Beer Blast review by Josh

Beer Blast by Philip Van Munching

Review by Josh80/100Read June 11, 2022

The first 2/3s of Beer Blast is a general history of the U.S. beer industry. That history goes like this: in the later 19th century beer sales soared. Beer had been around for much longer, of course, but Americans primarily drank whiskey. The rise of beer was driven by the wave of German immigrants, and (ironically) by the temperance movement. Beer was promoted as less intoxicating alternative to hard liquor.

Initially beer was an exclusively local business. The low price/weight ratio, poor refrigeration technology, and limited shelf-life all meant that beer needed to be sold and consumed pretty close to where it was produced. In 1865 there were 2,252 small breweries produced an average of 1,643 barrels of beer.

Over the next fifty years technical and macroeconomic changes, along with a handful of aggressively expansionist brewery owners drove industry concentration. By 1915, the number of breweries had declined by about 40%, but the average size had increased more than 2,500%, to over 44,000 barrels. Low-cost rail shipping enabled companies like Schlitz, Blatz, Pabst, and Anheuser-Busch to ship their products over entire regions from massive factories in Milwaukee and St. Louis. Even so, the industry was still quite fragmented compared to today. Before prohibition, no individual firm produced more than 2% of U.S. beer.

Prohibition reshaped the industry. The legal beer industry shut down for 13 years, and when it started again in 1934, another 40% of the companies had been wiped out. The next several years saw additional consolidation, and by the end of World War Two, the top 5 brewers controlled 19% of the U.S. Beer Market.

How people consumed beer had changed, though. Before prohibition, most beer (around 90%) was sold on draft at bars. Canned beer didn't exist, and bottled beer was substantially more expensive than draft; plus, most people had no way to refrigerate beer. Canning lines required large initial capital investment in equipment, but the cans had very low unit costs. This drove further consolidation, as the large brewers used their superior economic position to spend heavily on advertising.

This trend accelerated when Philip Morris bought Miller, at the time a mid-sized regional brewer. They started pouring profits from their cigarette business into an effort to make them the nation's largest brewer. The result was continued consolidation and by 1980 the industry was down to just 101 breweries, with the five largest producing 75.9% of all beer, and by 2000 the big three controlled over 80% of production.

The last third of the book switches the focus a bit. The author belongs to the unfortunately named Van Munching family, which brought Heineken to the United States and established it as the number one import in the country.

Heineken could never compete with the big U.S. brewers on cost. It had to be shipped across the Atlantic. So, instead, Heineken branded itself as higher quality. The premium price was justified by the fact that it was imported from Europe, where people were known to be fancier.

Van Munching talks quite a bit about what would and would not be on brand for Heineken. It's ads were classy and understated - no talking frogs for them. When some neophyte marketer suggested a gimmick involving a wet t-shirt contest, it just went to show how poorly he understood the brand. Van Munching had no moral or ideological issues with such promotions, but he knew the attendees would be drinking domestic.

The movie Blue Velvet illustrated the class distinctions of beer drinkers in the late 80s. When the deranged Frank (Dennis Hopper) spots a yuppie (Kyle MacLachlan) drinking Heineken, he yells "Heineken? Fuck that shit! Pabst Blue Ribbon!" The exchange reinforced the reputations of both brands. It also reinforced the idea that the beer a person drank said a lot about the type of person they were.

Because craft brewers couldn't possibly hope to compete with the majors on price they had to position themselves as a premium products. That meant competing with imports, which dominated the premium segment at the time. In this context, Boston Beer's Jim Koch comes off as rather sleazy. His beer, Sam Adams, was the overtly "patriotic" alternative to "un-American" brands like Heineken. Van Munching is relatively sanguine about this, but he clearly sees Koch as an opportunistic marketing person, not a great brewing innovator.

Overall I'd give the book four stars. It's an interesting read for people who're already interested in the beer business, but not so compelling that I'd recommend it to just anyone.

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