The Geography of Beer: Policies, Perceptions, and Place 3031390075, 9783031390074

Table of contents :
Foreword
Contents
Editors and Contributors
1 Expanding Geographies of Beer
Abstract
Introduction
Organization of the Book
Policies
Perceptions
Place
Final Musings
References
Policies
2 Tax and Legislation and Their Impact on the British Brewing Industry 1643 to 1880: From Civil War to the Free Mash Tun
Abstract
Early Legislation
Three-Threads
Tax and the Invention of Porter
Arthur Guinness and the Move to Porter Brewing
Malting
Unmalted Grain
Porter Coloring
The Beerhouse Act of 1830
The Free Mash Tun Act of 1880
Conclusion
Appendix
References
3 From the Beer Orders to Last Orders—Legislation, Taxation and the Modern Beer Landscape of London
Abstract
Introduction
Background
A Brief History of Brewing in the UK and London
Consumption, Taxation, Politics and Beer in the UK
The Tied House Pub System and the Beer Orders
Legislation, Taxation and the Introduction of Small Breweries Relief/Progressive Beer Duty
Brewing and Beer in London
The Rise of Craft Brewing in London Post-2002
Styles of Beer and Increasing Diversification
Popularity, Ratings and Survival
Planetary Perspectives and London’s Beer Futures
The Sale and Consumption of Beer
Fiscal Futures
Conclusions
References
4 The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry
Abstract
Introduction
The British Beer Industry from a Historical Perspective
Integration of Markets: Globalization and the Invasion of the British Beer Market
Recent Counterevents: Brexit
From Traditional Cask Ales to a British Craft Beer Industry
The British Beer Market: Current Outlook
Conclusion: Is There Still British Beer?
References
5 Blood Alcohol Regulations and EU Beer Exports
Abstract
Introduction
Related Literature
Data
Trade Data
Blood Alcohol Content
Methodological Approach
Results
Descriptive Summary
Regression Results
Conclusion
References
6 What Drives on- Versus Off-Trade Beer Consumption? A Regional and Global Panel Analysis of 97 Countries
Abstract
Introduction
On-Trade Versus Off-Trade Demand Factors
Regional and Country Specific Demand
Covid Impact
Data
Methodology
Results: Pre-test
Results: Full Sample
Results: Regional Analysis—Income Elasticities
Results: Regional Analysis—Own Price Elasticities
Results: Regional Analysis—Cross Price Elasticities
Conclusion
Appendix
References
7 Questioning the Cluster Imperative: Why Danish Craft Breweries Choose not to Cluster Geographically, and What (not) to Do About It
Abstract
Introduction
The Danish Beer Market—Structure, Evolution, Innovation and Location of Firms
Evolution and Market Structure
Location Patterns
Theoretical Background and Earlier Literature on Location and the Beer Industry
Traditional Location and Co-location Theory
Clusters and Agglomerations
Location and Co-location of Breweries—A Special Case?
Data and Methodology
Results
Territoriality and Local Branding
Consumer Hinterland and Spatial Distance to Competitors
Use of Limited Resources to Serve Markets
Cons of Considering Clustering and Alternatives
Disadvantages of Clusters
Alternatives to Clustering
Discussion, Implications and Conclusions
References
8 Adaptive Reuse in the Canadian Craft Beer Sector
Abstract
Introduction
Adaptive Reuse and Sustainability
Adaptive Reuse in the Craft Beer Sector
Methods
Spatial Distribution Overview
British Columbia
Prairie Provinces (Alberta, Manitoba, Saskatchewan)
Central Provinces (Ontario, Quebec)
Atlantic Provinces (New Brunswick, Newfoundland & Labrador, Nova Scotia, Prince Edward Island)
Territories (Northwest Territories, Nunavut, Yukon)
Housing Craft Breweries: New Builds and Building Reuse
New Construction
Reuse
Commercial
Industrial
Institutional
Residential
Agricultural
Policy Dimensions
Conclusion
Acknowledgements
References
9 The Geography of Brewery Entry After Beer Relegalization in Spring 1933
Abstract
Introduction
Beer Legalization and the Location of Breweries Operating in 1933
The Geography of 1933 Breweries
The Geography of Brewery Entry Across 1933
Case Studies of City-Level Brewery Location in 1914 and 1933: New York and Chicago
Empirical Analysis: The Determinants of the Geography of Brewery Entry in 1933
Conclusion
References
10 Brews and Rules: Geospatial Aspects of State Beer Laws in the United States
Abstract
Introduction
Federalism and Interstate Commerce
State Beer Laws
Four Vignettes
State Beer Taxes
State Homebrewing Laws
“Blue Laws” and Sunday Sales
Grocery Store Sales
Discussion and Conclusion
Acknowledgements
References
11 Wet and Dry: The Alabama Beverage Control Act and the Prohibition of the Saloon
Abstract
References
12 Politics, Geography, and the Three-Tier System
Abstract
Introduction
Literature Review
Self-distribution
Direct-to-Consumers
Recent Legal Challenges
Beer, Campaign Finance, and the Three-Tier System
Theory, Interdisciplinary Research, and the Future of the Three-Tier System
References
List of Cases
Perceptions
13 Local Legends, Local Flavor: Leveraging Folklore in Craft Beer Marketing
Abstract
Introduction
Neolocalism
Legend Research and Theory
Methodology
Findings: Telling Legends Through Beer Marketing
Beers with Tales to Tell
Black Dogs, Spider Gates, and Synecdoche
Looking for a Legend
Conclusion: Learning from Legends
References
14 Southern Cultural Tropes in Craft Beer Naming and Image Conventions
Abstract
Introduction
Craft Beer Landscapes in the Southeast United States
Expressions of Southern Identity
Place-Making Through Names and Imagery of Craft and Creative Industries
Branding Southerness in a Regional Craft Beer Industry
Place-Making and Conveying Southern Themes Through Brewery and Product Names
Place-Making and Visualizing Southerness Through Product Labels
Rivers as Southern Symbolism in Product Names and Labels
Conclusion
Appendix
References
15 What About the Locals? Laying Out a Third Place Branding Strategy for Local Craft Breweries in the Neolocalism Literature
Abstract
Introduction
Third Places
The Neolocalism and the Third Place Literature Gap
Making Space Within Place: An Alternative View of Neolocal Branding
Methods: Exploring Third Place Branding Through a Neolocal Lens
Elucidating Third Place Branding Elements
Play
Provocation
Participation
Proximity: Physical Environment and Community Scale
Conclusion
Novel Insights and Future Directions
Limitations and Future Research
Closing Remarks
References
16 Sense of Place Expressions in Welsh Craft Beer Branding: Identity, Neolocalism and Social Terroir
Abstract
Introduction
Theoretical Background
Craft Beer Research
A Sense of Place
A Sense of Place in Craft Beer
Methods
Findings
Location
Thematic Analysis Findings
Discussion
Conclusion
References
17 Regional Identity as a Marketing Strategy for Breweries in Czechia
Abstract
Introduction
Landscape, Regionalism, and Nationalism as Environments for Brewery’s Regional Identity
Data and Methods
Results
Accentuation and Frequency of Regional Identity Marketing
Interactions of Accentuation and Frequency of Regional Identity Usage
Spatial Distribution of Breweries by Regional Accentuation and Enabling Environment
Conclusion
References
18 The Bulgarianization of Craft Beers
Abstract
Introduction
Craft Beer Revolution, Globalization, and Localization
The Craft Beer Culture
Bulgarianization of Craft Beer
Place-Related Neolocal Strategies
Bulgarian Nature in a Beer Bottle
Conclusion
References
19 Spatial Aspects of Craft Brewing in Slovakia
Abstract
Introduction
Temporal and Spatial Background
Distribution of Craft Breweries in Districts of Slovakia
Conclusion
Acknowledgements
References
20 One of the Boys: Beer and Populism in Contemporary British Politics
Abstract
Introduction
Authenticity, Ordinariness and Populism: Beer in Political Discourse?
Signalling Britishness: Working-Class Authenticity and Ordinariness through Boris Johnson’s and Nicola Sturgeon’s Beer Drinking
Brand Boris, Beer and an Illusion of Authenticity
Nicola Sturgeon and Beer for Independence
Conclusion
References
21 Feminist Ferment: Media, Digital Geographies, and Geopolitics Surrounding Womxn in the US Craft Beer Landscape
Abstract
Introduction
Purpose and Research Questions
Creating the Beerscape: The Power of a Material and Digital World
The Beerscape: A Man’s World?
The Discourse and Semiotics Around Womxn in Craft Beer
Marketing and Branding
Flavor and Taste
Womxn and the Brewery Workforce
Reassembling the Beerscape: Advocating for a Different World
Methodology
Results
Identifying Types of Content Produced on the Website
Beer
Website
Employees
Community
How the Content is Shared
The Micro-cultures the Content Enables and How the Content Affects Womxn
Discussion
Conclusion
Works Cited
22 “Sober Curious” or “Semi-Sober”? An Exploration of the Moderation Movement in the United States as “Trendy Teetotalism” or “Neo-Temperance”
Abstract
Introduction and Purpose
Making a Case for a Cultural Landscape of Moderation via a Theory-Generating Literature Review
Prohibition, Its History, and Impacts
The Movement Toward Moderation and Its Implications
On the Politics and Ideologies of Consumption
The Moderation Movement as a Path to Wellness and Maintaining Healthy Relationships with Alcohol
So What Does This Have to Do with Low(er) Alcohol Beer?
Exploring the “Dry January” Effect via an Industry Analysis of No/Low-Alcohol Beer
Examining How (Craft) Breweries Engage with the “Sober Curious” via Qualitatively-Informed Quantitative Analysis of Brewery Websites
Production and Representations of Low(er) Alcohol (Craft) Beers in the US
Lowest ABV Analysis (Quantitative Results)
How Low(er) ABV Beers Are Marketed (Qualitative Results)
Non-alcoholic Brews
Low(er) Alcohol Brews
Discussion and Conclusion
Acknowledgements
References
23 Crisis, Adaptation, and Innovation in Saskatchewan: Crafty Brewers and Their Pandemic Survival
Abstract
Introduction
Literature Review
The Craft Beer Industry in Saskatchewan
Methodology
Impacts of the Covid-19 Pandemic on Saskatchewan Microbreweries
Adaptations and Innovations of Saskatchewan Microbreweries
Mature Breweries
Case 1: Bushwakker Brewpub
Case 2: PaddockWood
“Young” Breweries
Case 1: Rebellion Brewing Company
Case 2: 9 Mile Legacy Brewing Company
Case 3: Malty National Brewing Corp
Case Studies 4 and 5: Shelter and High Key Brewing Co.’s
New Breweries
Case Study 1: Better Brother Brewing Co.
Insights on Resilience from the Saskatchewan Craft Beer Industry
Conclusion
References
Place
24 Historical Variation of Non-local Geographical Brewery Names in the United States
Abstract
Introduction
Methodology
Results
Discussion and Conclusion
References
25 Hops, Skip, and a Jump: The Regional Uniqueness of Beer Styles
Abstract
Introduction
Data Collection and Mapping
Beer Style Networks
Eigenvector Centrality
Stress Test
Network Robustness and Local Resources
Does Geography Matter?
Concluding Remarks
Acknowledgements
References
26 Geographical Connections in Brewing: Locating Place and Placelessness in Beer Production
Abstract
Introduction
A “Place” for Beer?
Place and Placelessness in Brewing Ingredients
Barley
Hops
Yeast
Water
Discussion
Conclusion
References
27 “You Don’t Have to Go Home, But You Can Stay Here:” Resilience Amongst Ruins in the Community Pub Buyout Campaign of the Horncliffe’s Fishers Arms
Abstract
Introduction
Contributions
Methodology
Chapter Structure
‘There’s a Terrible Loss’: History, Reflections, and Impacts of the Decline of the Salmon Fishing Industry
Learned Hopelessness? Narratives of Development and Responsibility in Deindustrialized and ‘Left-Behind’ Places
“There’s Nothing Quite Like It:” Developing Counter-Narratives in Mundane Spaces
Concluding Notes
Acknowledgements
References
28 Drink Something, Do Something”: Philanthropy, Place, and a Rural Beer Geography
Abstract
Neolocalism and Communitas—The Craft Beer Milieu
Toward Meaning and Community
Focusing on the Local: East-Central Illinois’ Rural Beer Geography
Riggs Beer Company, Urbana, Il
Big Thorn Farm and Brewer, Georgetown, Il
Craft Beer and the Coles County Zythological Society
Closing Thoughts
Acknowledgements
References
29 Exploring the Potential of Craft Brewing for Rural Revitalization in China: The Brewers’ Perspectives
Abstract
Introduction
China's Craft Beer Movement
Craft Beer and Rural Development
Methods
Results and Discussion
Less Exposure to Western Culture Outside Urban Centers
Lower Income Levels in Rural Areas
Localness as an Add-On but not a Driver
Environmental Protection Laws
Beer Production Legal Framework
Neo-Ruralism
Implications and Further Research
Conclusion
Acknowledgements
References
30 Brewing Value? On the Impact of Local Breweries on Nearby Rentals
Abstract
Introduction
Data and Empirical Method
Results and Discussion
Conclusion
Appendix
References
31 Anchieta: Local Transformation and Building the Craft Beer Market in Porto Alegre (Brazil)
Abstract
Introduction
The Beer Market in Brazil
Anchieta District and the Fieldwork
Craft Breweries, Local Identity, and Urban Regeneration
Porto Cervejeiro: A Local Policy for Developing Beer Tourism in Anchieta District
Policies to Stimulate the Brewing Industry and the Consumption of Craft Beers
Conclusions
References
32 Location and UK Pubs: A Commentary and Empirical Analysis
Abstract
Introduction
UK Pub Locations—An Historical Overview
Drinking Spaces, the Pub as the Hub, Drinking, Health, and Regeneration
Location and Marketing
Methodology
Findings: Location as a Pub Choice Criteria
Findings: Mapping Pub Choice Locations
Discussion
Limitations
Acknowledgements
References
Index

Citation preview

Mark W. Patterson Nancy Hoalst-Pullen Editors

The Geography of Beer Policies, Perceptions, and Place

The Geography of Beer

Mark W. Patterson • Nancy Hoalst-Pullen Editors

The Geography of Beer Policies, Perceptions, and Place

123

Editors Mark W. Patterson Department of Geography and Anthropology Kennesaw State University Kennesaw, GA, USA

Nancy Hoalst-Pullen Department of Geography and Anthropology Kennesaw State University Kennesaw, GA, USA

ISBN 978-3-031-39007-4 ISBN 978-3-031-39008-1 https://doi.org/10.1007/978-3-031-39008-1

(eBook)

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Paper in this product is recyclable.

Foreword

Historically, beer has always largely revolved around geography. For starters, it is heavy, so most beer—both historically and today—is made relatively locally. There is a reason that Heineken, one of the largest global companies, has 167 breweries for the 190 countries where it operates. Even when beer is not made locally, geography matters. As the global economy grew, geography often determined which places were able to sell their beer further from home, based on characteristics like water (which defined flavor and styles), access to transportation routes, and more. Beer was also a natural target for tax and legislation, with local politics in turn shaping the character of local beer markets and their competitiveness. Over time and in many markets, it may have seemed as if the importance of geography was perhaps waning. Globalization and mergers meant that beer production appeared to largely be consolidating into a similar global style dominated by a few large firms. While geography mattered for production, production locations were based on considerations like minimum efficient scale and organization of production networks more than local place-based characteristics. There were a growing number of academic papers on convergence in global alcoholic preferences as national and regional variations in consumption patterns appeared to generally move toward global averages. Although the consolidation trend has continued with the largest global brewers—today the top four firms control roughly half the world beer market—the past decades have reminded us how important geography remains to the world of beer. From the explosion in small breweries across many parts of the USA and Europe, fights about brewery location surrounding water availability in Mexico, to the banning of beer sold in stadiums at the World Cup, beer geography has never been more relevant. The relevance of geography for beer is something the chapters and themed sections of this book drive home with both breadth and depth. While each theme shows a dimension of the geography, the reader would be wise to remember their intersection. Policies are shaped by perceptions and place. The first section gives us ample examples of this throughout time and place. In turn, policies and politics shape perceptions and influence the development path of places. And we see the chapter by Rankine, Tominc, and Irwin or we saw in President Obama’s “beer diplomacy,” beer and its perception can play a prominent role in politics itself. Consequently, it is only by understanding each theme, as well as their interactions, that we begin to truly understand the evolving relationship between geography and beer. Consequently, this volume is well timed for anyone looking to understand not just beer’s past and present, but also its future. I would also go so far as to venture that there are broader lessons contained within the chapters that follow. The era where Friedman’s The World is Flat was relevant has arguably given way to one in which national borders are once again highly relevant and regional variation in politics and economics may be diverging. As a product brewed and consumed across space and time, beer and geography scholarship provide a lens into society and politics during these shifting times, helping readers learn not only about beer but also make sense of those larger changes. Since flat is often (though not always) a word you

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Foreword

do not want associated with your beer, perhaps The World is Bubbly would be an accurate alternative title for this volume. I hope you as the reader find interest and insight in those bubbles. Boulder, USA

Bart Watson Chief Economist The Brewers Association

Acknowledgements

We are lucky to (and fortunately, continue to) work with many exceptional individuals throughout the world; the vast majority of whom have dedicated their time and effort into creating and completing the volume. We begin at the beginning when offering thanks. If there is one individual who stands above the rest, it would be our Editorial Director, Dr. Robert K. Doe. There are often stories that are shared which showcase the change in direction in one’s life. Sometimes, it only takes one small, encouraging question (“when are you doing the next volume?”) to make something that did not exist come to fruition. We cannot always predict the weather, but we can keep chasing tornados. Peer reviewers are influential to the outcome of the chapters and essential to us editors. The double-blind review process used in this volume helped us in selecting credible, high-quality, interesting chapters. We want to thank all 50+ anonymous reviewers who played an instrumental role in providing guidance to the authors in verifying, improving, and further advancing their research, particularly in the context of beer geographies. While the idea from the volume arose nearly a decade ago, the true push to corral beer-related experts and assemble their research as the “third beer geography book” occurred at a Beeronomics Conference held in Dublin, Ireland, in 2022. We had chats with many attendees—academic and otherwise—on the intersections of beer, politics, prohibition, propaganda, perceptions, and of course geography; these lively conversations were usually held over a pint or three at various venues throughout the city, as would be expected in the country that was once (and perhaps still is) synonymous with pubs and stout. We extend our heartfelt gratitude to the Beeronomics Conference, where we were permitted to personally announce a call for chapters in a manner reminiscent of an old town crier. Many of the authors at that conference answered our call, producing unique and informative chapters for this volume. We would like to give a huge thanks to the people in the beer industry, from the servers to the brewmasters to the publicans. Without you, we would be writing about something else and probably not having as much fun. Last but not least, a thank you to YOU, if you are indeed reading this. This book was made for you. Cheers, Sláinte, 乾杯, Salud, 干杯, Prost, Şerefe, 건배, Skål, Santé! Prohibition? No! Expand beer geographies Beyond fermenting

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Contents

Expanding Geographies of Beer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nancy Hoalst-Pullen and Mark W. Patterson

1

Policies Tax and Legislation and Their Impact on the British Brewing Industry 1643 to 1880: From Civil War to the Free Mash Tun . . . . . . . . . . . . . . . . . . . . . . Martyn Cornell

13

From the Beer Orders to Last Orders—Legislation, Taxation and the Modern Beer Landscape of London . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adam Dennett, Jakub Wyszomierski, and Steven Gray

27

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sven Van Kerckhoven and Sean O’Dubhghaill

45

Blood Alcohol Regulations and EU Beer Exports . . . . . . . . . . . . . . . . . . . . . . . . . Tibor Besedeš and Thomas J. Prusa

59

What Drives on- Versus Off-Trade Beer Consumption? A Regional and Global Panel Analysis of 97 Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fergal O’Connor and Nadine Waehning

71

Questioning the Cluster Imperative: Why Danish Craft Breweries Choose not to Cluster Geographically, and What (not) to Do About It . . . . . . . . . . . . . . . Jesper Lindgaard Christensen and Poul Houman Andersen

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Adaptive Reuse in the Canadian Craft Beer Sector . . . . . . . . . . . . . . . . . . . . . . . . 101 Roger M. Picton and Vanessa Mathews The Geography of Brewery Entry After Beer Relegalization in Spring 1933 . . . . 113 Jason E. Taylor Brews and Rules: Geospatial Aspects of State Beer Laws in the United States . . . . 129 Matthew Balentine and Michael Pretes Wet and Dry: The Alabama Beverage Control Act and the Prohibition of the Saloon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Richard White Politics, Geography, and the Three-Tier System . . . . . . . . . . . . . . . . . . . . . . . . . . 147 Jeff Dense

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Perceptions Local Legends, Local Flavor: Leveraging Folklore in Craft Beer Marketing . . . . 159 Jeffrey S. Debies-Carl Southern Cultural Tropes in Craft Beer Naming and Image Conventions . . . . . . 175 Joshua Z. Merced What About the Locals? Laying Out a Third Place Branding Strategy for Local Craft Breweries in the Neolocalism Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 Matthew M. Mars and Craig A. Talmage Sense of Place Expressions in Welsh Craft Beer Branding: Identity, Neolocalism and Social Terroir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Maggie Miller and Robert Bowen Regional Identity as a Marketing Strategy for Breweries in Czechia . . . . . . . . . . . 215 Martin Lepič, Michal Semian, David Hána, and Kryštof Materna The Bulgarianization of Craft Beers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Elitsa Stoilova Spatial Aspects of Craft Brewing in Slovakia . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 Alfred Krogmann, Magdaléna Nemčíková, Daša Oremusová, and Lucia Petrikovičová One of the Boys: Beer and Populism in Contemporary British Politics . . . . . . . . . 257 Amy Rankine, Ana Tominc, and Mary Irwin Feminist Ferment: Media, Digital Geographies, and Geopolitics Surrounding Womxn in the US Craft Beer Landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 Delorean S. Wiley and Colleen C. Myles “Sober Curious” or “Semi-Sober”? An Exploration of the Moderation Movement in the United States as “Trendy Teetotalism” or “Neo-Temperance” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Colleen C. Myles, Bren Vander Weil, Bart Watson, and Delorean S. Wiley Crisis, Adaptation, and Innovation in Saskatchewan: Crafty Brewers and Their Pandemic Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293 Richard Gray and Nicholas Tyack Place Historical Variation of Non-local Geographical Brewery Names in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 Richard Deal Hops, Skip, and a Jump: The Regional Uniqueness of Beer Styles . . . . . . . . . . . . 319 Ryan M. Hynes, Bernardo S. Buarque, Ronald B. Davies, and Dieter F. Kogler Geographical Connections in Brewing: Locating Place and Placelessness in Beer Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341 Aron D. Massey and Alanna Higgins “You Don’t Have to Go Home, But You Can Stay Here:” Resilience Amongst Ruins in the Community Pub Buyout Campaign of the Horncliffe’s Fishers Arms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 Bridget Shaffrey

Contents

Contents

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Drink Something, Do Something”: Philanthropy, Place, and a Rural Beer Geography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363 Adam Prince, Alicia Neal, C. C. Wharram, Donald H. Holly, Jay D. Gatrell, James Hildebrandt, Jerry Esker, Kurt Leifheit, Michael Cornebise, and Zach Newell Exploring the Potential of Craft Brewing for Rural Revitalization in China: The Brewers’ Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 Bruno Ferreira and Yanjie Long Brewing Value? On the Impact of Local Breweries on Nearby Rentals . . . . . . . . 385 Justin Callais, Javier E. Portillo, and Gary A. Wagner Anchieta: Local Transformation and Building the Craft Beer Market in Porto Alegre (Brazil) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 Andrey Felipe Sgorla Location and UK Pubs: A Commentary and Empirical Analysis . . . . . . . . . . . . . 413 Victoria K. Wells, Nadine Waehning, K. E. Arnold, and Ignazio Cabras Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427

Editors and Contributors

About the Editors Mark W. Patterson is an author, editor, educator, and homebrewer. As an academic geographer, he instills a sense of wanderlust in his students through stories of his travels. A six-week backpacking trip through China in the late 1980s has inspired many subsequent trips with colleagues and students. He combines his love of travel and beer with his scholarly activities. What started out as a personal quest to sample local beers where and when he traveled and lived turned into several publications, including The Geography of Beer: Regions, Environment, and Societies (2014), Atlas of Beer (2017), The Geography of Beer: Culture and Economics (2020), a beer course at his university, and a study abroad program on European beer. When Mark is not overseas, he is typically at a pub planning his next trip or at home checking the FG of his latest homebrew. Nancy Hoalst-Pullen is an author, editor, professor, and traveler. Her beer excursions started in the 1990s when she enjoyed a celebration with several Herero families that included a killed goat, sour milk, and a lot of store-bought lagers. Her globetrotting experiences have since expanded to 40+ countries, hundreds of interviews, and thousands of beers. She is the co-editor of The Geography of Beer: Regions, Environment, and Societies (2014) and The Geography of Beer: Culture and Economics (2020) and the co-author of the National Geographic Atlas of Beer (2017). Her Ph.D. in Geography is from the University of Colorado at Boulder.

Contributors Poul Houman Andersen Aalborg University Business School, Aalborg University, Aalborg, Denmark K. E. Arnold Department of Environment and Geography, University of York, York, UK Matthew Balentine Department of Geoscience, University of North Alabama, Florence, AL, USA

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Tibor Besedeš School of Economics, Georgia Institute of Technology, Atlanta, Georgia, USA Robert Bowen Cardiff University, Cardiff, Wales Bernardo S. Buarque Spatial Dynamics Lab, University College Dublin, Dublin, Ireland Ignazio Cabras Accounting and Finance Management Department, Northumbria University, Newcastle, UK Justin Callais Department of Economics and Finance, University of Louisiana at Lafayette, Lafayette, LA, USA Jesper Lindgaard Christensen Aalborg University Business School, Aalborg University, Aalborg, Denmark Michael Cornebise Eastern Illinois University, Charleston, IL, USA Martyn Cornell Brewery History Society, London, UK Ronald B. Davies School of Economics, University College Dublin, Dublin, Ireland Richard Deal Pennsylvania Western University - Edinboro, Edinboro, PA, USA Jeffrey S. Debies-Carl Department of Psychology and Sociology, University of New Haven, West Haven, CT, USA Adam Dennett Centre for Advanced Spatial Analysis, University College London, London, UK Jeff Dense Eastern Oregon University, La Grande, OR, USA Jerry Esker Eastern Illinois University, Charleston, IL, USA Bruno Ferreira School of Community Resources and Development, Arizona State University, Phoenix, USA Jay D. Gatrell Eastern Illinois University, Charleston, IL, USA Richard Gray University of Saskatchewan, Saskatoon, Canada Steven Gray Centre for Advanced Spatial Analysis, University College London, London, UK Alanna Higgins School of Geography, University of Nottingham, Nottingham, England, UK James Hildebrandt Sarah Bush Lincoln Health Center, Mattoon, IL, USA Nancy Hoalst-Pullen Department of Geography and Anthropology, Kennesaw State University, Kennesaw, GA, USA Donald H. Holly Eastern Illinois University, Charleston, IL, USA Ryan M. Hynes School of Economics, University College Dublin, Dublin, Ireland; Spatial Dynamics Lab, University College Dublin, Dublin, Ireland David Hána Faculty of Science, Charles University, Prague, Czech Republic Mary Irwin Centre for Communication, Cultural and Media Studies, Queen Margaret University, Edinburgh, UK Dieter F. Kogler Spatial Dynamics Lab, University College Dublin, Dublin, Ireland

Editors and Contributors

Editors and Contributors

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Alfred Krogmann Department of Geography, Geoinformatics and Regional Development, Faculty of Natural Sciences and Informatics, Constantine the Philosopher University, Nitra, Slovakia Kurt Leifheit Carle Health, Urbana, IL, USA Martin Lepič Faculty of Science, Charles University, Prague, Czech Republic Yanjie Long HAITC - International Tourism College, Hainan University/Arizona State University, Haikou, China Matthew M. Mars College of Agriculture and Life and Environmental Sciences, University of Arizona, Tucson, AZ, USA Aron D. Massey Department of Humanities and Social Sciences, West Liberty University, West Liberty, USA Kryštof Materna Faculty of Science, Charles University, Prague, Czech Republic Vanessa Mathews Department of Geography and Environmental Studies, University of Regina, Regina, Canada Joshua Z. Merced Department of Geography, Planning, and Recreation, Northern Arizona University, Flagstaff, AZ, USA Maggie Miller Swansea University, Swansea, Wales Colleen C. Myles Department of Geography and Environmental Studies, Texas State University, San Marcos, TX, USA Alicia Neal Eastern Illinois University, Charleston, IL, USA Magdaléna Nemčíková Department of Geography, Geoinformatics and Regional Development, Faculty of Natural Sciences and Informatics, Constantine the Philosopher University, Nitra, Slovakia Zach Newell University of Southern Maine, Portland, ME, USA Daša Oremusová Department of Geography, Geoinformatics and Regional Development, Faculty of Natural Sciences and Informatics, Constantine the Philosopher University, Nitra, Slovakia Fergal O’Connor Cork University Business School, University College Cork, Cork, Ireland Sean O’Dubhghaill Brussels School of Governance, Brussels, BE, Belgium Mark W. Patterson Department of Geography and Anthropology, Kennesaw State University, Kennesaw, GA, USA Lucia Petrikovičová Department of Geography, Geoinformatics and Regional Development, Faculty of Natural Sciences and Informatics, Constantine the Philosopher University, Nitra, Slovakia Roger M. Picton School of the Environment, Trent University, Peterborough, Canada Javier E. Portillo Department of Economics and Finance, University of Louisiana at Lafayette, Lafayette, LA, USA Michael Pretes Department of Geoscience, University of North Alabama, Florence, AL, USA Adam Prince University of South Alabama, Mobile, AL, USA

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Thomas J. Prusa Department of Economics, New Jersey Hall, Rutgers University, New Brunswick, NJ, USA Amy Rankine Centre for Communication, Cultural and Media Studies, Queen Margaret University, Edinburgh, UK Michal Semian Faculty of Science, Charles University, Prague, Czech Republic Andrey Felipe Sgorla University of Gastronomic Sciences of Pollenzo, Bra, Italy Bridget Shaffrey Geography Department, Durham University, Durham, UK Elitsa Stoilova Ethnology Department, University of Plovdiv, Plovdiv, Bulgaria Craig A. Talmage Entrepreneurial Studies, Hobart and William Smith Colleges, Geneva, NY, USA Jason E. Taylor Department of Economics, Central Michigan University, Mount Pleasant, MI, USA Ana Tominc Centre for Communication, Cultural and Media Studies, Queen Margaret University, Edinburgh, UK Nicholas Tyack University of Saskatchewan, Saskatoon, Canada Sven Van Kerckhoven Brussels School of Governance, Brussels, BE, Belgium Bren Vander Weil Department of Geography and Environmental Studies, Texas State University, San Marcos, TX, USA Nadine Waehning School for Business and Society, University of York, York, UK Gary A. Wagner Department of Economics and Finance, University of Louisiana at Lafayette, Lafayette, LA, USA Bart Watson Brewers Association, Boulder, CO, USA Victoria K. Wells School for Business and Society, University of York, York, UK C. C. Wharram Eastern Illinois University, Charleston, IL, USA Richard White College of Business, University of Alabama in Huntsville, Huntsville, AL, USA Delorean S. Wiley Department of Geography and Environmental Studies, Texas State University, San Marcos, TX, USA Jakub Wyszomierski Department of Geography, University College London, London, UK

Editors and Contributors

Expanding Geographies of Beer Nancy Hoalst-Pullen and Mark W. Patterson

Abstract

Geography and beer are inextricably linked, as beer and its ingredients—water, malted grains, yeast, and bittering agents like hops (Humulus lupulus)—reflect the locations in which they are made, and the societies that make them. Supported by Nave et al.’s (2022) findings, we reiterate how academic research on “beer geographies” has expanded since 2015 and recognize the nuances and intersections researchers have pondered over the last decade. Moreover, we provide a short overview of how geography has influenced beer styles and the lexicon used in identifying them. The chapter presents the rationale for the three sections of this volume—policies, perceptions, and place—and provides a brief synopsis of each chapter, all of which contribute to our ever-expanding stories, appreciation, and understanding of beer geographies. Keywords

Geography



Beer

Policies




Perceptions




Place

Introduction Geography is key to understanding the intersections, nuances, and importance of beer and brewing. This line of thought seems self-evident nowadays—even glaringly so with the flourishing and multifaceted routes current

N. Hoalst-Pullen
M. W. Patterson (&) Department of Geography and Anthropology, Kennesaw State University, Kennesaw, GA, USA e-mail: [email protected] N. Hoalst-Pullen e-mail: [email protected]

researchers and academics have produced and published on the subject—but it wasn’t always. Our first edited volume on the topic, entitled Geography of Beer: Regions, Environment, and Societies (2014), was an incredibly difficult volume to put together; namely, because there weren’t many individuals (especially geographers) who dedicated their time and attention to studying these intersections. Indeed, few researchers were identifying the role(s) that place and space had in the creation, distribution, and interpretation of beer and brewing. The idea of terrior, a defining concept within the wine industry that incorporates the environmental contexts (e.g., climate, topography, soil etc., see White, 2020) that create a “sense of place” or “taste of place,” was only becoming part of the lexicon for beer, thanks in part to the burgeoning craft beer industry. Even discerning the relationships societies have (had) with beer was relatively limited in scope and scale and generally left to a handful of beer writers with a penchant toward all things historical.1 Fortunately, our Internet searches, networking, and old-fashioned pleading were not in vain, and led us to recruit an eclectic assortment of authors whose chapters (and earlier papers) have served to define the varied intellectual landscape of the field (Patterson & Hoalst-Pullen, 2014; see Patterson & Hoalst-Pullen, 2023). In response to the first Geography of Beer (2014) volume, the co-editors attended a meeting of the Wine Specialty Group of the American Association of Geographers (AAG) to make the case for a more panoptic view of geography and alcohol; as a result, the specialty group has

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While plenty of exceptions do exist regarding this comment (the many writings by Michael Jackson being the most glaring example), most academic writings in beer geographies prior to 2015 were a series of one-off papers by authors whose primary research was in another field of study (e.g., Flack 1997; Schnell and Reese, 2003, etc.).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_1

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N. Hoalst-Pullen and M. W. Patterson

Fig. 1 US craft breweries and production data. Source Brewers Association (2023)

expanded its moniker to “Wine, Beer, and Spirits.”2 Publications on the topics of beer geography increased as well since 2014. In fact, Nave et al. (2022) found that publications addressing craft beer grew significantly only after 2015 (which was serendipitously the year after our first volume was published). While this timing may be a coincidence, its increase was in tandem with an explosion in the number of operating breweries in the United States, despite the relatively constant barrel production numbers (Brewer’s Association, 2023, see Fig. 1). Over the last decade or so, beer geography research has become more prolific and nuanced. In fact, a Google Scholar search using the terms “geography” and “beer” returned more than 17,000 hits for research published over the last 5 years.3 A brief look at the first 100 or so papers exhumed a

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The American Association of Geography’s Wine, Beer and Spirits Specialty Group has had several names since its inception in 2003. While the original name was Viticulture and Oenology Specialty Group, this was later simplified to Wine Specialty Group. After the 2015 AAG Annual Meeting in Chicago, the name changed to the Wine Beer and Spirits Specialty Group, keeping ‘wine’ first in the list as an homage to the group’s origins. A couple years later, the name inexplicably changed to the “Geography of Wine, Beer and Spirits.” As of 2022, the name was officially changed back to Wine, Beer, and Spirits. 3 A more straightforward search using “Geography of Beer” as a title for a given publication still provides 588 papers.

cacophony of topics, ranging from the world hop production to the interrelations of craft tourism and social terroir, and from the role of sustainability in the brewing industry to the spatial patterns found among beer brands and their communities. While many of these results are (to no real surprise) published in geography themed books or in geography-oriented journals, more and more beer geography publications are found in journals and/or by authors outside of geography, including sociology, business, food science, sustainability, and health, to name but a few. But why does location matter? And has it always been that way? As geographers, we believe that location does matter, and with regards to beer, it matters a lot. If we look only at the basics—say, global beer production and consumption patterns, as shown in Figs. 2 and 3—there are geographic patterns of where beer is made and who drinks it. China is by far the largest producer of beer (360 million hL), followed by the US (203 million hL), Brazil (143 million hL), and Mexico (135 million hL) (BarthHaas, 2022). Consumption patterns differ with the heaviest drinkers per capita found in the European countries of Czechia, Austria, and Lithuania (Kirin Holdings, 2022). But these current global patterns only scratch the surface on what “beer geography” means, especially if we delve into the policies and politics, the cultural perceptions, and local to global trends that have converged, diverged, and impacted the historical and modern beer landscapes.

