Local to National and Back Again: Beer, Wisconsin & Scale

Note: This is an academic paper, recently accepted for publication in the book The Geography of Beer by Springer.

Chapter in The Geography of Beer by:
Andrew Shears
Department of Geography & Geology
Mansfield University
Mansfield, PA 16933 USA

Abstract: Brewing has been an important part of Wisconsin’s culture and economy since the first settlers arrived in the early 1800s. Like much of the country, Wisconsin brewers experienced a spatial shift in accordance with the industry’s technology. Starting with many brewers each serving local markets, developments in beer preservation, packaging and transport allowed certain Wisconsin brewers to seize opportunities for expanded market areas. The enlarged economies of scale achieved by these larger brewers provided a competitive advantage that slowly put smaller operations out of business. By the mid-20th Century, brewing had largely become a national enterprise with fewer local or regional players. Though its market share remained limited, the craft brewing movement represented a reversal of this trend, both nationally and in Wisconsin. Like the early brewers who had settled the state, these new Wisconsin breweries were focused on achieving an economy of scale by developing a local market of consumers.

Keywords: beer, brewing, Wisconsin, historical geography, economic geography


Beer has been an important part of United States culture since the beginning, and perhaps nowhere is that more true than in the state of Wisconsin. Settled largely by German immigrants in the mid 19th Century, Wisconsin had a population thirsty for beer from its earliest days. Breweries were established in the region before Wisconsin achieved statehood in 1848 and grew rapidly in number as more of the state was settled. Because of the limitations of packaging and purification technology, brewing at the time had to occur near the site of consumption, meaning breweries were, by necessity, local enterprises—local ingredients, brewed and then poured locally–conditions allowing brewers to create economies of scale within very small geographic areas. Beer production proved so profitable across Wisconsin that the state hosted over 300 breweries by the mid-1880s, with at least one in nearly every community (Kroll,1976; Apps, 2005).

When a fire devastated Chicago in 1871, established brewers in nearby Milwaukee were well situated to expand operations and fulfill that market’s demand. Combined with advances in packaging and preservation techniques, this enlarged geographic footprint allowed four major Milwaukee-breweries—Pabst, Schlitz, Miller and Blatz—sales necessary to streamline production, improve reliability of product quality, and expand distribution to achieve national prominence. As brewing industrialized in the latter portions of the 19th century, breweries in Wisconsin and throughout the United States faced a period of consolidation. With the largest brewers exploiting newly broadened markets, smaller local breweries were unable to compete. Prohibition during the 1920s and 1930s would further transform the brewing industry, eliminating most of the remaining local small-scale brewing companies while positioning surviving brewers for national distribution. The consumer shift from kegged to packaged beer enhanced this distribution channel while further widening the gap between the larger and smaller producers. Most of the smaller local and regional breweries in the United States went defunct during the postwar years, leaving just 80 in the entire country by 1983; Wisconsin was no different, with just seven breweries remaining in the state that year. American beer had scaled to mass consumerism, with the top six brewing companies controlled 92% of all beer production in the United States in 1983, most of which distributed to a national consumer base (Beer Advocate, 2012).

During the 1980s and 1990s, the winds shifted again to a nearly reverse direction. While the major breweries still maintained a stranglehold on the national beer market, the 1976 founding of New Albion Brewery marked the beginning of craft brewing, smaller-scale operations serving local customer bases. As craft beer’s variety of flavors and recipes became increasingly popular around the country, more so-called “microbreweries”—those with production of fewer than 25,000 barrels annually—opened to cater to this demand. Similarly, Wisconsin brewing experienced a particular renaissance with microbreweries. Joining three smaller brewers that had survived the storm, Glendale’s Sprecher Brewing Company opened in 1985, the first of the new wave that includes over 100 breweries now operating in the state. Like the state’s earliest small-scale brewers in the mid-1800s, these new breweries strongly focused on seasonal production, local ingredients and local consumption, establishing economies of scale . While historically, Wisconsin brewers’ local economic interactions were by necessity for sake of spoilage, today Wisconsin’s microbrewers focus locally for high quality ingredients, low distribution costs, and for the attractive if marketable connection to Wisconsin’s unique history and place.



Bringing Beer to the Americas and Wisconsin

While indigenous groups had fermented beverages before Columbus, brewing of beer specifically has been practiced on the North American continent since at least 1612, when Dutch colonists Adrian Block and Hans Christiansen founded a brewery in New Amsterdam (Apps, 2005; Beer Advocate, 2008; Janik, 2010). The first British brewery in the New World quickly followed in 1613, when the London Company established a brewery in Jamestown to supply the demand of colonists angered by poor quality of imported beer (Baron, 1962; Apps, 2005). From these beginnings, brewing beer was strongly intertwined into European-North American culture. As the continent was conquered by waves of European colonizers and later American and Canadian migrants, beer production spread hand-in-hand with settlement.

Emergence of local breweries in small American frontier settlements was a reality of beer storage and distribution technologies of the time. Until pasteurization and bottling were perfected in the second half of the 19th century, brewers were limited to preserving their beer in containers using only primitive sealing hardware, and shelf lives were short. Casks or kegs, not bottles, were the preferred method of storage, making transport of finished product cumbersome (Kroll, 1976). Shipping beer across the Atlantic was not feasible; Jamestown’s colonists had demanded a brewery because imported beer had arrived spoiled, poisoned or otherwise undrinkable. By the time of the American Revolution, rejecting imported English malt liquors and ales in favor of beer from a local colonial brewer, or even home brewers, had become a patriotic act (Baron, 1962).

Beer’s prominence declined when whiskey, chosen for its efficient use of surplus grain and its potency, became the preferred alcoholic beverage of Americans crossing the Appalachians. Finding a beer-drinking American who spoke English in the 1840s was a very difficult task. Brewing would return to the forefront of American culture when a massive wave of German immigrants came to the United States, seeking personal freedom and economic opportunity through ownership of family farms. Seeking the cheap and plentiful land of the American frontier, these Germans largely came to the Northwest Territory, incorporated by the federal government in 1787 to organize settlement of lands south of the Great Lakes and north of the Ohio River, from Pennsylvania west to the banks of the Mississippi. As German immigrants established farms and populated the region, the Northwest Territory was partitioned into new states: Ohio, Indiana, Illinois, Michigan, Wisconsin, and part of what would become northeastern Minnesota. Because beer was the preferred drink of these German settlers, a demand for suds followed these immigrants to the American frontier. Unlike the earlier American immigrants and their descendants, people of British heritage who preferred ales, the Germans brought a thirst for a beer unfamiliar to Americans of the time: lager (Baron, 1962; Ogle, 2006; Knoedelseder, 2012).

