market into three segments: the majors (e.g. Anheuser-Busch), imports (Heineken), and craft brewers (small producers).

Sales volumes of beer made by the majors grew by 1.6 percent last year, and imports rose by 2 percent. Craft brewers, however, rose by 5 percent.

"The big news is that imports aren't showing the growth they once did," Gatza said. "The market is really changing right now."

The last time domestic microbrews grew faster than imports was 1996. In fact, foreign beer sales had their weakest year since 1991.

Rule of the Goliaths

Of course, the beer business will always be dominated by Goliaths. Majors control 85.1 percent of the market, with imports accounting for about 11.6 percent, according to the AOB.

Microbreweries may be inching up, but they hold just 3.3 percent of the total national market. That amounts to some $3.5 billion in aggregate revenue.

To put things into context, consider that Stone Brewing, a San Diego-based company that is one of craft brewing's latest stars, will make about 40,000 barrels this year. Anheuser-Busch brewed 103 million barrels in 2003. (A barrel equals 31 gallons, or about 14 cases.)

Still, there are plenty of reasons for optimism among the little guys. The biggest is that consumers no longer view boutique beers as fads.

"Beer drinkers are changing their tastes," says Gatza. "They have much less loyalty to individual brands than they once did. They're more willing to experiment with different beers and styles."

Written by: Gordon T. Anderson
Distillers and Brewers
Consumer Goods

Indeed, every region of the country now boasts one or more strong local microbreweries, capturing shelf space at stores and appearing on tap handles at bars and restaurants.

(To see reviews of five such great American beers, click here.)

"Stone and Dogfish Head are two of the definite stars right now," Gatza said, noting that Delaware-based Dogfish Head's sales nearly doubled last year. For its part, Stone's sales rose 33 percent in 2003 and the company recently embarked on a $10 million expansion of its brewing facility.

"The mood in the industry is great right now," said Gatza. "People are expanding their production capacities, really gearing up. A lot of brewers think bigger and better things are coming."

The Good Life is a weekly column that chronicles products, people and trends in luxury consumer goods, travel, and fine food and drink. Write to:  Top of page

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