Expanding Geographies of Beer

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Fig. 2 2020 global beer production by country (BarthHaas, 2022)

Fig. 3 2020 global beer consumption (Brewers of Europe, 2023; Kirin Holdings, 2022)

Historically, beer and geography were inextricably linked, because where beer was made determined what was made. It dictated what ingredients were used, the methods of production, and as a result, led to discernable tastes specific to a place. The development of global beer culture and the eventual understanding of modern beer styles exist (in part) because of the geographical restrictions inherent to beer’s four basic ingredients—water, grain, bittering agents (commonly hops), and yeast. The distinctiveness of these ingredients (and the manner in which they were produced) provided specific flavor profiles of the beer from the given region. For example, the mineral-ladened waters in and around the town of Burton-on-Trent, Staffordshire, England,

are exceptionally rich in calcium, magnesium, and sulfate4 yet low in sodium and bicarbonate. Created from surface water trickling through the unusually thick bands of gypsum rock on its way to the aquifers, this distinctive water chemistry was prime for high hop utilization, thus making Burton-on-Trent what Brown (2007) calls the “spiritual home” of India Pale Ale. Examples like this are aplenty and helped to contribute to the provenance of beer styles. Porter from London. Lambic

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The dry, slightly sulfureous aroma from Burton beer is known as the “Burton snatch” and is a tell-tale sign of the local provenance.

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from Belgium. Kölsch from Köln (Cologne), Germany. Steam beer from California. A Czech Pilsner. But the establishment of beer styles, something we take for granted today in the beer lexicon, is a recent phenomenon created by Michael Jackson (see Jackson, 1977). To clarify, the concept of beer styles is quite old, with ancient Babylonians brewing around nine types of beer, including “dark sweet beer,” “golden beer,” “red beer,” and “strained beer” in the 3rd millennium BC (Damerow, 2012; Sewell, 2020). For centuries, brewers (and most likely, tax collectors) all over the world could describe their beers, with location playing a prominent role in what their names and associated alcohol levels and flavor profiles would be. A beer from Köln tasted like a beer from Köln. A beer from Flanders tasted like beer from Flanders. Early beer writers tried to categorize beers by “classes,” “divisions,” “kinds,” “species,” “types,” and (like wine) “varieties.” But it was Michael Jackson that coined the word “style”5 in his book The World Guide to Beer (1977) when he stated, “[i]f a brewer specifically has the intention of reproducing a classical beer, then he is working within a style.” It was Jackson —as Garrett (2019) so eloquently wrote—who took the “chaotic uncharted world of beer—and mapped it out.” Jackson connected the dots between beer styles and their geographies and made it into a canon. He salvaged styles from breweries—like saison from Dupont—and made them archetypes. Sometimes, he invented styles that never technically existed, like oud Bruin and Flanders red.6 Most importantly, he gave beer a common language7—one adopted by brewers, beer aficionados, beer writers, beer bloggers, and yes, even beer academics. The timing of The World Guide to Beer (1977) could not have been more perfect—in 1976, the federal excise tax was cut to $7/barrel, which stimulated the rise of small breweries. By 1978, homebrewers in the United States were free from

5 Which Cornell (2011) theorizes is an artifact of his old reporter and editor days that relied on “style guidelines” for writing. 6 Ironically, the confusion still remains, but the trend shows subtle distinctions being made between the styles. The Oxford Companion to Beer (Oliver, 2011) attempted to differentiate the two, but even the write-ups are contradictory, with Oud Bruin noted as “a distant cousin of Flanders red ale” but lacking the “’barnyard’ Brettanomyces character” of a Flanders Red, while the write-up on the Belgian red ale (which we assume is an alias of the Flanders red) states that only “English speakers now differentiate the two styles, the Belgians do not.” Meanwhile, the Brewer’s Association Beer Style Guidelines once considered these under one style name called “Belgian-Style Flanders Oud Bruin or Oud Red Ale;” however, they are currently (as of 2023) deemed two distinct styles, Flanders Red Ale and Oud Bruin (BJCP, 2021). See Mulder (2020) for an enlightening write-up on the reasons and absurdities of beer taxonomy a la Jackson. 7 Although Cornell (2017) notes that the big push to use the “beer style” terminology was by Fred Eckhardt, an American beer writer who authored the book The Essentials of Beer Style: A Catalog of Classic Beer Styles for Brewers and Beer Enthusiasts in 1989.

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federal regulations restricting self-production, as well as the limited beer selections from the few macrobreweries mass-producing adjunct lagers. In the same year, Charlie Papazian formed the American Homebrewers Association. Homebrewers—both individually and collectively—recreated classic beer styles, replicating the variety of flavor profiles from faraway places and bringing the beer geographies into their kitchens, basements and backyards. By 1985, the Beer Judge Certification Program (BJCP) was founded, with Jackson’s writings becoming the framework for the BJCP Beer Style Guidelines, which today has categorized (listed, described, and organized) over 100 styles. By 2007, the Cicerone program—think sommeliers for beer—was certifying individuals at increasing levels of encyclopedic knowledge on acquiring, discerning, and (properly) serving the BJCP-recognized styles of beer. We titled this chapter Expanding Geographies of Beer to underscore how research on beer has been growing, not only in terms of numbers of breweries, but in our lexicon, our ways of approaching geography, and how we define or redefine the modern-day beer landscape, or “beerscapes.” It highlights the unique and pioneering ways of understanding how policies, perceptions, and place impact and influence beer, brewers, and breweries. Our expanding geographies are also reflected in the diversity of authors in this volume— 75 in total, hailing from four continents (North America, Europe, South America, and Asia) and representing everything from business schools to brewery organizations, from ethnology to political science, and from the geospatial sciences to communication and cultural studies. Authors are not just academic researchers or professors, but lawyers, CEOs, musicians, students, independent scholars, historians, business consultants, and even a university president. Indeed, the field of beer scholarship is a highly collaborative one from which an authentic community of scholars has emerged. Collectively, these chapters carve out an understanding of beer geography within a context of social, economic, and political spaces and places.

Organization of the Book The remaining 31 chapters in this volume are divided into three sections—policies, perceptions, and place. Like in previous volumes, we acknowledge overlap among themes and know that the sections are not mutually exclusive.

Policies Alcohol is one of the most highly regulated consumer goods, as evident in Staples et al. (2022). Many of the regulations stem not (so much) from a health and

Expanding Geographies of Beer

well-being perspective, but rather an economic one. Policies and politics have been central to drinking beer, whether it be the bars and taverns where revolutions were sought (see Conroy, 2018) and migrants sought refuge (Hoalst-Pullen and Patterson, 2020), or the regulations of what can be made, how it can be made, where it can be made, and of course, how much it will be taxed (e.g., Miller, 2019). Overall, the chapters in this section look at policies from global to local scales, and how they affect the beer industry, blood alcohol limits, the production, distribution, and consumption of beer, the location of breweries, and even Prohibition itself. This section begins with some historical context, with Cornell providing an historical examination of British tax and legislation from 1643 to 1880 and how brewers worked with in and around such legislation and tax to provide the masses with beer. This follows with a more modern take on British beer tax by Dennett, Wyszomierski, and Gray, with the 2002 Progressive Beer Duty tax and the subsequent expansion and excitement surrounding the London beerscape. The next three chapters showcase research with a more coarse-scale approach, with Van Kerckhoven and O'Dubhghaill’s study on the impacts of Brexit and globalization on the UK beer market. They find the expected diversification of domestic beer production has not occurred. In Chapt. 5, Besedeš and Prusa’s research addresses blood alcohol laws in selected export markets and whether there is a relationship between blood alcohol content laws and EU beer exports. In Chapt. 6, O’Connor and Waehning look at how price and consumer demand for beer are affected by policies in 97 countries and identify region-specific differences. The last chapter geographically situated in Europe is by Christensen and Andersen, who examine regional development policies in the North Jutland region of Denmark and how local breweries tended not to cluster. They advocate that resource-constrained breweries should cluster, as it would help them leverage knowledge and agglomeration advantages. The next set of chapters examine the policies in North America, at province, state, and national scales. Starting with Canada, Picton and Matthews investigate how the Canadian craft beer sector is (re)adapting buildings to be used as breweries. They studied over 1000 breweries across Canada to develop suggestions for policy makers to extend the life cycle of buildings. The following chapter has a uniquely historic focus, as Taylor examines the US beer industry as the Noble Experiment known as Prohibition came to an end in 1933. He found the relative geographic distribution of breweries was largely unchanged from the immediate preProhibition era (1914) to the immediate post-Prohibition era (1933). However, some subtle differences were found, particularly in California and Wisconsin, which had the largest loss and gain, respectively, in terms of shifting brewery

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shares between 1914 and 1933. Next, Balentine and Pretes look at the spatial distribution of state beer laws in the US. Specifically, they focus on legislation on beer excise taxes, homebrewing restrictions, “blue laws” and Sunday sales, and grocery sales. They conclude explanations for each state’s laws are too numerous to attribute to overarching regional characteristics. With a continued examination of the role of legislation of beer distribution, White traces the development of draft beer-related legislation in Alabama counties, from its outright ban to present time where current laws allow for draft beer to be distributed and served on a case-by-case basis. Finally, Dense examines the three-tier system in the US, in which breweries in certain states are required to use a distributor to distribute their beer. The ever-changing legislation at the state level makes this chapter quite timely.

Perceptions Perceptions play a crucial role in the world of beer, influencing how people experience, appreciate, and engage with different beer styles, brands, and overall beer culture. These perceptions can be shaped by several factors, including personal preferences, cultural influences, marketing efforts, and community norms. Geography too plays an important role in shaping perceptions of beer. In certain regions, specific beer styles are deeply embedded in the local culture and traditions, leading to a strong association between the beer and the identity of the community or politics. Locations with rich beer history usually have identifying traits, whether they be authentic (think of a British pub in the UK) or inauthentic (think of an Irish pub anywhere not in Ireland). Marketing efforts also contribute to shaping perceptions of beer, as advertising and branding strategies can influence how consumers perceive a particular beer brand or style. When done “right,” geographically speaking, this marketing can encapsulate the concept of neolocalism, which Schnell and Reese (2014) define as the “conscious attempt of individuals and groups to establish, rebuild and cultivate local ties, local identities and increasingly local economies” (168). In other words, there is a desire for consumers to reconnect with their communities and to learn the stories and landscapes that shape the local sense of place. Small-scale independent breweries with beers that cater to the local community are perceived as “better” because they are deemed authentic (Fletchall, 2016). However, marketing can sometimes create illusions of authenticity, by relating beer to imagery that features pre-industrial craftsmanship, natural settings and landscapes, concrete locations, and historical roots (Gatrell et al., 2018; O’Neill et al., 2014). Perceptions regarding beer geography can also be influenced by cultural, political, or economic changes in

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society, resulting in new identities and perspectives that buck established trends and stereotypes.8 Overall, the chapters in this section look at the perceptions of beer, beer brands, and breweries, and how these perceptions shape the local, regional, and national beliefs and beerscapes. Topics included in this section are wide ranging, from folklore to gendered environments to brewer insights from the COVID-19 pandemic. Neolocalism is an overarching theme for many of the chapters in this section. This sense of place and place attachment starts with Debies-Carl examining local legends and folklore as a signifier of neolocalism. He qualitatively analyzes how breweries use this discourse in their marketing of beer. In the next chapter, Merced uses spatial frameworks of consumption, place-making, and neolocalism of the craft beer industry, to examine naming and image conventions to understand ideologies of Southerness and regional identity across five states in the Southeast US. By situating craft beer as an actor in the cultural economy, he shows how culture, identity, and experiences are commodified in a growing industry. Miller and Bowen explore how with the branding of craft beers in Wales, breweries often use place associations. Their study suggests the use of such associations could be tweaked, depending on local, domestic or international markets. Mars and Talmage use a novel third place branding model, which integrates the notion of third place with narratives of local beer branding. They find the model can inform brewers and community developers how to approach place-making in ways that underscore local consumer connectedness. Czechia, Bulgaria, and Slovakia may have similar historical trajectories—early ties to Roman, Byzantine and Ottoman empires, twentieth century ties to communism, and their modern emergence into the twenty-first century—but the unique beer cultures found in these Eastern European countries make neolocalism necessary to identify the “distinctively local” (Flack, 1997). To begin, Lepič, Semian, Hána, and Materna evaluate the significance, conditions, and spatial distribution of regional identity as a marketing strategy of breweries in Czechia. They find landscape attractiveness is one of the key features used to promote beer. Stoilova conducts an examination of Bulgarian breweries and their pursuit of crafting an authentic local beer flavor. Through a neolocal lens, she explores the process of Bulgarinization observed in craft beers, illustrating how indigenous plants and local symbols are employed to establish an unmistakably Bulgarian character in the realm of craft beer production. Along similar lines, Krogmann, Nemčíková, Oremusová, and

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Marketing efforts to shift perspectives on brand perceptions can altogether backfire too, as is what happened with a 2023 Bud Light campaign and resulting boycott (Saul, 2023).

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Petrikovičová provide a spatial differentiation of craft breweries in Slovakia by examining their history and factors affecting their location. They show through a detailed study of brewery names, labels, and beer names how breweries try to reflect the bond to the environment in which they exist. Identity is key to the next chapters, with Rankine, Tominc, and Irwin comparing the message(s) conveyed in photos of UK politicians and beer. The authors explore the use of beer as a class signifier of British national identity. Next, Wiley and Myles examine how beer is a gendered object, and what effects that has on womxn. They find breweries influence and produce gendered environments through branding, workforce, and community engagement. The final two chapters of this section showcase examples of shifts in perception. Myles, Vander Weil, Watson, and Wiley look at the rise and popularity of low-alcohol and no-alcohol beers by conducting a market analysis of industry craft brewing data. Their study offers insights into the trends toward moderation and what it means to be “sober curious” within the US craft beer industry. Finally, Gray and Tyack investigate steps breweries in Saskatchewan undertook to survive the COVID-19 pandemic. The brewers’ perception of issues provided valuable insight in developing plans to not only weather the pandemic, but even in some cases to expand operations.

Place Beer not only plays a role in many cultures but has had a treasured place within many societies over the centuries. Beginning in Mesopotamia and establishing its modern existence as a “craft,” beer has ebbed and flowed through the centuries in a manner that reflects not only its local presence throughout the world (Arthur, 2022), but as a medium in the global diaspora (and colonization) of people (e.g., Cornell, 2020) and even as an extension of religion itself (Guerrero, 2022). How we interpret “beer places” is wide-ranging and scale dependent. From traditional British pubs with their wooden interiors and cozy nooks to vibrant beer halls in Germany where maßkrüge clink with cheerful toasts, modern beer places add a distinct flavor to the beer-drinking experience. Locally, breweries have become vibrant social spaces and cultural hubs, where beer lovers can connect with the brewing process, engage in tastings, and learn about different beer styles. As we scale up, beer places show spatial trends, clustering in urban areas (see Nilsson et al., 2019; Wojtyra et al., 2020) and taking on the preferences of the region (Zook and Poorthuis, 2013). With an increasing number of breweries found worldwide, it is no surprise that (in the United States, at least), most people live near a brewery (Patterson et al., 2022).

Expanding Geographies of Beer

But regardless of the scale of examination, beer and place are interwoven. The diasporas of people to distant lands include the knowledge and transculturation of brewing, beer styles, and beer culture (Patterson et al., 2020). In many cases, beer helps to forge social bonds which in turn define a place. A classic example is Oktoberfest, which originally celebrated a royal marriage, but is now a festival synonymous with Munich and beer (Hoalst-Pullen and Patterson, 2017). From various perspectives, the chapters in this section examine how beer and place share a unique bond. We begin this section with a chapter from Deal, who looks at geographic names of historical breweries in the US. Using spatial statistics, he found pre-Prohibition breweries with European names were clustered in the Northeastern and Midwestern United States, but breweries with non-local US names were clustered in the Western United States. The next two chapters examine the roles that ingredients play in the understanding of place. Using an evolutionary economic geography model, Hynes, Buarque, Davies, and Kogler identify which ingredients noted in a regional beer recipe database are most central to certain beer styles. In the next chapter, Massey and Higgins delve into the relationship between geography and brewing, examining how place manifests and disappears in the realm of beer. They investigate the intriguing dynamic of producing beers in a regional style, even when situated outside the specific geographical area, and the subsequent transformation and reimagining of beer geographies. Employing the Reinheitsgebot–the Bavarian purity law established in 1516–as their guiding principle, they explore the geographical dimensions of barley, hops, yeast, and water. However, not all places and spaces are harbingers of a flourishing beer revolution. Shaffrey uses the lenses of geographies of ruination, deindustrialization, and development to explore how the closure of the only pub impacts a local community. Her research illustrates that everyday spaces like village pubs embody an intersecting, multi-scalar politics, and act as sites of resistance against dominant, hierarchical narratives of deindustrialized places. While some places may have lost their only brewery, other places never had one. Prince et al.’s narrative shows how the creation of a local beer society in a craft beer desert evolved to be more than about beer. The philanthropic efforts of their society underscore how beer, place, and circumstance merge to do good. The establishment of beer places continues with Ferreira and Long’s chapter, where they interview brewers in rural China to uncover what role breweries play in the country’s rural development efforts. They find structural barriers and cultural differences facing brewers could be simple growing pains in an industry that is gaining momentum outside of major cities. Sgorla investigates how craft breweries transformed the Anchieta District, in Porto Alegre, from an

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abandoned and impoverished area to a thriving craft brewery hub. He focuses on collaboration between breweries and government authorities through tax reductions and laws that stimulate brewpubs opening to promote beer tourism. Callais, Portillo, and Wagner examine the impact of location on short-term rental properties in New Orleans, specifically those located near new breweries openings. Using nine brewery openings they find average daily rental rates do not increase significantly, but monthly revenue and occupancy rates do. The final chapter by Wells et al. addresses place as an underappreciated element of pub visiting behavior. Their empirical evidence shows that proximity plays a key part in pub visiting decisions and that consumers will often visit pubs close to their home or other significant locations.

Final Musings Beer is a confluence of terroir, creativity, and culture. It not only reflects society—historically and today—but is a catalyst for new and expanding ways of seeing the world. It is hard to believe that nine years ago, we published the first volume of The Geography of Beer. Many of the chapters now seem like established knowledge in the field. Yet in 2014, this field and its accompanying jargon were novel insofar as they weaved together what was once thought of as disparate subjects that weren’t integrated (well, if at all) into the academic realm. This 2014 volume remains relevant9 almost a decade later because the topics within the chapters remain relevant—the genesis of beer, the geographic appellations of traditional styles, the global hop, the sustainability trends in the brewing industry, the origins and diaspora of IPA, the globalization and consolidation of the beer industry, and the place-based identities (neolocalism) of craft beer. We believe the same will go for this volume, which contains chapters focusing on policies, perceptions, and place. Each influences the others. Policies are influenced by perceptions and place, as perceptions and policies affect place. And place and policies impact perceptions. Indeed, the three are as intertwined as beer and geography are. And although these ideas of policies, perception, and place—in addition to propaganda, prohibition, politics, among other alliterative words—came up almost as soon as the first volume was published, we had to wait until now to assemble these chapters. Why? Because a decade ago, there weren’t enough scholars to make the connections between these

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As of Spring 2023, the publisher’s website shows the digital version of the book being accessed over 100,000 times (https://link.springer. com/book/10.1007/978-94-007-7787-3).

8

different areas of thought. In fact, this wasn’t possible even a few years ago, as our second volume, The Geography of Beer: Culture and Economics (2020), was supposed to include policies. With one exception,10 it didn’t. Beer geographies hadn’t quite expanded that far. When it comes to the “craft beer revolution” and the prolific rise of independent microbreweries, nine years seems like a long time. When we started working on the first volume of The Geography of Beer, it was 2012 and there were 2670 breweries in the US (Brewers Association, 2023) and 3458 breweries in Europe (Van de Walle, 2014). As we finalize this third volume for publication in 2023, there are 9709 US breweries and 9288 European breweries. The upsurge in breweries has brought with it the prolific rise in beer scholarship—beer-related books (academic and non-academic), special issues in journals, journal articles, blogs, trade magazines, websites, conferences, and tastings. With this expansion—of breweries and beer-related popular and academic publications—is an increasing lexicon that has adapted to growth and change. Indeed, the knowledge and research on beer geographies (and beer in general) seem exponential. We hope you enjoy reading this volume as much as we enjoyed serving as editors.

References Arthur, J. W. (2022). Beer: A global journey through the past and present. Oxford University Press. BarthHaas. (2022). BarthHaas Report 2021/2022. https://www. barthhaas.com/resources/barthhaas-report#!beer-production BJCP (2021). 2021 Style Guidelines: Beer Style Guidelines. https:// www.bjcp.org/bjcp-style-guidelines/ Brown, P. (2007). Burton-on-trent—The world’s most important beer town. All About Beer Magazine 28(1). https://allaboutbeer.net/ article/burton-on-trent%E2%80%94the-worlds-most-importantbeertown/#:*:text=Just%20over%20a%20century%20ago,imitated %20globally%2C%20but%20never%20bettered Brewers Association. (2023). www.brewersassociation.org. Brewers of Europe. (2023). https://brewersofeurope.org/site/countries/ key-facts-figures.php Conroy, D. W. (2018). In Public Houses: Drink and the Revolution of Authority in Colonial Massachusetts. Omohundro Institute and UNC Press. Cornell, M. (2011). Michael Jackson and beer styles. Brewing History 139:12–18. http://www.breweryhistory.com/journal/archive/139/ Cornell.pdf Cornell, M. (2017). Who was Michael “The Beer Hunter” Jackson. c/o Hops. https://cohops.se/who-was-michael-the-beer-hunter-jackson/ #:*:text=The%20big%20push%20to%20the,for%20Brewers% 20and%20Beer%20Enthusiasts

The exception is the final chapter in the volume by Bart Watson (2020), which looked at the patterns of brewery density through a political lens, discovering how economic interests, political coalitions, and regulatory conditions created long-term advantages for breweries in leading states. 10

N. Hoalst-Pullen and M. W. Patterson Cornell, M. (2020). Porter for the geography of beer. In N. Hoalst-Pullen & M. Patterson (Eds.), The Geography of Beer: Culture and Economics (pp. 7–22). Springer. Damerow, P. (2012). Sumerian beer: The origins of brewing technology in ancient Mesopotamia. Cuneiform Digital Library Journal, 2012, 2. Flack, W. (1997). American microbreweries and neolocalism: “Ale-ing” for a sense of place. Journal of Cultural Geography, 16(2), 37–53. https://doi.org/10.1080/08873639709478336 Fletchall, A. M. (2016). Place-making through beer-drinking: A case study of Montana’s craft breweries. Geographical Review, 106, 539–566. https://doi.org/10.1111/j.1931-0846.2016.12184.x Garrett, J. (2019) TL; DR—Tracing the origins of beer language, from Michael Jackson to Emojis. https://www.goodbeerhunting.com/ blog/2019/9/23/tldr-tracing-the-origins-of-beer-language-frommichael-jackson-to-emojis Gatrell, J., Reid, N., & Steiger, T. (2018). Branding spaces: Place, region, sustainability and the American craft beer industry. Applied Geography, 90, 360–370. https://doi.org/10.1016/j.apgeog.2017.02. 012 Guerrero, F. (2022) Baptized by beer: Continuity and change in the religious use of alcoholic beverages in medieval Norway and Iceland. In J. A. Geck, R. O’Neill, & N. Phillips (Eds.), Beer and brewing in medieval culture and contemporary medievalism. The new middle ages. Palgrave Macmillan. https://doi.org/10.1007/9783-030-94620-3_4 Hoalst-Pullen, N., & Patterson, M. (2017). National Geographic Atlas of Beer: A Globe-trotting Journey Through the World of Beer. National Geographic. Hoalst-Pullen, N., & Patterson, M. (2020). The Geography of Beer: Culture and Economics. Springer. https://doi.org/10.1007/978-3030-41654-6 Jackson, M. (1977). The World Guide to Beer. Courage. Kirin Holdings. (2022). News release. https://www.kirinholdings.com/ en/newsroom/release/2022/1223_01.html Miller, A. J. (2019). Crafting better industry: Addressing problems of regulation in the craft beer industry. University of Illinois Law Review, 4, 1353–1384. Mulder, R. (2020). Flemish brown, red or red brown? How Michael Jackson invented a beer style out of thin air. https://lostbeers.com/ flemish-brown-red-or-red-brown/ Nave, E., Duarte, P., Rodrigues, R. G., Paço, A., Alves, H., & Oliveira, T. (2022). Craft beer—A systematic literature review and research agenda. International Journal of Wine Business Research, 34(2), 278–307. https://doi.org/10.1108/IJWBR-05-2021-0029 Nilsson, I., Smirnov, O., Reid, N., & Lehnert, M. (2019). To cluster or not to cluster? Spatial determinants of closures in the American craft brewing industry. Papers in Regional Science, 98, 1759–1778. https://doi.org/10.1111/pirs.12434 Oliver, G. (Ed.). (2011). The Oxford Companion to Beer. Oxford University Press. O’Neill, C., Houtman, D., & Aupers, S. (2014). Advertising real beer: Authenticity claims beyond truth and falsity. European Journal of Cultural Studies, 17(5), 585–601. https://doi.org/10.1177/ 1367549413515254 Patterson, M., & Hoalst-Pullen, N. (2014). Geography of Beer: Regions, Environment, and Societies. Springer. https://doi.org/10. 1007/978-94-007-7787-3 Patterson, M. and Hoalst-Pullen, N. (2023). Geographies of beer. Oxford Bibliographies. https://www.oxfordbibliographies.com/display/ document/obo-9780199874002/obo-9780199874002-0252.xml Patterson, M., Hoalst-Pullen, N., & Batzli, S. (2020). Migration and the evolving landscape of U.S. beer geographies. In Myles (Ed.), Fermented Landscapes (pp. 127–152). https://doi.org/10.2307/j. ctvwh8f20.12

Expanding Geographies of Beer Patterson, M., Hoalst-Pullen, N., & Chu, W. (2022). 10 miles from a brewery: Population demographics and beer consumption patterns in the United States. The Geographical Bulletin., 63(1), 31–38. Schnell, S. M., & Reese, J. F. (2003). Microbreweries as tools of local identity. Journal of Cultural Geography, 21(1), 45–69. https://doi. org/10.1080/08873630309478266 Schnell, S. M., & Reese, J. F. (2014). Microbreweries, place, and identity in the United States. In Patterson and Hoalst-Pullen (Eds.), Geography of Beer: Regions, Environment and Societies (pp. 167– 187). Springer.https://doi.org/10.1007/978-94-007-7787-3_3 Sewell, S. (2020). The spatial diffusion of beer from its sumerian origins to today. In Patterson and Hoalst-Pullen (Eds.), Geography of Beer: Regions, Environment and Societies (pp. 23–29). Springer. https://doi.org/10.1007/978-94-007-7787-3_3 Staples, A. J., Chambers, D., & Malone, T. (2022). How many regulations does it take to get a beer? The geography of beer regulations. Regulation & Governance, 16, 1197–1210. https://doi. org/10.1111/rego.12403 Saul, D. (2023). Anheuser-Busch stock enters bear territory amid anti-trans bud light backlash. Forbes. https://www.forbes.com/sites/

9 dereksaul/2023/05/31/anheuser-busch-stock-enters-bear-territoryamid-anti-trans-bud-light-backlash/?sh=5fc1ec641bfe Van de Walle, M. (2014). Beer statistics: 2014 edition. The Brewers of Europe. https://brewersofeurope.org/uploads/mycms-files/documents/publications/2014/statistics_2014_web_2.pdf Watson, B. (2020). Leaders and laggards in U.S. brewing: political trajectories and brewery density. In Hoalst-Pullen, N., & Patterson, M. (Eds.), The Geography of Beer: Culture and Economics (pp. 7– 22). Springer. https://doi.org/10.1007/978-3-030-41654-6_16 White, R. E. (2020). The value of soil knowledge in understanding wine terroir. Frontiers in Environmental Science. https://doi.org/10. 3389/fenvs.2020.00012 Wojtyra, B., Kossowski, T. M., Březinová, M., Savov, R., & Lančarič, D. (2020). Geography of craft breweries in Central Europe: Location factors and the spatial dependence effect. Applied Geography. https://doi.org/10.1016/j.apgeog.2020.102325 Zook, M., & Poorthuis, A. (2013). Offline brews and online views: Exploring the geography of beer tweets. In The Geography of Beer: Regions, Environment, and Societies (pp. 201–209). https://doi.org/ 10.1007/978-94-007-7787-3_17

Policies

Tax and Legislation and Their Impact on the British Brewing Industry 1643 to 1880: From Civil War to the Free Mash Tun Martyn Cornell

Abstract

Keywords

From the introduction of a duty on beer during the time of the English Civil War in the 1640s, brewers have reacted to attempts by the state to pass legislation affecting their industry in a range of ways. Tax, legislation and revenue authority policies influenced and altered brewing and malting methods and beer styles in both Britain and Ireland, as brewers and maltsters sought to deal with the restrictions that legislation and regulation placed upon them, and endeavored to work around these restrictions, legally and, sometimes, illegally. They used their political levers—many in the trade were also members of parliament, with access to the government at the highest levels—to try to alter and influence government strategy around tax and legislation as it affected the brewing and malting industries. Attempts to mitigate higher levels of tax led to innovations in brewing styles that had a lasting effect, not least in the development of porter from London Brown Beer at the beginning of the eighteenth century, initially an attempt to cut costs. Brewers found themselves in conflict with excise authorities determined to maximize government revenue, as with, for example, the long series of battles over porter coloring from the 1780s to 1819. Occasionally, however, legislation worked in brewers’ favor, either in unintended manners, as with the Beerhouse Act of 1830, which eventually enabled them to build up empires of tied houses, or in ways that encouraged innovation and experiment, as with Gladstone’s Free Mash Tun Act of 1880, which permitted new ranges of ingredients to be used in brewing.

