How a Teetotaler Unleashed America's Craft Brew Revolution

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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.

%VIRTUAL-article-sponsoredlinks%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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