How Did Prohibition Contribute to the Beer Industry?

One would think that Prohibition, the law that was established after WWI to eliminate alcohol consumption in the United States, would have destroyed the beer industry. But while most of the early brewing companies collapsed under Prohibition, the ones that survived emerged from Prohibition stronger than ever and served as the base for the thriving beer industry that would rebuild into the juggernaut it is toady. How did less than 10% of America’s pre-Prohibition brewers manage to navigate the “no alcohol” laws of the 1920s and 1930s?

Sloto invites you on a journey of discovery in which you can find out more about this fascinating period of history.

Prohibition

The laws of Prohibition came about as a result of the 18th Amendment to the US Constitution. That constitutional amendment banned the manufacture, sale or transportation of intoxicating liquors. The amendment went into effect in January 1920 but Prohibition laws became some of the most difficult laws to enforce.

Bootlegging (production of illegally-produced liquor), opening of speakeasies (sites where alcoholic drinks were sold and drunk), the rise of organized crime and an increase in gang violence all contributed to Prohibition’s downfall. In 1933 the 21st Amendment ended Prohibition.

Brewers

Prior to the passage of the 18th Amendment, there were approximately 1300 brewers who were actively brewing beer in the United States. Approximately 1200 of those pre-Prohibition brewers closed their businesses but many of the ones that survived were able to do so because making beer wasn’t their major source of income.

Maureen Ogle, author of Ambitions Brew, The Story of American Beer, wrote that families including those that owned Coors, Anheuser-Busch, Miller, Pabst and Yuengling, had investments elsewhere that allowed them to restart their breweries in 1933. “What separated the companies that made it from the ones that didn’t is what they had to begin with at the start of Prohibition,” Ogle wrote. “The Pabst, Busch and Miller families had all invested in real estate holdings across the United States.”

Even before Prohibition, many of those companies had seen the writing on the wall and expanded into producing non-alcoholic drinks – malted milk, fruit juices and soft drinks. Ogle wrote that, “They understood that if they wanted to stay competitive, they were going to have to make not just beer but beverages that non-alcoholic drinkers wanted.”

Some companies also toyed with light beers which had less than 0.05% alcohol content which, under Prohibition laws, was legal. But most consumers didn’t take to the light beers and over time, when bootlegging and speakeasies made it easy to obtain real beer, the beer market collapsed and many of the brewers shifted into bottling other types of beverages.

Some even reconfigured their production lines to produce dyes to bolster the post-WWI shortages. Others sold malt syrup and yeast which was used by home brewers to make beer. One ad for a Budweiser-brand barley malt syrup showed a grocer selling the malt syrup while winking knowingly at customers.

Beer companies that made it through Prohibition found little competition when Prohibition ended in 1933. Some of those that went on to build beer empires include:

Anheuser-Busch

The Busch family was one of those that saw Prohibition coming. Tracy Lauer, the archives director for Anheuser-Busch, explained that  “Adolphus Busch….saw the potential for national Prohibition as early as the 1890s.” In 1908 he started development of a non-alcoholic cereal beverage that tasted like beer. It was called “Bevo” and was introduced in 1916. It became an immediate hit and inspired Busch to invest in building the largest bottling facility in the world.

Bevo sales slid along with the drop in sales of light beers in the 1920s  but Busch was able to diversify into non-alcoholic beverages and other products (infant formula, frozen eggs, carbonated tea and coffee products and even a Lampsteed Kampkar camper ad the Bevo Victory Boat and police vans that Prohibition officers used to round up bootleggers and moonshiners. It was Busch’s ability to diversify, along with his vision that beer would once again be sold in the United States, that kept his company afloat log enough to begin brewing again.

Coors

Beer sales were banned in Colorado in 1916, 4 years before the rest of the United States, so Adolph Coors already had experience diversifying. He became a producer of the malted milk that became popular at sofa fountains and candy stores. Some types of the malted milk were sold as food for babies.

During Prohibition Coors set up a ceramics and pottery business, using Colorado clay to make dinnerware, tea sets, labware and spark plugs. After Prohibition Coors returned to brewing beer but the porcelain company, now known as CoorTek, continues to supply ceramics and is the largest engineered ceramics manufacturing company in the world.

Miller

After Prohibition, Milwaukee became known as a center of beer-making in the United States but during Prohibition the situation was dire. In fact, the Miller family, owners of the Miller Brewing Company, tried to sell their company in 1925 but no one was interested. Miller tried to diversify with light beer, malt syrup and malted milk but its real estate holdings and investment income, including international bonds, government securities and mortgage loans, was the root of its survival.

Yuengling

Yuening of Pottsville Pennsylvania turned to the production of ice cream to get it through the Prohibition. The company was almost 100 years old when Prohibition hit and after the 18th Amendment was passed they opened an ice-cream parlor across the street from the brewery. The turn to ice cream was copied by the Detroit-based Stroh’s company.

Even after the company started brewing again after the repeal of Prohibition its dairy remained open (until 1985) and the Yueling Ice Cream brand began selling again in 2014.