Excise Sugar






Malt Duty Raw grain

Tax

Porter




Three-threads




Early Legislation The earliest interference by the state in the brewing industry was concerned with consumer protection, most notably to ensure that brewers (and brewsters) did not over-charge for their product. The assize of ale came into being at the end of the twelfth century in England alongside the existing assize of bread,1 its function to tie the price of ale to the price of grain, so that, e.g., when wheat cost eight shillings a quarter, a gallon of ale should sell for one penny.2 Breaking the assize was punishable by a session in the cucking stool, where offenders were tied up and dipped into a river or pond,3 or by a fine. However, municipal records from the end of the thirteenth century show so many brewers and (mostly) brewsters being fined, with, e.g., 57 cases entered into the court rolls in just one session in Norwich in 1289, and 121 brewers bought before the court in Newark in 1293,4 that it is clear the assize of ale had become a de facto tax on brewing.5 It would be another 350 years before taxes on brewing became formalized. On May 16, 1643, during the First English Civil War, the English Parliament, in an attempt to raise money to finance its struggle with King Charles I, passed an ordinance putting a duty of two shillings (2s) a barrel on all ale and beer having a value of six shillings or more before duty, made by commercial brewers and 1

Rosenthal (1964), p. 416. Britnell (1996), p. 95. 3 Bennett (1996), p. 104. 4 Rosenthal, pp. 417–8. 5 Britnell, p. 96. 2

M. Cornell (&) Brewery History Society, London, UK e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_2

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domestic brewers, and six pence (6d) a barrel on all ale and beer valued at under six shillings a barrel. Two years later, a 5% ad valorem tax was placed upon hops (altered in 1657 to two shillings per hundredweight). The same year, 1645, Charles I issued a warrant from his headquarters in Oxford declaring that the Royalists would impose the same excise duties on ale and beer as the Parliamentarians.6 The taxes on domestically brewed beer were removed in 1653, but at the Restoration in 1660, when Charles II took his place on the throne, although the tax on hops was removed, the duty on ale and beer continued, despite the Brewers’ Company in London petitioning Parliament for the removal of “the illegal and intolerable burden of Excise”.7 In 1671, the tax on strong ale and beer rose to 3s 3d a barrel, and on “small” ale and beer to 9d a barrel. Nine years later, the duty rates dropped back to their former levels. However, in 1689, when William of Orange and his wife Mary replaced Charles II’s brother James II on the throne of Great Britain in the “Glorious Revolution”, ale and beer duty was restored to its 1670s levels, as the new regime sought to finance wars not only against the deposed James, but against the France of Louis XIV, in what was later called the Nine Years’ War8 (known in North America as King William’s War). The following year, 1689, ale and beer taxes were doubled, to 6s 6d on a barrel of strong and 1s 9d on a barrel of small. They dropped by more than a quarter, to 4s 9d and 1s 3d, respectively, in 1690, then climbed to 5s 6d and 1s 6d in 1691, falling back to 4s 9d and 1s 3d in 1693, where they stayed until 1710. Meanwhile in 1697, a new tax was imposed on malt, as a rate of 4s 6d a quarter.9

Three-Threads The rises in duty encouraged brewers, and retailers, to perpetrate a fraud on the revenue that involved mixing extra-strong beer or ale with small beer or ale. Excise officials had no way of differentiating between extra-strong beer and “ordinary” strong beer, and nor would they have, until the perfection of the hydrometer/saccharometer in the 1770s and 1780s.10 The result was that extra-strong ale and beer paid the same tax as “ordinary” strong ale and beer. It was possible, therefore, to take a barrel of extra-strong beer and two of small beer, on which a total of 7s 3d of tax had been paid, and mix them to make three barrels each equal in strength to common strong beer, which should have paid tax

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of 14s 3d in total. This saving of 2s 4d a barrel in tax was only a fifth of a penny a (quart) pot, or thereabouts, but it was still 6% or so extra profit. The excise authorities were aware of this fiddle, and laws seeking to ban the mixing of different strengths of worts or beers were passed by Parliament in 1663, in 1670–1, 1689, 1696–97 and 1702. Brewers and retailers could be (in William III’s time) fined £5 per barrel for beer so mixed, when a barrel of strong beer retailed for less than a fifth of that sum. However, the threat of fines did not stop brewers and retailers from mixing extra-strong and weak. At some point between 1698 and 1713, judging by internal evidence, an anonymous Excise or Treasury official wrote a manuscript titled An account of the losse in the excise on beer and ale for severall yeares last paste, with meanes proposed for advanceing that revenue.11 The author gave the prices and likely strengths of different beers and ales: “Very Small Beer” retailed pre-tax at 3s a barrel, and paid (since 1693) 1s 3d a barrel tax. “Common Strong Beer and Ale,” made from “four Bushels of malt,” suggesting an original gravity of 1075 to 1085, sold for 18s a barrel and paid, at the time, 4s 9d a barrel tax. “Very Strong Beer or ale the Barrel being the Strong from 8 Bushels,” suggesting a huge original gravity, perhaps north of 1160, sold for almost twice as much, £3 a barrel, but still paid the same 4s 9d a barrel tax as common strong beer or ale. The fact that very strong brews paid the same tax as “common standard strong drink,” the anonymous author wrote, had “begot a kind of trade of Defrauding,” and he declared that “the notion thereof and profit thereby” of mixing very strong ale or beer with small beer and selling it as common strong ale or beer “has been of late and now is generally known,” and “the traders therein have turned themselves more and more to the practice of brewing it,” “very strong drink being now commonly a party of the Brewers Guiles, and the whole of many who Brew nothing else.” The result, he said, was that “the consumption of it is everywhere, which you have under several odd names, as Two Threades, 3 Threades, Stout or according as the Drinker will have it in price, from 3d. to 9d. the quarte.” A second publication, written by a former General Surveyor of Excise, Edward Denneston, “Gent,” which came out in 1713, also attacked the practice of selling a mixture of small and extra-strong beer under the name “three thrids” (sic). The 40-page pamphlet, titled A Scheme for Advancing and Improving the Ancient and Noble Revenue of Excise upon Beer, Ale and other Branches to the Great Advantage of Her Majesty and the general Good of her Subjects,12

6

Monckton (1966). Corran (1975), p. 89. 8 Monckton, p. 203. 9 Ditto. 10 Mathias (1959), pp. 70–1. 7

11 Anonymous, An account of the losse in the excise on beer and ale for severall yeares last paste, with means proposed for advanceing that revenue, British Library, Lansdowne MS 829/6 Fo. 108. 12 Denneston (1713).

Tax and Legislation and Their Impact …

claimed that the country was losing £200,000 a year in unpaid tax—equivalent, in relative terms, to more than £4 billion today—because of the frauds perpetrated by brewers and publicans. Denneston claimed that once, when he was working for the Revenue in London as General Surveyor, he visited Well Close in Goodman’s Fields, just to the east of the Minories, and on the edge of the City, on official business. There, he said, he spotted a sign outside the Fortune of War pub in Well Close which said: “Here is to he Sold Two Thrids, Three Thrids, Four Thrids, and Six Thrids.” “My Curiosity up on this Subject, led me into the House,” Denneston said. “I call’d for my Host, desir’d to know what he meant by the several sorts of Thrids? He answer’d, That the meaning was, Beer at Twopence, Threepence, Fourpence, and Sixpence a Pot, for that he had all sorts of Drink, and as good as any in England; upon which I tasted all the four sorts, and found they were all made up by Mixture, and not Beer intirely Brew’d; upon which I order’d the Surveyor of that Division to go and search that House, where he found only two sorts of Drink, viz. extraordinary Strong Beer, and Small, so that according to the Price he Mixt in Proportion; the same Fraud being more or less practis’d through the Kingdom.” “Three-threads at 3d a quart” is one of the beers being drunk in the time of Queen Anne mentioned by the anonymous brewery worker who had a letter published in the London Chronicle in 1760 under the pseudonym “Obadiah Poundage” that gave a history of the development of porter13 Poundage’s mention of three-threads was picked up 40 years later by a journalist called John Feltham, who wrote an article published in the Monthly Magazine and British Register in 1802 which claimed that porter had been invented to replace three-threads, which, Feltham asserted, was “a third of ale, beer, and twopenny”, drawn by landlords from three separate casks.14 Unfortunately, Feltham’s confusion over the true nature of three-threads has been repeated endlessly over the past two centuries, and three-threads has been tied in to the history of porter, though the two beers actually had nothing to do with each other. Three-threads is mentioned several more times during the eighteenth century, but by 1800, the practice of retailers mixing extra-strong and small beers and ales had evidently long ceased, which is presumably why Feltham was confused over the true nature of the mixture. All the same, it is clear that the imposition of taxes on ale and beer caused distortions in the market as brewers and retailers sought ways and means to lessen their tax burden, by illegally mixing different strengths of beer.

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Tax and the Invention of Porter It was the same pressures from higher taxes, and also pressures from rising commodity prices and other higher costs, that led brewers in London to develop, from the brown beer that was the most popular drink in the city at the time, the beer that became known as porter. The taxes on beer and ale rose again in 1710, to 5s for strong and 1s 4d for small. At the same time, taxes were climbing on coal, an important cost for big London brewers, who might have as much as 400 cauldrons, perhaps 560 tons of coal on their premises.15 A “war tax” of 5s a cauldron was imposed on water-borne coal in 1695, and another 3s per cauldron tax was imposed on top in 1710, ostensibly to build 50 new churches in London (in fact only ten were ever built).16 The London brewers worked on ways to keep their costs down and enable them to maintain the same retail price as before (which, legally, under the Assize of Ale, in force until 1761, they were obliged to do: prices could not be raised without the permission of the magistrates17). They began to cut the malt content, which of course made the beer weaker; increase the hop content, to boost the protection in weaker brews that hops give against organisms that sour beer; and use cheaper, wood-fired, smoky malts, which meant the beer needed long storage to lose its smoky flavor and become drinkable. According to William Ellis, writing in 1737, brown malt dried over wood was two shillings a quarter cheaper than malt dried over straw, and despite its “ill Taste”, London brewers of “Butt-keeping beers”, or porter, still used “many thousand quarterns of this malt” because the smoky taste “is lost in nine or twelve months, by the Age of the Beer, and the Strength of the Great Quantity of Hops that were used in its Preservation.”18 The serendipitous result of long aging of a well-hopped beer was the development of masses of estery flavors thanks to the ubiquitousness of Brettanomyces yeasts in wooden brewing vessels, which, given enough time (generally six months or more), munched up the higher sugars ordinary brewer’s yeast, Saccharomyces cerevisiae, left behind. At the same time, Brettanomyces added extra depth to the beer’s flavors, while spoilage bacteria such as pediococcus were kept at bay by the hops. The brewer and writer Ray Anderson wrote in 2003: “In more modern brewers’ parlance, porter “drank above its gravity” because of its ester content. The combination of relative cheapness and desirable

15

Mathias, p. 9. T. C. Hansard, The Parliamentary Debates from the Year 1803 to the Present Time, London, England, volume 40, p. 569, House of Commons debates 20 May 1819. 17 Monckton, p. 151. 18 Ellis (1742), pp. 13–14. 16

13

London Chronicle, London, England, November 1, 1760, pp. 4–5. Monthly Magazine and British Register, London, February 1, 1802, p. 42.

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flavor made porter irresistible to the urban laboring classes.”19 The development of porter was thus an indirect result of the rises in taxes on beer and ale and the commodities used to brew, and brewers’ desire to lower their costs.

Arthur Guinness and the Move to Porter Brewing In 1776, the excise authorities made the same accusations against the brewers of Cork that Edward Denneston had made against the brewers of London 63 years earlier, that they were defrauding the revenue by mixing extra strong ale with small beer and selling the mixture as “ordinary” strong beer, paying as a result less tax than they ought to. A bill was brought before the Irish parliament bringing in a ban for brewers in Cork and Dublin on making both strong ale and small beer (country brewers were exempt): they could only make one or the other, thus removing any chance for the two brews to be mixed together. Arthur Guinness of the St James’s Gate brewery in Dublin was called to give evidence when the change in the law came before the Irish House of Commons in February 1776, and spoke for four hours against the measure, declaring that whatever they did in Cork, no such fiddles involving mixing different strength beers had been going on in Dublin, and if the measure was passed, it would be “impossible for either the ale or small-beer brewery to exist in Dublin.”20 The problem for Dublin’s brewers of strong ale was that being able to make and sell small beer as well, by taking multiple ever-weaker mashes off the grain, they had already mashed once or twice to make strong ale, lowered their overall costs and brought them extra revenue and profits. If they could not make small beer any more, their costs would go up and their sales and profits would go down. Legislators rejected Guinness’s argument and the measure passed into law, becoming effective in September 1778. Guinness’s reaction to the ban on brewers like him brewing small beer alongside strong ale was, it appears, to start brewing porter. As an “entire” beer, using all the products of multiple mashes in one drink, porter solved the problem of not being able to use weaker worts obtainable from multiple mashes of the same goods to make small beer. Thus if the St James’s Gate brewery was not brewing porter before 1778, the change in the law made it economic folly not to begin making entire-butt black beer. Arthur Guinness was almost certainly making porter by 1779, when he became one of the two brewers, probably as the porter

M. Cornell

specialist, to Dublin Castle, the seat of Irish government, home to the Lord Lieutenant of Ireland (the other brewer was a known small-beer manufacturer).21 In 1783, Guinness told a parliamentary committee in Dublin: “A porter brewer buys none but the best, as none else will answer,”22 indicating he was brewing porter by then. A year later, in 1784, Guinness was specifically named as the supplier of porter to the castle.23 The move into porter brewing by the firm that became the greatest brewers of porter and stout in the world thus appears to be in direct response to changes in legislation.

Malting The desire by governments and the excise authorities to maximize revenue from the malt tax, and eliminate as far as possible efforts to avoid and evade taxation, meant that at one point maltsters were liable to no fewer than 101 different penalties for infractions of the law surrounding malting.24 Malt duty was originally imposed only in England and Wales, but in 1713, an attempt was made to impose it in Scotland. The Scots resisted right up to the highest level, and refused outright to have their malt taxed, even when the government, in 1725, sent two companies of soldiers to Glasgow to assist the Excise officers in enforcing the law. Even when the government finally succeeded in getting Scots maltsters to pay the malt tax, it remained considerably lower than in England and Wales for a hundred years. The tax on malt was assessed by the grain being measured “in couch,” that is after it had been steeped, or soaked in water, and when it was laid in the couch frame, a wooden box between eight inches and 30 inches high (20–90 cm), to begin germinating. Maltsters seeking to pay less tax would “press” the couched grain, to lower its volume, and there were strict regulations against this practice. Another, more technical measure was called “sprinkling”: after couching, the grain is spread out on the malting floor in a layer between three and 15 inches thick (7–40 cm). Many brewers believed that to ensure optimum germination, the grain needed to be wetted after seven days on the malting floor. The excise authorities feared this was a way of avoiding tax, by having the grain measured in the couch for tax purposes before it was properly swollen, and then swelling it more on the floor. Sprinkling was therefore forbidden by an Act passed in 1802 putting up beer duty.25 Maltsters and brewers considered this an unwarranted intrusion on best practice. But to quote the

21

Lynch and Vaizey (1960), p. 71. Lynch and Vaizey, p. 149. 23 Hibernian Journal or Chronicle of Liberty, Dublin, Ireland, Monday 18 October 1784, p. 4. 24 Stopes (1885), p. 608. 25 Matthias, p. 408. 22

19

Anderson (2003), pp. 27–30. Hibernian Journal or Chronicle of Liberty, Dublin, Ireland, Friday February 9, 1776, p. 4.

20

Tax and Legislation and Their Impact …

brewing historian Peter Mathias, “a tax upon domestic manufacture at the point of production inevitably involved the taxation authority in increasing control of the manufacturing process to avoid evasion.”26 The ban on sprinkling did not affect the maltsters of Hertfordshire, specialists in brown and colored malts, who never sprinkled, or their major clients, the big porter brewers of London. But it caused uproar in the rest of the country, and eventually, in 1806, sprinkling was allowed after the grain had lain a certain number of days on the floor.27 However, maltsters continued to be heavily regulated, and in 1812, another Act of Parliament was passed regulating the shape, position and use of cisterns used for soaking the raw grain, and the number and arrangement of the malting floors, with maltings not permitted to be more than five floors high.28 More floors meant more grain could be dried using the same source of heat, and restricting the number of floors raised the production cost of the malt, as the Norfolk maltster Crisp Brown complained to his client, the London porter brewer Samuel Whitbread, in 1812.29 A new Act in 1827 again placed restrictions on everything from the shape and construction of cisterns and couch frames to the keeping of barley books and the regulation of malt stocks, with fines totaling £13,500 for anyone unwise enough to break every law in the act. The need to keep barley books was abolished ten years later, but maltsters continued to be affected by a constantly changing range of laws. Those roasting malt for porter and stout brewing were not immune: the Roasted Maltsters’ Act of 1842 restricted roasting hours to 13 in winter and 14 in summer, and certain trades, such as grocers and druggists, were forbidden to roast malt for sale.30 The result of all this legislation, the malting expert Henry Stopes declared in 1885, was to stifle innovation and experimentation, so that malting was “the one industry which has progressed in scientific development less than any of similar magnitude in Great Britain.”31 Brewing with wheat was common in the Middle Ages, but in 1315, during the reign of Edward II, it was decided that too much wheat was being turned into malt to make ale, and malting with wheat was banned.32 Subsequently, brewers in Britain seem almost never to brew with wheat, at least commercially.

17

Unmalted Grain British brewers throughout the eighteenth century refrained from brewing with unmalted grain, believing that the law did not allow them to do so. The highly experienced brewing consultant George Blake, writing in 1791 after a career that had begun in Ringwood, Hampshire 26 years earlier, certainly believed unmalted barley was banned from the brewers’ mash tuns. In a pamphlet attacking, the inventor John Long over his invention of a method for cooling wort artificially, Blake said: “I think it necessary to premise previous to any further remarks on this Article that by the writer’s frequently adverting to the term raw corn, it seems as if he had placed the brewery on the footing of the malt distillers, who use raw corn or meal with their malt in the mash tun, which the brewer, were he inclined to do it, is by law prevented, a circumstance the writer may not be apprised of.”33 Long was from Ireland, where some brewers did brew with raw grain: David Sherlock, who ran a porter, ale and table beer brewery in South King Street, near St Stephen’s Green in Dublin, told a parliamentary inquiry in June 1807 that he used one third of raw barley in his porter, and one third of raw oats in his table beer. The practice was banned by the Irish Beer Act of June 1809, which, dealing specifically with brewing in Ireland only, said: “No Brewer or other Person or Persons in Ireland making or professing to make Beer, Ale, Porter or Small Beer for Sale shall use any raw or unmalted Corn in the brewing or making of any Beer, Ale, Porter or Small Beer for Sale.” In Britain, however, despite the belief of George Blake, and, apparently, the whole of the British brewing trade, there was no specific ban on using raw grain until the Beer Duty Act of April 1802, which insisted that beer or ale must be “brewed entirely from Malt and Hops” and without “any Material or Ingredient other than Malt and Hops,” under penalty of £100. The law was tested in a court case in January 1811, when Peter Dick, of Robertson’s Close, off Cowgate, Edinburgh, was prosecuted at the Court of Exchequer in the Scottish capital under that Act of 1802 for “manufacturing or preparing from certain ingredients or materials (not being malt and hops) a liquor, to imitate or resemble, or to be used as beer or ale brewed from malt and hops,” namely raw, unmalted barley. After lengthy argument involving heavyweight lawyers on both sides, he was convicted, and had to pay a fine of £200, equal to perhaps £14,000 today.34

26

Ibid., p. 409. Ibid., p. 411. 28 Stopes, p. 14. 29 Mathias, p. 411. 30 Stopes, p. 16. 31 Ibid., p. 18. 32 Ibid., p. 8. 27

33 34

Blake (1791), p. 66. The Edinburgh Advertiser, Edinburgh, Scotland, July 5, 1811, p. 18.

18

M. Cornell

The definitive ban on unmalted grain the United Kingdom only looks to come in the Beer Licenses Act of 1830, Section 17, which declared: It shall not be lawful for any brewer of beer for sale in the united kingdom to have in his or her brewery, or in any part of the entered premises, or in any mill connected with such brewery or entered premises, any raw or unmalted corn or grain whatsoever, either whole or unground or ground or bruised; and that all raw and unmalted corn or grain. Whether whole or unground or ground or bruised. which shall be found in such brewery or premises or mill, and all malted corn or grain, whether whole or unground, or ground or bruised, with which such raw unmalted corn or grain may have been or shall be mixed, shall be forfeited and may be seized by any officer of excise together with all sacks, casks, vessels or packages in which such raw or unmalted corn or grain shall and may be contained, or in which such raw and unmalted corn or grain and the malted corn or grain with which the same may or shall have been mixed shall or may be contained, and every brewer shall for every such offense forfeit the sum of 200l.

The unanswerable question is how differently British brewing, and British beers, might have developed if British brewers HAD been able, like their peers in, to name one country, Belgium, to use raw grain in their mash tuns. In Lambic, one of Belgium’s great specialty beers, e.g., in the nineteenth century unmalted wheat made up 58% by weight of the grist.35 Might such beers have developed in Britain if raw grain had been permitted in grists?

Porter Coloring One of the most important technical advances in the history of brewing was spurred in 1784 with the publication by the Hull-based brewer John Richardson of his book Statical Estimates of the Materials for Brewing.36 Richardson showed brewers that they could use the hydrometer, or as he named the version he used, “saccharometer,” to measure the amount of fermentable extract in raw worts. What the saccharometer did was reveal what poor value the brown malt brewers used to make porter was when compared to pale malt. Good pale malt might give an extract when mashed of 82 pounds per quarter, but high-dried “blown” Ware brown malt from Hertfordshire, of the kind “most sought after” by London porter brewers might give only 56 pounds of extract per quarter, almost a third poorer.37 This revelation resulted in brewers rushing to use as much pale malt in their porters as possible, since it was considerably cheaper, when the yields of fermentable material were taken into account, than brown malt. The problem then was to find a way of providing the color and flavor that

consumers demanded in porter. Most or all of the coloring methods available, however, were illegal, part of the drive by the Excise authorities in Great Britain to ensure that nothing untaxed went into beer, and nothing deceived the consumer as to a beer’s strength. From the 1780s until the end of the 1810s, the history of brewing in Britain was largely dominated by the battle between the brewers, trying to find ways that would not be banned of darkening their pale malt porters, which gave “a far less expense [sic] of materials than when brown malt alone is used”,38 and the Excise authorities, trying to ensure the brewers did not use untaxed and illegal ingredients in their beer. The move to brewing porters with pale malt resulted in the disappearance of the diastatic brown malt that brewers had, until Richardson’s revelations, used to make their porters. Since brown malt was now being used in porter solely to provide color and flavor, it needed to be dried to a darker color, so that it lost diastatic power as it gained coloring power.39 One way to darken porter brewed with pale malt, and give it the “empyreumatic,” roasted flavor drinkers wanted, was to use a substance known as “essentia bina.” This was made by boiling wort, or muscovado sugar, in an iron pot until it was like treacle, and then setting fire to it, and using that to color a mostly pale malt brew. Essentia bina, “double essence” in Latin, was developed around the 1690s, and was banned in 1701, when it was called “essentia bine,” “a late invented liquor or syrup made from malt and water, boiled up to the consistency of melasses,” since it was used by unscrupulous retailers to disguise watered-down brown beer. Brewers faced a fine of £20, later increased to £200, if caught using it40 (Fig. 1). Another coloring agent was “Spanish juice,” licorice boiled in water and then evaporated, though this, too, was illegal. Licorice itself was added to the wort and boiled in the copper: a former Excise officer named Joshua Richards told a House of Commons inquiry into the price and quality of beer in 1818 that small brewers in particular had at one time “frequently” used “a great deal of Spanish juice” and incautiously left the leaves of the licorice plant about the brewery: “Some of them used to boil [licorice root] in the copper, and then it came out with the hops, but I believe they have used nets lately … they hang [the licorice] up in [nets] in the copper when boiling.”41 Other methods of coloring porter included using elderberry juice and molasses. Just as it did a hundred years earlier, the British government looked to the brewers to supply revenue to finance 38

Good et al. (1813), p. 616. Pattinson (2014), p. 11. 40 Pickering (1764), p. 399. 41 The British Press, London, England, Wednesday September 15, 1819, p. 4. 39

35

Mulder (2018), p. 5. Sumner (2013), pp. 93–7. 37 Richardson (1784), p. 161. 36

Tax and Legislation and Their Impact …

Fig. 1 Boiling molasses in an iron pot until it bursts into flames, to make essentia bine, one of the illegal colourings used by porter brewers in the eighteenth and early nineteenth centuries. Picture taken in the Brewhouse at the Governor’s Palace, Colonial Williamsburg, Virginia

its wars. In April 1802, after the Treaty of Amiens had ended 10 years of warfare against revolutionary France, the government put up the tax on strong beer by a quarter, to 10s a barrel, and raised the tax on malt by almost four fifths, to 2s 5d a bushel. Now, more than ever before, brewers needed a way of coloring beers made with better-yielding pale malt so that they looked and tasted as much as possible like porter brewed with 100% brown malt. The next month after the tax rises, the City of London-based druggist and (from 1804) hop dealer Matthew Wood, later Sir Matthew, patented a process for “preparing a color from malt for the purpose of coloring spirits wines and other liquors”42 which involved mashing malt, boiling the extract until most of the water was driven off and then roasting it in iron pans.43 The Commissioners of Excise declared Wood’s coloring just as illegal as essentia bina, and prosecuted brewers who used it, until, in June 1811, doubtless under pressure from the ten or so Members of Parliament who were also brewers (including representatives from at least four of the big London porter breweries, Calvert’s, Whitbread, Meux Reid and Combe Delafield44), the Coloring of Porter Act was passed. This permitted the coloring of porter with “burnt brown sugar and water.” A license to make porter coloring cost £5, and £10 duty was payable on each barrel of coloring.45

19

The Act was repealed after just five years, and from July 6, 1817, even burnt sugar was banned for coloring beer46 However, Daniel Wheeler, a sugar coloring manufacturer off Drury Lane in central London47 unveiled via a patent application a new method of manufacturing coloring from malt, upon which duty had been paid (thus making the coloring legal).48 Brewers only had to use less than 2½% of Wheeler’s patent malt to make porter of the required color.49 The big porter brewers were swift to start using Wheeler’s “patent” malt: Whitbread was brewing with it the year it appeared, 1817, and Barclay Perkins had adopted it by 1820,50 for example. In Dublin, the Plunkett family opened a patent malt manufactory in 1819 to supply the local market.51 However, Wheeler’s patent proved unenforceable, after a coffee roaster in London named Joseph Malins began roasting malt as well, and selling it to brewers for coloring. Malins claimed he was not breaking any patent, as similar coffee roasters had been in use for more than a century before Wheeler’s patent application.52 Wheeler sued and lost, and the patent was declared void in March 1819.53 (All the same, malt roasted to Wheeler’s specifications continued to be called “patent” malt54) The use of “patent” malt by brewers in London, Dublin and elsewhere meant brown or blown malt fell away to, in many places, zero. John Tuck, a London brewer and writer, wrote with some sadness in 1822 that “the real taste of porter, as originally drank, is completely lost … Our ancestors brewed porter entirely with high dried malt; while in the present day, in many houses, high dried or blown malts are entirely omitted.”55 Thus, a drive by the excise authorities to maintain tax revenues by banning untaxed ingredients in beer eventually led to a major change in the recipes for porter and stout, involving the use of roast malt, a practice which continues to this day.

The Beerhouse Act of 1830 In the spring of 1830, the Tory government, led by the Duke of Wellington as Prime Minister, knowing it was facing an automatic general election with the death of the king, George IV, which was expected at any moment, was looking for a piece of popular legislation that, it hoped, would prove 47

Ibid., p. 423, footnote 3. Roberts (1903), p. 186. 49 House of Commons beer quality committee minutes 1819, p. 95. 50 Mathias, p. 423. 51 Faulkner (1888), p. 420. 52 The Globe, London, England, Tuesday, August 18, 1818, p. 3. 53 Morning Advertiser, Monday March 8, 1819, p. 2. 54 See, e.g., Wright (1892), p. 310. 55 Tuck (1822), p. 7. 48

42

Woodcroft (1857), p. 266. Reader Lack (1881), p. 44. 44 Mathias, p. 333. 45 Committee on Beer Materials, Minutes of Evidence Taken Before the Departmental Committee on Beer Materials, App III, London, England, 1899, p. 354. 46 Ibid. 43

20

popular with the voting public and keep it in office.56 It settled on the question of the licensing of inns and alehouses, which was controlled by local magistrates, who were regarded by many as too much in the pockets of the big brewers. Wellington’s government managed to pass that October “An Act to Permit the General Sale of Beer and Cyder in England,” better known as the Beerhouse Act, which allowed any householder to pay just two guineas (£2 2s) for a license to sell by retail ale, beer, porter and cider (but not wine or spirits). The intention was that this would create a new class of licensed premise free from the control of the magistrates and the established breweries. It did not save Wellington, whose government fell the following month. The duty on beer was repealed, for the first time in almost 200 years, probably because collecting it from the thousands of new small brewers, the government hoped to encourage would have proved too costly. At the same time, the Law of Unintended Consequences, which dogs all government attempts to control the drinks trade, meant that the more than 35,000 new beerhouses the act created inside three years (and eventually more than 45,00057) almost all became, eventually, part of the brewers’ tied estates that the act was supposed to destroy,58 as beer house owners became indebted to their beer suppliers and mortgaged or sold their premises to them. Another by-consequence of the Beerhouse Act was that the big London brewers started making ale as well as porter and stout, and cutting their prices, to ensure they captured as much as possible of the new beerhouse trade. This may have been prompted by rumors circulating in the weeks before the new act came into force that “a great many new breweries” were being planned, and “within three weeks not less than 150 houses in this branch of trade will be opened within ten miles of London.”59 Whatever the reason, the biggest breweries sent round a joint circular to their customers announcing that they were cutting the prices of all their beers and ales by 12s a barrel, equal to a halfpenny a pint, and a cut of more than a quarter in the case of porter, which was reduced from 45s a barrel to 33s.60 At the same time most of the 11 remaining “principal porter brewers” in London began brewing ale, if not for the first time, then certainly, for most, for the first time in decades, “contrary to ancient custom, and in direct opposition to the established Ale Brewers of the Metropolis,” according to

56

Gourvish and Wilson (1994), pp. 12–13. Ibid., p. 21. 58 Harrison (1971), pp. 81-2. 59 The St. James’s Chronicle, London, England, Tuesday October 5, 1830, p. 4. 60 Ibid. 61 Bell’s Life in London and Sporting Chronicle, London, England, Sunday April 20, 1834, p. 4.

M. Cornell

one indignant writer.61 The newspapers complained that the porter brewers “compelled” their growing numbers of tenants to now take the brewer’s ale, as well as their porter. The porter brewers’ response was that they were brewing ale to make up for the decline in sales of porter. They also wanted to be a “one-stop shop” for the huge numbers of new beerhouses who did not brew their own beer, by being able to supply a beerhouse keeper with both porter and ale, and thus, hopefully, ensuring no other brewer got a foot in the cellar door. Thus, legislation designed as a free trade exercise to open up the market for retailing ale, beer and porter for consumption “on the premises” had the reverse effect, of increasing the size of brewers’ tied estates. At the same time, it caused an unanticipated shift in policy by London’s big porter brewers, who began competing directly with London’s ale brewers, such as Mann and Charrington, who themselves were beginning to expand rapidly as public taste changed toward ale and away from porter.62 This would probably have happened eventually anyway, as new cohorts of drinkers took up drinking mild ale rather than porter, and the porter brewers saw their market disappear, though probably not for another 40 or so years: Reid & Co. of Liquorpond Street was the last brewery in London to make only porter and stout, but began building an ale plant in 1875, stretching down Leather Lane,63 and started selling pale and bitter ales “in large quantities” from 1877.64

The Free Mash Tun Act of 1880 Apart from one brief period in 1812–13 during a time of extremely high barley prices, brewers in Britain were forbidden from using sugar to brew beer with. Unsuccessful negotiations in 1812 about extending the permission for the use of sugar went on at the highest level, with Samuel Whitbread junior, Harvey Combe and Charles Calvert, representing three of the biggest porter brewers in London (and all MPs) meeting the Prime Minister, Lord Liverpool, and Charles Vansittart, the Chancellor of the Exchequer to try to negotiate a deal for continuing the use of sugar in brewing, in order to prevent a rise in the price of beer.65 Brewers were only finally allowed to use sugar after the Brewing from Sugar Act was passed in 1847 granting them permission, a move driven, probably, by the West Indian sugar interests, who still had MPs in the House of Commons and supporters and members in the House of Lords,66 as an

57

62

Gourvish and Wilson, p. 79. The Times, London, England, Tuesday January 4, 1876, p. 16. 64 Barnard (1890), p. 81. 65 Matthias, pp. 234–5. 66 Corran, p. 267. 63

Tax and Legislation and Their Impact …

21

Fig. 2 Important production areas seventeenth to nineteenth centuries

attempt, by widening the market in Britain for sugar, to mitigate the effects of the Sugar Duties Act of 1846, which removed the tariff protection that West Indian sugar had enjoyed.67 Brewers had to pay a duty of 22s 6d for every 180 pounds of sugar used, this being the amount reckoned to be equivalent to a quarter of malt, upon which the tax at the time was 21s 8d. However, for almost 20 years, the use of sugar by British brewers was “inconsiderable,” until a rise in the price of malt in 1866, after which it leapt forward, hitting 66,500 tons in 1880. It was reckoned that in 1881–2, the amount of sugar used in brewing was 5.5% of the total weight of all fermentables, which, given sugar’s greater efficiency in the fermenting vessel, mean about 10% of British beer came from sugar.68 The previous year, 1880, William Ewart Gladstone, Prime Minister and Chancellor of the Exchequer at the same time, brought out a budget that abolished all duties on malt, after 183 years, and also repealed the duty on sugar used for

brewing. Instead, beer itself was now taxed, for the first time in half a century, and on its original gravity.69 The brewer would now, Gladstone told the House of Commons, be able to “brew from what he pleases,”70 so that the Inland Revenue Act 1880 became better known under its entirely unofficial title of the Free Mash Tun Act. The “free mash tub” (as it was also called71) did not just affect the fermentables: brewers could now use roasted barley, rather than the more expensive roasted malt, to color their dark beers. Roast barley was said to give a drier and sharper flavor to beers than roast malt.72 But more importantly, the act, by permitting brewers to use adjuncts freely, meant they were able to start developing brighter, lighter beers that catered for the increasing public demand for a comparatively lower-gravity beer at a cheap price.73 Under

69

Clark (1998), p. 65. Hansard 1803–2005 HC Deb 10 June 1880 vol 252 cc1622–709. 71 Standard, London, England, Thursday December 9, 1886, p. 2. 72 Hough et al. (1971), p. 165. 73 Gourvish and Wilson, p. 195. 70

67 68

Monkton, pp. 159–60. Corran, op. cit.