This new preference for lagers further complicated the geography of brewing in the mid-1800s. Early German-American brewers of lager were limited in both mobility and seasonality of their production, meaning this beer had to be brewed near the point of consumption. Beer was so demanded by these settlers farmers too far from breweries of the day resorted to brewing their own at home, much like they created their own soap and bullets (Apps, 2005). Unlike ales, which could be prepared in a matter of days with simple equipment, lagers required significantly more patience and investment. The process for brewing lagers at the time required two to three months of “resting” so yeast and other solid ingredients could sink to the bottom of the barrel. This resting needed to take place at near-freezing temperatures, which in the age before refrigeration meant storage in underground caverns (Apps, 2005; Ogle, 2006), and only during seasons where ice was readily available (Hachten and Allen, 2009).

To fulfill this new and growing demand for lager, the settlers began breweries in communities dotting the entire region, brewing lagers for local consumption. As Ogle (2006: 16) notes:

“the 1840s were a time of few roads or rails and reliable cold storage was limited to underground caverns. A lager brewer sold nearly all of his beer within a mile or two of his brewhouse, cultivating the goodwill of nearby tavern owners, Germans for the most part who had set up shop in order to supply beer to other immigrants.”

Breweries were dispersed throughout the Midwest by necessity. Early American brewers were engaged in a classic example of market-oriented manufacturing, locating production close to the point of sale to avoid issues with transport and spoilage of product. Brewing remained a largely market-oriented manufacturing activity through much of the 19th Century because the production process had implied costs; most of the brewers had to be located near the point of consumption to be profitable. By adding water to grain, brewing beer not only increased the bulk of the ingredients and raised transportation costs, but because preservation methods remained unperfected, it also began the clock on spoilage. In essence, American brewers faced the same extraordinary potential opportunity cost that had ruined imported British ales during colonial times (Baron, 1962). Because beer was difficult and expensive to transport, and the constant threat of spoilage lingered, early breweries were limited to producing small volumes and reaching only very local markets (Smith, 1998). With settlement spreading beer consumers throughout the Midwest, thousands of small breweries were established in the region by the mid-19th century to fulfill demand, many by German immigrants (Kroll, 1976). The federal government recorded a total of just 132 breweries in the entirety of the United States in 1810. By 1850, reflecting the impacts of the German in-migration, there were 431; by 1860, there were 1,269 and by 1873, the population of breweries in the United States peaked with 4,131 active brewing operations (Van Munching, 1997). Each of these breweries were dependent upon their local markets, with nearly every farm market town in predominantly German areas featuring at least one brewer.

Germans founded each of the early breweries that rose to prominence in the United States. Adolphus Busch settled in St. Louis in 1857 and four years later, married the daughter of Eberhard Anhueser, a brewer whose beer had long suffered from quality problems. After buying the brewery from Anheuser in 1865, Busch experimented with the brewing process; in 1876, the Anheuser-Busch Company began brewing a Bohemian recipe he called Budweiser (Knoedelseder, 2012; Ganey and Hernon, 2012). Another brewer, a Prussian immigrant named Adolph Coors, settled in Denver in 1873 and built the Coors Brewing Company, which would later achieve dominance in the western United States and become a national brand (Van Munching, 1997).

Wisconsin’s brewing history, which predates its 1848 statehood, was likewise driven by the arrival of German immigrants. Some sources, and local folklore, suggest that two breweries—one in Elk Grove, another in Mineral Point—were operating before 1840, but this remains unconfirmed by historians (Janik, 2010). Well suited to the state’s climate, hops are believed to be the first crop grown by American settlers in the state (Hintz, 2011). Oddly enough, Welsh immigrants Richard Owens, William Pawlett and John Davis began the state’s first documented brewery in 1840. The three men built a five-barrel brew kettle out of a copper-lined wooden box and created the Milwaukee Brewery, a company that remained in business until the 1880s (Kroll, 1976).

Probably the most important brewer early in Milwaukee’s history was Jacob Best, a German who had settled there in 1841. Best and his four sons profoundly impacted the future of brewing, not only in Milwaukee, but for the entire United States. In 1842, Jacob founded the Best and Company brewery, running it until his retirement in 1853, when son Philip took over and renamed it the Philip Best Brewing Company. In 1862, Philip Best’s daughter Maria married German flatboat captain and brewer Frederick Pabst, who would buy half of the company from his father-in-law two years later. After Philip Best died in 1867, the brewery would continue its success under Pabst’s leadership, renamed Pabst Brewing Company in 1889 (Cochran and Collins, 1948/2011; Apps, 2005; Pabst Mansion, 2012). This brewery was not the family’s only impact on Milwaukee brewing. Two of Jacob Best’s other sons, Jacob Jr. and Lorenz, left Best and Company in 1850 to start the Plank-Road Brewery in Milwaukee. In 1855, the brothers sold Plank-Road to Frederick Miller, another German immigrant who would later find a measure of success in the brewing industry (Van Munching, 1997; Shepherd, 2001; Apps, 2005).

What made brewing such a lucrative industry in Wisconsin for families like the Bests, Pabsts and Millers was the tremendous local demand. Beer was tremendously popular among the German-American immigrants, who were mostly farmers in the Wisconsin countryside. To achieve any measure of success, brewers had to establish an economy of scale in the local market because transport was so difficult. Brewers of mid-19th Century simply could not effectively serve a large area; beer’s rapid spoilage and the era’s limited speed of transportation allowed each brewer to serve only a very compact market area. With these transport limitations, the only way to fulfill the demand of this spatially expansive group of consumers was to have many breweries dotting the state. While neighboring states had their share of breweries, Wisconsin had many more; by 1860, Wisconsin hosted nearly 200 breweries, with over 40 in Milwaukee alone (Janik, 2010).

