Why Your Local Craft Beer Might Not Be as Local as You Think

Wine, beer, and other potent potables.
Aug. 13 2013 5:00 AM

Your Local Beer Isn’t as Local as You Think

And maybe that’s OK.

Samuel Adams beer and other drinks are displayed at the Boston Beer Co. booth at the 28th annual Nightclub & Bar Convention and Trade Show.
Samuel Adams Boston Lager: maybe brewed in Boston, maybe not.

Photo by David Becker/Getty Images for Nightclub & Bar Media Group

After you’ve been on four or five brewery tours, they all start to look the same. Here are some plastic bags for your feet, and here is the sharp stink of bleach. Here is the gleaming mash tun, and here are some tall fermenters. The monotony doesn’t matter to beer geeks, who make pilgrimages to pay their respects to their favorite beverage (and possibly score some free samples). To me, Anchor Brewing’s beautiful brewery in San Francisco is basically the Lincoln Memorial.

For many craft beer drinkers, choosing a beer isn’t purely a matter of taste—it’s about place and connection. It’s thrilling to visit a brewery and enjoy a pint with the people who made the beer just a few yards away from where they’re serving it. Craft beer enthusiasts invest in a business, but also in a story: beer as a local product, produced by passionate local entrepreneurs.

But what if you visited your favorite brewery and discovered that they didn’t make your favorite beer there? Sometimes they don’t. That’s because of a practice known as contract brewing, in which one brewery hires another brewery—sometimes one across the country or on the other side of the world—to make some or all of its beer.

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Most craft beer produced in the United States isn’t contract brewed. Ten million of the 13 million barrels of craft beer sold in 2012 came from regional craft breweries like Sierra Nevada and New Belgium, whose beers are brewed at facilities owned and operated by the brewery. According to the Brewers Association, only 1.7 percent of the beer sold last year was contract-brewed. But as demand for craft beer grows, more and more small breweries are experimenting with alternative, cheaper brewing arrangements to get their foot in the door.

Within the beer industry, the phrase “contract brewing” has pretty negative connotations. Many brewers working today still remember the shakeout from the last craft beer bubble in the mid-1990s. Just as the tech bubble made everyone snatch up shares for every company that ended in dot-com, the staggering rise of breweries like Redhook and Pete’s Brewing made everyone think there were similarly big bucks to be made in beer.

The market was flooded with beer, and a lot of it was terrible. As beer journalist Tom Acitelli documented in his excellent history of the American craft brewing movement, The Audacity of Hops, Anheuser-Busch saw a prime opportunity to deliver a heavy blow to its rivals in the independent craft industry. In a Dateline episode that aired in October 1996, it targeted one of the country’s leading craft brewers, Boston Beer’s Jim Koch.

At the time, Boston Beer contracted out production of the iconic Samuel Adams Boston Lager—named for the city’s beloved “brewer patriot”—to other commercial brewing facilities around the country: in Pittsburgh; Portland, Ore.; and Eden, N.C. An Anheuser-Busch rep made an appearance on Dateline, making an earnest call for truth in advertising. If Sam Adams wasn’t made at the historic brewery in Jamaica Plain in Boston, where were most craft beers made? And how? Between the bad PR and the bad beer many upstart breweries were churning out, the industry suffered through a slump between 1996 and 2000, and the words contract brewing were usually followed by a sneer.

Today, beer drinkers are a much more discerning lot than they were in the ’90s, with more sophisticated palates and the savvy to know, for example, that Anheuser-Busch makes Shock Top Belgian White and that MillerCoors owns Blue Moon. Also, many breweries, including Boston Beer, now voluntarily print the location of the actual brewing facility and not just the location of the brewery headquarters.

But even with this openness, there is still a lot of room for interpretation, especially when there are so many different kinds of contract relationships. The initial cost of starting your own brewery can be intimidating—rent on a warehouse, large steel fermentation tanks, kegs, and forklifts are all expensive. Paying an existing brewery to make your beer for you means that aspiring brewers only need to raise $50,000, not $500,000, to realize their dreams.

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