22

M. Cornell

the impact of the “free mash tun” the proportions of sugar, maize and (to a lesser extent) rice rose and rose, so that by the start of the First World War adjuncts made up almost a fifth of the total brewing grist in the UK.74 The “running” ales increasingly popular after 1885, both pale bitter ales and milds, light in alcohol, sparkling and refreshing,75 were enabled by Gladstone’s Free Mash Tun, and would be the defining styles of British beer for the next century. At the same time, the ability to use previously unpermitted ingredients saw a host of new styles of beer appear: oatmeal stout, e.g., made with flaked oats, and milk stout, containing unfermentable lactose sugar76 (Fig. 2).

Conclusion Over the 240 years from the first introduction of excise duty on beer to the Free Mash Tun Act of 1880, the impact of taxes, of excise rules and regulations and of legislation around the brewing and beer retailing trades was considerable, generally unexpected, sometimes stifling of innovation and often long-lasting. At least some of the beers drunk in

Britain might have been very different without the tax regimes imposed by governments anxious to raise money to wage wars. It is possible porter might never have developed; it is probable a tradition of brewing with wheat would have survived, the way it did in, e.g., the Low Countries and Germany. It is possible the malting industry might have developed very differently if maltsters, tightly fenced around with rules that, if broken, could result in heavy fines, had felt able to experiment. The influence of tax and legislation upon the brewing industry, and the beers it produced, would, of course, continue after 1880: indeed, within 40 years even more radical changes in taxation and legislation affecting brewers and beer drinkers than had been seen during the wars against revolutionary France would again transform the industry and its products.

Appendix Members of Parliament from the brewing and hop trades 1700–1880

Name

Brewery

Address

Constituency

Dates

Constituency specialty

John Baker

Hop grower

Canterbury

Canterbury

1796–7; 1802–18

Hops

Charles Barclay

Barclay Perkins Anchor Bwy

Southwark

Southwark; Dundalk; West Surrey

1815–37

Brewing; Hops

David Barclay

Barclay Perkins Anchor Bwy

Southwark

Penryn; Sunderland

1826–47

Hamar Bass

Bass

Burton upon Trent

Tamworth; Staffordshire West

1878–85

Michael Arthur Bass

Bass

Burton upon Trent

Stafford; East Staffordshire; Burton

1865–86

Brewing

Michael Thomas Bass

Bass

Burton upon Trent

Derby

1848–1884

Brewing

Francis Bernard Beamish

Beamish & Crawford

Cork

Cork city

1837–41; 1853–65

Thomas Bliss

Bliss

Maidstone

Maidstone

1698–1708

Hops

John Bolland

Hop merchant

Mark’s Lane, London

Bletchingley

1814–18

Charles Buxton

Truman Hanbury Buxton

Brick Lane, Spitalfields

Newport IoW; Maidstone; East Surrey

1857–71

Hops

Sir Edward Buxton

Truman Anbury Buxton

Brick Lane, Spitalfields

Essex South; East Norfolk

1847–58

Barley and malting

Sir Thomas Fowell Buxton

Truman Anbury Buxton

Brick Lane, Spitalfields

Weymouth

1818–37

Barley and malting (continued)

74

Ibid, p. 184. Ibid., p. 45. 76 Cornell et al. (2010), pp. 88–91. 75

Tax and Legislation and Their Impact …

23

Name

Brewery

Address

Constituency

Dates

Constituency specialty

Charles Calvert

Calvert

Hour Glass bwy Thames Street

Southwark

1812–32

Brewing

Felix Calvert

Calvert

Peacock Bwy, Whitecross Street

Reading

1713–1716

John Calvert

Calvert

Peacock Bwy, Whitecross Street

Hertford borough; Tamworth

1754–1802

Barley and malting

John Calvert

Calvert

Peacock Bwy, Whitecross Street

Malmesbury; Tamworth; St Albans; Huntingdon

1780–1831

Barley and malting

Nicholas Calvert

Calvert

Hour Glass bwy Thames Street

Tewkesbury

1754–1774

Hops

Nicholas Calvert

Calvert

Hour Glass bwy Thames Street

Hertford boro’; Hertfordshire

1802–34

Barley and malting

Sir William Calvert

Calvert

Hour Glass bwy Thames Street

London; Old Sarum

1742–6§1

Brewing Brewing

John Cholmeley

Cholmeley

Southwark

Southwark

1698–1711

Ebenezer John Collett

Hop merchant

Southwark

Grampound; Cashel

1814–1830

Harvey Combe

Combe Delafield

Covent Garden, London

London; Old Sarum

1796–1817

Brewing

Sir John Hind Cotton

Parson

Red Lion bwy East Smithfield London

St Germans; Cambridge; Marlborough

1741–80

Barley and malting Brewing

Sir Charles Cox

Cox

Southwark

Southwark

1695–1713

Joseph Cripps

Cripps

Cirencester

Cirencester

1806–41

Sir Thomas Crosse

Crosse

Westminster

Westminster

1700–22

Brewing

George Gipps

Hop merchant

Canterbury

Canterbury

1780–1796; 1797–1800

Hops

Thomas Godfrey

Hop grower

Sandwich

Hythe

1802–10

Hops

Benjamin Guinness

Guinness

Dublin

Dublin

1865–8

Brewing

Sir Arthur Guinness

Guinness

Dublin

Dublin

1868–1880

Brewing

Hudson Gurney

Barclay Perkins Anchor Bwy

Southwark

Shaftesbury; Newtown (IoW)

1812–32

Barley and malting

Richard Anbury Gurney

Barclay Perkins Anchor Bwy

Southwark

Norwich

1818–32

Barley and malting

Edmund Halsey

Anchor Bwy

Southwark

Buckingham; Southwark

1717–29

Brewing

William Hammond

Goat’s Yard bwy

Southwark

Southwark

1754–61

Brewing

Robert Culling Anbury

Truman Anbury Buxton

Brick Lane, Spitalfields

Middlesex

1857–67

Brewing

John Cam Hobhouse

Truman Anbury Buxton

Chiswell St, London

Westminster; Nottingham; Harwich

1820–51

Brewing; Barley and malting

Sir Benjamin Hobhouse

Whitbread

Chiswell St, London

Bletchingley; Grampound; Hindon

1797–1818

Frederick Hodgson

Hodgson, Bow

Bow, Middlesex

Barnstaple

1824–47

William Holmes

Holmes

Farmhill, Sligo

Grampound; Tregony; Bishop’s Castle; Haslemere; Berwick

1808–41

Robert Hucks

Hucks

Bloomsbury

Abingdon

1722–41

Barley and malt

William Hucks

Hucks

Bloomsbury

Abingdon; Wallingford

1709–40

Barley and malt (continued)

24

M. Cornell

Name

Brewery

Address

Constituency

Dates

Constituency specialty

Thomas Inwen

Hucks’ bwy, and hop merchant

Southwark

Southwark

1730–1743

Brewing

Henry Isherwood

Isherwood

Windsor

New Windsor

1796–7

John Hodson Kearsley

Henry Robinson & Co

Wigan

Wigan

1831–7

Sir Edmund Knowles Lacon

Lacon

Great Yarmouth

Yarmouth

1812–18

Barley and malting

Sir George Meggott

Meggott

Stoney Lane, Southwark

Southwark

1722–3

Brewing

Sir Henry Meux

Meux

Kilkenny

Hertfordshire

1847–59

Barley and malting

Sir Gregory Page

Page

Wapping, London

Shoreham

1708–20

John Palmer

Palmer

Bath

Bath

1801–1808

Humphrey Parsons

Parsons

Bath

Harwich, London

1722–41

Brewing

Sir John Parsons

Parsons

Red Lion bwy Smithfield London

Reigate

1685–1717

Hops

John Patteson

Patteson

Norwich

Minehead, Norwich

1802–12

Barley and malting

John Ramsbottom

Ramsbottom

Windsor

Windsor

1810–45

Richard Ramsbottom

Ramsbottom

Windsor

Windsor

1806–10

Sir Thomas Ridge

Ridge

Portsmouth

Portsmouth

1708–11, 1722–27

Charles Shaw-Lefevre

Whitbread

Chiswell St, London

Downton, Hants

1830–57

George Shum

Combe Delafield

Covent Garden, London

Honiton

1796–1805

Richard Smithwick

Smithwick

Kilkenny

Kilkenny

1846–7

John Stephenson

Stephenson

Horse Shoe bwy, St Giles, London

Mitchell; Tyregony; Plympton Erle

1754–5; 1761–1794

Barley and malting

Henry Thrale

Thrale

Anchor bwy Southwark

Southwark

1765–80

Brewing

Ralph Thrale

Thrale

Anchor bwy Southwark

Southwark

1741–7

Brewing

Nathaniel Warren

Warren

Dublin

Dublin city

1784–90

Brewing

Samuel Charles Whitbread

Whitbread

Chiswell St, London

Middlesex

1820–30

Brewing

William Henry Whitbread

Whitbread

Chiswell St, London

Bedford

1818–35

Samuel Whitbread (1830–1915)

Whitbread

Chiswell St, London

Bedford

1852–1895

Samuel Whitbread i

Whitbread

Chiswell St, London

Bedford borough, Steyning

1768–96

Samuel Whitbread II

Whitbread

Chiswell St, London

Bedford borough

1790–1815

Sir Robert Wigram

Meux Reid

Clerkenwell, London

Fowey; Wexford

1802–7

William Wigram

Meux Reid/Reid

Clerkenwell, London

New Ross; Wexford

1807–31

Sir Matthew Wood

Hop merchant

Mark’s Lane, London

London

1817–1843

Adapted and extended from Peter Mathias, The Brewing Industry in England 1700–1830, p. 333

Hops

Brewing

Tax and Legislation and Their Impact …

References Anderson, R. (2003). Microbes and the origin of Porter. Brewery History (Journal of the Brewery History Society), London, England, issue 113. Barnard, A. (1980). The noted breweries of Great Britain and Ireland (Vol. III). Bennett, J. M. (1996). Ale, beer, and brewsters in England: Women’s work in a changing world, 1300–1600. Oxford University Press. Blake, G. (1791). Strictures on a New Mode of Brewing, lately introduced into His Majesty’s Brew-house, London, by – Long, Esq. of Dublin. Britnell, R. H. (1996). The commercialisation of English society, 1000– 1500. Manchester University Press. Clark, C. (1998). The British malting industry since 1830. Cornell, M. (2010). Amber, gold and black, the history of Britain’s great beers. Corran, H. S. (1975). A history of brewing. Denneston, E. (1713). A scheme for advancing and improving the ancient and noble revenue of excise upon beer, ale and other branches to the great advantage of her majesty and the general good of her subjects. Ellis, W. (1742). The London and country brewer (4th ed.). Faulkner, F. (1888). The theory and practice of modern brewing (2nd ed.). Good, J. M., Gregory, O. G., & Bosworth, N. (1813). Pantologia, a new cyclopaedia (Vol. IX). Gourvish, T. R., & Wilson, R. G. (1994). The British brewing industry 1830–1980. Cambridge University Press. Harrison, B. (1971). Drink and the Victorians. England. Hough, J. S., Briggs, D. E., & Stevens, R. (1971). Malting and brewing science. Chapman and Hall. Lynch, P., & Vaizey, J. (1960). Guinness’s Brewery in the Irish economy 1759–1876. Cambridge University Press. Mathias, P. (1959). The brewing industry in England 1700–1830. Cambridge University Press. Monckton, H. A. (1966). A history of English ale and beer.

25 Mulder, R. (2018). Lambic: The need for a new historical narrative. Brewery History (the Brewery History Society Journal), London, England, no. 175. Pattinson, R. (2014). The home brewer’s guide to vintage beer. Quarry Books. Pickering, D. (1764). The statutes at large from the Eighth Year of King William III to the Second Year of Queen Anne (Vol. X). Reader Lack, H. (1881). Abridgements of specifications relating to brewing, wine-making, and distilling alcoholic liquids AD 1634– 1866. Commissioners of Patents. Richardson, J. (1784). Philosophical principles of the science of brewing. Roberts, J. (1903). The grant and validity of British patents for inventions. Rosenthal, J. T. (1964). The assizes of weights and measures in Medieval England. The Western Political Quarterly, 17(3). Stopes, H. (1885). Malt and malting. England. Sumner, J. (2013). Brewing science, technology and print, 1700–1880. Pickering & Chatto. Tuck, J. (1822). The private brewer’s guide to the art of brewing ale and porter. Woodcroft, B. (1857). Subject matter index of patents of inventions, Patent Office, pt I. Wright, H. E. (1892). A handy book for brewers: Being a practical guide to the art of brewing and malting.

Martyn Cornell is an internationally recognized expert on the history of beer, brewing and beer styles. He has spoken on the history of beer at conferences in Denmark, the Netherlands, Brazil, the UK, Ireland and the United States. His books include Beer: The Story of the Pint (2003), Amber Gold and Black, a history of British beer styles (2010, translated into Portuguese and published as A História das Cervejas Britânicas, 2022) and Strange Tales of Ale (2015). He is a member of the editorial board of the journal of the Brewery History Society.

From the Beer Orders to Last Orders— Legislation, Taxation and the Modern Beer Landscape of London Adam Dennett, Jakub Wyszomierski, and Steven Gray

Abstract

Keywords

London has one of the longest and most well-established brewing histories of any city in the world but by the Millennium the industry in the city had dwindled to just a handful of breweries brewing a limited range of established beers. Then, in 2002, the UK government introduced a new progressive beer duty tax which enabled small-scale brewers to brew beer while paying less tax than their larger competitors, thus levelling the uneven financial playing field that economies of scale had created. This chapter charts the impact of this transformative policy through the beer itself analysing data on over 9000 different beers brewed in the city by almost 300 different brewers. Through a detailed quantitative analysis of beers, their characteristics and their brewers, we document the evolving new beer scene unleashed by this small stroke of fiscal creativity. We find that once the small breweries were able to compete financially with the large breweries and a new cohort of passionate brewers had learned the necessary skills, a dynamic new beer landscape eventually emerged a decade or so after the fiscal change was made. This new scene reflects London’s global status, showcasing the planetary influences shaping one of the most exciting contemporary beer landscapes in the world.

London

A. Dennett (&)
S. Gray Centre for Advanced Spatial Analysis, University College London, London, UK e-mail: [email protected] S. Gray e-mail: [email protected] J. Wyszomierski Department of Geography, University College London, London, UK e-mail: [email protected]




Progressive beer duty




Craft beer




Taxation

Introduction As Cornell (2004) notes in the introductory sentence to his book, ‘Beer is Britain’s favourite drink.’ For any adult living in Britain today, this observation might pass without question—a simple statement of fact borne out by any trip out of the home. Venture into any pub, restaurant, supermarket, or corner-shop; attend any music or sporting event and beer will be front and centre with the availability ‘craft’ beer— like Wi-Fi in a hotel—now an expected standard rather than an exotic exception. In London, the capital city of the United Kingdom, home to some 8 million residents and at least double that number of overseas visitors every year, it would be difficult to find anyone else—local, recent arrival, or visitor—who would disagree. The vast number of drinking establishments selling a bewildering array of beers with styles representing almost every brewing tradition across the world, many of which brewed by small craft breweries within the city limits, would provide ample anecdotal evidence to validate Cornell’s observation. However, we do not have to travel back very far into history to find a very different situation. At the turn of the Millennium, anyone walking into one of London’s many pubs would likely be met with a small selection of mass-produced lagers (Carling [Black Label], Fosters or Stella [Artois]), the ubiquitous Guinness and one or two ales (probably John Smith’s or Boddingtons ‘bitter’ on keg, alongside, if you were lucky, a small selection of cask ales probably including ‘London Pride’). Most of these beers would have been brewed by just one of six multinational brewers (House of Commons, 2004). Successive decades of gradual monopolisation in the brewing industry—

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_3

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acquisitions, mergers and the out-competing of smaller brewers through the advantages offered by economies of scale—alongside the control of sales through the pub-tie system, meant that by the year 2000, the once diverse beer ecosystem of the country had been reduced to lifeless monoculture with beer drinkers faced with a dreary, predictable homogeneity within most pubs. So, what has happened in the two decades since to affect such a huge turnaround in the fortunes of the nation’s and the Capital’s beer story? How has the turnaround unfolded and where do we find ourselves now in terms of the volume, variety and quality of beer available in London? And what are the prospects for London’s renewed global prominence as perhaps one of the most exiting beer cities in the World right today? In this chapter, we will answer these questions through examining historic evolution of brewing alongside the influence of beer taxation and laws relating to the consumption of beer in the UK. This history culminates in a seismic event which was the introduction of Progressive Beer Duty —later dubbed ‘Small Breweries’ Relief—in 2002. We then chart the evolution of beer and brewing in the Capital since the year 2000 using longitudinal data on beer and breweries in the city compiled by RateBeer.com, using this evidence to help review the structural and planetary forces at play today, before pondering likely prospects for the future.

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London’s population consumed a lot of beer. The Porters who manually transported goods around the city drank so much of the local brew (possibly for its energy providing calorific content (Cornell et al., 2022) as much as its taste), that the name ‘London Porter’ was coined to describe the distinctive style of well-hopped beer brewed from dark malts that they drank. Porter lives on today but is perhaps most famous as the forebear of Stout (strong) Porter or simply ‘Stout’ now sold all over the world over by Dublin’s Guinness Brewery. Although London Porter was popular amongst the residents of the city, it is the lighter coloured ‘pale’ ale that was brewed in many of the same breweries at the time which, arguably, has had even more global influence. Hodgson’s Brewery opened in 1751 on the River Lea near Blackwall, on the Thames, where the East Indiamen ships docked. George Hodgson and his son Mark took advantage of the readily available export route for their product via the nearby docks to colonial markets in India, as evidenced by advertisements for ‘Hodgson’s very best pale ale’ appearing in Indian newspapers from the late 1700s. Now it is true to say that the story of India Pale Ale—of simply IPA—is somewhat more associated with the Burton-on-Trent brewers like Bass and Allsopp who exported huge volumes of strong, light, hoppy pale ale to India during the 1800s, but thanks to Hodgson, it can well be argued that London is the birthplace of IPA—the style of beer, more than any other (or at least the inspiration for), that is associated with the recent global boom in ‘craft’ brewing.

Background A Brief History of Brewing in the UK and London The United Kingdom has one of the oldest and most well-established brewing industries and beer drinking cultures in the World, the origins of which have been traced back to pre-Roman times (Cornell, 2004; Hornsey, 2007), with evidence for beers containing the four key ingredients we would recognise today—malted barley, hops, yeast and water—existing back as far as the fifteenth century. While beer has always been brewed across the whole of the British Isles, London plays a particularly important role in both the production and consumption history of British beer. The exact numbers of brewers and active breweries in the city as it grew are hard to establish definitively, but accounts exist of some 190 ‘common brewers’ existing in the city by 1701 (Cornell, 2004) with still around 100 by the mid-1800s (Brown, 2015) brewing ever increasing volumes of beer (Hornsey, 2007) servicing a population which ranged from somewhere between 630,000 at the beginning of the period to over 3 million by around 1860 (Hitchcock, 2017; Old Bailey, 2018).

Consumption, Taxation, Politics and Beer in the UK As brewing took off in Britain and London during its industrial and imperial heyday and the history of British beer begins to take shape, it is easy to forget the parallel evolution of consumption and taxation practices which were just as important in shaping the beer landscape of the country.

The Tied House Pub System and the Beer Orders It is impossible to talk about beer in the UK without also mentioning the role of the public house or the ‘pub’. For centuries, pubs (or synonymously inns, taverns, alehouses etc.) have been licenced to sell beer and other alcoholic beverages to customers on the premises and form the social and cultural backbone of urban and rural communities across the country. Until 2016, they still accounted for the majority of beer sales in the UK (BBPA, 2022) and are still central to the supply of beer to consumers despite ‘off-sales’ (sales in

From the Beer Orders to Last Orders—Legislation, Taxation …

supermarkets, off-licences and, increasingly, online) now accounting for more volume. There are presently around 47,000 pubs in the UK, with around 3500 of those in London (Foley, 2021) but this represents the latest nadir as the number of pubs has been in decline for decades—e.g., in 1990, there were around 64,000 pubs in the UK and there has been a steady decline since. The reasons behind the decline in pub numbers in the UK is multifaceted. Changing drinking (alongside working and leisure) habits have certainly contributed, with more people opting to drink at home purchasing beer at lower cost from supermarkets (Foster & Ferguson, 2012). Another part of the story is the phenomenon known as the ‘tied house.’ As Deconinck and Swinnen (2016) describe, tied houses are pubs which were traditionally owned by the breweries and leased back to tenant publican landlords who agree to exclusively sell the beer of that brewery. Controlling both the means of production, distribution and the main retail environment meant that breweries with large estates could effectively monopolise the market and stand to make large profits, incentivising a drive for growth and consolidation. Over the course of the twentieth century so it proved to be. Poelmans and Swinnen (2011) show how in 1900 some 6447 breweries existed in the UK, brewing on average some 0.9 million litres a year. By 1950, this number had shrunk to a mere 567 breweries on average producing some 7.4 million litres each per year. By 1980, there were only 142 breweries left in the country, but each one was producing on average 48 million litres of beer per year. If the shrinkage in number and expansion in scale of breweries over this period seems dramatic, by the end of the 1980s, the picture was even bleaker. As described in an official parliamentary report (House of Commons, 2004) by 1989, ‘the market for beer in the UK was dominated by six national brewers’—Bass, Allied Breweries, Whitbread, Grand Met, Courage and Scottish and Newcastle. Between them these six breweries accounted for 75% of UK beer production and owned or controlled over half of the pubs in the country. Landlords in tied pubs complained that they were being forced by the breweries to buy their beer at inflated costs, putting them at a big disadvantage when competing against the discounts that supermarkets were offering. Compounding the problem, the ties meant that they were unable to diversify their beer offering and sell alternative brews to their customers. These complaints will have contributed to the Director General for fair trading in 1986 commissioning a report by the Monopolies and Mergers Commission into the consolidation and monopolisation of the UK beer market (House of Commons, 2004). The report led to government legislation known as The Beer Orders being imposed in 1989 which required the breweries to sell or release from their ties half of their pub estates above a threshold of 2,000

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premises and allowed those who were still tied to buy and sell one brand of cask beer and one brand of bottled beer from any other supplier. Unfortunately, as was observed by Waterson (2010) and borne out by official statistics (Foley, 2021; House of Commons, 2004), far from releasing tenant landlords from servitude, the beer orders simply shifted the ownership to new large ownership companies which became known as ‘PubCos’ who bought up many of the estates sold off by the breweries. Some of these PubCos, e.g., Enterprise Inns (8739 pubs in 2004) and Punch Taverns (8410 pubs in 2004), owned more pubs than the largest brewers had in 1989 and far from freeing landlords from high wholesale prices and limited retail options, served to exacerbate the problem. As reported in the report for the select committee on trade and industry (House of Commons, 2004), the PubCos controlled large national centralised distribution systems and so even where small local breweries did exist, PobCo landlords were unable (except for the occasional guest tap) to buy their beer. The beer orders were revoked in 2003, but the die had already been cast and as McVeigh (2010) reports, the PubCos retained most of their estates, or at least while they were still profitable; selling or closing those that weren’t.

Legislation, Taxation and the Introduction of Small Breweries Relief/Progressive Beer Duty For beer drinkers in the UK around the time, the beer orders were revoked, the situation was bleak—brewing was still dominated by a small handful of large breweries with few incentives to innovate around their product offering meaning while it was possible to find some cask beer brewed by a small number of regional and micro-breweries, taps and pumps in pubs were overwhelmingly dominated by the large national breweries. Pubs had been and still were closing at an alarming rate, especially in deprived areas (McVeigh, 2010) but also in large cities like London where changes in lifestyle preferences and costs were meaning people were increasingly choosing to drink at home. But while the big picture did not inspire confidence, the large national breweries and PubCos had not succeeded in completely snuffing out all small beer producers. Although the big 6 brewers (by 2003 now featuring Coors—who had purchased Bass from Interbrew; Interbrew UK–who had also purchased Whitbread before selling Bass; Anheuser— Busch, most famous for Budweiser and who eventually take over everybody; Carlsberg-Tetley—a merger of the Danish and Yorkshire brewers; Diageo—a merger of Guinness and Grand Metropolitan and Scottish Courage—the only brewer left from the original big 6 in 1989) now controlled a huge 84% of the market (House of Commons, 2004), 16% of beer

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was still being brewed by smaller regional or even local ‘craft’ breweries. These breweries survived but were not thriving. This is despite the heroic efforts of organisations like the Campaign for Real Ale (CAMRA), who were formed in 1971 with the simple primary mission to ‘secure the long-term future of real (cask conditioned) ale, cider and perry by increasing their quality, availability and popularity’ (CAMRA, 2022). However, another grass roots organisation—the Society of Independent Brewers (SIBA) who were formed in 1980 to represent the interests of Britain’s independent brewers— were successful after a long campaign of lobbying government officials (alongside CAMRA) to affect perhaps the most significant change in beer legislation in the UK possibly since beer duty was first levied by the Crown back in 1643 and certainly since the Beerhouse Act of 1830 liberalised the sale of beer (Hornsey, 2007). This problem for small brewers was clear and is recounted by Dave Roberts, former SIBA chairman and brewer: “I started my brewery in 1982 and it was so very difficult to sell beer then. Why? Well, first of all the idea of small local breweries was in its infancy and so there was little palpable demand from the customer so no pressure on a licensee to stock an unknown beer. More important though was the simple fact that every new account opened was descended on by beer reps [wholesale distributors] who basically had all the discounting powers available to keep us new brewers out of the market which was dominated by the tied house system. This severely limited where we could sell beer: for years we were chasing our tails just to survive and facing monthly beer duty bills which we would have to fund ourselves as it was a production tax and not a sales tax.” (SIBA, 2022a, p. 3)

Alongside the marketing and access to pubs problem, beer duty on beer produced (not sold) had to be paid at the same rate as that produced by the big brewers who enjoyed huge discounts on the vast volumes of ingredients they used to brew beer. This meant that whenever new smaller breweries tried to enter the market, they could easily force them out through heavily discounting their product through the wholesalers. SIBA and CAMRA began lobbying politicians for a change in the way beer duty was levied upon their inception in 1980 but it wasn’t until the Labour government of Tony Blair won the general election in 1997 that a glimmer of hope emerged. With help from some academic economists (Pugh et al., 2001) who, commissioned by the two groups, modelled the impact of an alternative Progressive Beer Duty (PBD). They were able to demonstrate both economic benefits through the reduction in price to consumers, as well as a benefit to small breweries who, through reduced costs, could more readily compete with the larger brewers for access to the all-important distribution networks supplying the pubs.

The case to the Treasury was accepted by the government and in 2002, Gordon Brown, the Chancellor of the Exchequer announced the introduction of a new Progressive Beer Duty (now called Small Breweries’ Relief-SBR). The new scheme was available to any brewer brewing less than 60,000 hectolitres a year and meant that for breweries producing less than 5000 hectolitres (500,000 L) received a 50% discount on duty paid. Those brewers brewing more than 5000 hl but not more than 30,000 hl received a smaller discount, with another smaller discount for those brewing between 30,000 hl and 60,000 hl per year (the upper limit raised to this level in 2004) (HM Treasury, 2021a). These were significant discounts, but despite the promise and the hopes of groups like SIBA and CAMRA, it would take some time for the effects to be felt.

Brewing and Beer in London The Rise of Craft Brewing in London Post-2002 At this point in the story, we return back to London to view, at first hand, the impact of this new taxation policy on the beer landscape in the city—a policy which as we will see was progressive in name, but eventually radical in its effect. To observe what happened after 2002, we are able to take advantage of the extensive beer data resource that is RateBeer.com.1 RateBeer has been in existence since 2000 —although alongside many other formerly independent concerns in the beer world, since 2019 has been owned by AB InBev—and has documented beers and the breweries that have produced these beers across many countries and cities in the world. RateBeer provides an API to their data allowing users to download data on beers by name and reviews, while the public facing website allows anyone to view tabulations of breweries (open and closed) and their beers back to the year 2000. Figure 1 shows the number of active breweries in London documented by RateBeer. As RateBeer provides information on the closure dates of some breweries, it was possible to

1

RateBeer provides access to data through an API—https://www. ratebeer.com/api-documentation.asp—Two datasets obtained from RateBeer were employed: a snapshot from June 2018 (6207 records) and one from October 2022 (7640 records). The datasets were merged based on a unique Beer ID. Importantly, some of the records from 2018 were missing from the most recent snapshot. As a result, the total number of records in the dataset was equal to 10,242 beers and 302 breweries. Furthermore, the brewery types were reclassified into following categories: Brewpub = Brewpub + Brewpub/Brewery. Commercial = Commercial Brewery + Commissioner. Craft = Microbrewery + Client Brewer. Details of these definitions found here: https:// community.ratebeer.com/t/brewer-types-clarifications-and-needed-rework/ 15722

From the Beer Orders to Last Orders—Legislation, Taxation … Fig. 1 Growth of breweries in London from 1999 to 2022

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differentiate between the number of breweries that are active, and the number of breweries being opened. At the time, SBR was introduced in 2002 only three breweries of note existed in the city—Fullers (brewers of London Pride), Youngs and the recently opened Meantime Brewery in Greenwich. A small number of ‘Brewpubs’ (pubs with brewing facilities on the premises) existed at a few locations in the city alongside an equally small number of micro(craft) breweries. And this remained the situation for almost a decade. Anyone observing the brewing scene in London immediately after the introduction of SBR would have been forgiven for thinking its effect on encouraging small brewers into the industry was limited. However, the industry in the city was starting from an extremely low base. Anyone familiar with the mathematical properties of exponential growth will recognise that where the rate of growth is

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proportional to the size of a population over time and if that population is bordering on non-existent, then there will be a long period of apparently little activity before a sudden acceleration. As documented by Dennett and Page (2017), there were a number of other elements which needed to be in place before the exponential explosion in craft brewing occurred. SBR prepared the ground and made the conditions favourable for anyone who might have considered starting a brewery, but who would these people be? The population of Britain had spent decades consuming very little other than massproduced lagers and bitters, so the knowledgebase around the potential breadth and diversity of beer was virtually non-existent. Yes, CAMRA had kept alive a semblance diversity through their promotion of traditional cask ales, but their aversion to anything other than traditional cask ales

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(which adhered to strict definitional parameters) is well documented through the spats they had with Brewdog—one of the first of the new wave of craft brewers emerging in Britain post-SBR who were starting to brew American-style, highly hopped, cold, kegged IPAs (Brewdog, 2011). But then as Fig. 1 shows, in around 2010, things began to take off in the city. Dennett and Page (2017) note the confluence of factors such as the growth of the craft food and drink scene in the city more generally at this time, the availability of affordable, well-located space (particularly under railway arches near the centre of the city, close to potential local markets), technological advances (key-kegs allowing beer to be kept more easily without spoiling) and nod to global factors such as the financial crisis of 2008 and the growing popularity of international beer styles. But in passing reference to these factors, they fail to acknowledge the importance of London’s status as a globally interconnected ‘planetary’ city. Indeed drawing on the ideas of Brenner (2013) who articulates the notion of global socio-spatial ‘urban’ landscapes—within which breweries dialectically help co-produce—where planet-encompassing zones of ‘action, imagination and potentiality’ (Brenner, 2013, p. 95) emerge, we being to see these forces at play with the new breweries establishing themselves at this time and the influences they draw upon in developing both their beers and their brewing philosophies. The emergence of the Kernel Brewery in 2009—one of the pioneers of the new wave of craft breweries which exploded after 2010—is really in many ways emblematic of the planetary forces at play in shaping the post-SRB landscape of beer in London. There are multiple accounts of the role that Kernel and its founder Evin O’Riordain played in the fledgling craft beer scene (Bullen, 2018; Hawkes, 2013; Spencer et al., 2013) and what shines through is the important role that O’Riordain’s time in New York played in shaping his ideas, introducing, not just new beers, but new attitudes towards beer. A ‘culture of connoisseurship’ (Bullen, 2018) which in many ways was the complete antithesis of the approach of the industrial brewer and something which carries with it the very urban connotations of Baudelaire’s flaneur—a figure who was as intrinsically cosmopolitan and well-travelled and as ‘sincere without being absurd’ (Baudelaire, 2012, p. 9) as the evolving new cultures around artisanal approaches to beer and its consumption that Kernel would introduce to the city. Of course, London’s global interconnectedness through business, trade and commerce, the arts, human migration and much more has never been in doubt, but through the re-birth of a beer scene now characterised by truly global attitude serving a truly global city, we see something so very

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different to what had gone before. Figure 2 shows the spatial arrangement of these breweries today, with most located within the inner London boroughs and some noticeable clusters just south of the Thames in Bermondsey (see Dennett & Page, 2017, for an account of the forces at play in creating these clusters). Of particular note are the numbers of unique beers produced by these breweries. The largest circle belongs to the Kernel Brewery in Bermondsey established just over a decade ago and can be contrasted with the Western-most commercial brewery, Fullers, at the Griffin Brewery in Chiswick, which has been brewing on that site since 1816 and which has achieved just a fraction of the unique brews that Kernel has.