The immigrants who populated the state brought with them a German culture in which breweries and beer were integral parts of community life. Janik (2010: 89) argues that “[b]reweries were as much a part of the state’s communities as churches or schools.” Entire towns in Wisconsin were built around established breweries, just like they were around churches and schools, as German immigrants settled the frontier. Beyond obviously providing beer and its related social benefits, brewers sponsored community events and charities, provided employment opportunities, and were reliable customers of local farmers’ produce (Janik, 2010; Hintz, 2011). Kroll (1976) noted that this reliance on local ingredients greatly influenced brewing recipes among these early brewers, with many beers produced only seasonally to account for availability of ingredients.

Milwaukee had so many breweries that, by 1870, the city’s beer supply completely outpaced demand. High turnover on the brewery scene was common, and many that opened during this period were in business few years. Because reliable containment had not yet been developed, shipping the beer to distant markets remained unfeasible, leaving brewers to fight only for the local demand (Kroll, 1976). The city’s brewers needed to expand their market area to new consumers, but until the industry dramatically changed, they faced impossible spatial barriers to achieving this.


New Developments for a Dynamic Economy of Scale

Oversaturation and limited distribution area would not concern Milwaukee’s brewery owners for long, thanks to a wayward lantern kick from a mythical bovine. Though the newspaper story that blamed the Great Chicago Fire of 1871 on Catherine O’Leary’s cow was fabricated, the inferno that resulted was real enough to destroy most of the bustling city just 80 miles south of Milwaukee (Janik, 2010). The blaze destroyed many of Chicago’s local breweries and damaged its water supply, which combined with the city’s thirsty predominantly German population, created a new demand for beer brewed elsewhere. The close proximity to Chicago’s charred ruins and the water route Lake Michigan provided between the two cities allowed Milwaukee’s brewers to enter this newly opened lucrative market (Moran, 1962). Even without effective packaging, the short relative distance meant Chicagoans could drink beer brewed in Milwaukee while it was still fresh, and that Milwaukee’s brewers could claim a far larger market area earlier than brewers located elsewhere (Kroll, 1976).

It was Chicago’s demand for beer that allowed several Milwaukee breweries establish a new, larger economy of scale that would later provide the income necessary to establish to national prominence. An upstart Milwaukee brewer, Joseph Schlitz of Schlitz Brewing Company, seized the opportunity to quench the thirst of Chicagoans by flooding the city with his beer. Schlitz’s longtime slogan—“the Beer That Made Milwaukee Famous”—was adopted during this period as a reference to the brand’s, and the city’s, new wider market (Van Munching, 1997; Hintz, 2011). Pabst also took advantage of Chicago’s misfortune, capitalizing on its expanded market to become the country’s largest brewery in 1874 (Cochran and Collins, 1948/2011). However, to expand any further, Milwaukee’s beer industry needed several important technological advancements.

As Milwaukee’s brewers expanded to the Windy City, industry-shifting progress in brewing technology was taking place on the other side of Illinois. In St. Louis, Adolphus Busch had been following the continuing work of French scientist Louis Pasteur and his efforts to prevent rapid spoilage of beer. Because the ongoing Franco-Prussian War severed the beer supply coming to France from German brewers in 1870, Pasteur sought a way to improve the quality of French brews. In 1875, he determined that by steaming his beer, slowly heating containers to 170 degrees Fahrenheit by subjecting them to a steam bath, he could eliminate the spoilage-causing bacteria that hitchhiked into beer when yeast was added (Kroll, 1976). Busch was quick to adopt Pasteur’s process; by the time Budweiser was introduced the next year, all Anheuser-Busch beers were pasteurized before shipment (Van Munching, 1997). By being the first major brewer to adopt pasteurization, Anheuser-Busch seized a crucial advantage by brewing beer that remained unspoiled longer, allowing effective distribution far from the point of production for the first time (Van Munching, 1997; Knoedelseder, 2012; Ganey and Hernon, 2012). In Milwaukee, the Philip Best Brewery was the first to adopt pasteurization beginning in 1878, and soon thereafter began shipping kegs of its beer globally. Its wide-reaching distribution gained the company such a following that, when it was renamed the Pabst Brewing Company in 1889, it was the largest brewer in the world.

A perfected pasteurization process set the stage for another of Busch’s improvements, a revolutionary change in beer sales and distribution. One change he initiated was to construct a network of taverns owned by the brewery, where his products would be sold exclusively. By implementing this vertical integration strategy for the Anheuser-Busch Company, Busch managed to cut costs by eliminating the “middleman,” which meant the company’s beers were priced cheaper than its competitors (Knoedelseder, 2012; Ganey and Hernon, 2012). To solidify this edge, Busch launched a new kind of beer marketing, printing posters and displays for the company taverns, and purchasing various trinkets with logos of various Anheuser-Busch brands, to be given away to customers (Ganey and Hernon, 2012). To supply his taverns and to expand his market, Busch then combined his beer’s newly extended freshness with the speed and efficiency of rail transport to expand his market area widely; because of St. Louis’s location central to the U.S.’s rail network, the Anheuser-Busch Company was able to ship Budweiser and other beers to distant consumers (Knoedelseder, 2012; Ganey and Hernon, 2012). Like pasteurization, this model was one that Busch adapted from elsewhere; he had seen Canadian brewer Molson use rail to achieve a wide market in Ontario as early as the 1860s (Ganey and Hernon, 2012; Van Munching, 1997). Busch added a new wrinkle to Molson’s model, though, as the advent of early refrigeration rail cars allowed his beer to stay even fresher for longer. As an early adopter, Anheuser-Busch used this combination of technologies and business models to achieve broader prominence earlier than its competitors (Van Munching, 1997). By exercising this crucial advantage and expanding markets domestically, Anheuser-Busch grew from being the 32nd largest U.S. brewer in 1877 to one of the ten largest in 1890, and propelled Augustus Busch into fantastic success, making him St. Louis’s wealthiest resident (Ganey and Hernon, 2012). Seeing Anheuser-Busch’s success in this enterprise, Milwaukee breweries like Pabst, Schlitz and Blatz all followed this model as well, establishing a network of taverns and distribution agencies throughout their domestic market territories. Like Anheuser-Busch, the Milwaukee breweries were well-connected to the rail network, and were able to minimize the St. Louis operation’s advantages through direct competition, retaining their prominence (Kroll, 1976; Van Munching, 1997).

