The Audacity of Hops: The History of America's Craft Beer Revolution (15 page)

“Hey, we ought to start a brewery,” he said, more than half-joking.

As these sober boasts go, though, Ware soon found himself on the phone with the Bureau of Alcohol, Tobacco, and Firearms (ATF) office in Denver. A helpful voice on the other end sent a two-foot-thick stack of papers that Ware promptly left for weeks undisturbed on the kitchen table of the small farmhouse he shared with a fellow musician named Otto Zavatone (Ware played sax and Zavatone the piano in a local band called the Fornicators). He had his work at the institute, his music gigs, and the small farm where he and Zavatone grew and raised what they could eat (they once hit a monthly low of ten dollars in groceries)—he didn't have time for red tape. Eventually, he confronted the stack and called the ATF back. The same helpful voice directed him to the parts that he absolutely had to fill out, and on September 25, 1979, he and Hummer and a third partner, an engineer named Al Nelson, had the forty-third brewery license in the United States.

They then sought materiel and advice. Ware visited Jack McAuliffe at New Albion and got further help, including with supplies like grains and hops, from what would seem like an odd choice: Jeff Coors, scion of the increasingly cultish Big Beer brand (Coors was available only in eleven states by the mid-1970s, and no less than Henry Kissinger and Gerald Ford were said to have had cases of it flown to Washington, DC). Coors's grandfather and Ware's grandmother had dated—plus Jeff Coors thought it would be good for legislative lobbying purposes to have a second brewery in Colorado. Ware, Hummer, and Nelson also retrieved in Denver an old stainless-steel food-processing kettle that could hold a barrel and a half at a time. And they named Zavatone, who had worked as a chef and a fisherman, brewmaster. Finally, Nelson had a farm near Hygiene, at the edge of the Rocky Mountain National Park, and on that farm he had some goats, and next to the goats was a steel shed that they then turned into the Boulder Brewing Company's first brewhouse. In it, they brewed a stout that won a blue ribbon at the American Homebrewers Association's first-ever national competition, held in the brewery's nearby namesake city. It was a nice little confidence builder.

The partners were soon spending $25,000 on the construction of a three-story, one thousand-square-foot brewhouse, also on Nelson's farm, to supplant the goat shed. They didn't have the local government green-lights for it, but they figured—correctly, it turned out—that once it was built, it would be hard for the authorities to order it shuttered. When the authorities did get wind of the brewhouse, they were actually helpful and a tad bemused by the whole enterprise. Their response was like the one from Sonoma County that Jack McAuliffe encountered in setting up New Albion four years before: Who had ever
heard
of such a thing as a new small brewery? By July 4, 1980, Boulder Brewing had twenty cases of hand-labeled, hand-filled bottles to sell at the Gold Hill Inn, a rustic resort near the Rocky Mountain National Park. The American craft beer movement was no longer a West Coast thing.

*
California Steam appears to have been as short-lived as its second word. The author asked those involved at the time in the American craft beer movement in the San Francisco Bay Area for their recollections of the brewery. No one could recall much about it—only that it had existed and that it perhaps ran into legal trouble because of the similarity of its name to Anchor's signature brand (there is no record in California of a court case involving the companies). The Maltose Falcons newsletter, in fact, may signify the most thorough reference to California Steam in its time.

K
en Grossman and Paul Camusi
reassessed their plans. They knew they needed to talk to Jack McAuliffe again. They drove the three hours from Chico to
Sonoma and analyzed the mechanics—and, more subtly, the finances—of the nation's first start-up craft brewery. McAuliffe and Suzy Stern—Jane Zimmerman had bowed out by then to pursue what became a successful career as a therapist—were still working long days alongside Barkley and a handful of others, including those brought in to bottle on Wednesdays. And the output was still relatively small, with the forty-five-gallon batches translating into about twenty cases of beer at a time.

The only big thing that had changed at New Albion by then was that it had switched grain suppliers—from the soon-to-close Bauer & Schweitzer Malting Company to the soon-to-move Anchor nearby. As he often did in his role as munificent godfather, Fritz Maytag cut a deal with McAuliffe to supply New Albion with grains. Every six to eight weeks, someone would drive Stern's Dodge van to San Francisco, with a bin hooked up to the back that could hold as much as sixteen hundred pounds of malted barley. The driver would spray about that amount from Anchor's silo and drive it right back to Sonoma.

Otherwise, things in the corrugated-steel warehouse continued apace, with fame lapping at the edges of Jack McAuliffe's dream. Michael Lewis, by then renowned in the industry for regularly placing his UC-Davis graduates at some of the nation's most well-known breweries, routinely led classes of ten to twenty through the brewery, with McAuliffe, in these instances, an obliging tour guide willing to answer numerous questions. Stern once found an envelope in the office mail addressed simply as “The Brewery, Northern California.”
Newsweek
mentioned “America's smallest brewery” in a story about the big ones (“The people who sit at a bar and drink eight or nine bottles of Budweiser are not going to be the people who drink New Albion,” Stern told the weekly). And one day, someone knocked on the door—someone who had written some of the era's more memorable pop songs. James Taylor was a beer fan and had heard of the little brewery; might he look around? Beer writer Michael Jackson, too, dropped by. Tom de Bakker picked him up at the San Francisco airport and showed him first around his own brewery in Novato; then he drove him twenty miles in his 1968 Triumph 250 to New Albion. There Jackson signed a copy of his book
The World Guide to Beer.
Finally, none other than
New York Times
wine critic Frank J. Prial paid a visit in late spring and liked what he saw, telling the Old Gray Lady's influential readership of “what may be one of the country's best beers.” Prial took refuge amid the brewing terminology in a wine simile: “Because New Albion is not filtered, it is not crystal clear like most mass produced beers. It also contains small amounts of yeast. Like true Champagne, New Albion's final fermentation literally takes place in the bottle.”