Styles of Beer and Increasing Diversification As can be observed in Fig. 1, shortly after Kernel established in 2009, the exponential growth of brewing in the city really takes off with, between 2012 and 2018, something in the order of 20 additional active craft breweries emerging in the city every year (and a number of others falling by the wayside), peaking in 2022 at around 130 independent craft breweries in the city, alongside a significant growth of commercial (larger breweries brewing over 35,000 hl of beer per year, but also including smaller client brewers who borrow the facilities of others to brew and contract brewers who brew beer for other entities such as supermarket own brands) breweries—a level of activity not seen since the early eighteenth century. Clearly as the number of breweries grew, as too would the beers brewed by them. Figure 3 shows this cumulative growth by the types of beer brewed since 2000 and it is clear to see the dominance of varieties of what RateBeer terms ‘Anglo-American’ beers, which far outpace every other style of beer combined, such that by 2022, some 4,500 individual Anglo-American beers had been brewed by breweries in the city over the period. These are cumulative, so it is not the case that all of these beers would be available to drink today should you pay a visit to the city, but the figure clearly illustrates the huge levels of innovation just in this single style. Figure 4 breaks down each style supergroup into a proportional representation of the sub-styles within the dataset. Within the dominant ‘Anglo-American’ style, it is clear that American Pale Ale (APA) and mostly American-style India Pale Ale, rather than more traditional IPA (IPA) dominate. The more traditional English Ordinary and Premium Bitters are still prominent alongside the Stouts and Porters for which London was originally famous, but the influence of

From the Beer Orders to Last Orders—Legislation, Taxation …

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Fig. 2 Spatial distribution of breweries across London, by brewery type and number of unique beers produced, 2022

European styles of beer is also notable. In particular, Saison (from the French for ‘Season’) and popular in Belgium is particularly prominent. It is closely related to the Sour Beer group which has seen perhaps the most rapid ascent in recent years and really demonstrates a broadening of the drinking pallets of London beer drinkers beyond the styles that are historically familiar. Lagers brewed in the style of the famous German and Czech Pilsners have also played a part and indeed are the third most populous style by the end of our study period. Another striking illustration of the evolution over time in beer diversity can be seen in Fig. 5. Here, we tabulate the overall percentage of beer brewed in each style, disaggregated by type of brewery. Not only is it clear to see first the initial dominance of the commercial brewers alongside the

marked lack of diversity across styles, but we see both the gradual shift to the craft brewers who by 2012 are brewing far more different styles than the commercial brewers and who eventually drive an increasing diversity across the system such that virtually every style of beer is brewed in the city in later years. In a final note on diversity, we turn to the demographer’s and ecologist’s toolbox and calculate a Gini-Simpson diversity index across both all beers in the system and within each brewery operating within London over the study period. The Gini-Simpson index ranges between 1 (infinite diversity) and 0 (total homogeneity) and reveals the extent to which brewers differed or were similar to each other across their offerings, as well as how the whole system reflects how

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Fig. 3 Cumulative tally of beers brewed in London by style since 2000

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adventurous or conservative the brewers were within the city. Figure 6 shows two very interesting trends. Firstly, across all beers we see a growing diversity in the post-SBR years, which is in-line with the general growth in beers of all types across the city. However, at the individual brewery level, we initially see a lurch towards homogeneity until about 2008—this is certainly the result of just a small handful of breweries specialising in particular market segments (commercial lager and bitter brewers and a small number of brewpubs and craft breweries more likely producing pale ales) however post-2010, we see a rapid

diversification of brewing within breweries, reflected a more adventurous and experimental approach to brewing within the new breweries that were emerging.

Popularity, Ratings and Survival The data reveals a story of initially slow and then rapid proliferation of new breweries within London with a real turning point at around 2010, with a landscape of increasing diversity both between and within breweries increasing over

From the Beer Orders to Last Orders—Legislation, Taxation …

Fig. 4 Breakdown of beer styles brewed in London since 2000

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Fig. 5 Evolving beer diversity within London2

the whole period. Coincidentally (or perhaps not) 2010 also saw the establishment of the London Brewers Alliance3—a collective of breweries within the city who met with the ambition to meet, share experience and knowledge, foster collaboration and cooperation and generally support skills

2

The distinctions between commercial and craft breweries are determined by the ratebeer classification. Discussion on their forums suggests they are classifying commercial breweries as any which brew over 35,000 hectolitres per year—https://community.ratebeer.com/t/ brewer-types-clarifications-and-needed-rework/15722 3 https://www.londonbrewers.org/about.

development and drive forward innovation the excellence beer in the city (Dennett & Page, 2017). Greg Hobbs, the Director of Brewing for the Five Points Brewing Company recounts the rapid growth in the membership of London Brewers Alliance after 2010 expanding the membership from around 15 members at its inception to over 100 in 2019, crediting the SBR as the catalyst for breweries like his getting off the ground at this time (SIBA, 2022a). The fostering of economies of cooperation in this way served the dual purpose of both driving up the quality and innovation of beer in the city, but also acting as a support network for those in the industry.

From the Beer Orders to Last Orders—Legislation, Taxation …

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Fig. 6 Diversity across all beers and within breweries in London over time 0.6

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The post-SBA story of brewing in London is not one of unbridled success across the industry. RateBeer data tells us that while there remain 126 micro/craft breweries, commercial breweries and brewpubs still active in the city today, since 2003, 64 breweries have closed—the vast majority of these only a few years after opening. A clear narrative about why some breweries survive and why some have closed down does not emerge from the data, although it is true to say that there is a suggestion that those breweries enjoying the highest RateBeer ratings for their beers remain open, while some of those which have closed down, did not enjoy such high praise from the community of drinkers who took the time to rate their beers on the RateBeer App. There are, however, some peculiarities in the ratings data which mean that successfully disentangling customer satisfaction from brewery success and survival is problematic.

Available beers

Active breweries

Before delving into the issue, it is first useful to understand a little more about the character of beers brewed in London over the last 20 years. Figure 7 illustrates the alcoholic characteristics of every beer within every style brewed in the city over our 20-year study period. The dotted line represents the median Alcohol by Volume (ABV) across all beers over this period which is somewhere between 5.3 and 5.4%. It is clear to see, however, that the alcoholic qualities of beer can vary considerably both within and between styles. Anglo-American Ale—the most popular and widely brewed beer in the city—has a slightly lower average ABV of 5%, with most beers (the inter-quartile range represented by the limits of the red-box) falling somewhere between a relatively small range of 4.2 and 6% ABV and outliers as low as 0% ABV and as high as 22% ABV. Other beers such as Stout and Porter generally have a higher average ABV and much

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Fig. 7 Beer styles in London and their alcoholic characteristics

wider usual range of between 5 and 9.5% ABV, whereas Lagers have a generally lower average ABV around 4.7% and a narrower normal range between 4.5 and 5.2% ABV. Difficulties in the data begin to emerge when we map these different ABV and style characteristics onto the ratings that RateBeer users give the beers. Figure 8 illustrates this issue. Each panel in the chart represents a different style of beer within our dataset. The x-axis of the graph records the ABV, while the y-axis records the average RateBeer rating for that beer on a scale of 1–5. As you can see, for most styles of beer, there is a positive (although not always strong) linear relationship between the strength of the beer in terms of its alcohol content and the quality of that beer as reviewed by the people who drink it. The strength of this relationship is indicated by the R-squared value with higher values indicating a somewhat

stronger association, although it should be said that for nearly all styles of beer, the association is not a very strong one, more of a suggestive trend. The intercept value represents the average value of the relationship between ABV and rating when a hypothetical beer of this style is brewed at 0% ABV—this can be thought of as the baseline (alcohol free) popularity of this beer with higher values indicating an, on average, more popular beer. Leaving cider out of the conversation (both because it is not a beer and because it has a statistically insignificant association between ABV and ratings), we can observe that Belgian Beer, Sour Beer, Wheat Beer, Stout and Porter have higher intercept values so are generally more highly regarded by the drinkers that consume them. For Stout and Porter, the relationship between ABV and rating is strongest meaning that more reliably, higher ABV Stouts and Porters

From the Beer Orders to Last Orders—Legislation, Taxation …

Fig. 8 Relationship between ratebeer ratings and alcohol by volume (ABV) for all beers brewed in London

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will be regarded more highly by drinkers. That said the slope (coefficient) is steepest for lager and Anglo-American Ale meaning an increase in ABV is likely to have a sharper beneficial effect on ratings than for other beers. This association between ABV and rankings is on one level difficult to explain and on another highly plausible. Objectively, there is nothing about the ABV of a beer that should make it higher or lower quality, however given that most people are providing these rankings via a mobile phone app while they are drinking, it might not be a wild hypothesis to suggest that those who are drinking higher ABV beers are more likely to benefit/suffer from the effects of the alcohol and are perhaps more liberal with their scoring at these times. Whatever the reasons for the relationship, the reality on the ground has some weak indications that those breweries that on average score higher average ratings from their customers, also on average brew slightly higher ABV beers and are slightly more likely to still be in business relative to some of those who on average scored less highly before closure. At this stage, the evidence is not strong enough to suggest to fledgling brewers that brewing Imperial Stouts may improve their chances of survival (Fig. 9), but this would be an interesting hypothesis to explore in future research.

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breweries in the city—which was purchased first by SABMiller in 2015 and then subsequently sold on to Japan’s Asahi who then also purchased Fuller’s, the oldest operational independent brewer in the city. The Camden Town Brewery was sold to AB InBev in 2015. Heineken purchased minority stakes in both North London’s Beavertown Brewery in 2015 and then the Brixton Brewery in 2017 before going on to acquire the entire businesses a few years later. In 2019, Molson Coors purchased the Hop Stuff Brewery based in Woolwich. To an extent, this has a feel of history repeating itself and beer lovers conscious of the consolidation in the industry that occurred during the nineteenth and twentieth centuries might be forgiven for fearing the worst. But the playing field is not exactly the same as it was before, certainly in London. The ideas on planetary urban systems introduced by Brenner (2013) that we have already referred to in reference to the emerging craft philosophies of beer in London post-SBR are also pressingly relevant in relation to the various other inputs (raw materials, recipes and ideas, workers) and outputs (sales to increasingly globally aware and indeed international customers, the presence of disposable global capital for the purchasing of beer products) which sustain and nourish the brewing industry in the city. Many of these simply did not exist in Britain during the first wave of consolidation, so there may be cause for some optimism alongside a healthy degree of trepidation.

Planetary Perspectives and London’s Beer Futures The Sale and Consumption of Beer The account of the evolution of brewing in London over the last 20 years above details the extent of the beer revival in London following the introduction of SBR. The scale of the change since 2010 has been remarkable and begs the inevitable questions about the sustainability of the revival. There are signs in the data that the rapid expansion of craft brewing in London between 2012 and 2019 is slowing. Cabras (2021) ponders this situation across the whole of the UK and notes that the craft beer market is becoming increasingly saturated with most breweries operating on small profit margins and facing increasingly lower rates of return as costs continue to increase. At the same time, Cabras (2021) also notes that the rise in the popularity of craft beer has not gone unnoticed by the large multinational brewers who have moved in to try and take a slice of the pie, either through brewing their own beers in the style of some of the more popular craft brews or in a more tried-and-tested manner through simply buying some of the emerging small craft brewers. This has happened in London—many of the commercial breweries mapped in Fig. 2 started life as independent craft breweries but have since been purchased by multinationals. The first of these was the Meantime Brewery in Greenwich—one of the only pre-SBR craft

The introduction of SBR had such a seismic effect on the financial viability of small-scale brewing that it is easy to forget that the situation around tied pubs has not really evolved very much at all in the last 20 years. In 2016, the UK government introduced a piece of legislation known as the ‘Pubs Code4’ which, amongst other intentions, was an effort to allow tied tenants to release themselves from their purchasing obligations and request a Market Rent Only (MRO) rental agreement for their premises if they wished to do so. If the intention was to free those who wanted to leave and create a healthier marketplace for small brewers to access, the reality has been quite different. As reported by Davies (2019), the PubCos has generally retained the upper hand with only 57 MRO tenancies emerging from over 739 applications since the scheme began. There has been an increase in the proportion of independent ‘Free House’ pubs in the UK accounting for around 50% of the national pub estate now (Foley, 2021), but much of this increase has been due to an overall decline in the total number of pubs in the

4

https://www.legislation.gov.uk/uksi/2016/790/contents/made.

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Fig. 9 Beer-level relationship between ABV and customer rating

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country, with most closures coming from those owned by the brewers and PubCos. In a sign that the pub landscape of Britain is still not aiding its small brewers, SIBA is still actively campaigning5 for rules in England and Wales to change (as they have in Scotland) to give tied pub landlords the right to buy beer from local producers. But where craft brewers are still finding it hard to sell beer in the places where it has traditionally been consumed, alternative markets have been sought and found to fuel the continued growth of the industry. And nowhere is this more apparent than in London. As reported by Dennett and Page (2017), the rise of the ‘tap room’ has been inextricably linked to the growth of brewing in the city, with virtually every small-scale brewery in the city now opening their premises for at least a few days and evenings a week to sell directly to customers. In many ways, Soja’s (1980) ideas around a socio-spatial dialectic are relevant to this evolution where structural forces in the brewing industry forced a change in brewing and consumption practices—relocating consumption to the site of production in ways that were hitherto alien to the London brewing scene. In turn, however, the co-location of consumption and production served to enhance the connection between the brewer and the beer drinker, generating a virtuous feedback loop serving on the one-hand a clamour for authenticity by discerning consumers and on the other enabling brewers to respond more dynamically to the feedback from their customers, improving the beer and in turn the customer experience, while serendipitously also maximising the productivity of the space they occupy. For these reasons and others (reported by Dennett & Page, 2017), these endeavours have been very successful and lucrative for the brewers with some areas of the city, such as Bermondsey with its ‘Beer Mile’6 and more recently places such as Walthamstow in the north of the city, now home to clusters of breweries (and indeed tap-room outposts for non-native interlopers such as Manchester’s Cloudwater Brewery and Bristol’s Moor Brewery in Bermondsey) which are becoming honey-pot destinations for both local beer drinkers and beer tourists—a phenomenon which is now well documented in the literature (see Reid, 2021). Indeed London’s position in the global urban hierarchy and its status as the third most popular tourism destination city in the world in 2019 after Bangkok and Paris, with some 19 million international visitors every year (Mastercard, 2019), means that its businesses which benefit from direct customer contact are in a unique position to be able to benefit from an inflated leisure-driven customer base.

5

https://www.siba.co.uk/2022/08/18/pub-landlords-locked-into-buyingfrom-big-brewers-and-pubcos-should-be-given-guest-beer-right/. 6 https://www.bermondsey-beer-mile.co.uk/.

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London is almost the archetypal planetary city drawing the resources which sustain it from all over the globe and tourists and travellers are no less a resource than any other. Add to this a subsection of this group who are enticed by the marketable narratives of geographic, procedural and material authenticity (Thurnell-Read, 2019) alongside an implied historical authenticity referenced by merely existing and brewing in London, then it is easy to see why both beer tourists and more traditional generic tourists in search of an ‘authentic’ London experience help provide a newly expansive customer base for the breweries in the city. However, despite this situational advantage for London, in mid-2023 we are also beginning to see the impact of wider economic challenges on the industry with high levels of inflation in the UK pushing up the costs of brewing ingredients and energy prices. The affects the profit margins of the brewers who struggle to pass on these costs through increased retail prices where the same forces are limiting the disposable income of customers and indeed has led to the collapse or near-collapse of some notable breweries. Brew by Numbers–one of the original new-wave Bermondsey breweries—was only saved from going out of business by moving to cheaper premises in Greenwich and a last-minute buy-out by an investment firm who had also recently purchased the struggling Peckham Brewery in London and the well-established Black Sheep Brewery in Yorkshire. While the connection to the customer has been absolutely key to establishing and potentially sustaining the industry into the future, one final piece in the puzzle relates to what many would see as they antithesis of this experience—the growth of online sales in recent years and the ability of breweries to sell direct to customers via web-shops. SIBA’s latest ‘Craft Beer Report’ (SIBA, 2022b) details that only 21% of their members do not have an online shop, while around half of their member breweries had increased the use of e-commerce since the global Coronavirus pandemic struck in 2020—33% launching a web-shop as a direct result of the pandemic. Of course, brewers are far from unique in shifting to online sales as a means to help sustain their business, but where the trend in drinking behaviours more generally has been towards home ‘off-sales’ consumption rather than in the nation’s pubs, then it appears craft producers in adding another revenue stream are building resilience to competition from the large producers. While the shift to online sales might have contributed to resilience for some in the industry, it does have implications for the huge expansion in the variety and diversity of beer we have observed in London. As noted by SIBA (2022b), the big casualty of the pandemic has been cask beer which can only be consumed in that form, either directly from the breweries or from local pubs. Output has plummeted to less than half of the beer produced by volume nationally.

From the Beer Orders to Last Orders—Legislation, Taxation …

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Fiscal Futures

Conclusions

A final note should be made in relation to the policy that kick-started the revolution. Despite the huge success of SBR, there were some who were not entirely happy with the policy. One of the principal complaints was that the production thresholds for various levels of tax relief were too blunt and resulted in constraining gradual growth where, e.g. volumes brewed over 5000 hl, 30,000 hl and 60,000 hl per year would attract much higher tax burdens than those below the threshold (HM Treasury, 2021a). Critics (including the Small Brewers Duty Reform Coalition7) proposed a rebranding of these thresholds such that those breweries in the mid-range in particular (over 30,000 hl) paid proportionally lower duty rates—in effect to reward investment and modest growth and success and not encourage the leaps in expansion that were needed to counteract sharp duty increases above the thresholds. The treasury accepted these arguments and proposed some alterations to SBR (HM Treasury, 2021b) which included both an earlier introduction of higher duty rates at 2500 hl per year rather than 5,000, but a more gradual tapering of the rates above 5000 hl such that, e.g. a brewer producing 20,000 hl per year would be paying just under 75% tax, whereas under the original scheme, they would have been paying 87.5% (HM Treasury, 2021b). Other changes will also come into play, such as changes to the national alcohol duty system (HM Revenue & Customs, 2022) which means that different rates of duty will apply to beers brewed 1.2%–3.4% ABV, 3.5%–8.4% ABV and 8.5%–22% ABV—potentially making higher strength beers much more expensive to consume and produce— something which could have unforeseen consequences given our observations on the relationship between ABV and customer ratings. In much the same way that the impact of the original SBR scheme could not have been fully anticipated, it is difficult to predict exactly what the impact that this fiscal tinkering with have on London and the UK’s re-established beer scene. In SIBA’s SBR review (SIBA, 2022a), one brewer puts forward arguments for some very small brewers or those brewing higher strength beers fairing worse, while conversely, those—including, ironically, the big national brewers—focusing on lower alcohol cask beers potentially enjoying large benefits. Time will tell as the changes will come into force in 2023.

In this chapter, we have explored how one creative central government policy has played a pivotal role in revitalising the British beer scene and has helped re-establish London as one of the most exciting cities in the world to drink beer. The impact of Small Brewers Relief took some time to be realised, but once a community of outward looking, experimental and passionate brewers began to emerge in London in the early 2000s, the ground had been prepared for a revolution to occur where starting a brewery became a financially viable option for anyone who wanted to do so. Our analysis reveals both the rapid growth in the city since around 2010 and an explosion of diversity reflecting influences from all corners of the beer brewing world and the important global position that London enjoys. In recent years, on a single trip to Bermondsey, one could visit eleven different breweries (all with tap-rooms) and sample a traditional Porter or London Pale Ale from the Southwark brewery; a table beer, an India Pale or an Imperial export stout from the Kernel; a double, triple or black IPA, Belgian Gueuze or Baltic Porter from Brew by Numbers; a New England IPA, West Coast IPA or German Helles from the Brick Brewery or a Raspberry Saison from Partizan. The variety and quality of the beer being produced, who is producing it, where it is being drunk and the customers who are drinking it represents a significant evolution from the first wave of brewing in the city many hundreds of years ago. We have shown how classical capitalist market forces shaped and controlled the brewing industry and the beer consumption industry in London and the UK for a long time. The pub—a symbol of British cultural identity—was, and to a significant extent remains, a pawn in the monopolistic ambitions of Big Brewing, but also how in an industry where taxation and regulation has always played an important part, how achievable interventions by the state can disrupt a destructive equilibrium and re-wild what for a long time many had considered a moribund ecosystem. It remains to be seen what impacts high levels of inflation and export challenges brought on by Brexit will have on the brewing ecosystem of London, and it is inevitable there will be some who don’t survive in the long term. But this new level of diversity and activity should mean that there is now a degree of resilience in the system and London’s re-established prominence in the global beer scene is secure.

References

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https://reformsbr.com/small-brewers-coalition-commentary-on-recentsiba-open-letter-to-the-treasury/.

Baudelaire, C. (2012). The painter of modern life: And other essays (Second). Phaidon. BBPA. (2022). UK Beer Market. British Beer and Pub Association. https://beerandpub.com/statistics/uk-beer-market/.

44 Brenner, N. (2013). Theses on urbanization. Public Culture, 25(1 (69)):85–114. https://doi.org/10.1215/08992363-1890477 Brewdog. (2011). CAMRA cancels BrewDog’s GBBF Bar. BrewDog. https://www.brewdog.com/blog-article/camra-cancels-brewdogsgbbf-bar Brown, M. (2015). London brewed—A historical directory of the commercial brewers of London from Circa 1650. Brewery History Society. Bullen, C. (2018). In Bermondsey, a Steady Heartbeat—The Kernel in London England. Good Beer Hunting. https://www.goodbeer hunting.com/blog/2017/12/28/in-bermondsey-a-steady-heartbeat-thekernel-in-london-england Cabras, I. (2021). Craft beers and breweries in the United Kingdom: Where now, what next? In R. Capitello & N. Maehle (Eds.), Case Studies in the Beer Sector (pp. 37–48). Woodhead Publishing. https://doi.org/10.1016/B978-0-12-817734-1.00003-3 CAMRA. (2022). What we stand for. CAMRA—Campaign for Real Ale. https://camra.org.uk/about/about-us/what-we-stand-for/ Cornell, M. (2004). Beer: The story of the Pint. Headline. Cornell, M., Anspach, P., & Hobday, L. (2022). The history of porters —In collaboration with historian Martyn Cornell—Blog—Anspach & Hobday|London Craft Brewery. Anspach and Hobday Blog. https://www.anspachandhobday.com/blog/porter-history Davies, R. (2019, May 31). Tied up: Pub landlords battle law that was meant to help them. The Guardian. https://www.theguardian.com/ business/2019/may/31/tied-up-pub-landlords-battle-law-that-wasmeant-to-help-them Deconinck, K., & Swinnen, J. (2016). Tied Houses: Why they are so common and why breweries charge them high prices for their beer. In I. Cabras, D. Higgins, & D. Preece (Eds.), Brewing, beer and pubs: A global perspective (pp. 231–246). Palgrave Macmillan. https://doi.org/10.1057/9781137466181_12 Dennett, A., & Page, S. (2017). The geography of London’s recent beer brewing revolution. The Geographical Journal, 183(4), 440–454. https://doi.org/10.1111/geoj.12228 Foley, N. (2021). Pub Statistics (Briefing Paper No. 8591). House of Commons Library. https://commonslibrary.parliament.uk/researchbriefings/cbp-8591/ Foster, J. H., & Ferguson, C. S. (2012). Home drinking in the UK: Trends and causes. Alcohol and Alcoholism, 47(3), 355–358. https://doi.org/10.1093/alcalc/ags020 Hawkes, W. (2013, July 21). How to start your own brewery. The Guardian. https://www.theguardian.com/lifeandstyle/2013/jul/21/ how-to-start-own-brewery Hitchcock, T. (2017). London, 1780–1900|The Digital Panopticon. https://www.digitalpanopticon.org/London_1780-1900 HM Revenue and Customs. (2022). The new alcohol duty system: Consultation Response. HM Revenue and Customs. https://www. gov.uk/government/consultations/the-new-alcohol-duty-systemconsultation HM Treasury. (2021a). Small Brewers Relief: Technical Consultation. HM Treasury. HM Treasury. (2021b). Small Brewers Relief—Technical Consultation Response. HM Treasury. Hornsey, I. S. (2007). A history of beer and brewing. Royal Society of Chemistry. House of Commons. (2004). House of commons—Trade and industry— Second report. House of Commons Trade and Industry Committee. https://publications.parliament.uk/pa/cm200405/cmselect/cmtrdind/ 128/12802.htm Mastercard. (2019). Global Destination Cities Index 2019. https:// newsroom.mastercard.com/wp-content/uploads/2019/09/GDCIGlobal-Report-FINAL-1.pdf McVeigh, C. (2010, October 19). How the beer tie is killing our pubs. The Guardian. Retrieved from https://www.theguardian.com/ lifeandstyle/wordofmouth/2010/oct/19/beer-tie-oft-pub-trade

A. Dennett et al. Old Bailey. (2018). London history—A population history of London— Central Criminal Court. https://www.oldbaileyonline.org/static/ Population-history-of-london.jsp Poelmans, E., & Swinnen, J. (2011). A brief economic history of beer. In The Economics of Beer. OUP Oxford. Pugh, G., Tyrrall, D., & Wyld, J. (2001). Will progressive beer duty really help UK small breweries? A case study in profit appropriation. Journal of Small Business and Enterprise Development, 8(4), 311–337. https://doi.org/10.1108/EUM0000000006828 Reid, N. (2021). Craft beer tourism: The search for authenticity, diversity, and great beer. In M. Ferrante, O. Fritz, & Ö. Öner (Eds.), Regional Science Perspectives on Tourism and Hospitality (pp. 317–337). Springer International Publishing. https://doi.org/ 10.1007/978-3-030-61274-0_16 SIBA. (2022a). SBR @ 20—Small breweries’ relief: 20th anniversary. The Society of Independent Brewers. https://www.siba.co. uk/wp-content/uploads/2022/10/[email protected] SIBA. (2022b). The SIBA craft beer report 2022b. https://www. dropbox.com/s/qkkstzse63lq63n/SIBA%20Craft%20Beer% 20Report%202022b%20.pdf?dl=0 Soja, E. W. (1980). The socio-spatial dialectic. Annals of the Association of American Geographers, 70(2), 207–225. https:// doi.org/10.1111/j.1467-8306.1980.tb01308.x Spencer, M., & Doherty, A. (Directors). (2013). Andy Smith Makes Beer. https://vimeo.com/66575506 Thurnell-Read, T. (2019). A thirst for the authentic: Craft drinks producers and the narration of authenticity. The British Journal of Sociology, 70(4), 1448–1468. https://doi.org/10.1111/1468-4446. 12634 Waterson, M. (2010). Beer—The ties that bind (Working Paper No. 930; Warwick Economic Research Papers). University of Warwick. https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2010/twerp_930.pdf

Adam Dennett is Professor of Urban Analytics and formerly Head of Department at the Bartlett Centre for Advanced Spatial Analysis (CASA), at University College London. Adam is a geographer with broad research interests which range from migration and mobilities, housing, gentrification, urban models and, of course, beer—all tied together with a fondness for data and computational methods.

Jakub Wyszomierski is a final year PhD researcher in the Department of Geography at University College London. His research focuses on geodemographics and capacity of spatial microsimulation techniques for the development of national geodemographic classifications with a high temporal and spatial granularity. As a part of his project, he also develops the 2021 Output Area Classification, that can ensure UK-coverage in the face of Census deharmonisation.

Steven Gray is an Associate Professor in Spatial Computation at the UCL Centre for Advanced Spatial Analysis and Director of UCL Digital Humanities. He has engineered multiple award-winning systems as part of his research into social media mining using advanced distributed workflows, with his work featured in various worldwide media outlets and publications. In recent years, he has focused and specialised in research on distributed high-performance computing and analysing large datasets in real-time. His research aims to open up new possibilities for data visualisation, collection, mining, and analysis of large scale spatial computational problems.

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry Sven Van Kerckhoven and Sean O’Dubhghaill

Abstract

The British beer market developed and operated historically separately from the continental and international beer markets. Since the 1970s, it started to replicate some of the trends that were common to its neighboring markets. Since then, the British beer market has been largely dominated by lagers that were being produced by foreign-headquartered companies. As the appetite for lagers grew, foreign-headquartered companies came to dominate the overall British beer market. Brexit and the emergence of craft breweries could have led to a revival of the British beer industry through both more exotic and diversified domestic production and the decrease of EU imports. However, this does not seem to have panned out. This chapter investigates the Britishness of the UK’s beer in light of globalization, which has spurred integration with foreign markets and with regards to both Brexit and the emergence of craft brewers which might have reversed this tendency. Keywords

Beer



UK

Brexit




Craft beer




Globalization




EU

Introduction The alcohol industry has always been one of the most regulated industries. All alcoholic beverages are subject to several regulatory interventions, and the taxation of the alcohol industry has provided governments with significant revenues. In particular, beer has been subject to several S. Van Kerckhoven (&)
S. O’Dubhghaill Brussels School of Governance, Brussels, BE, Belgium e-mail: [email protected] S. O’Dubhghaill e-mail: [email protected]

additional regulations due to its importance in social, cultural, public, and economic life, as well as its impact on health. In the sixteenth century, regulations stipulated the precise ingredients to be used in the production of beer, e.g., the Reinheitsgebot, a German law delineating and limiting the ingredients to be used in the production of beer, has had a long-lasting impact on the German brewing industry (van Tongeren, 2011). The introduction of a tax on grut, an ingredient common in the production of beer in the seventeenth century, has even been claimed to have led to the creation of Belgium and the Netherlands (Deconinck et al., 2015). As a consequence of an even more dire set of circumstances, the increased appetite for wine in the British upper class was curtailed as a result of the French–British wars, and this put the British firmly on the path to becoming a beer drinking nation, the taxation incomes of which supported the rise of the UK to become a world power, thereby financing its colonization efforts (Nye, 2007). As such, it does not come as all that much of a surprise that beer and the brewing industry have also been impacted by two recent events: globalization and the ensuing, decreased significance of borders, exemplified by the ever-integrating European Union, and the resulting countermovement toward greater national self-determination, exemplified by the departure of the United Kingdom from the European Union during the so-called Brexit process, for example. This chapter assesses the shifting political agenda’s impact on the beer industry, from deeper integration to disintegration. We focus in particular on the British beer industry, which has been strongly impacted by both of the aforementioned events, as formerly one of the largest EU member states, and currently the only nation state that has seceded from the European Union. The subsequent section provides a historical account of the British beer industry. The third section then studies the impact of the integration of international, and particularly European, markets in recent decades on the British beer

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_4

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industry. After Brexit, this evolution not only ground to a halt, but has actually been reversed, which is the subject of the fourth section. The re-emergence of national and local breweries went hand in hand with more general shifts found throughout the beer industry, namely the arrival of craft beers and revival of local beers, a trend which is covered in section five. Section six then provides ‘a lay of the land’ of the current British beer industry as it stands today. It further investigates exactly how ‘British’ British beer still is. The chapter then ends with a conclusion in which we argue that British beer and the British brewing industry have been mostly taken over by foreign-headquartered brewers.