Pasteurization, company taverns and rail transport were not the only major developments in brewing during this crucial period. In Denmark, biochemist Emil Christian Hansen determined that yeast itself, which Pasteur had rightly blamed for bringing bacteria into beer, could actually be harmful to the fermentation process if certain types of the fungus were present in the batch. In 1883, Hansen developed a pure yeast culture and introduced it to the Carlsberg Brewery, with incredible results. The pure yeast brought the best possible fermentation, vastly improving both the reliability of the brewing process and the finished product’s consistency (Kroll, 1976). American brewers adopted pure yeast even more quickly than they had pasteurization; that same year August Uihlein, heir to the Schlitz brewery, went to Copenhagen to purchase some of Hansen’s yeast culture. By 1887, the largest breweries—including Anheuser-Busch, Schlitz, Philip Best/Pabst, Blatz, Miller and others—all used pure yeast cultures in their fermentation processes (Kroll, 1976; Van Munching, 1997; Knoedelseder, 2012). Smaller breweries that had not established a larger economy of scale could not afford the scientific equipment necessary to maintain this yeast culture stuck to older family recipes with less reliable results, ultimately earning a reputation for poor quality that would exacerbate their later demise (Kroll, 1976).

These developments were important pre-conditions for another advancement in brewing: use of bottles for packaging. Though Anheuser-Busch was experimenting with bottling in the 1870s to save cost during the pasteurization process, brewers used bottles sparingly until two decades later. Spoilage issues, federal regulations regarding taxation of beer, and ineffective capping mechanisms for bottles, hampered wide adoption of bottling. It might seem backwards that bottling came after pasteurization; however, the elimination of bacteria was absolutely necessary before this development in beer packaging could occur. Before pasteurization to extended beer’s shelf life, harmful bacteria would cause a sealed bottle of beer to spoil in just a few days (Kroll, 1976). Brewing regulations of the time, in place to levy taxes on beer, further hampered the economic feasibility of bottling. Until 1890, federal law prohibited brewers from bottling on the premises of their brewing operation. Breweries were allowed only to fill kegs, the established base unit of volume, so tax collectors could calculate volume produced simply by counting the number of kegs filled. Then, after the kegs were accounted and marked as taxed, brewers who wished to bottle beer had to transport these bulky containers to a separate facility to fill bottles, an additional cost both in moving the goods, but a delay that cost time during which the beer was fresh (Baron, 1962; Kroll, 1976; Van Munching, 1997; Knoedelseder, 2012). Only through the lobbying efforts of the powerful Pabst Brewing Company was the law changed in 1890.

Though state law still required brewing and bottling operations to occur in separate buildings, Pabst was allowed to build a gauged pipeline connecting its brewery to its bottling plant, allowing measurement of production for taxation while substantially lowering costs for bottling, a model immediately adopted by other breweries throughout the country (Cochran and Collins, 1948/2011). Bottling was finally made feasible in 1892 by the introduction of the crown cap by Crown Cork and Seal Company of Baltimore. Before the crown cap, plants used a number of unreliable methods for sealing bottles, including cork and wax. The older sealing methods would often fail, ruining the beer by losing the seal and allowing beer to go flat, or by exploding under the pressure of carbonation. The crown cap was the first reliable beer cap avoiding both of those shortcomings, a design which is still used today. Though bottled beer would not be popular with consumers until after the end of Prohibition—only about 20% of all American beer sales by volume were packaged in 1900—the crown cap was the final ingredient for making bottling, and therefore the development of national distribution networks, economically feasible (Kroll, 1976; Knoedelseder, 2012).


Big Beer Gets Bigger, and Smaller Breweries Disappear

Wisconsin would continue to lead the country in beer production, but the geography of that production had shifted dramatically. The numerous developments in brewing, bottling and sales that greatly benefited the larger Milwaukee breweries like Pabst, Schlitz, Blatz and Miller—Milwaukee’s “Big Four”—were also changes that left many smaller breweries behind. The large brewers were able to capitalize on their improvements to the efficiency of the brewing process by producing more beer for a lower cost, undercutting prices of their competitors. Smaller breweries remained unable to afford equipment necessary maintain a pure yeast colony or to pasteurize their beers, and their quality relative to the larger brewers suffered in comparison (Van Munching, 1997). The economies of scale achieved by these local brewers were, by definition, small in both area and profitability; though the small brewers could carve out a living with these local markets, they were not becoming wealthy by practicing their craft and did not have extra capital to invest in improving production. These tiny economies of scale were certainly unable to withstand new competition from the better-funded breweries that invaded these smaller markets, spending lavishly on advertising campaigns to promote the more reliable quality of their cheaper beer. Expansion of larger breweries into new territories spelled the end of the local breweries serving every community. Suddenty, breweries were no longer spread throughout small settlements dotting the state but were instead concentrated in the larger cities.

The impact of this shift on Wisconsin’s brewing landscape was profound. As the local brewers scattered throughout the state faced unprecedented competition from larger operations, particularly from those in Milwaukee, many folded or were swallowed by larger companies before the close of the 19th century. Kroll (1976) suggests that Wisconsin’s brewery population peaked around 1880, with over three hundred operating at times, with as many as fifty operating in the city of Milwaukee. This was the peak of the local brewer, before the technological improvements led to a market invasion from larger competitors. By 1900, as companies closed and consolidated in beer’s new economic climate, only 135 breweries remained in the state (Apps, 2005). Suddenly, an overwhelming portion of beer produced in Wisconsin originated from a handful of very large breweries and brewing companies, located mostly in Milwaukee, with the remaining production coming from the shrinking number of smaller breweries found scattered in communities across the state.

Now, the larger Wisconsin breweries were competing not with the small local operations, but with the larger national players. Oddly enough, Wisconsin offered relatively few location-specific competitive advantages for its brewers to achieve success in a national market. Early on, access to locally grown grain and hops provided cheap ingredients to brewers, but the long-term impact of local crops was limited. Shortly after statehood in 1848, Wisconsin had become the country’s breadbasket, leading the United States in the production of wheat, barley and other grain. By the beginning the Civil War just a short time later, however, depletion of the soil’s nutrients and increased competition from new farms in Minnesota and Iowa had driven most of Wisconsin’s farmers out of grain production and into the dairy industry (Kroll, 1976; Apps, 2005). Though the climate is ideal for growing hops, cultivation of the cropin Wisconsin followed the same trajectory as wheat; after being one of the first crops planted in Wisconsin by American settlers, the state’s hops production increased exponentially until a flooded market caused prices to collapse in 1867. The collapse, during which the market rate for hops dropped from 60 cents per pound to just five cents per pound, ruined the financial viability of many hops-growing farms and drove even more farmers to the relative stability of dairy farming (Apps, 2005; Ogle, 2006). The loss of large-scale local grain and hops production required Wisconsin brewers to purchase ingredients from suppliers in other states, eliminating this brief advantage.