These were heady times for New Albion, and Grossman and Camusi at first sought to emulate McAuliffe's approach of rendering their homebrewing
operation into a slightly larger commercial one. But then they thought harder about it. New Albion's output in 1979 was sufficient to cover the brewery's operating expenses, but not enough to fund much growth. If they wanted their own commercial venture to be profitable, then they would have to brew more beer at a time. They settled on a ten-barrel system, which could produce roughly 315 gallons per batch, and set about physically and financially building what became Sierra Nevada Brewing Company in Chico. Their efforts are illustrative of the challenges that start-up craft breweries still faced fourteen years after Maytag saved Anchor and more than three years after McAuliffe built New Albion. There simply wasn't the equipment available; and traditional funding, from commercial or investment banks and private equity firms, was a nonstarter. What institution in its right fiscal mind would loan someone thousands—maybe hundreds of thousands—to build a small, inherently fragile company to compete with Anheuser-Busch and Miller?

Even Maytag, with his profitability since 1975, confronted a bankruptcy scare involving Anchor's move to Mariposa Street in August 1979. In fact, that first year at the new location was déjà vu all over again: Anchor lost money. Worse yet, Maytag had pledged his own assets, including real estate and stocks, to build out the Mariposa site, designing and buying equipment before any financing came through, leaving him with sleepless nights. Then one morning, he woke up, got dressed, went downstairs, and couldn't leave. He went back to bed. The larger plant, though, did allow Anchor to expand its production and therefore its distribution; soon it regained its financial footing. Still, in a way as pioneering as much of what Maytag had done to that point, the bankruptcy scare served as an unspoken cautionary tale to the second wave of American craft brewers that came after him: watch your growth, kids. Some in the second wave (and third and fourth) would heed this tale. Others would not.

As for McAuliffe, as heady as the times were for his little warehouse operation, he did not recommend the business. He told the
Washington Post
that first full year of operations:

You know, you have to either have a great deal of money—an unbounded amount of capital—or you have to be able to weld and do water chemistry and build the place and go get money and write business plans and do design, mechanical analysis, structural analysis, and all that stuff … and then run the brewery. There aren't too many of them out there like that.

You have to be totally committed. The only thing you think about is beer and brewing. You work 10 hours a day, eight days a week. That's the way it is.

Grossman especially possessed such mechanical know-how from his work with bicycles as well as from his homebrewing. What he and the other second-wave craft brewers lacked was access to capital—the other route to a semblance of stability, according to McAuliffe. It was not just the incredulity of traditional money sources; it was the trend of things, the very notion of where beer as an industry was going, the strivings of the early craft movement notwithstanding. Bob Weinberg was the era's most respectable industry analyst and was often quoted by a media that understood beer through the prism designed by Miller's John Murphy or August Anheuser Busch III.

A former Air Force officer, Defense Department analyst, and MIT lecturer with a formidable knack for number crunching, Weinberg went to work for Anheuser-Busch in 1966 as a vice president of corporate planning; five years later he struck out on his own to produce for clients exhaustive surveys of the brewing industry. By 1980, Weinberg was predicting that only a handful of breweries would remain by the new millennium. It was a pervasive and persuasive shorthand. Bill Coors, grandson of the Big Beer founder and driving force behind the aluminum can that did so much to change the way Americans consumed beer, told Henry King of the USBA that there would be only five breweries by the year 2000. “I was simply extrapolating the death curve out,” Coors said later.

To get capital in this climate meant to get it from yourself, friends, or family (or, most likely, a combination). Grossman and Camusi decided after visiting McAuliffe again that they would need $50,000 to start up Sierra Nevada in Chico (another early decision after other locations around San Francisco were ruled out). They foolishly tried banks first—Grossman did not own any credit cards and had run his homebrewing shop on the good graces of his own prompt bill payments to nonmainstream venders; Camusi may have had a gas card but not much else. Still, they buttoned up and went into banks—and were duly turned away. It was not merely the lack of credit but the state of the brewing industry that banks could read about via Weinberg, Coors, and others. A brewery—a small one in a relatively remote area of Northern California at that—was simply not a sound investment. At this point, we can almost step back and see the American craft beer movement as a doomed venture by 1979 and 1980, one that was by no means assured of stumbling out of the decade
of stagflation and oil crises in any kind of fighting shape. The country, like a listing ship in rough seas, was about to turn into a major recession that would make borrowing all the more difficult, for craft brewers and everyone else.

Steve Dresler, Sierra Nevada's brewmaster, adds hops to the early brew kettle fabricated by ken Grossman.
COURTESY OF SIERRA NEVADA BREWING COMPANY