The British Beer Industry from a Historical Perspective For many centuries, the British beer market developed in quite a unique fashion. Historically, Britain was mostly forested and thus largely unsuited for grain production. Mead and spontaneously fermented ciders were, thus, traditionally the predominant alcoholic beverages until beer became more prevalent with the arrival of Anglo-Saxons in the fourth century AD. However, beer brewing was present on the Isles even prior to the invasion of the Romans. In Roman Britain, brewing existed for both domestic and retail purposes, indicating the existence of Roman era malting or brewing operations, a fact that has been demonstrated through the discovery of remains unearthed across both England and Wales (Cornell, 2004). Beer acquired popularity in the United Kingdom during the Middle Ages, when beer became the drink of choice and was drunk with every meal. Typically, beer (ales) was brewed on the premises where it was sold, but this slowly changed with the arrival of guilds who improved both the quality of beer and availability thereof. With brewing becoming both more organized and reliable, inns and taverns turned to early commercial breweries, rather than brewing themselves. This period also saw the arrival of the ale-conner, an early version of a tax officer, who tested both the quality and strength of a given beer, and imposed the appropriate duty (Hanson, 2013). The British beer market, thus, was dominated traditionally by local and regional cask ales, which finished maturing in the cellar of the pub, rather than at the brewery and were served with only natural carbonation. The eighteenth century bore witness to the appearance of a few new typical British styles. Early in that same century, London-based breweries developed a new beer style: the porter. This beer was the first to be aged on the brewer’s premises (rather than at the publican’s premises). The development of the porter also allowed for a scaling up of production because it allowed the beer to be distributed more widely. It was the first beer that was ready for immediate

S. Van Kerckhoven and S. O’Dubhghaill

consumption. The India Pale Ale was developed later that same century and dated back to the arrival of hop-bringing Flemish immigrants in the fourteenth century. These hopped beers, and the India Pale Ale in particular, exploded in domestic popularity throughout the 1850s. The same century also saw further governmental involvement with the introduction of a progressive tax on beer production. Another aspect of the British beer industry, and an integral part of British social and cultural life, is the place of the pub. British pubs are places to which people go to socialize, relax, and have a drink. In 2012, an attempt to grant British pubs UNESCO World Heritage status was launched. Pubs in the UK are often owned by brewers, much more than they commonly are in other countries. These pubs are only allowed to carry the beer of the brewer to whom they are affiliated (or are owned by). These so-called tied houses ensured the longevity of historical trends and protected regional and local brewers for quite some time from domestic and international competition. In 1974, for example, 53% of all pubs were either owned by or rented from the six biggest British brewers at the time (Cabras, 2018).1 However, as explained below, these tied houses slowly gave way to free houses, and ultimately failed to protect regional and local brewers. The pubs that were not part of a brewery, so-called free houses, slowly gained greater appeal and benefited from the increased distribution of beer in glass bottles, which are easier to transport and store, rather than kegs, and allowed for greater variety in their offerings (Foley, 2021).

Integration of Markets: Globalization and the Invasion of the British Beer Market National borders started to disappear with globalization, as products started to travel across different countries. The UK was impacted by this trend, as well as by European integration more generally, which substantially increased trade across European countries. The UK joined the European Economic Communities in 1973, and this allowed some of the continental European trends to reach the UK. Lager, which already had a longstanding popularity in Europe and around the world, took the British beer market by storm in the 1970s. The parenthetical focus on local and

1

Bass, Allied Watneys/Grand Metropolitan, Scottish, Newcastle, Courage and Whitbread. Bass were acquired by ABInbev. Its brewery, and some of its brands, were subsequently sold to Colson Moors. Grand Metropolitan merged with Guinness plc. to form Diageo. Scottish and Newcastle were acquired by Heineken and Carlsberg, respectively. Courage was taken over by Marston’s Brewery which itself sold 60% of its shares to Carlsberg. Whitbread still exists, but has largely moved out of the brewing industry.

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry

regional ales was also taken over by increased attention to both imports and to international beer brands. This also resulted in an increase in the number of imported beers, bringing in different, long-established beer styles from around the world, but which had been absent or in short supply in the UK prior thereto. These new trends were not welcomed by everyone in the UK to an equal degree. For example, the ‘Campaign for real ale (CAMRA)’ became a movement aimed at ensuring the survival of typical British beers and was an immediate response to the British market succumbing to lagers and increasing their imports of ‘foreign’ beers and styles (Brown, 2012). This, and a specific tax law lowering the required excise duties for small breweries, initially led to a revival of regional and local breweries that focused on cask ale. However, CAMRA failed to reverse the ongoing trend toward international beers and lagers. Cask ales are still prevalent thanks to CAMRA, but are not very popular, with sales of the leading cask ales standing at less than 10% of lagers. The most popular examples include Sharp’s Doom Bar, Greene King IPA, Timothy Taylor’s Landlord, Fuller’s London Pride, and Greene King Abbot Ale, but most of these are no longer owned by British companies, as explained below. As non-UK styles gained popularity in the UK over the course of recent decades, the British beer market started to become more integrated with both the EU and American beer markets. Consumer tastes shifted and this led to an increased appeal in ‘foreign’ styles. This trend started to take hold during the 1970s, due to increased foreign travel and the promotion of the subjects by writers, such as Michael Jackson (1977). At the same time, typical British styles found their way around the globe. Porters, stouts, and India Pale Ales became increasingly popular in North America and Europe. Originally British innovations, these beer styles became popular with craft brewers from all over the globe and are, consequently, produced in a variety of places at present. This has meant that the British beer market has started to mimic other beer markets’ industrial organization. A large part of the market became served by lager producers. Due to lagers’ increased appeal, and those of internationally well-recognized beers, the British beer market quickly became a top priority for multinational brewers. With few well-established lagers domestically, this position was taken over by foreign-headquartered brewers, who used the cash flow generated by the sales of the latter to take over several existing ale producers, thereby increasing their presence in the British market. This allowed for a concentration in the industry, one spurred on by technological innovations providing substantial economies of scale and scope, with only a few multinationals serving the majority of the market (Tremblay and Tremblay, 2009). Thus, globalization and integration with the EU pushed trends and foreign beer producers into the UK.

47

Recent Counterevents: Brexit The UK’s decision to leave the European Union, after a referendum in 2016, has had a substantial impact on EU-UK trade relations. Several papers have already studied the impact of the UK’s exit from the European Union on a variety of industries, e.g., the impact on fisheries (see among others Phillipson & Symes, 2018), the financial sector (Van Kerckhoven, 2021; Van Kerckhoven & Odermatt, 2020), and the pharmaceutical industry (Kazzazi et al., 2017). In line with the historic cases mentioned above, Brexit is yet another reality that has changed the legal, social, economic, and political underpinnings of beer markets, as well as those of the beer and brewing industries more generally. As explained above, the UK and EU’s beer markets became increasingly integrated over time. Recent decades bore witness to significant beer import and export between the UK and continental Europe. The EU is the major place of origin beer that is imported into the UK, comprising about 90% of all beer imports in terms of volume (Statista, 2001). The UK’s departure from the European Union could have affected the imported volumes from the EU to the UK. Figure 1 shows pre- and post-Brexit imports into the UK from the EU, and exports from the UK to the EU. Both are sizable and remained rather stable for an extended period. The year 2016 was a great year, with a substantial decline following the referendum and the UK’s decision to leave the UK. The final withdrawal agreement only came into force at the very end of 2020, but it is reasonable to assume that both importers and exporters were already anticipating some issues with their UK-EU business. Moreover, business owners and consumers might already have expected some impact resulting from Brexit, thereby allowing them to preemptively adapt their menus/tastes. The British imports of European beers recovered quickly, however, and currently exceed the levels seen in the immediate run-up to Brexit.2 British exports seemed to have struggled much more, currently still falling below the level observed in 2016. Figure 1 clearly indicates that UK and EU trade started to diverge over time. Initially, imports and exports were almost fully balanced, but since Brexit in specific, the EU’s exports into the UK have been more robust and are even slowly expanding, whereas the UK’s exports to the EU have started to drop off, with little sign of recovery. It should also be noted that after Brexit, and even prior to the finalization of the withdrawal agreements, customs already received a higher workload, and supply chains have been proven to be disrupted. This has also been noted by some breweries.

2

It should be noted that the 2020/2021 data could also have been influenced by the arrival of COVID-19.

48 Fig. 1 Trade in beer between UK and EU (2013–2021) in pound value. Source UK Trade Info (based on trade data from HM Revenue and Customs), https://www.uktradeinfo.com/, authors’ compilation

S. Van Kerckhoven and S. O’Dubhghaill

Trade in Beer between UK and EU 500000000 450000000 400000000 350000000 300000000 250000000 200000000 150000000 100000000 50000000 0 2013

2014

2015

2016

EU imports from the UK

Kent’s Old Dairy Brewery, a Department for International Trade export champion for the south-east prior to Brexit, participated in a video promoting the potential for Brexit to boost export sales. However, by 2022, it noted that its exports of both bottled and kegged beers to Germany, Italy, and Sweden fell from £600,000 to £2,000 a year. Due to the paperwork and customs involved with exporting, their only remaining EU customer travels to the UK by van to pick up the beer (and even that has become much more cumbersome) (Guardian, 2022a, 2022b). However, as established above, many foreignheadquartered brewers have been serving the British market for quite some time. Moreover, these brewers have also acquired several British brands. As such, the presence of European beers in the British market extends further than just imports. Indeed, the appeal of continental beers, including lagers, had already pushed several European brands to establish production facilities in the UK in order to respond to the UK’s demand, rather than importing these beers. So, the overall consumption of European headquartered brewers in the UK is much larger than what one can determine on the basis of imports alone. It seems that Brexit, like CAMRA before it, did not seem to have been able to reverse the UK’s trend toward importing more European beers; however, it did affect exports from the UK to the EU. Moreover, there have been some additional issues encountered by brewers located in the UK concerning the sourcing of brewing ingredients. Brewers have complained about the difficulties involved in sourcing ingredients, their higher cost, the paperwork that comes with this process, and longer delivery times. In early 2021, a slowdown in barley and wheat trade between the UK and

2017

2018

2019

2020

2021

EU exports to the UK

EU occurred, most likely due to logistical issues following Brexit. Only 99,000 tons of wheat arrived at UK ports in January 2021, compared to an average of 221,000 tons in the months prior. Because both barley and wheat are used to produce other products, one might look more closely at the import of hops in the UK, as these are solely used to brew beer (Van Kerckhoven et al., 2020a, 2020b). The UK is a medium-sized producer of hops, but it imports quite a sizeable amount from both Germany and the United States of America (US). As Fig. 2 indicates, it seems as though Brexit had a minor impact on the sourcing of this key ingredient. Indeed, 2018 saw a substantial drop, after which imports seemed to have picked up once again. Brexit’s overall impact seems to be minor and does not seem to have affected the trend toward an increased presence of foreign-headquartered brewers in the British beer market. It has certainly failed to reverse this trend. However, both Brexit and the pandemic reduced the export of beer, as stipulated above, which meant that more highly hopped beers remained on British soil, given that these tended to be among the more popular export products (The Drinks Business, 2022). Additionally, it seems as though Brexit might have hurt the presence of British beers abroad to a more significant extent, with a declining export level. UK-based brewers are, thus, at risk of losing their competitiveness vis a vis domestic players in foreign markets. Brexit has not resulted in a significant change in this respect as there has not been an introduction of a customs duty. Hence, beer is just subject to 20% VAT. However, even those beers sold in the UK that are also produced in the EU, as well as in the UK, seem to have encountered issues with successfully making it to Britain (Guardian, 2021).

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry

49

Hops (in 1,000 GBP) 60,000 50,000 40,000 30,000 20,000 10,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 UK Export

UK import

Fig. 2 Hops import and export. Source UN Comtrade, International Trade Center and authors’ calculations

From Traditional Cask Ales to a British Craft Beer Industry The emergence of craft breweries, initially a trend beginning in the United States, also spread to the UK. Small and independent brewers have always existed, of course, but the territory of home brewers and hobby clubs failed to make any kind of significant impact on the beer market until recently. The encompassing terms of craft beer and microbreweries emerged as the movement grew throughout the 1970s, and some brewers increased their production and distribution (Carroll & Swaminathan, 1992), even while definitions remained elusive and vague (Cabras & Bamforth, 2016). Several studies have examined microbrewing, microbreweries, and craft breweries in the UK (Preece, 2016; Knowles & Egan, 2002; Cabras, 2016; Danson et al., 2015) and have mainly focused on the growth that took place in specific regional areas and markets, or in relation to the effect of taxation and subsidies, and of particular business models adopted by new entrants onto these markets. Craft beer’s growing appeal came from the craft brewers’ focus on differentiation in an increasingly homogenous beer market. Diversification fell as multinationals aimed to satisfy a uniform demand. In this context, new businesses and business models were developed, forfeiting the economics of scale and scope and aiming at those beer drinkers who were fed up with the uniform products brewed by multinationals. Craft breweries typically experiment with both their ingredients and brewing styles. Their focus on differentiation went hand in hand with a focus on quality, which is also reflected in their marketing strategies. In the UK, where traditional cask ales had been dominant until the 1970s, there were still quite some small breweries,

even though the growth of commercial brewers (examined previously) had already meant that many stopped producing their own ales or were acquired by larger British players. Together with the arrival of lagers, it took quite some time for smaller brewers to re-establish themselves. Moreover, many of them continued to focus on cask ales with CAMRA. Young, experimental, and small brewers have only found themselves to be a niche in the UK in recent decades. By 1980, 25 new microbreweries had been established, a trend that continued thereafter. Even though many of these still focused on cask ale, more differentiation gradually emerged. This was supported by the Beer Orders of 1989 (these orders were revoked in 2003), which limited one brewery’s number of tied houses to 2,000 and required tied houses to allow a guest ale on their menu. Further legislation, such as the Progressive Beer duty of 2002, reduced the beer duty levied on small breweries, and provided additional support to small brewers. By 2010, the number of craft brewers had exploded, and they generally graduated far beyond the traditional cask ales. Their beers, which contained a lot of flavor and hops, finally started to attract the eye of the British beer drinker (Guardian, 2014). As a result, the number of breweries exploded from around 142 in 1980 to nearly 1,500 in 2015 (BBPA, 2015). According to both Cabras and Bamforth (2016) and Cabras (2018), the rise of micro and craft beers in the UK took place in three waves. In the late 1970s and mid-1980s, British consumers started to be dissatisfied with the continuing reduction in beer variety, which led to the creation of CAMRA, which focused on the revival of ‘real ale’ and cask-conditioned beers brewed using traditional methods. CAMRA’s work in promoting these traditional ales also created a launching platform for more novel and experimental breweries. The second wave took place in the 1990s, just as some consolidation was reached in this

50

market segment, and those who survived found the process of distribution easier due to the Beer Orders. The 2000s brought a further, sharp increase in the number of micro and craft breweries as technological developments lowered the barriers to entry and as the progressive beer duty was implemented (Wyld et al., 2010). These micro and craft beers also slowly made their way out of dedicated pubs to mainstream pubs and distribution to major retailers, thereby increasing their visibility. The long standing ‘rivalry’ between CAMRA’s focus on traditional cask ales and these newer brewers came to an end when CAMRA opened the door of their festival to microbrewers bringing their kegs. However, the emergence of craft breweries also attracted the interest of many foreignheadquartered brewers. Meantime brewing, for example, was sold to SAB Miller in 2015, citing concerns about the scalability of a craft brewer (Zytophile, 2015). ABINBEV also acquired Camden Town Brewery in 2015. The emergence of a craft beer scene in the UK brought diversification and certainly led to an explosion of new breweries joining the market, but this did not change the dynamics of the British market all that much. Craft brewers who were faring well tended to be acquired by foreignheadquartered brewers before too long, and those remaining on the British scene seemed too small to really impact the market to any significant degree. The subsequent section will deal with the British brewing market’s current landscape in greater detail.

The British Beer Market: Current Outlook Based on the previous two sections, it is clear that the integration of the British beer market and the arrival of foreign-headquartered companies have not been reversed due to either Brexit or on the basis of the emergence of craft breweries. As indicated in Table 1, foreign-headquartered multinationals currently dominate the British brewing industry, offering lagers, beers originating from other countries, as well as several British beers that they have added to their portfolios. Data were taken with regards to the fame and popularity of different beers on YouGov in order to construct this table and that allows for a representative sample of the

3

It should be borne in mind that in some cases, mostly the most popular ones, the brand name has been used, whereas in other cases the beer brand might already refer to the brewer. We have not adapted this and have instead used the original data. Consumption data for the different brands was not available, so we used this data as a proxy and are well aware that there are several lacunae with this approach. However, having more detailed data would not change our main arguments, but might actually support them more strongly.

S. Van Kerckhoven and S. O’Dubhghaill

UK’s population to be taken.3 The ciders were removed from the original table,4 and the table was then extended to include the type of beer, the company that owns the brand, and the headquarters of the latter (Table 1). Based on this table, we can understand the origins of the most popular beers in the UK in greater detail and in terms of the location of the brewer to which they belong. Overall, the most popular beers in the UK are no longer owned by British brewers. The styles and origins are still British, but the ownership has shifted. Of the 139 different beers, only 30 are still owned by a British brewer, comprising about 22% of the total. Several beers, about 17% of the total, are owned by a Belgian brewer (mostly ABINBEV), and 12% by a Dutch brewer (mostly Heineken). Table 2 and Map 1 provide a full overview of the origin of the 139 most popular beers in the UK and the country in which they are headquartered. It is abundantly clear that the beers that are ranked more highly tend to be owned by foreign-headquartered businesses. These businesses also produce lager, which is very popular in the UK. Interestingly, even though most of the popular beers originate from the European Union (about 46%), there is also some substantial global presence with the inclusion of brewers from both North America (about 15%) and Asia (about 15.5%). Many of these foreignheadquartered brewers have taken over the British market by first entering with their lager beers and then by acquiring British brewers. The only major beer producer headquartered in the UK is Diageo, which owns beers of Irish origin, such as Guinness, Harp, and Hop House. However, it does need to be stressed that these multinationals also produce their wares in the UK, as stated previously; not all of their production is imported, and even typical, non-UK styles and brands (e.g., lagers such as Heineken, Stella Artois) are produced in the UK. Complementing these multinationals, some regional macrobrewers have been able to retain some independence and remain British-owned. Typically, those that have been able to survive the mergers and acquisitions mania, which began early in the previous century, have been able to do so due to their reliance on the infrastructure that they own. Most of the remaining popular brewers that are

4

Including them would not have changed the major arguments below. There are still a number of British owned cider producers, such as Thatchers, Brothers Cider Co., H. Weston (Weston, Old Rosie), the SHS Group (Merrydown), and Orchard Pig. However, the most popular options are no longer British-owned: Strongbow, Woodpecker, Old Mout, and Bulmers belong to Heineken (the Netherlands), Kopparberg, and Rekoderlig to, respectively, the Swedish Kopparbergs Brewery and Åbro Bryggeri, Magners, Gaymer, K Cider, and Blackthorn to the C&C Group (Ireland), Carling to Molson Coors (Canada/United States of America), Somersby to Carlsberg (Denmark), Frosty Jack and Kingstone to the French cooperative Agrial, and Savanna Dry to the Distell Group Limited (South Africa).

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry

headquartered in the UK own a substantial number of bars. These tied houses have ensured a solid presence in the market and are common regionally. For example, Brains Brewery operates 250 pubs in Wales, Samuel Smith operates 200 pubs in Yorkshire, Shepherd Neame owns 303 pubs and hotels throughout London and South-East England, Hall and Woodhouse operate 250 pubs in the South of England, and the same applies to W. H. Brakspear & Sons Ltd., Wadworth Brewery, Hook Norton Brewery, and Butcombe. The direct

51

involvement of these brewers in the on-trade and their regional embeddedness through tied houses might explain how they were able to continue to work independently. However, some of these brewpubs were previously acquired by bigger multinationals (such as Chef and Brewer by Asahi). However, beers such as Marston’s, Hobgoblin, Thwaites, McEwan’s, Bombardier, Wychwood, Wainwright, and Courage Directors are owned by Carlsberg for 60% and and are 40% owned by Marston’s (a UK-based brewery).

Table 1 Most popular beers in the UK, style, brewery, and headquarters, adapted from https://yougov.co.uk/ratings/consumer/popularity/beercider/all and authors’ additions5 Place

Name

Fame (%)

Popularity (%)

Type

Company

Headquartered

1

Budweiser

98

55

Lager

ABINBEV

BEL

2

Guinness

97

53

Stout

Diageo

UK

3

Heineken

98

53

Lager

Heineken

NED

4

Stella Artois

96

49

Lager

ABINBEV

BEL

5

Corona

90

48

Lager

ABINBEV

BEL

6

Peroni

82

47

Lager

Asahi

JAP

7

San Miguel

89

45

Lager

Mahou-San Miguel Group

SPA

8

Sol

79

43

Lager

Heineken

NED

9

Kronenbourg 1664

89

42

Lager

Heineken

NED

10

Carlsberg

96

40

Lager

Carlsberg Group

DEN

11

Amstel

81

40

Lager

Heineken

NED

12

Foster’s

84

39

Lager

Asahi

JAP

13

Beck’s

82

38

Lager

ABINBEV

BEL

14

Tetley’s Brewery

77

37

Ale

Carlsberg Group

DEN

15

Birra Moretti

64

37

Lager

Heineken

NED

16

Carling

94

35

Lager

Molson Coors

CAN/US

17

Greene King IPA

71

35

IPA

CK Asset Holdings

Hong Kong

18

Old Speckled Hen

80

34

Ale

CK Asset Holdings

Hong Kong

19

Tiger Beer

55

34

Lager

Heineken

NED

20

Shandy Bass

76

33

NA

ABINBEV

BEL

21

Fuller’s

72

32

Lager

Asahi

JAP

22

Corona Extra

80

32

Lager

ABINBEV

BEL

23

Marston’s

63

32

Ale

Carlsberg Group

DEN

24

BrewDog

75

32

Craft

BrewDog

UK

25

Grolsch

71

32

Lager

Asahi

JAP

26

Newcastle Brown Ale

78

31

Ale

Heineken

NED

27

Boddingtons

78

31

Ale

ABINBEV

BEL

28

Estrella Damm

58

30

Lager

S.A. Damm

SPA

29

Coors Light

83

30

Lager

Molson Coors

CAN/US

30

Red Stripe

75

30

Lager

Heineken

NED (continued)

5

Fame refers to the percentage of people who indicate a knowledge of the product. Popularity refers to the proportion of people having a positive opinion of the product.

52

S. Van Kerckhoven and S. O’Dubhghaill

Table 1 (continued) Place

Name

Fame (%)

Popularity (%)

Type

Company

Headquartered

31

Old Golden Hen

62

29

Bitter

CK Asset Holdings

Hong Kong

32

Hobgoblin

70

29

Brown ale

Carlsberg Group

DEN

33

Murphy’s

61

29

Stout

Heineken

NED

34

Doom Bar

53

28

Ale

Molson Coors

CAN/US

35

Desperados

64

28

Lager

Heineken

NED

36

Bass

67

27

Lager

ABINBEV

BEL

37

Erdinger

44

27

Lager

Privatbrauerei Erdinger

GER

38

BrewDog Punk IPA

72

27

Craft

BrewDog

UK

39

Worthington’s

67

27

Ale

Molson Coors

CAN/US

40

Miller

64

27

Lager

Molson Coors

CAN/US

41

John Smith’s

78

26

Ale

Heineken

NED

42

London Pride

70

26

Ale

Asahi

JAP

43

St Austell

52

26

Ale

St Austell Brewery

UK

44

Chef and Brewer

53

25

Brewpubs

CK Asset Holdings

Hong Kong

45

Skol

71

25

Lager

ABINBEV

BEL

46

Bud Light

82

25

Lager

ABINBEV

BEL

47

Abbot Ale

59

25

Ale

CK Asset Holdings

Hong Kong

48

Lindemans

50

24

Kriek

Brouwerij Lindemans

BEL

49

Leffe

49

24

Ale

ABINBEV

BEL

50

Bishops Finger

46

23

Brewpubs

Shepherd Neame Brewery

UK

51

Thwaites

61

23

Ale

Carlsberg Group

DEN

52

Spitfire Kentish Ale

46

22

Brewpubs

Shepherd Neame Brewery

UK

53

BrewDog Lost Lager

60

22

Lager

BrewDog

UK

54

Old Peculier

53

22

Old ale

T&R Theakston

UK

55

Marston’s Pedigree

58

22

Amber ale

Carlsberg Group

DEN

56

McEwan’s

57

22

Ale

Carlsberg Group

DEN

57

Timothy Taylor

39

22

Brewpubs

Timothy Taylor Brewery

UK

58

Asahi

39

22

Lager

Asahi

JAP

59

Staropramen

39

21

Lager

Molson Coors

CAN/US

60

Tennent’s

68

21

Lager

C&C Group

IRL

61

Miller Genuine Draft

47

20

Lager

Molson Coors

CAN/US

62

Caffrey’s

52

20

Irish ale

Molson Coors

CAN/US

63

Coopers

44

19

Lager

Coopers Brewing Limited

AUS

64

Bavaria

45

19

Lager

Swinkels Family Brewing

NED

65

Bombardier

50

19

Amber ale

Carlsberg Group

DEN

66

Brahma

37

19

Lager

ABINBEV

BEL

67

Hop House 13

38

19

Lager

Diageo

UK

68

Harp

56

19

Lager

Diageo

UK

69

Pilsner Urquell

39

19

Lager

Asahi

JAP

70

Camden Hells Lager

36

19

Lager

ABINBEV

NED

71

Tuborg

49

18

Lager

Carlsberg Group

DEN

72

Hoegaarden

45

18

White

ABINBEV

BEL

73

Black Sheep

35

18

Several

Black Sheep brewing

UK (continued)

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry

53

Table 1 (continued) Place

Name

Fame (%)

Popularity (%)

Type

Company

Headquartered

74

Bath Ales

31

17

Ale

St Austell Brewery

UK

75

Special Brew

77

17

Special

Carlsberg Group

DEN

76

Efes

37

17

Lager

Anadolu Efes Biracılık ve Malt Sanayii

TUR

77

Coors Banquet

41

17

Lager

Molson Coors

CAN/US

78

Ruddles County

38

17

Bitter

CK Asset Holdings

Hong Kong

79

Singha

41

17

Lager

Boon Rawd Brewery

THAI

80

Brains

38

17

Several

Brains Brewery

UK

81

Samuel Smith’s

35

17

Several

Samuel Smith Old Brewery

UK

82

Oranjeboom

35

17

Lager

United Dutch Breweries BV

NED

83

Blue Moon

33

17

White

Molson Coors

CAN/US

84

Adnams

31

16

Several

Adnams

UK

85

TsingTao

32

16

Lager

Tsingtao Brewery Company Limited

CHI

86

Shepherd Neame

28

16

Several

Shepherd Neame Brewery

UK

87

Wychwood

28

16

Cask ale

Carlsberg Group

DEN

88

Duvel

38

16

Golden ale

Moortgat

BEL

89

Great Lakes

29

16

Several

Great Lakes Brewing Company

US

90

Bells

43

16

Craft

Bell's Brewery, Inc

US

91

Warsteiner

29

16

Lager

Warsteiner brewery

GER

92

Tsingtao Beer

32

15

Lager

Tsingtao Brewery Company Limited

CHI

93

Tyskie

32

15

Lager

Asahi

JAP

94

Tanglefoot

34

15

Golden ale

Hall and Woodhouse

UK

95

Badger Ales

34

14

Cask ale

Hall and Woodhouse

UK

96

Chang

33

14

Lager

ThaiBev

THAI

97

Wainwright

34

14

Golden ale

Carlsberg Group

DEN

98

Fursty Ferret

29

14

Pale ale

Hall and Woodhouse

UK

99

Goose Island

29

14

Several

ABINBEV

BEL

100

Pure Brewery

29

14

Craft

PURE brewing

US

101

Molson Canadian

32

13

Lager

Molson Coors

CAN/US

102

Bud Light Platinum

39

13

Lager

ABINBEV

BEL

103

Otter Bitter

29

13

Session

Otter Brewery

UK

104

Budejovický Budvar

24

12

Lager

Budweiser Budvar Brewery

TSJ

105

Innis and Gunn

29

12

Craft

Innis and Gunn

UK

106

Brakspear

26

12

Brewpubs

W. H. Brakspear and Sons Ltd.

UK

107

Cruzcampo

28

11

Lager

Heineken

NED

108

Wadworth

27

11

Brewpubs

Wadworth Brewery

UK

109

Courage Directors

29

11

Bitter

Carlsberg Group

DEN

110

Lagunitas

24

11

Lager

Heineken

NED

111

LaBatte Blue

25

10

Lager

ABINBEV

BEL

112

Harbin

19

10

Lager

Harbin Brewery

CHI

113

Sierra Nevada

31

10

Lager

Sierra Nevada Brewing Company

US

114

Tripel Karmeliet

18

10

Triple

ABINBEV

BEL

115

Thornbridge

24

10

Craft

Thornbridge Brewery

UK

116

Heverlee

20

10

Lager

Park Abbey

BEL (continued)

54

S. Van Kerckhoven and S. O’Dubhghaill

Table 1 (continued) Place

Name

Fame (%)

Popularity (%)

Type

Company

Headquartered

117

Brakspear Triple

25

9

118

Samuel Adams

25

9

Triple

W. H. Brakspear and Sons Ltd.

UK

Lager

Boston Beer Company

US

119

Otter Ale

24

9

Ale

Otter Brewery

UK

120

Yuengling Lager

21

9

Lager

D. G. Yuengling and Son

UK

121

Modelo Especial

19

9

Lager

ABINBEV

BEL

122

Weihenstephaner

18

9

Weiss

Bayerische Staatsbrauerei Weihenstephan

GER

123

Deuchars

25

9

IPA

Heineken

NED

124

Chimay

22

9

Ale

Chimay

BEL

125

Hook Norton

20

9

Brewpubs

Hook Norton Brewery

UK

126

Paulaner

18

8

Lager

Paulaner Brauerei Gruppe

GER

127

Foam Brewers

18

8

Craft

Foam brewers

US

128

Butcombe

20

8

Brewpubs

Butcombe

UK

129

Natural Light

15

7

Light

ABINBEV

BEL

130

Vermont Brewery

16

7

Several

Vermont Brewing

US

131

O Haras

15

7

Craft

Carlow Brewing Company

IRL

132

Bellerose

18

7

IPA

Brasserie des Sources

FRA

133

Marz Community

15

7

Craft

Marz Community Brewing Company

US

134

Hitachino

17

7

Craft

Hitachino

JAP

135

Tecate

12

7

Lager

Heineken

NED

136

Milwaukee Best Ice

17

7

Lager

Molson Coors

CAN/US

137

Pacifico

16

6

Lager

ABINBEV

BEL

138

Founders

12

6

Several

Mahou-San Miguel Group

SPA

139

Yanjing

17

5

Lager

Beijing Yanjing Brewery

CHI

Lastly, the UK, like other countries, has witnessed a revival of microbreweries typically focusing on craft beer. These breweries typically produce smaller amounts of beer of high quality and are often independently owned.6 Craft breweries have been growing both in the UK and in the EU. In particular, the number of small breweries has exploded in the UK. These breweries offer a wide variety of beers and beer styles, which are typically produced in smaller batches. Interestingly, some craft producers have made it onto the list provided by YouGov, data replicated in Table 1. However,

those that did make the list are, with the exception of BrewDog, not based in the UK.7 The appeal of craft beer has risen, but they have yet to become well-established and well-known in the eyes of the British public. Interestingly, British craft brewers have always collaborated intensely with brewers around the world. For example, some UK-based breweries produce beer in different countries, which was then imported back into the UK in order to be branded and sold there. For example, the UK-based craft brewer Beavertown Brewery used to produce its beers at the Belgian brewery De Brabandere as it worked to satisfy demand ahead of the construction of a larger brewing facility in London. They referred to this as a partnership, rather than working with a contract brewer (this 7

6

In the UK, the Society for Independent Brewers (SIBA), for example, runs the Assured Independent British Craft Breweries initiative, whose logo can be used to identify breweries that are small, independent, and that brew quality beer.

Brewdog, of which 22% is owned by US-based TSG Consumer Partners, has launched a new way of acquiring funding through its ‘Equity for Punks’ scheme which was launched internationally. It is, therefore, reasonable to assume that it is not only UK citizens who own shares in the company.

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry

55

Fig. 3 Brewery headquarters of the most popular beers in the UK

arrangement has been described in Van Kerckhoven et al., 2020b). They also started to brew at De Proef in Belgium and Brand Brewing in the Netherlands thereafter. Interestingly, Beavertown is one of the more successful UK craft brewers and was recently taken over by Heineken (Guardian, 2022b), showcasing that even craft brewers are not immune to foreign-headquartered brewers, and are an appealing take over choice for large brewers who are seeking to enter that market segment as well. Indeed, even though the UK has a vibrant craft beer scene, trying to re-cement the UK’s place as a great brewing nation means that its most popular craft beers are no longer owned by the founders of the craft brewery and have been taken over by the same foreign-owned breweries or asset managers as other sectors. Table 3 indicates the 10 most popular craft beers in 2020, the most recent year for which data are available. These data focus on the on-trade, but for many craft brewers that is also

where they sell the most beers. With the sale of Beavertown to Heineken in 2022, this would mean that only BrewDog’s IPA is among the 10 most consumed craft beers in the UK that is not foreign-owned. Brexit-affected craft brewers directly; most of the top 100 craft brewers in the UK used to send about 20% of their production abroad, something that has become increasingly difficult. Thus, internal competition has risen, with the supply of highly hopped beers for UK consumers at an all-time high whose interest in these beers had previously been limited. At the same time, and in order to offload these beers, some brewers undercut their retailers by lowering their webshop price to the wholesale price offered to retailers, potentially having a long-term impact on distribution channels (The Drinks Business, 2022). It is clear that both the COVID-19 pandemic and Brexit have led to more intense competition between craft brewers. With the significant uptake in inflation in the last year, this competition will only

56 Table 2 Country of ownership of the 139 most popular beers in the UK

Table 3 On-trade best-selling craft beers, data from https:// www.morningadvertiser.co.uk/ Article/2020/11/30/What-is-theon-trade-s-best-selling-craft-beer, additional information by the authors

S. Van Kerckhoven and S. O’Dubhghaill Country

Occurrence

Percentage

UK

30

22.22

BEL

23

17.04

NED

17

12.59

DEN

13

9.63

CAN/US

12

8.89

JAP

8

5.93

US

8

5.93

Hong Kong

6

4.44

CHI

4

2.96

GER

4

2.96

IRL

2

1.48

SPA

2

1.48

THAI

2

1.48

AUS

1

0.74

FRA

1

0.74

TSJ

1

0.74

TUR

1

0.74

2020

Brand

1

Camden Hells Lager

42,426

ABINBEV

BEL

2

BrewDog Punk IPA

41,784

BrewDog

UK5

3

Camden Pale Ale

30,273

ABINBEV

BEL

4

Marston’s Shipyard

24,229

Carlsberg

DEN

5

Beavertown Neck Oil

22,065

Heineken

NED

6

Blue Moon

20,173

Molson Coors

CAN/US

7

Brooklyn Lager

17,24

Brooklyn Brewery

US

8

Goose Island Midway IPA

13,066

ABINBEV

BEL

9

Maltsmiths American Style IPA

12,785

CK Asset Holding

Hong Kong

10

Greene King East Coast IPA

12,439

CK Asset Holding

Hong Kong

intensify further, thereby hampering the prospects of many craft breweries’ ability to survive, while making some of them easy pickings for foreign-headquartered brewers.