No amount of cheap ingredients could match Wisconsin’s biggest advantage for breweries: its substantial local market of beer drinkers. Milwaukee’s Big Four, as well as the smaller brewers who found modest success, first achieved an economy of scale from the incredible local demand from Wisconsinites of German ancestry. By embracing the local market, brewers were able to build profitable enterprises on a smaller scale. Brewers could then invest their profits in more efficient brewing equipment with larger capacities, transport and preservation of the beer, and marketing to consumers beyond the traditional reach of the brand. This continual demand from German immigrants not only provided an economic space where breweries initially dotted the Wisconsin landscape, but the economic stability necessary for successful brewers to expand their market areas to larger scales. As the countless new technologies developed at the end of the 19th Century allowed the Big Four, along with the likes of Anheuser-Busch and Coors, to take their brands to a larger audience, commercial brewing saw an industry-wide shift to larger-scale production, wider spatial extent of consumers, and fewer players.


Expansion Brings Consolidation, Prohibition Leaves Destruction

As smaller breweries around the country began to go out of business, some brewers decided to merge with other companies to share resources in competition with the new giants. By 1910, only 1,568 breweries remained, just one-third the number that had been in operation at the peak some 37 years earlier; but, production was up from nine million barrels in 1873 to 53 million (Baron, 1962; Van Munching, 1997). Small breweries were unable to compete in terms of price and marketing, and many consolidated with each other to share resources in competition against the larger players. This was not a phenomenon limited to Wisconsin; for example, Pittsburgh’s 36 breweries in 1900 had consolidated to just two by 1910 (Van Munching, 1997).

Beyond consolidation, brewing in the United States faced another challenge at the beginning of the 20th century, thanks to the religious and political climate of the United States: the growing Temperance Movement. Though Temperance had been a political force in the United States since the early-1800s, the movement really gained momentum with the advent of the First World War. Even before American involvement in Europe, the war stoked much anti-German sentiment among the American public, and it was the brewers who felt the wrath. It no longer helped sales to be a proud German; August A. Busch, heir and now owner of Anheuser-Busch in St. Louis, was a strong supporter of the Kaiser early in the war and his wife Lilly spent the war in Germany as a show of loyalty, both facts that consumers long remembered. Sales of Anheuser-Busch beer plummeted as public opinion shifted against Germany, first for pioneering poison gas in warfare, then for sinking the U.S.’s ship, the Lusitania. By the time the United States entered the war in 1917, anti-German sentiment was a major threat not only to the German brewers, but the millions of Americans with who were German immigrants or claimed German ancestry. It was in this social climate that the Temperance Movement gained serious traction in mainstream American politics.

In Wisconsin, the tension was heightened, not only because of the brewing industry’s importance to the state’s economy, but because Wisconsin had become a center for temperance supporters. Janik (2010) notes that the war heightened an existing divide between two groups in the state: the temperance movement, largely led by rural Christian Protestants of British descent, and the largely urban Roman Catholic German-American brewers and beer drinkers. As hostility and oppression against German people and culture grew, many communities in Wisconsin founded local German heritage societies, organized during the war to defend their civil liberties. Heavily bankrolled by brewers, these societies ultimately alienated Wisconsin German-Americans, and the breweries they owned, from the larger public.

Though several states, including Iowa, North Dakota and Rhode Island, and a number of counties had gone “dry”—meaning the sale of alcohol was legally prohibited—attempts to eradicate alcohol on a national scale had largely stalled through the first two decades of the 20th Century. However, American involvement in the war had amplified the calls for temperance, as Van Munching (1997: 19-20) observed:

“[t]hose [anti-German] feelings, coupled with protestant moralism and its attendant fear of rampant immigration, would help the temperance movement achieve its ultimate goal: national prohibition.”

American involvement in the First World War ultimately pushed prohibition over the top. The U.S. Congress voted to declare war on Germany and its allies on April 6, 1917; by August 1, a Prohibition amendment to the U.S. Constitution had passed the Senate, approved by the House of Representatives on December 17, and then passed to the states for ratification on December 18. The proposed amendment did not prohibit consumption or possession of alcohol, but made it very difficult for citizens to obtain them by outlawing production, sale, transport, or import of such beverages:

“After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.”
–18th Amendment to the United States Constitution, Article I

Ratification of a constitutional amendment in the U.S. by states is usually a years-long process, and though Prohibition implemented quickly by these standards, the process still outlasted the war. By the time Nebraska became the 36th state to ratify the proposal on January 16, 1919—bringing the legislation past the threshold of three-quarters of states required for federal ratification and implementation—Armistice in Europe was already in its third month. The Volstead Act, a piece of legislation accompanying the 18th Amendment designed to detail its enforcement, established the date of January 17, 1920 as the beginning of Prohibition in the United States.

The impact on the economy of American brewing was swift and brutal. Breweries across the country closed en masse. Some facilities were converted to other uses as brewing companies sought new revenue flows. With mixed results, Anheuser Busch, Pabst and Stroh’s tried producing soft drinks and “near beer” beverages with less than 0.05% ABV to qualify for the Volstead Act’s definition of non-intoxicating beverages. Blatz adapted its brewery to produce alcohols for industrial purposes, while Schlitz used its brewing facilities during Prohibition to produce candy. Though the former brewers found relatively little demand for their new products, shifting emphasis to other industries gave these companies the cash flow needed to ultimately last through the Prohibition (Brunn, 1962).

Survivors were the exception: with their main product now illegal to produce, many brewers simply closed their businesses, liquidated their now largely worthless equipment, and sought new opportunities. In Wisconsin, at least 54 breweries that had been open in January 1920 were permanently shuttered a year later. At least eleven of these breweries, such as Joseph Hussa (Bangor), Farmer’s (Beaver Dam), Hausmann (Madison), William Rahr & Sons (Manitowoc), Menasha, New Lisbon, Gutsch (Sheboygan), K. Schreier (Sheboygan), Mueller (Two Rivers), Ruder (Wausau) and West Bend had been producing beer since before 1860. While many of these breweries that closed were in decline, losing considerable market share to the larger producers during the first two decades of the 20th Century, it was Prohibition that finished them off (Kroll, 1976).


The Beer Bubble, World War II, and Post-War Consolidation

Proving deeply unpopular, the American experiment with temperance ended on December 15, 1933, when the 21st Amendment was put into effect to fully repeal Prohibition. The news caused something of a “gold rush” in the brewing industry, as the larger breweries rushed to get their mothballed equipment back online. In addition to the larger brewers resuming production, some 30 new breweries started operation in Wisconsin during those last 15 days of 1933. These new breweries were less the continuation of brewing tradition of years past and instead were representative of a sensed opportunity; many were started by businessmen with no beer production experience, but who had bought into the brewing industry by purchasing equipment from those brewers who liquidated during Prohibition. Starting fresh against the machinery of the larger brewers, with no brewing experience, with an economy in the depths of the Great Depression, and often in locations with limited potential for carving an economy of scale within a now-nationally scaled brewing industry, these new brewers had little chance for success. In Wisconsin, fewer than half of the 30 breweries opened in 1933 survived the decade, and none of the 44 breweries founded in the between 1933 and 1945 exist today. Breweries established earlier were not immune to these problems; facing poor economic conditions and increased crunch from competition of the larger brewers, some 33 of the 71 Wisconsin brewery companies that had survived prohibition were defunct by 1950 (Kroll, 1976; Apps, 2005).

Economic restructuring in the brewing industry were not the only changes to American beer culture during this time. In the period following Prohibition through the end of World War II, U.S. sales of packaged beer surpassed kegged beer for the first time. The large networks of company taverns established by Anheuser Busch, Pabst, Schlitz and others were largely liquidated during Prohibition, leaving third-party saloons and taverns as the primary remaining—and less profitable—market for kegged beer, making bottling far more attractive to brewers as well. Prior to Prohibition, bottled beer accounted for just 18% of beer sold in the United States; by 1934, 25% of American beer was packaged, a number that would grow to nearly 60% by 1942 (Kroll, 1976).

With a new eye toward packaged beer sales, container costs became especially important. Canned beer, a far cheaper and more efficient packaging, made its debut in 1935 when the Continental Can Company perfected the canning process as a solution to broken bottles and light-caused spoilage (Van Munching, 1997). Canned beer represented some 10% of beer packaged in 1941, before the war effort limited metal supplies available for canning.

Despite this and other occasional packaging shortages, World War II didn’t provide nearly as many challenges to brewers as had the First World War. Though Germany was still an enemy, brewers were not singled out for sharing that heritage; many of the brewers by this point were either American-born children or grandchildren of the German founders, or businesspeople otherwise uninterested in German culture. Still smarting from wide disdain endured a generation before, the brewers very publicly contributed to the war effort, many pledging 15% of their beer production to military (Van Munching, 1997).

After the war, brewers scrambled to expand their markets throughout the country as it experienced unprecedented prosperity. Schlitz and Anheuser-Busch, the largest and second-largest brewers in the United States, pushed for a larger national footprint through purchasing existing breweries and building new facilities (Van Munching, 1997). The two companies were constantly jockeying for competitive advantage, each following the other’s expansion into new territories, using increasingly aggressive marketing to grab more sales. Anheuser-Busch’s established network of rail transport positioned the brewer with a distinct advantage as it began national distribution of Budweiser, Michelob and Busch. In 1957, Anheuser-Busch ultimately surpassed Schlitz as the largest beer producer in the United States, a position it has maintained to present (Ogle, 2006; Knoedelseder, 2012; Ganey and Hernon, 2012). Pabst, now the third largest brewer, attempted to remain competitive with Anheuser Busch and Schlitz by purchasing Blatz, a fellow Milwaukee-based brewery and the eleventh largest in the country, in 1958 (Kroll, 1976; Apps, 2005; Pabst Mansion, 2012).

As the larger brewers expanded their brands to national distribution and consolidated operations, smaller breweries were put into an increasingly tight financial situation. The larger brewers were establishing a new economy of scale that allowed them to produce large quantities of beer at a very low cost. The beer’s cheap price was unmatchable by the smaller breweries, which found demand for their products dwindling. The high margins achieved on these mass-produced beers brought large profits, which were then invested into national advertising campaigns that provided another impossible advantage over the smaller producers.

Though Anheuser-Busch’s position as largest brewer in the United States was unchallenged the brewery’s sales growth outpaced its competitors, Wisconsin remained the largest beer-producing state, by virtue of hosting the second (Schlitz), third (Pabst), seventh (Miller) and ninth (G. Heileman) largest breweries in the United States (Van Munching, 1997). Three other Wisconsin breweries, all much smaller than these four, survived the crunch: Joseph Huber Brewing Company in Monroe, Jacob Leinenkugel Brewing Company in Chippewa Falls and Stevens Point Brewery in Stevens Point (Kroll, 1976).

Though the wholesale destruction of local brewing in Wisconsin was mostly complete by the 1975, the landscape of Wisconsin’s brewing industry was in a state of flux, even amongst the big breweries. The 1970s would see the rapid decline of two of Milwaukee’s Big Four, as Schlitz and Pabst began their slide to obscurity, while Miller would suddenly catapult to national prominence. Another Wisconsin brewing company, G. Heileman, would take advantage of the industry’s continued consolidation to quietly rise to the third largest American brewer by piecing together a network of regional breweries.

Despite an established national distribution and production network, Schlitz’s market share collapsed between 1970 and 1980. Part of an ill-fated attempt to lower production costs in competition with Anheuser-Busch, Schlitz executives had used cheaper ingredients that dramatically lowered the quality of the beer, resulting in several embarrassing public relations fiascoes through the decade. By 1982, Schlitz was purchased by Michigan’s Stroh Brewery Company and largely ceased to exist (Van Munching, 1997; Apps, 2005).

Pabst’s decline was more gradual. The company’s modest expansion strategies in the post-war years—the company’s most aggressive move was the purchase of Blatz in 1958—left the brewery with limited liquid capital and limited efficiency relative to its competitors in Anheuser Busch and Miller. Lacking the cash to compete in a national marketing war, Pabst saw a slow slip in its market share through the 1970s (Van Munching, 1997), and would continue to fall further behind as expensive television advertising became the price for competing nationally.