Conclusion: Is There Still British Beer? This chapter has evaluated the current landscape of both the British beer and brewing industries. The British beer market was dominated historically by small, local brewers and developed quite a variety of unique beer types. The UK’s increased integration with the European and global markets in the 1970s changed this dynamic. Foreign-headquartered brewers accessed the British market with the arrival of lager

Volume (HL)

Owner

Nationality

beers, which quickly became popular throughout the UK. These companies then slowly, but steadily, started to acquire several of the UK-based brewers, thereby expanding their offerings in the process. The UK’s beer industry is, thus, largely owned by foreign-headquartered brewers who might have kept the British brands and might even still produce these beers in the UK. Opposition, in the form of the ‘Campaign for real ale’, failed to reverse the evolution toward consolidation in these foreign-headquartered brewers, but it succeeded in creating the launching pad for both micro and craft brewers. It was initially assumed that Brexit and the emergence of the aforementioned brewers would regenerate the Britishness of beers in the UK, but that did not take place. Brexit mostly

The Last of the Britons? The Impact of Globalization and Brexit on the UK Beer Industry

hurt British beer producers’ exports, all while the European imports recovered quickly. Craft and microbrewers slowly gained a higher market share and have increased the diversification of British brewers, but they can no longer be seen as the market segment in which British beers can withstand the deep pockets of foreign-headquartered brewers. Indeed, several of the most popular craft brewers have been acquired by these same companies. So, other than some UK-based craft breweries, regional brewers with strong links to the hospitality sector seem to be the last real British brewers.

References British Beer, & Pubs Association (BBPA) (2015). Statistical handbook —A compilation of drinks industry statistics. Brewers Hall. Brown, P. (2012). Britain. In G. Oliver (Ed.), The Oxford companion to beer (pp. 177–183). Oxford University Press. Cabras, I. (2016). A pint of success: How beer is revitalizing cities and local economies in the UK. In N. Chapman, J. Lellock, & C. Lippard (Eds.), Untapped: Exploring the cultural dimensions of the craft beer revolution. Cabras, I. (2018). Beer on! The Evolution of Micro- and Craft Brewing in the UK. In C. Garavaglia & J. Swinnen (Eds.), Economic perspectives on craft beer (pp. 373–397). Palgrave Macmillan. Cabras, I., & Bamforth, C. (2016). From reviving tradition to fostering innovation and changing marketing: The evolution of micro-brewing in the UK and US, 1980–2012. Business History, 58(5), 625–646. Carroll, G. R., & Swaminathan, A. (1992). The organizational ecology of strategic groups in the American brewing industry from 1975 to 1990. Industrial and Corporate Change, 1(1), 65–97. Cornell, M. (2004). Beer: The story of the pint: The history of Britain's most popular drink. Headline. Danson, M., Galloway, L., Cabras, I., & Beatty, C. (2015). Micro-brewing and entrepreneurship: The origins, development and integration of real ale breweries. International Journal of Entrepreneurship and Innovation, 16(2), 135–144. Deconinck, K., Poelmans, E., & Swinnen, J. (2015). How beer created Belgium (and the Netherlands): The contribution of beer taxes to war finance during the Dutch revolt. Business History, 58(5), 694– 724. Foley, N. (2021). Pub statistics. House of commons library briefing paper, 8591. Hanson, D. J. (2013). Historical evolution of alcohol consumption in society. In P. Boyle, P. Boffetta, A. B. Lowenfels, H. Burns, O. Brawley, W. Zatonski, & J. Rehm (Eds.), Alcohol: Science (pp. 3– 12). Policy and Public Health. Jackson, M. (1977). The world guide to beer. Kazzazi, F., Pollard, C., Tern, P., Ayuso-Garcia, A., Gillespie, J., & Thomson, I. (2017). Evaluating the impact of Brexit on the pharmaceutical industry. Journal of Pharmaceutical Policy and Practice, 10, 32. Knowles, T., & Egan, M. (2002). The changing structure of the brewing and pub retailing. International Journal of Contemporary Hospitality Management, 14(2), 65–71. Nye, J. V. C. (2007). War, wine and taxes: The political economy of Anglo-French trade, 1689–1900. Princeton University Press. Phillipson, J., & Symes, D. (2018). ‘A sea of troubles’: Brexit and the fisheries question. Marine policy (pp. 168–173).

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Preece, D. (2016). Turbulence in UK public house retailing: Ramifications and responses. In I. Cabras, D. Higgins, & D. Preece (Eds.), Beer, brewing and pubs: A global perspective. Palgrave Macmillan. Statista. (2001). Industries and markets: Beer industry in the UK. Available at https://www.statista.com/study/23342/beer-in-the-ukstatista-dossier/ The Drinks Business (2022). How brexit and covid-19 changed the craft beer industry for good, August 26, 2022. The Guardian (2014). The craft beer revolution: How hops got hip. The Guardian, August 13, 2014. The Guardian (2021). Wetherspoon’s short on some beers as Brexit affects deliveries. The Guardian, September 1, 2021. The Guardian (2022a). Kent brewery hailed as Brexit ‘export champion’ has one EU customer left. The Guardian, September 4, 2022a. The Guardian (2022b). London craft brewer Beavertown sells up fully to Heineken. The Guardian, September 7, 2022b. Tremblay, C. H., & Tremblay, V. J. (2009). Recent economic developments in the import and craft segments of the brewing industry. In J. Swinnen (Ed.), The economics of beer. Oxford University Press. Van Kerckhoven, S. (2021). Post-Brexit leadership in European finance. Politics and Governance, 9(1), 59–68. Van Kerckhoven, S., & Odermatt, J. (2020). Euro clearing after Brexit: Shifting locations and oversight. Journal of Financial Regulation and Compliance, 29(2), 187–201. Van Kerckhoven, S., Van Meerten, M., & Wellman, C. (2020a). The dynamics of the hops industry. In E. S. Madsen, J. Gammelgaard, & B. Hobdari (Eds.), New developments in the brewing industry. Oxford University Press. Van Kerckhoven, S., Van Meerten, M., & Wellman, C. (2020b). Contract brewing and its implications for the beer industry. In E. S. Madsen, J. Gammelgaard, & B. Hobdari (Eds.), New developments in the brewing industry: The role of institutions and ownership (pp. 235–255). Oxford University Press. van Tongeren, F. (2011). Standards and international trade integration: A historical review of the German ‘Reinheitsgebot’. In J. F. M. Swinnen (Ed.), The economics of beer. Oxford University Press. Wyld, J., Pugh, G., & Tyrrall, D. (2010). Evaluating the impact of progressive beer duty on small breweries: A case study of tax breaks to promote SMEs. Environment and Planning c: Government and Policy, 28(1), 225–240. Zytophile. (2015). Why meantime sold up to SAB Miller—The inside story, May 16, 2015.

Prof. Dr. Sven Van Kerckhoven is Vice-Dean for Education and Assistant Professor Business and Economics at the Brussels School of Governance. He obtained his Ph.D. in Applied Economics and Master degrees in International Politics and Business Economics from the KU Leuven. As Visiting Fellow at Stanford University and the University of Warwick, he discovered that sharing a beer is the best way to integrate in new places.

Dr. Sean O’Dubhghaill is Assistant Professor at the Brussels School of Governance (Vrije Universiteit Brussel). He is an anthropologist who is interested in every aspect of how we consume culture and in what that consumption communicates about us. He has a Ph.D. in social and cultural anthropology from KU Leuven. Beer became an invaluable tool in cultural brokerage and engaging in dialog during his examination of the Irish diaspora’s lives and patterns of belonging in Belgium.

Blood Alcohol Regulations and EU Beer Exports Tibor Besedeš and Thomas J. Prusa

Abstract

We examine how blood alcohol content (BAC) regulations have affected EU beer exports over the 1995–2019 period. We use BAC levels to group destination markets into five groups and examine how beer exports vary across BAC stringency. We distinguish between changes in the breadth of countries serviced (the extensive margin) and the trade deepening (the intensive margin). We find BAC rules which affect the two margins differently. The breadth of EU exports is lower for destination markets with the least stringent BAC rules than markets with more stringent rules (i.e., lower BAC cutoff). By contrast, we find that the depth of EU exports increases as the BAC rules become less stringent. We offer possible explanations for the divergent effects of BAC rules on trade patterns, but the results highlight the need for ongoing research on the topic. Keywords





Beer exports Blood alcohol content Trade breadth Regulation




Trade depth




Introduction Over the last 30 years, consumption and trade of beer have increased worldwide. For example, between 1999 and 2019, worldwide exports of beer from EU members increased by

T. Besedeš School of Economics, Georgia Institute of Technology, Atlanta, Georgia 30332-0615, USA e-mail: [email protected] T. J. Prusa (&) Department of Economics, New Jersey Hall, Rutgers University, New Brunswick, NJ 08901, USA e-mail: [email protected]

35%. Despite the impressive average growth, there is significant variation across EU members. For example, British and Greek exports decreased by 27% and 41%, respectively, while Romanian and Bulgarian exports increased by more than 2000%. One source of the variation in the growth of beer exports across EU members has to do with newfound opportunities of new members following successive rounds of expansion of the EU since 2000 and another is due to trade deepening. A complicating factor for understanding the evolution of beer trade is that alcohol exports, in general, and beer exports, specifically, are subjected to numerous regulations in destination markets. Some countries, such as Egypt, Indonesia, Iran, and Pakistan, prohibit the consumption of any alcohol or beer, and a rule that one would imagine has a depressing effect on trade!1 More commonly, countries allow but regulate beer and alcohol consumption. A common regulation involves blood alcohol content (BAC), also referred to as blood alcohol level. Governments often establish a maximum BAC for driving a motor vehicle and motorcycle. BAC regulations vary across countries, with some countries having lower legal limits and others having higher limits. Assuming BAC rules are enforced, a lower BAC level should affect the amount of alcohol consumed. Further, one could expect BAC rules to affect a supplier’s exports across markets with more exports to those countries with less restrictive regulations. We focus on the role of blood alcohol content level as it is a regulation that is imposed in virtually all countries and hence allows us to conduct a large cross-country investigation, covering multiple exporters and virtually the entirety of their destination markets, rather than focusing on a specific case study focused on a less universal regulation. In this chapter, we offer an initial examination of the interplay between BAC regulations and beer exports.

1

A total of 26 countries in our data prohibit consumption of beer.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_5

59

60

The focus of our investigation is how BAC regulations in destination markets affect the extensive and intensive margins of EU members’ exports. The extensive margin captures the breadth of exports and is most often measured as a simple count of the number of markets a country exports. The intensive margin captures the depth of exports and reflects how large exports are to an average destination. It is typically measured as average sales across all markets. We discovered a number of interesting patterns. To begin with, we find that beer exports are observed even for destination countries where alcohol consumption is prohibited. The prohibition appears to be more binding for beer in kegs and less binding for beer in cans and bottles—packaging formats which presumably are easier to avoid detection.2 Second, while we find that it is generally true that lower BAC levels imply lower levels of consumption and trade, the observed trade dynamics are not uniformly related to differences in BAC levels. Broadly stated, beer exports are higher to countries with less restrictive BAC rules. This is not an unexpected result. However, we find that exports to countries with the least restrictive BAC rules are lower than to those with somewhat more restrictive BAC rules. Both the breadth and the depth of beer exports are higher for countries that were already in the EU before its expansion in 1995, many of whom are considered to be the traditional beer-brewing countries, such as Belgium, Germany, Great Britain, the Netherlands, and Ireland. The new members that joined in 1995 have a higher extensive margin, exporting to more destinations, than those that joined after 2003, while the differences between the two sets are more muted on the intensive margin, the average sales to a destination. Once we take into account the different packaging containers in which beer is sold, exports of beer in cans, bottles, and kegs tend to reach fewer destination markets with higher BAC levels, i.e., have a lower extensive margin. However, exports to markets with higher BAC levels generally involve much larger values resulting in significantly larger intensive margins, especially for bottles and kegs exported to markets with highest BAC levels. Our findings make it clear that the observed beer trade patterns are more complicated than one might expect from a simple rank ordering of BAC cutoffs. Additional study of the reasons for these empirical findings is an interesting path for future research.

2

Our data is reported by exporters, not importers. As our exporters are member of the EU, it is possible that they report exports to countries where consumption is prohibited. Presumably were we able to use import data reported by countries where alcohol is prohibited we would not observe any imports in trade. If that were indeed the case, we could conclude that beer in cans and bottles is imported in ways that avoid detection.

T. Besedeš and T. J. Prusa

Related Literature A number of previous studies have documented the effect of regulations on beer consumption and production. While none of these studies have focused on beer trade, they provide helpful background and context for our results. There are four key insights from the prior literature that are particularly relevant. The first key issue stressed in the literature is that BAC is just one type of (beer) regulation. Staples et al. (2021) document that within the USA alone, there are literally thousands of regulations governing the production, distribution, and consumption of beer. Moreover, they point out that regulations vary significantly across production and consumption localities. These varying regulations can mean that some beer products might be sold and consumed in certain localities (and/or consumption outlets) but not in others. More generally, the complicated web of regulations raises the cost of distribution and sales. These higher costs will limit which brewers and beer brands will be available to each market. As Melitz (2003) demonstrated, higher trade costs (which in this case are due to regulatory regimes) will reduce the number of beer varieties available. In addition, economic theory predicts that smaller brewers and the most geographically distant brewers will not service high regulatory cost locations. The second key issue is the challenge of compiling consistent regulatory measures across a large set of countries. For example, Staples et al. (2021) are limited to variations across US localities. Limited data on regulations across a broader set of countries handicaps most of the literature. The cross-country empirical studies that have been conducted are mostly limited to high income, developed countries. For example, Brand et al. (2007) create an index based on five regulations governing beer consumption (where more restrictive measures are given higher index scores) and use this index to study the impact of beer regulations across countries. They find a negative correlation between their index and per capita alcohol consumption—in other words, more restrictive regulations reduce beer consumption. This finding confirms that regulations work; however, their study is limited to just 30 OECD countries. We note, however, that like this study, Brand et al. (2007) include BAC levels for operation of motor vehicles as one of their five regulations. In addition to the far wider set of countries in our analysis, another key difference between this paper and Brand et al. (2007) is that they do not separately identify the impact of BAC nor do they attempt to identify any nonlinearities in the regulatory impact. Nonlinear effects have been identified in the literature, most notably by Colen and Swinnen (2011) who identify a nonlinear effect between income and beer

Blood Alcohol Regulations and EU Beer Exports

consumption. In particular, they find an inverse U-shape where beer consumption initially increases with rising incomes, but at higher levels of income, beer consumption falls. They argue that in addition to possible regulatory reasons, the wider availability of substitutes (e.g., spirits, wine) in the highest income countries likely plays an important role in the decline in beer consumption at the highest income levels. It should be noted that their finding is mostly based on temporal income variation rather than cross-section variation as they only have data for seven countries. Cook et al. (2014) look at a somewhat larger set of countries (38) and find policies regulating the physical availability of alcohol, particularly those concerning business hours or involving a licensing system for off-premises alcohol retail sales, as well as minimum legal drinking age, which were the most consistent predictors of alcohol consumption. This work implies that alcohol policies that regulate the physical availability of alcohol are associated with lower alcohol consumption in low- and middle-income countries. By contrast, they find policies that BAC limits for drivers and random breath testing to enforce BAC limits were not associated significantly with alcohol consumption. The lack of significance of BAC on consumption could be due to their linear specification as our results suggest the impact of BAC on consumption is nonlinear. However, their finding could also be due to the relatively small set of countries in their study, a data limitation which severely hinders their ability to identify a nonlinear impact of BAC on consumption. A third theme that emerges in the literature is that socio-economic and cultural conditions have a complex interrelationship with alcohol regulations. For instance, alcohol consumption tends to be associated positively with a country’s living standards. Cultural and social practices also influence alcohol consumption. To the extent that these additional factors are at odds with the regulatory policies can result in complex cross-country differences in how regulations affect consumption. At one extreme, for example, in societies where abstinence as a cultural norm is widespread, lax regulations may have little effect. Relatedly, a US government study on foreign trade barriers frequently cites alcohol beverages as being subject to significant trade restrictions and quotas (USTR, 2021). The USTR (2021) report does mention that such trade restrictions are often associated with cultural and social norms against alcohol consumption. This makes it likely our BAC metric is not the only, or at least not the most direct, regulation that could restrict beer importation. It is unfortunate that the USTR report highlights trade barriers governing alcohol imports only for those countries with restrictions and therefore does not provide information to allow us to directly quantify the independent role played by such trade barriers.

61

Finally, the fourth theme that emerges from the literature is the incredible growth in global beer markets, both in terms of the variety of beer varieties and also in terms of the number of independent brewers (suppliers). Howard (2014) discusses how the globalization of beer has affected local beer markets noting that it has become increasingly difficult to compete, particularly in larger markets. Garavaglia and Swinnen (2017) discuss the growth of micro- and craft breweries over the last two decades highlighting the increase in competition and an end of the worldwide consolidation in the beer industry. As we argue in our conclusion, increased competition may be one explanation of our results.

Data There are two key pieces of data used in this study—beer exports and BAC levels.

Trade Data Our data on European Union (EU) member countries’ beer exports are sourced from Eurostat’s Comext database.3 Comext provides detailed product-level data on exports of all EU member countries to all destination markets across the globe. Products are classified according to the EU’s 8-digit Combined Nomenclature (CN) classification which codifies about 9500 products. The reporting thresholds are codified by EU legislation and require any extra-EU transaction involving more than €1000 in value or 1000 kg in net weight can be reported. Reporting thresholds for intra-EU transactions are higher and member specific. Our analysis uses trade data at the annual frequency starting in 1995 and ending in 2019. During this period, Comext uses three product codes to capture trade in beer with codes differentiated by how beer is packaged rather than by the type of beer. The first code, 22030010, is defined as beer in containers bigger than 10 L, which we will refer to as kegs. The other two codes capture trade of beer in containers smaller than 10 L and are differentiated as bottles, 22030001, and “other containers excluding bottles,” 22030009. We will refer to the former packaging as bottles and the latter as cans. As a result, our data reflect trade in beer exported in the three most common packaging formats: cans, bottles, and kegs. During the time period we analyze, the EU went through several rounds of expansion. Austria, Finland, and Sweden joined the EU in 1995 and thus are in our dataset every year. There were three subsequent rounds of expansion. Cyprus,

3

http://epp.eurostat.ec.europa.eu/newxtweb/.

62

Czechia, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia joined in 2004, while Bulgaria and Romania joined in 2007. For these countries, data in Comext are available starting in 1999. Croatia was the last country to join the EU in 2013 with Comext reporting its data starting in 2001. Given the compositional changes the EU has undergone, we adopt the following notational convention when referring to different groupings of EU exporters. EU28 refers to all 28 EU members as of the last year of our sample, 2019, which includes Great Britain which departed at the end of January 2020. In other words, EU28 refers to an all-EU aggregate. EU12 refers to the 12 EU members as of 1994, prior to the 1995 expansion. We refer to countries that joined in 1995 as EU12–15. Finally, we use EU15–28 to refer jointly to countries that joined the EU after 2003. Comext provides trade data measured in current euros for every country. In order to compare the value of imports and exports across time, we deflate the values using the annual GDP deflator for the Eurozone obtained from OECD with 2015 as the base year.4

Blood Alcohol Content Blood alcohol content (BAC) regulations for drivers are available from the World Health Organization (WHO).5 WHO reports blood alcohol regulations in three years, 2013, 2015, and 2018. In our analysis, we use the maximum legal level of blood alcohol for the general population (some countries have different regulations for young drivers). We use the earliest available year for every country. For the majority of countries to whom the EU members export beer, BAC levels are available in 2013. For the rest of the countries, we use BAC levels from 2015 or 2018, allowing us to identify BAC levels for 188 countries. Only a handful of countries report changes to their BAC level over the 2013–2018 period. Out of 188 countries in the WHO database, 22 report changes in their BAC levels in the three years for which data are available. Two countries first relax their regulation, increasing the BAC limit, followed by a reduction to the original level.6 Another eight countries relax their BAC regulation by increasing the legal limit.7 Finally, twelve countries increase the stringency of their policy by reducing the BAC level.8 Most changes in the

T. Besedeš and T. J. Prusa

WHO database involve a country transitioning from a missing BAC value to a positive BAC level. The fact we rarely observe changes in BAC levels in the WHO database gives us confidence in our assumption that the reported BAC data reasonably apply to the years prior to 2013.9 The WHO identifies countries that prohibit consumption of alcohol as well as those that allow consumption of alcohol but set a maximum BAC value. The highest BAC level we observe in our data is 0.12 and the lowest level is 0. There are three clusters of countries across the BAC levels. There are 36 countries that prohibit consumption or have a BAC limit of zero. Another 59 countries have set their BAC limit at 0.05, while 56 have set it at 0.08. As a result, we categorize countries into five groups: (1) countries that prohibit alcohol consumption (26 countries), (2) countries that set their BAC at 0 (10 countries), (3) countries where the BAC limit is less than 0.05 but greater than 0 (31 countries), (4) countries with the BAC equal to 0.05 (59 countries), and (5) countries with a BAC limit above 0.05 (62 countries). Figure 1 depicts the BAC levels across countries using the above grouping system to classify them into five groups. As seen, countries that prohibit alcohol are largely Middle Eastern countries including Afghanistan, Iran, Kuwait, and Pakistan. Countries that have BAC set to zero are mostly located in Eastern Europe. Africa, Asia, and Europe are the most diverse continents with countries in each of the five BAC-level groups.

Methodological Approach Our investigation examines two measures of the patterns of EU exports of beer: (1) the extensive margin (or the breadth) of exports and (2) the intensive margin (or the depth) of exports. We use simple definitions often used in the literature to measure the two margins.10 The example in Table 1 allows us to clarify how we calculate the intensive and extensive margins. The table depicts a hypothetical EU country exporting beer to five partner countries, labeled A, B, C, D, and E, starting in 1995 and ending in 1999. The annual value of exports is indicated for each destination market. For example, €3M was exported to country A in 1996; the exporter did not sell any beer to country A in either 1995 or 1999. In addition, we assume that destination markets A, B, and C share a similar BAC regulation level (Group 4) and

4

https://stats.oecd.org/Index.aspx?QueryId=61354. https://www.who.int/data/gho/data/themes/topics/indicator-groups/ indicator-group-details/GHO/drink-driving. 6 Armenia and Nigeria. 7 Czechia, Democratic Republic of Congo, Georgia, Liberia, Myanmar, Romania, Samoa, and Turkmenistan. 8 Botswana, Brazil, Colombia, Cuba, Equatorial Guinea, Ireland, Laos, Malta, Mongolia, Montenegro, New Zealand, and Uruguay. 5

9

Countries with a non-missing BAC value change almost always involved very small changes in the BAC level (e.g., from 0.03 to 0.02) and such changes did not imply a difference in the BAC group assigned to the country. 10 See Besedeš et al. (2017) for example.

Blood Alcohol Regulations and EU Beer Exports

63

Fig. 1 Worldwide blood alcohol content limits for drivers. Source Original to the authors

Table 1 Hypothetical exports to five destination markets (millions €) and the extensive, utilized extensive, and intensive margins of trade

Country

BAC group

Year 1996

1997

1998

A

4

3

2

2

B

4

2

C

4

1

D

5

4

E

5

1

1995

4

1999

2

2

1

1

1

4

4

4

3

2

1

BAC Group 4 (BAC = 0.05) Extensive margin (breadth)

0

3

2

Utilized ext. margin (relative breadth)

0

1.0

0.67

1.0

0.67

Average intensive margin (depth) (millions €)

0

2.00

1.50

1.67

1.5

2

1

2

1

1

BAC Group 5 (BAC > 0.05) Extensive margin (breadth) Utilized ext. margin (relative breadth)

1.0

0.5

1.0

0.5

0.5

Average intensive margin (depth) (millions €)

2.50

4.00

2.50

4.00

4.00

Source Original to the authors

destination markets D and E share another BAC regulation level (Group 5). Studies often examine how the extensive and intensive margins evolve over time (Besedeš & Prusa, 2011). The extensive margin is simply the count of the number of partner countries to which exports are sent. Hence, the extensive margin measures the breadth or the reach of a country’s exports. Note that in our example, the extensive margin for BAC Group 4 equals 2 in both 1997 and 1999. However, only one of the countries is active in both years, country C, while country A was active in 1997 and country B was active in 1999. As we are interested in how beer exports differ across destination markets and BAC regulations, we use a relative measure of the extensive margin which we call utilized extensive margin (Besedeš & Prusa, 2011), or relative breadth. Comparing the sheer number of destinations a

country exports to within each of our five BAC-level regulation groups of countries only makes sense if the groups have an equal number of countries. However, they do not. It is entirely different to export to eight markets when there are a total of ten possible destinations than it is to export to eight markets when there are 62 possible destinations. The sizes of our five groups of countries based on BAC regulations are 26, 10, 31, 59, and 62. In order to compare how broad exports of beer are across destination markets within each of these groups, we compute the utilized extensive margin which is simply the ratio of the number of active destinations to the possible number of destinations in a market. This means the utilized extensive margin ranges from 0 to 1. For the example depicted in Table 1, if we assume that the entire set of BAC Group 4 potential destination markets is just the three countries A, B, and C, we can compute the relative breadth for each year. The extensive margin is 3 in 1996

64

which means that the relative breadth (i.e., utilized extensive margin) is 1; by contrast, the extensive margin is 2 in 1997 which means that the relative breadth is 0.67. Similar calculations can be done for BAC Group 5 (countries C and D) for each year. The intensive margin is the average value of trade across active destination markets in each year. Hence, one can think of it as a measure of how deep a country’s exports penetrate a market on average. In our example, the depth of trade (i.e., the intensive margin) varies from year to year depending on which countries are actively trading and how large each destination market’s purchases are. In our example, overall between 1995 and 1999, the depth grew from €0M to €1.5M for BAC Group 4 and from €2.5M to €4M for BAC Group 5. There is no equivalent to the utilized extensive margin on the intensive margin side. There is no upper bound on the size of the intensive margin as there is for the extensive margin, where if there are 56 possible destinations, the highest the extensive margin can become is 56. We compute both margins for every year in our sample and for every EU member; we note that the destination markets are grouped by BAC level which means that for each EU exporting country, we calculate each margin for each BAC level.

Results Descriptive Summary We begin our analysis by first providing a descriptive summary of the breadth and depth of EU beer exports. Figure 2 offers a sense of how the breadth of EU exports varies across destination markets grouped according to BAC regulations and for various groupings of EU countries averaged across the entire 1995–2019 sample period. We group EU members into four groups, with the utilized extensive margin measure averaged across EU members in each group. Not surprisingly, the average relative breadth (i.e., utilized extensive margin) is the smallest for the group of destination markets that have prohibited consumption of alcohol. What is surprising, on the other hand, is that the relative breadth is not zero for these countries. Across all 28 EU members, the average relative breadth in these markets is 16%. That is, the EU28 countries, on average, export beer to 16% of the countries who prohibit alcohol consumption. Across the three groups of EU exporters, grouped by their accession to the EU, the EU12 countries have the largest utilization rate at 29%, while EU15–28 additions average 7%. Interestingly, the largest relative breadth is for destination markets that have set their BAC level at 0. This is true across all four groupings of EU exporters. EU12 countries, some of which are traditional producers and consumers of beer, have

T. Besedeš and T. J. Prusa

Fig. 2 Average utilized extensive margin (relative breadth). Note:BAC refers to the blood alcohol content limits for drivers. EU28 refers to all 28 EU members in 2019. EU12 captures the 12 members prior to 1994, EU12–15 refers to Austria, Finland, and Sweden who joined in 1995, and EU 15–28 refers to the post-2000 new member countries. Source Original to the authors

the highest average relative breadth, at just above 60%, in destination markets with BAC regulation set at 0, followed by the EU12–15 additions and then EU15–28. Somewhat surprisingly, across all four groupings of EU exporters, the relative breadth in destination markets with highest BAC levels is the lowest across all countries that allow consumption of alcohol. One might expect that as the maximum level of BAC increases, that EU exporters may be able to reach more markets. This does not seem to be the case.11 As we will shortly argue, the average intensive margin sheds a different, yet complementary, perspective on this result. Figure 3 presents a different view of how the relative breadth (i.e., utilized extensive margin) varies across the five levels of BAC regulations and across EU members. The figure shows five maps of EU exporters, one for each of the five destination BAC-level groups, where exporters are identified by their respective relative breadth, which is grouped by quintiles. Thus, the dark blue color denotes the first quintile of utilization identifying countries who utilize less than 20% of their extensive margin. The second quintile, identified by light blue color, identifies countries whose utilization is in the second quintile, between 20 and 40%, and so on. The figure offers a somewhat more granular summary of the relative breadth than Fig. 2 and allows us to observe some of the same patterns as well as identify some new ones. The relative breadth is smallest in the set of countries that prohibit consumption of alcohol. No EU member utilizes more than 80% of the possible breadth in

11 We will offer possible explanations for this surprising pattern in the final section of this chapter.

Blood Alcohol Regulations and EU Beer Exports

65

Fig. 3 Utilized extensive margin (relative breadth) by BAC level. Note The figure reports the size of each EU member’s utilized extensive margin across destination markets. Each panel shows the geographic differences in utilization of the extensive margin for a specific group of destination markets, which are grouped according to their BAC level.

The size of the utilized extensive margin is identified by the quintile in which it belongs, so that the utilization of 0.35 (35% of the possible extensive margin) would be in the second quintile. Source Original to the authors

this group of destination markets. Interestingly, the same is true of the set of countries with maximum BAC level above 0.05. Relative breadth is highest in the set of destination markets with BAC levels set between 0 and 0.05, with only Germany and the Netherlands utilizing more than 80% of the possible extensive margin (identified by pink color in the figure). Note that none of the countries that join the EU utilize more than 80% of the relative extensive margin to any BAC grouping during this period. We should note that Fig. 3 depicts the average relative breadth. Thus, it may be possible for some countries to utilize more than 80% in some

years, but not when averaged over our 25-year long sample. With 25 years and five BAC-defined groups of destination markets, we measure relative breadth 125 times for each exporter. In theory, an exporter can utilize more than 80% of the extensive margin a total of 125 times. The Netherlands does it most often, 75 times or 58% of the time, with Germany next highest at 65 times or 52%. Other countries that utilize more than 80% of their extensive margin do so much less frequently: Austria (2 times), Belgium (15), Czechia (4), Denmark (12), Spain (6), France (4), Great Britain (10), Italy (2), and Poland (2). EU28 as a whole utilizes more than 80%

66

of the extensive margin in almost every possible instance, 122 times of the possible 125. EU12 does it 121 times, while the EU12–15 and EU15–28 additions do it much less frequently, 2 and 23 times, respectively. One pattern we can see in Fig. 3 common across all five panels is that irrespective of the destination markets’ BAC regulation level, the EU countries with the highest relative breadth tend to be countries with a tradition of beer brewing: Germany, the Netherlands, Denmark, and Belgium, with Czechia the only newer EU member joining them. Across the five panels, the lowest relative breadth belongs to most other eastern and central European countries as well as countries with a stronger wine producing and drinking culture, such as Italy, France, Spain, and Portugal. Turning our attention to the depth of exports (or intensive margin), Fig. 4 shows the average depth, in millions of (real) euros, across the same groupings of EU exporters and the same five groupings of destination markets according to their BAC levels. As depicted in the example in Table 1, to compute the depth for each destination market, we aggregated exports for each group of EU exporters (e.g., EU12) and then averaged by the number of markets where those exports were going. The analysis of the depth of exports helps explain two surprising results we found above when we looked at the utilized extensive margins. One unexpected finding was that EU countries were able to export beer even to countries that have prohibited consumption of alcohol. The depth (i.e., intensive margin) results clearly indicate that while there are some positive exports to this group of markets, the exports are very small in size, almost negligible. The other puzzling result was the observation that the utilization of the extensive margin decreased as the maximum BAC-level regulation increased, suggesting an inverse U-shape. In other words, as the maximum level of BAC in destination markets increases, EU countries export to fewer markets. Figure 4 shows that for the entire EU28, and the original EU12 countries, the average size of exports to a destination market increases with BAC regulation levels, with the difference starkest for exports to countries with BAC below 0.05 and those with BAC at or above 0.05. For example, EU12 exports to countries with maximum BAC level of at least 0.05 are at least five times as large as average exports to countries with BAC level set to 0 and at least three times as large as their average exports to countries with BAC level set to between 0 and 0.05. In other words, the relationship between BAC and depth of trade is positive, not inverse U-shaped, for the largest beer exporting countries. For the EU15 additional countries, the average trade depth is small, not surprising for countries without as much of a beer brewing tradition (Austria, Finland, and Sweden), and decreasing as the BAC level in the destination markets increases. For EU28 additions, the intensive margin is

T. Besedeš and T. J. Prusa

Fig. 4 Average intensive margin (depth of trade). Note BAC refers to the blood alcohol content limits for drivers. EU28 refers to all 28 EU members in 2019. EU12 captures the 12 members prior to 1994, EU12– 15 refers to Austria, Finland, and Sweden who joined in 1995, and EU 15–28 refers to the post-2000 new member countries. Source Original to the authors

smallest in alcohol-prohibited markets, largest in those that have set their BAC level to 0 and then decreases for the other three groups of destination markets.