Miller, however, followed the opposite trajectory of its Milwaukee brethren and expanded rapidly after cigarette manufacturer Philip Morris purchased the brewery in 1970. Because the company had many other profitable products, Philip Morris was able to patiently invest to gain a toehold in brewing. Within two years of its purchase, the company had taken Miller to national distribution, spending heavily on national advertising campaigns (Apps, 2005). However, Miller’s good fortune was cemented with its 1972 acquisition of Meister Brau, a small Chicago brewery which the year prior had developed the first “health-conscious” beer, Meister Brau Lite. Though sales of this healthy beer had been difficult under Meister Brau, Philip Morris used the perfect marketing strategy to bring their new acquisition to the masses (Van Munching, 1997). Repackaged by Miller simply as “Lite,” Philip Morris aggressively promoted the beer as “macho,” ingeniously labeling it as “less filling”—meaning, its drinkers can consume and get drunker before overwhelming their digestive tracks—and hired a number of star athletes to endorse the brand (Van Munching, 1997; Apps, 2005).

Another Wisconsin company, LaCrosse-based G. Heileman Brewing, had managed to become the third largest brewer in the United States by 1980 using a completely different strategy than Miller. Instead of taking its products national, G. Heileman came to prominence behind its collection of many regional brands gathered either via acquisition of established breweries or arranging licensing deals for Canadian beers:

• Old Style Beer, a G. Heileman original recipe which had gained popularity in the upper Midwest since its 1902
• Blitz-Weinhard, based in Portland, Oregon
• Falls City Brewing Company and Weidieman Brewing Company, both based in Louisville, Kentucky
• Grain Belt brewery, based in Minneapolis and Hamm’s based in St. Paul
• National Bohemian Brewing Company, based in Baltimore, Maryland
• Olympia Brewing Company and Rainier Beer, both based in Washington state
• Lone Star Brewing Company, based in San Antonio
• Milwaukee’s Blatz beer, acquired from Pabst in 1968
• Drewry’s, a Canadian beer brewed for American drinkers in South Bend, Indiana
• Carling’s Black Label, a Canadian beer brewed for American drinkers in Cleveland, Ohio.

Heileman’s rise would prove short-lived, because American beer production was again shifting. Now that the large brands had expanded nationally and eliminated many of the regional and local brewers from competition, a frontier of sorts had closed. Van Munching (1997: 28) observed that by 1980, the national reach of brands like Anheuser-Busch’s Budweiser, Miller’s Lite and Pabst Blue Ribbon, “[g]rowth for the biggest brewers could no longer come from expanding distribution geographically,” but instead “would have to focus on market share.” Indeed, in 1983, some 92% of beer production in the United States came from just six breweries—Anheuser-Busch, Miller, Heileman, Stroh, Coors and Pabst—leaving very little room to find new markets (Beer Advocate, 2012). The result would be an all-out war between the major breweries for American beer drinkers, largely fought with television advertisements while each brewery’s beer suffered from a continual decline in ingredient quality and heightened flavor-killing pasteurization processes, all to cut costs.


The Modern Crunch, and the Rise (Return?) of the Micros

While the major breweries spent tens of millions of dollars on advertising to coax market share from the others’ customers, the scale of American brewing was about to shift again with the beginning of craft beer heralded by the founding of the New Albion Brewing Company. While stationed in Scotland with the U.S. Navy in the 1960s, McAuliffe had been exposed to a variety of beers and ales largely unseen in the homogenized beer culture in America, which led him to learn brewing. When he returned to the United States in 1968, McAuliffe attended college and worked in the San Francisco Bay Area. Dissatisfied with American beer, McAuliffe continued brewing as a hobby, eventually saving enough money and finding investors to start a brewery. In October of 1976, McAuliffe founded the New Albion Brewing Company in Sonoma, California, using high quality ingredients to brew small batches of varieties like pale ales, porters and stouts, styles with strong flavors not available from other American brewers of the day.

Another distinction for New Albion was its abandonment of pasteurization for bottle-conditioning as a method of preservation. While pasteurization steamed beer to kill pathogens but ultimately removed some flavor, bottle-conditioned beer made use of yeast leftover from the primary fermentation process to provide a secondary, in-bottle fermentation to carbonate the beverage. Carbonation continues after bottling as the live yeast continues to ferment, in the process using the remaining oxygen and preserving the beer from spoilage without sacrificing flavor to pasteurization. Though the shelf life of bottle-conditioned beer is marginally shorter than that of pasteurized beer, bottle-conditioning does require more time in production because the beer must fully mature after bottling (Van Munching, 1998; Beer Advocate, 2012). In 1977, a commitment to quality, not quantity, was a novel idea in American brewing. McAuliffe’s focus on fresh and quality ingredients, flavorful recipes, and flavor-adding brewing processes gained New Albion national media attention, and a huge demand for its beer. Though McAuliffe’s self-designed brewery could produce 7.5 barrels per week, it simply was not enough to establish an economy of scale given operation costs and New Albion closed in November 1982 (Beer Advocate, 2012; Acitelli, 2013). The importance of New Albion was not the beer itself, but the brewery’s impact on American brewing culture. Within a few years of New Albion’s opening, several microbreweries dotted California. Through the 1980s, the growing popularity of Boston’s Samuel Adams Brewing Company and Chico, California’s Sierra Nevada Brewing Company had brought microbrewing national attention (Acitelli, 2013).

Of the several hundred breweries operating in the state during its peak, three small Wisconsin breweries had survived through the many economic uncertainties of the 20th century: Huber (Monroe), Leinenkugel (Chippewa Falls) and Stevens Point. In 1985, Sprecher Brewing Company opened in Milwaukee, the first new brewery to be established in the state in nearly 20 years, and was quickly followed by others. Seven microbreweries had begun operations by 1990: Sprecher, Hibernia (Eau Claire), Capital (Middleton), James Page (Stevens Point), Lakefront (Milwaukee), Water Street (Milwaukee) and Rowland’s Calumet (Chilton). Like New Albion, each of the new breweries focused on implementing unique recipes to brew a variety of styles, brewing seasonal recipes with seasonal produce, using quality local ingredients, and establishing a local economy of scale. Of the seven earliest new microbreweries in Wisconsin, to date only Hibernia has closed its doors (Apps, 2005).

During the next decade, craft brewing expanded across the American landscape as hundreds of new brewers started producing beer. Mimicking the larger national trend, the Wisconsin craft brewing scene exploded during the 1990s with the state seeing over 30 new breweries opening for business. The trend only accelerated through the next decade, as 45 more breweries opened, bringing the state’s total to 79 operating in 2010. Many of the breweries focused specifically on developing the rich consumer base of Wisconsin beer drinkers by using local ingredients and marketing with local terms: the award-winning Wisconsin Belgian Red from New Glarus notably includes Door County Cherries in its ingredient list, while O’So Brewing Company in Plover, Titletown Brewing Company in Green Bay and Capital’s Supper Club lager are named for a common local colloquialisms (Revolinski, 2010). A number of these breweries have found great success, despite limited distribution. Perhaps the best example is New Glarus, which was the 17th largest American brewery in 2012 despite not distributing outside of the state of Wisconsin (Brewers Association, 2012).

Large-scale breweries were witnessing a much different trend. The big “Beer Wars” of the 1980s and 1990s greatly changed the beer landscape. Some breweries simply declined and were eventually purchased by competitors. All of Heileman’s brands were sold to Pabst in 1996, fallout after Heileman owner Alan Bond famously financed his purchase of the company with junk bonds. Pabst stopped producing beer in Milwaukee in 1997 and contracted its beer production to Stroh’s facility in La Crosse. After a long decline, Stroh’s itself entered receivership in 1999, and its brands were split by Pabst and Miller. Pabst, which by this point had become a glorified holding company with a large portfolio of beer properties, contracted out its brewing to Miller and left the state in 2001. Miller was purchased by South African Breweries in 2002, to form a new company called SABMiller. Several American breweries, to increase competitiveness and market share, with others. Coors merged with Canada’s Molson Brewing Company in 2005 to combine operations. Belgian brewing company InBev purchased Anheuser-Busch, America’s largest brewer, in 2008. Faced with a newly enlarged competitor in Anheuser-Busch InBev, Molson Coors merged its American production with SABMiller to form MillerCoors later in 2008 (Knoedelseder, 2012; Ganey and Hernon, 2012; Hintz, 2011). In 2012, the largest independently operating brewer in the United States was, in fact, the D.G. Yuengling and Company of Pennsylvania, the fourth largest producer of beer in the U.S. after Anheuser-Busch InBev, MillerCoors and Pabst (Brewers Association, 2012).

Though craft brewing has been growing both in business and volume since the mid-1980s, its beer still accounted for just around five percent of the national beer production by 2010. Still, the impact was substantial enough that larger brewers took notice, introducing new styles and brands to squash the fresh competition. Coors, for instance, introduced Blue Moon, a Belgian style beer in 1985 (Van Munching, 1998), while Anheuser-Busch launched Shock Top as a direct competitor in 2006. Miller responded to the rise of craft brewing by purchasing Jacob Leinenkugel Brewing Company in Chippewa Falls in 1988 to absorb its recipes and established customer base in the upper Midwest (Apps, 2005). Since then, Leinenkugel has become a large regional brewery, expanding in the early 2010s to limited national distribution. Anheuser-Busch InBev also followed this model, purchasing Latrobe, Pennsylvania’s nationally distributed Rolling Rock in 2006 (Knoedelseder, 2012) and acquiring Chicago-based regional brewery Goose Island in 2011 with intentions for expanding its distribution (Yue, 2013). As involvement from the larger brewery companies suggests, craft beer had become lucrative business, with $10.2 billion in sales in 2012. The Brewers Association (2012) found 2,403 craft breweries operating nationwide in 2012, the highest number since the 1880s. The trend is echoed in Wisconsin, where nearly 100 breweries operate in the state, more than any time since prohibition. Brewing remains an important industry to the state of Wisconsin, though now more as an attraction for “beer tourists” who come to sample the state’s many craft breweries, as a customer for local agriculture, and to fulfill the continued strong demand for quality beer.



Tightly intertwined into both the history of the United States and Wisconsin, brewing is a tradition that extends to the country’s earliest days. The history of brewing in Wisconsin, long one of the largest beer producing states, serves as a microcosm for the larger trends in American brewing. As German settlers moved into Wisconsin beginning in the 1830s, they brought incredible demand for beer, a spoilable product that with technology of the time required production near the point of consumption. As settlers populated the Wisconsin frontier, brewers followed, numbering over 300 in the state during the 1880s. Because of the substantial demand and relatively captive market, brewers were able to establish economies of scale for their products at an exceptionally local level.

These economies of scale were disrupted in the 1870s by new technological innovations in the brewing and preservation process. The implementation of pasteurization, pure yeast cultures and improved bottling techniques allowed brewers to begin distributing to larger markets because the product would not spoil before consumption. Milwaukee’s breweries additionally benefitted from the Great Chicago Fire of 1871, which gutted that city’s brewing industry. By opening the door for Schlitz, Pabst and Miller to compete in Milwaukee, the Great Fire altered these brewers’ economy of scale to a larger market including the city of Chicago, placing them favorably for increased national competition from Anheuser-Busch and others. As breweries began to nationalize distribution in the late-1800s, many Wisconsin beers achieved significant success, with Schlitz and Pabst both spending time as the largest brewers in the country. These constantly growing brewers, which achieved their success thanks partially to improved purity standards, pushed smaller brewers with less reliable quality and smaller margins out of the market. By the time of Prohibition in 1920, Wisconsin was down to just around 110 brewers, a number further lowered by beer production becoming illegal.

After Prohibition, a brief beer bubble popped, leaving in place the trend seeing smaller brewers consolidate or close, while larger brewers continued to jockey for more national sales. By 1983, very few breweries operated in the United States, and the six largest breweries controlled 92% of domestic production. When the craft brewing movement of the 1980s through 2000s took off, Wisconsin saw the establishment of a new network of local breweries that it had missed for much of the later 20th Century. These breweries wielded craft recipes to brew a variety of styles, used quality local ingredients and established local economies of scale, echoing the early local Wisconsin brewers over a century before.


Works Cited


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Author: Andrew Shears

Andrew Shears is an Assistant Professor of Geography at Mansfield University in Mansfield, Pennsylvania. His research interests lie at an intersection of the human-environmental nexus, and includes branches of mapping, technological, memorialization and urban geographies. He lives in Wellsboro, Pennsylvania with his wife Amy, a professional photographer.