Regression Results While Figs. 2, 3 and 4 allow us to visually assess differences across EU exporters in the breadth and depth of their beer exports, they mask a lot of the variation across both exporters and time. To better account for these sources of variation, we estimate two different regression specifications. The first specification examines how the depth (i.e., the intensive margin) and the relative breadth (i.e., the utilization of the extensive margin) differ by BAC regulation in the destination markets, taking into account differences across EU exporters and time. We estimate the following specification: yibt ¼ b0 þ

X b

bb BACLevelib þ ci þ dt þ eibt ;

ð1Þ

where yibt denotes the outcome variable of interest (i.e., either the relative breadth or the depth). Subscript i denotes a particular EU member (the exporter), subscript b indicates the BAC regulation-level group (1, 2, 3, 4, 5), and subscript t indicates the year of the observation.12 We use two sets of fixed effects. To control for all factors that are common to each exporter across time, we use country fixed effects ci .

In effect the specification summarizes country i’s exports across the destination markets within each of the five BAC groups.

12

Blood Alcohol Regulations and EU Beer Exports Table 2 Estimation results (all beer packaging types) Prohibited BAC = 0 0 < BAC < 0.05 BAC = 0.05 BAC > 0.05 Constant Omega

67 Relative breadth (utilized extensive margin)

Depth (intensive margin)

–

–

(–)

(–)

1.865***

1.492***

(0.166)

(0.396)

1.571***

1.538***

(0.116)

(0.377)

1.622***

3.075***

(0.135)

(0.891)

0.705***

3.791***

(0.090)

(0.317)

− 1.695***

− 0.248***

(0.088)

(0.389)

0.621*** (0.194)

Observations

2977

2977

Country fixed effects

Y

Y

Year fixed effects

Y

Y

Source Original to the authors Note Estimates are based on Eq. 1 Robust standard errors in parentheses Marginal effects reported for utilized extensive margin *** p\0:01, ** p\0:05, * p\0:1

To capture factors common to each calendar year, we use year fixed effects dt . The coefficients of interest are bb which indicate differences in the margins across BAC regulation levels, with each regulation level represented as a dummy variable. Since there are five possible levels, we have to exclude one level that will serve as a reference to which other levels are compared. We will use the markets that prohibit alcohol as the reference category. Thus, this specification allows us to examine how the margins vary with BAC level while preserving the granularity in our data as the dependent variable reflects the exporter’s intensive or extensive margin in a given year and given BAC regulation level in the destination market. Our results are summarized in Table 2.13 Before discussing our estimates, we briefly note how we estimate our regressions. We use OLS when examining the depth of trade, which is measured in euros (i.e., levels). However, since the relative breadth is a double bounded measure,14 we use the FLEX estimator of Santos Silva et al. (2014) developed in part to correctly estimate extensive

margin regressions; as is commonly done in FLEX estimations, we report the marginal effects rather than estimated coefficients. Results in Table 2 are based on exports of all three packaging types added together.15 We can see that the relative breadth of exports is higher for every level of BAC regulation compared to markets that have prohibited alcohol. Interestingly, the relative breadth is largest for countries which have set maximum BAC level to 0, followed by the two intermediate levels, which, while individually precisely estimated, are not statistically different from each other. The utilization of the extensive margin for markets with the highest maximum BAC level is the lowest from all non-prohibited groups of markets, with a coefficient less than half the size of the other regulation-level groups of countries. This confirms our observation from the descriptive summary that the relative breadth of exports largely decreases with BAC regulation level if alcohol can be legally consumed.

Full estimation results including time and country fixed effects are available upon request. 14 It is bound below by zero and above by one, the highest extent of utilization of the extensive margin.

15 Suppose Germany exports all three packaging types to, say, Chile. For example, €100 in cans, €200 in bottles, and €300 in kegs. The specification in Table 2 would reflect that Germany exports €600 of beer to Chile.

13

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T. Besedeš and T. J. Prusa

The conclusion is opposite when it comes to the depth of exports; this is similar to what we saw in our descriptive analysis. In markets where alcohol is not prohibited, the average export depth increases with the maximum BAC level, with a stark increase for markets that have set their BAC level to at least 0.05. The average value of exports of beer to markets with BAC level set at 0.05 is twice as large, on average by about 1.5 million euros, and even larger to markets with BAC above 0.05 by some 700,000 euros. We also offer a second specification which allows us to examine how the depth and the relative breadth differ by BAC regulation in the destination markets, taking into account differences across EU exporters and time. However, in this specification, rather than examining the breadth and depth of all beer exports (aggregated across packaging types), we now examine both margins for each type of packaging. As a result, when the outcome of interest is the relative breadth, yibkt denotes the relative breadth of EU member i’s exports to BAC group b of beer packaged in container type k (cans, bottles, kegs) in year t. Similarly, with respect to trade depth, yibkt captures the average exports of EU member i to BAC group b of beer packaged in container type k in year t. We then estimate the following specification with the variable PackageType identifying the container in which beer is sold16: yibkt ¼ b0 þ

XX b

k

bbk ðBACLevelib

 PackageTypek Þ þ ci þ dt þ eibkt :

ð2Þ

As with the previous specification, parameters of primary interest are bbk . Rather than discussing a table of parameter estimates, we think that the results are more cleanly described by plotting the estimated b parameters.17 Figure 5 depicts the results for the relative breadth. The excluded group is cans sold to countries that prohibit alcohol consumption. As a result, the breadth for other packaging types (relative to cans to prohibited markets) can exceed 1 (or be negative).18 To streamline the discussion, we only report the packaging type specification for the entire EU28 group. The results largely reinforce what we learned previously. First, ignoring markets that prohibit alcohol, for all three packaging types, the relative breadth of exports decreases as the BAC regulations become less stringent. For cans and bottles, the decrease is modest until the highest BAC level (BAC > 0.05), but in general the decrease is seen for all 16

The FLEX estimator is again used for the utilized extensive margin and OLS is used for the intensive margin. 17 The full estimates are available upon request. All key parameters are statistically significant at the 1% level. 18 Negative values for bottles and kegs to prohibited markets indicate that it is even rarer to service those markets in those types of containers compared to cans of beer.

Fig. 5 Estimated utilized extensive margin (relative breadth) by BAC level and packaging. Note BAC refers to the blood alcohol content limits for drivers. EU28 refers to all 28 EU members in 2019. EU12 captures the 12 members prior to 1994, EU12–15 refers to Austria, Finland, and Sweden who joined in 1995, and EU 15–28 refers to the post-2000 new member countries. Estimates are based on Eq. 2. Source Original to the authors

three package types. Second, kegs have the lowest utilized extensive margin for each BAC level. We presume that this reflects that (i) transportation costs are larger for kegs and (ii) kegs are almost exclusively consumed outside the home. Thus, many countries that export beer in kegs to some markets do not find it worthwhile (or are unable) to export to as many markets as the other packaging types. Figure 6 depicts the results for the depth of exports. The results are quite interesting. First, when it comes to markets that prohibit alcohol consumption, not only do bottles and

Fig. 6 Estimated intensive margin (depth of trade) by BAC level and packaging. Note BAC refers to the blood alcohol content limits for drivers. EU28 refers to all 28 EU members in 2019. EU12 captures the 12 members prior to 1994, EU12–15 refers to Austria, Finland, and Sweden who joined in 1995, and EU 15–28 refers to the post-2000 new member countries. Estimates are based on Eq. 2. Source Original to the authors

Blood Alcohol Regulations and EU Beer Exports

kegs have a lower breadth they also have a much lower depth (as compared to cans). This confirms the difficulty of these packaging types entering the prohibited markets. Second, the depth (i.e., intensive margin) increases across BAC levels for bottles and kegs; however, for cans the depth for the highest BAC level (BAC > 0.05) falls compared to the less stringent BAC levels. This may reflect bottles and kegs longer presence in the beer market as cans are a relatively newer packaging type and may still be lacking some consumer acceptance. Moreover, certain types of beer might be more difficult to export in cans to certain markets. In Fig. 7, we graph the year fixed effects from our estimates of Eq. 2. The black solid line depicts the point estimates for the breadth and the black short-dashed lines reflect the 95% confidence intervals. The orange long-dashed line depicts the point estimates for the depth of trade and the orange short-dashed lines reflect the 95% confidence intervals. Looking first at the breadth, it is clear that not only has it increased over time but that the year effects post-2006 are statistically different from zero. In other words, over time EU countries are increasing the number of available markets they are exporting to. On the other hand, the depth of trade does not change much over time, once we take into account exporter and destination market differences. Taken together, controlling for packaging types and BAC levels, the results indicate that (i) EU beer exporters have increased the scope of their export sales over time, exploiting new markets, etc. and (ii) how much they sell on average in a market has remained constant.

Fig. 7 Estimated year effects. Note The black solid line shows the estimated year fixed effects for utilized extensive margin (breadth of trade). The long-dashed orange line shows the estimated year fixed effects for the intensive margin, depth of exports. The short-dashed lines show the 95% confidence interval for respective estimates, black for utilized extensive margin and orange for intensive margin (depth of trade). Estimates are based on Eq. 2. Source Original to the authors

69

Conclusion This chapter is an initial effort to study the impact of how BAC regulations affect the export patterns of beer. Our analysis indicates that EU beer exports have grown both by expanding the number of markets serviced, the breadth of exports, and also the depth of sales to each market. Nevertheless, it appears the increased scope which has had the greater impact (at least statistically). It is reasonable to assume that the trade effect would follow the stringency of BAC rules. Namely, one would expect that countries with very stringent BAC rules would have less trade than those with more relaxed BAC rules. This would especially be the case if the stringency of other alcohol regulations is correlated with the stringency of BAC rules. We find that the expected relationship holds for the intensive margin (i.e., the depth) but not for the extensive margin (i.e., the breadth). In particular, somewhat surprisingly, we find EU exporters which have a larger extensive margin for destination markets with low BAC cutoff level (i.e., more stringent regulations). A better understanding of this empirical finding should be the subject of additional research. Our findings indicate that while BAC levels matter, their impact is not a simple linear (or even positive) relationship for at least the breadth of trade. We offer three possible explanations for our findings. First, they are consistent with Cook et al. (2014) who argue that the stringency of other alcohol regulations does not reflect a country’s relative BAC rules. For instance, a country might have a high BAC cutoff but not allows beer to

70

T. Besedeš and T. J. Prusa

be purchased by anyone younger than 21 years of age. Or, conversely, a country might have a low BAC cutoff but not allows beer to be purchased by anyone regardless of their age. A second possibility is that countries with higher BAC cutoffs may also have larger domestic beer industries. If true, a larger domestic beer industry might lobby for a higher BAC cutoff (which would suggest more trade), but the domestic beer producer(s) may also pose stronger competition to foreign beer producers. Consequently, we might observe fewer foreign suppliers even with higher BAC cutoffs. Larger domestic beer markets, whether driven by macro-brewers or craft brewers, may make for more competitive markets that not all exporters can enter due to the extent of competition and the cost of entry, but when they do enter, they sell a lot of beer. Such behavior could reconcile our finding that markets with highest BAC levels have fewer EU members exporting to them but are exporting more on average. There may be an additional source of competition. Third, countries with higher BAC levels may also have more robust markets for alcoholic drinks that are substitutes for beer, such as wine and liquor (Colen & Swinnen, 2011). In that case, it may be more difficult to enter as exporters are not only competing with domestic brewers but also domestic and foreign producers of close substitutes. Said differently, an understanding of the political economy of BAC rules might be an important explanation of the trade patterns documented in this chapter.

Colen, L., & Swinnen, J. F. M. (2011). Beer‐drinking nations: The determinants of global beer consumption. The Economics of Beer, 123–140. https://doi.org/10.1093/acprof:oso/9780199693801.003. 0007 Cook, W. K., Bond, J., & Greenfield, T. K. (2014). Are alcohol policies associated with alcohol consumption in low- and middle-income countries? Addiction, 109(7), 1081–1090. https://doi.org/10.1111/ add.12571 Garavaglia, C., & Swinnen, J. (2017). The craft beer revolution: An international perspective. Choices, 32(3), 1–8. Howard, P. H. (2014). Too big to ale? Globalization and consolidation in the beer industry. In M. Patterson, & N. Hoalst-Pullen (Eds.), The Geography of beer: Regions, environment, and societies (pp. 155– 165). Springer. https://www.springerprofessional.de/en/thegeography-of-beer/4827868 Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695– 1725. https://www.jstor.org/stable/1555536 Paschall, M. J., Grube, J. W., Thomas, S., Cannon, C., & Treffers, R. (2012). Relationships between local enforcement, alcohol availability, drinking norms, and adolescent alcohol use in 50 California cities. Journal of Studies on Alcohol and Drugs, 73(4), 657–665. https://doi.org/10.15288/jsad.2012.73.657 Santos Silva, J. M. C., Tenreyro, S., & Wei, K. (2014). Estimating the extensive margin of trade. Journal of International Economics, 93 (2014), 67–75. Staples, A. J., Chambers, D., & Malone, T. (2021). How many regulations does it take to get a beer? The geography of beer regulations. Regulation & Governance. https://doi.org/10.1111/ rego.12403 United States Trade Representative. (2021). 2021 National Trade Estimate Report on Foreign Trade Barriers. https://ustr.gov/sites/ default/files/files/reports/2021/2021NTE.pdf

References

Tibor Besedeš is the Mary S. and Richard B. Inman, Jr. Professor of Economics at Georgia Institute of Technology as well as a Director of the Forum for Research in Empirical International Trade. He was previously an assistant professor of Economics at Louisiana State University. He holds a Ph.D. in Economics from Rutgers University.

Besedeš, T., Goldbach, S., & Nitsch, V. (2017). You’re banned! The effect of sanctions on cross-border financial flows. Economic Policy, 32(90), 263–318. Besedeš, T., & Prusa, T. J. (2011). The role of extensive and intensive margins and export growth. Journal of Development Economics, 96 (2), 371–379. Brand, D. A., Saisana, M., Rynn, L. A., Pennoni, F., & Lowenfels, A. B. (2007). Comparative analysis of alcohol control policies in 30 countries. PLoS Medicine, 4(4), e151. https://doi.org/10.1371/ journal.pmed.0040151

Thomas J. Prusa is a professor of Economics at Rutgers University, New Brunswick, New Jersey. He has published over 70 articles in leading journals and books. Most of his research has focused on trade policy decision-making by the US International Trade Commission; in addition, he has written several highly cited papers with Tibor Besedeš on issues related to the duration of trade.

What Drives on- Versus Off-Trade Beer Consumption? A Regional and Global Panel Analysis of 97 Countries Fergal O’Connor and Nadine Waehning

Abstract

This chapter examines the elasticities of demand of beer (price, cross price and income). This shows how the drivers of demand for beer vary regionally. We break down this demand between on- and off-trade consumption to show that these two markets have very distinct features, analysing data for 97 countries using Euromonitor data from 2006 to 2021, using a panel fixed effects model. We find that off-trade beer is a complement for on-trade, the “Prinks effect” where beer is consumed at home before going to an on-trade venue, but on-trade beer is a substitute for off-trade beer. We identify region-specific differences such as: Western Europeans off-trade beer consumption falling as their incomes rise and Eastern Europe being the only region where the “Prinks effect” doesn’t hold. We make recommendations around region specific similarities in on- and off-trade which could be considered by businesses considering pricing and internationalisation policies. Keywords













Beer consumption On- versus off-trade Location Panel analysis Price elasticity of demand Income elasticity of demand Cross price elasticity of demand

Introduction Beer can be consumed either in places such as pubs, bars, restaurants (on-trade) or at home bought from a corner shop or a supermarket (off-trade). The importance of on-trade F. O’Connor (&) Cork University Business School, University College Cork, Cork, Ireland e-mail: [email protected]

versus off-trade drinking has been discussed from a health perspective around the world, given the strong relationship between alcohol consumption and a range of alcohol-related harms (e.g. mortality, morbidity, wider social harms) are mostly associated with off-trade drinking as it is cheaper (Page et al., 2017; Robinson et al., 2015). Additionally, the comparison between off-trade drinking, on-trade offers ample opportunities to positively affect its local economy through providing employment, use of local products, supporting local services, encouraging social interactions which has shown to be good for people’s mental health. The on-trade sector can also booth the local economy by attracting visitors to a place (Cabras et al., 2020; Mount & Cabras, 2016; Wells et al., 2019). However, the global economic outlook has steadily worsened substantially over the last few years, especially considering lower growth expectations and higher uncertainty worldwide (Euromonitor, 2022a). This is a threat to the positive economic effects on-trade alcohol consumption has over off-trade alcohol consumption. The war in the Ukraine, the rise in energy prices, increasing in some places by 600% (Hampson, 2022) and the cost-of-living crisis have now hit an economy still recovering after to Covid (BBC, 2022). These uncertainties and shocks to supply chains have led to significant increases in energy and food prices especially for lower-income households (BBC, 2022). Recent studies have linked these macro-economic factors to a trend towards more off-trade alcohol consumption within the European context (Rabinovich et al., 2021; Tomlinson & Branston, 2014) and across the globe (Pomarici et al., 2012). Tomlinson and Branston (2014) specifically stated that the split between on- and off-trade sales is now almost 50:50, which they see as contributing to the ongoing demise of the traditional public house. This has been further sped up through an enforced, if temporary, behavioural change to off-trade drinking due to Covid lockdowns (Hardie et al., 2021).

N. Waehning School for Business and Society, University of York, York, UK © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_6

71

72

F. O’Connor and N. Waehning

Fig. 1 Countries examined by region

This outlook leads to the question of what key factors are driving alcohol consumption in on- versus off-trade settings. Especially considering the importance of on-trade for the local economy and more responsible drinking behaviours. Various studies have investigated country-specific factors (Meng et al., 2014; Sousa, 2014). However, there is a lack of research assessing the factors and mechanisms impacting onversus off-trade drink sales—especially from a global or regional perspective which is particularly important to beer markets for business strategies during difficult economic times. This chapter seeks to give answers to some of the questions around on- and off-trade beer consumption for both business and policymakers. The global coverage of the data used will give an idea of how regions differ in terms of their sensitivity to changes in the price of their own product (Own Price Elasticity of Demand), changes in the price of another related good (cross-price elasticity of demand—here on- and off-trade beer are treated as related goods), and changes in income (income elasticity of demand). This gap was not solely identified by the authors of the chapter but also by recent publications such as Nave et al. (2021) who conducted a systematic review and Shakina and Cabras (2021) who hoped that their research would stimulate investigations into beer pricing mechanisms in other countries outside the UK. Annual global beer consumption data only went back to 2006. Using a panel data approach will allow us to get more accurate answers, that can be drawn from the global dataset and allow for more conclusive answers to these questions.

The dataset covers 97 countries from 2016 to 2021 and will also be analysed at a regional level to look for differences in consumption drivers, shown in map in Fig. 1. This chapter is split into the following sections. We first introduce literature around demand factors for on- versus off-trade, country-specific demands and finally the impact of Covid as discussed in previous studies. We then introduce our empirical study to shed light on the posed questions. Starting with a brief introduction of the data followed by the discussion of key findings split into the world sample (full sample) and later on broken down into five key regions (Asia, Eastern Europe, Western Europe, Africa and South America), for each context we checked the income, own price and cross price elasticity.

On-Trade Versus Off-Trade Demand Factors The demand for alcoholic beverages seems to have become more elastic with respect to changes in its own price since the mid-1950s and the income elasticity has been falling since the mid-1960s (Fogarty, 2010). Possible reasons for the trend might include an increase in the use and availability of alternative products to consume (soft drugs, wine and spirits) as substitutes. The author gives a wide range of estimates of the own price elasticity of beer (from +1.28 to −3) based on the country-level studies used in their meta-analysis. An issue with using the results from this and other studies like it is that many of these studies cover periods in the 1950s and 60s, and the majority come from

What Drives on- Versus Off-Trade Beer Consumption? …

the UK and other advanced economies. Eakins and Gallagher (2003) find that the price elasticity of demand for beer in Ireland lies in the region between −0.42 and −0.76. Meng et al. (2014) estimated own-price elasticities for the UK from 2001 to 2009 using individual-level data and found that their own price elasticity of demand for beer was negative, with off-trade beer being more elastic. They estimate the relationship at −0.98, indicating that any increase in the real price of off-license beer would see a commensurate fall in sales volume. This would discourage businesses who wished to increase their revenue from increasing prices, while encouraging authorities who want to limit alcohol consumption to increase taxes on off-licence beer. They also find a large negative price elasticity of demand for on-licence beer at −0.78. In terms of cross price elasticity in the UK, Meng et al. (2014) find that an increase in on-trade prices in the UK results in a rise in off-trade consumption, though the effect is small with a cross price elasticity of 0.14. However, increases in the price of off-licence beer have a negative effect on on-trade sales, however the estimate is statistically and insignificantly different from zero. Robinson et al. (2014) investigated the impact of the alcohol act on off-trade alcohol sales in Scotland. A statistically significant reduction was observed in off-trade sales in Scotland, but this decline was driven by reduced off-trade sales of wine and pre-mixed rather than beer. Page et al. (2017) supported the above and demonstrated that a small increase in the price of alcohol, above inflation, in both markets, would substantially reduce the number of patients attending emergency departments for treatment of violencerelated injuries in England and Wales. Ritchie et al.’s studies (2009) uncovered that much wine purchased by young adults is specifically for consumption at home, often pre-loading before a night out. From a behaviour angle, the argument could be made that the government should invest more to support on-trade consumption. This would have a direct impact upon their subsequent behaviour in whichever pub or club they later frequent. However, it is often solely on-trade consumption which is held responsible for any resulting anti-social behaviour. Sousa (2014) focused on the price elasticity of demand for alcohol. Spirits in the on-trade, and beer and cider in the off-trade, were found to be the most price elastic types of alcohol, while “ready-to-drink” in the on-trade and wine in both the on- and off-trade were found to be the least price sensitive. Grosova et al. (2017) conclude that income elasticity was insignificant, and rather the most important determinants of on-trade demand were the off-trade prices and substitute products. Finally, they concluded that Czech beer drinkers are less price sensitive in comparison with UK beer drinkers which was supported by a study by Tomlinson

73

and Branston (2014). Rabinovich et al. (2012) identified an increase in income was associated with relatively higher levels of on-premises purchase of alcohol across four EU member states (Ireland, Finland, Latvia and Slovenia). Gell and Meier (2011) found higher income households spent proportionately more on on-trade alcohol than lower-income households, however off-trade alcohol expenditure did not differ significantly according to household income. Some studies have stated that off-trade could be seen as a substitute for on-trade drinking (Grosova et al., 2017), however when diving a bit deeper, others suggest there is a link between the off-trade versus on-trade in form of prinks (pre-drinks, i.e. drinking before going out for the evening). Forsyth (2010) concluded that drinking before entering nightclubs was the norm, although the location and extent of this “front-loading” varied. This is further supported by Ritchie (2011) who discussed wine usage particularly by the younger female participants and beer or spirits as prinks by younger males; everyone buying a bottle, meeting up at someone’s house, drinking before going out so that they needed to buy fewer drinks at the pub, or particularly night club, that they were going to end up in. Meng et al. (2014) indicate this relationship might exist, but as the results were insignificant, it could not be concluded from that study.

Regional and Country Specific Demand Most studies assessed price elasticity for consumer demand for alcohol consumption in specific countries (Meng et al., 2014; Sousa, 2014). Other studies like Fogarty (2010) conducted literature review and concluded only little support has been found for the idea that the demand for alcoholic beverages varies fundamentally across most countries, with the exception of wine. Fogarty (2010) also argued that the demand for alcohol does not vary fundamentally across countries, a claim we will offer evidence against. This finding may be driven by the fact that most studies to date have focused on European, North American and Australasian markets. We will see below that other regions do not always follow the same pattern. This idea is disputed by Pomarici et al. (2012) and Robinovivh et al. (2012) who concluded that there are significant differences in the alcohol consumption in on- versus off-trade across the global and across four EU member states (Ireland, Finland, Latvia and Slovenia). Additionally, Posmarici et al. (2012) stated that patterns of consumption habits are driven by factors which are country/area-specific. Wang et al. (1996) looked only at the US, but found that beer, wine and spirits are dominated by income effects over the substitution effect.

74

Covid Impact A recent study by Plata et al. (2022) pointed out a Covid paradox: health professionals were warning about a sharp rise in alcohol sales during lock down. However, Stevely et al. (2021) contradicted those worries in their study which found in Scotland there were no significant changes in alcohol consumption levels or the frequency of drinking overall. They suggested that increases in off-trade alcohol consumption offset any reductions in on-trade drinking. However, this drop or lack in increased sales of alcohol was not reflected in a reduction of alcohol-related harms (e.g. mortality, morbidity, wider social harms), instead alcohol-related harms increased during the Covid lockdowns. Therefore, more focused studies assessing consumer segments identified that certain consumer groups such as older individuals, essential workers, individuals with children and those suffering from high depression reported an increase in their consumption of alcohol (Plata et al., 2022). Excess purchases increased within the top one fifth of households that normally bought the most alcohol (Anderson et al., 2022). Their purchases increased by more than 17 times more than the bottom one fifth of households, that bought the least alcohol. Excess purchases were greater in the most deprived households, compared with the least deprived households. It was not just specific to the segmentation of increased alcohol consumption that was identified, but also to the characteristics of drinking occasions (Hardie et al., 2021). The more focused study on consumer segments and occasions of drinking are pointing out the importance of changing consumer behaviour from at home drinking to a more social on-trade and more regulated consumption. The last three years had a devastating impact on the beer industry worldwide, with on-trade dropping in some countries up to 100% due to strict lockdown rules. But that is not consistent across the world due to differences in Covid impact and restrictions. Additionally, anecdotal evidence highlights one key issue faced by breweries that is access to markets and based on the size of the brewery the ability to adapt to different types of outlets.

Data The data we use come from Euromonitor and covers 97 countries, all listed in the Appendix under Table 4. Euromonitor groups these countries into regions1 and the sample within each region is also shown in Table 4. The

1

Asia, Eastern Europe, Western Europe, Africa, South America are used here.

F. O’Connor and N. Waehning

sample period overs 2006–2021 and only countries in Euromonitor that had all observations for all variables used over the full period were included. Figure 2 shows a growth of over 20% in the volume of beer sold globally, between the start of our sample in 2006 and its end in 2021. The 2020 Covid pandemic is clearly visible with a significant fall in on-trade sales in 2020 that had not recovered by 2021. However, off-trade sales more than made up for that, with total beer volume increasing by over 3 billion litres in 2020, but only 234 million in 2021 despite the recovery in on-trade volumes. An unweighted price index for the average price of beer across the full sample of countries is shown in Fig. 3. With prices rising in both categories across the full sample, we can see that the average on-trade price outpaced increases in off-trade prices by 20% over the full sample period.

Methodology We assess three types of econometric specifications. These are Pooled OLS, and panel models with random effects or fixed effects. We begin by assessing the simplest econometric specification, Pooled OLS, by using Whites and the Breusch Pagan tests for heteroscedasticity and Durbin-Watson tests for autocorrelation. If these issues are not present then the Pooled OLS method would be used. In practice this is unlikely as Pooled OLS would treat all countries as homogenous, which is rarely the case in international samples—making fixed or random effects model more likely to be appropriate. A Hausman test of fixed versus random effects is used following the estimation of the same model specifications using fixed and random effect as below. v2 ðkÞ ¼ ðb  BÞ0 ½VarðbÞ  VarðBÞ1 ðb  BÞ;

ð1Þ

where b are the coefficients the fixed effects model and B are the coefficients from the random effects model, Var() represents the variance–covariance matrix a model. In this study, fixed effects is found to be more applicable, as has been the case in most past cross-country studies of price elasticity. Our model takes the following form: Voli;t ¼ a þ b1 Pit þ b2 CPit þ b3 Yit þ li þ vit

ð2Þ

where Volit are country j’s volume of sales per capita in year t, P is the real price of the good itself, CP is the alternative goods real price, Y is real income, li represents the fixed effect of country i, and vit is the disturbance term. As in Lee et al. (2015) we will assess the impact of Covid on model specification through a likelihood-ratio test. This takes the form:

What Drives on- Versus Off-Trade Beer Consumption? …

75

1,40,000 1,20,000 1,00,000 80,000 60,000 40,000 20,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Off Licence Vol

On Licence Vol

Fig. 2 World on- and off-trade beer consumption, litres millions. Source Euromonitor

350

300

250

200

150

100 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 On-Licience MSP Index

Off-Licience MSP Index

Fig. 3 World on- and off-trade market sales beer price index2, 2006 = 100. Source Euromonitor, Authors Calculation

LRT ¼ 2ðLr  Lur Þ

ð3Þ

where Lr is log-likelihood of the restricted (simpler) model and Lur is log-likelihood of the unrestricted model (more complex). The effect of Covid will be included as a simple-level dummy variable in one specification and as slope dummies on each of the independent variables in the final specification.

Results: Pre-test For the full sample and all subsamples analysed below, Whites and the Breusch Pagan tests for heteroscedasticity indicated that there is heteroscedasticity in all Pooled OLS regression results. Durbin-Watson tests all indicate that there is also strong positive autocorrelation in the Pooled OLS. These

76

F. O’Connor and N. Waehning

We will first look at results for elasticities relative to the volume of beer sold per capita for the world. We use per capita measures to remove effect of rising populations on calculated elasticities. As this is a real variable (unaffected by monetary inflation), we also use real (inflation adjusted) measures of GDP per capita and prices for on- and off-trade beer. All variables are expressed as natural logs to allow for easier interpretation. Table 2 shows the results of the fixed effects panel regressions using the full sample of countries where on-trade sales volume per capita is the independent variable. Table 3 carries out the same analysis but for off-trade sales per capita. Across all specifications, for both on- and off-trade sales, we can see that the constant term is negative and significant. As these regressions are in log–log, this is a log variable and when converted back these are positive numbers, indicating a base level of demand for beer. For example, for specification (5) above a constant of −5.999 translates to 0.002 L of consumption per capita, when all other variables are equal to zero. So, while the constant terms in all the regressions are statistically and significantly different from zero, they are economically insignificant in determining the level of consumption. The own price elasticity of demand for on-trade beer per capita is given in the second row (Ln on-trade price). Regardless of specification the answer is the same—a rise in the price of on-trade beer results in a fall in sales volume, but the fall in sales volumes is much smaller than the rise in price meaning that a profit maximising on-trade business should increase beer prices. A 1% of increase in price leads to between a 0.16% and 0.148% fall in sales volume, per specification (1) and (5), respectively. For consumers beer in an on-trade setting seems to be the natural substitute for beer in an off-trade setting, and vice versa. Here we look at the cross-price elasticity of demand

for on- and off-trade beer sales. In Table 2 a 1% price rise in off-trade prices results in a fall in on-trade sales of between 0.23 and 0.33% across the various equation specifications. This means that off-trade beer is a complement for on-trade beer, and not a substitute as might be expected, with their consumption rising together. This seems to relate to the fact that on-trade beer consumers are likely to also consume off-trade beer, possibly before going to a licenced premise, a practice sometimes referred to as “Prinks”. Models (1) and (2) are Hicksian, or compensated, elasticities—where no income elasticity is included. Models (3)– (5) are Marshallian, or uncompensated, elasticities where income is controlled for. As the signs on the cross price elasticities for both Tables 2 and 3 remain the same, whether we use Hicksian or Marshallian elasticities, we can say that income effects do not dominate substitution effect. This is in contrast to Wang et al. (1996) who look only at the US but find that beer, wine and spirts are dominated by income effects over the substitution effect. The income elasticity of demand for beer is similar regardless of how we choose to specify our equations. For on-trade sales a 1% increase in GDP per capita results in between a 0.34% increase in the volume of beer sold per specification (3) and 0.47% increase per (5). This makes beer a normal good as would be expected, with consumption increasing as income increases across the world. As the results are significant, they also contradict Grosova et al. (2017) who find income to be insignificant. As it is untested whether the pandemic would change the level of demand or effect slope of the independent variables, we go through several specifications. In models (2) and (4) we include a level dummy for the two years effected by the Covid pandemic, 2021–22.3 We see a consistent reduction in the level of on-trade sales per capita and as the likelihood-ratio test is significant in both cases, we would conclude that including these dummy variables improves the explanatory power of the models. Once slope dummies are included the Covid constant becomes insignificant, so we only include slope dummies in model (5). The income elasticity of demand for on-trades sales falls from 0.472 pre-pandemic by 0.067 to 0.405 during Covid-effected periods, making on-trade consumers consumptions levels less sensitive to changes income. This can be explained as increases in income for many consumers in many countries at various times could not be spent on trade as these premises were shut. The effect of the pandemic on own price elasticity of demand for on-trade sales is dramatic. Including this slope dummy doubles consumers’ price sensitivity, from −0.148

2

3

results indicates that Pooled OLS is inappropriate for this data. The results for the full sample are available in the appendix Table 5. Results for each region are available on request. A Hausman Test of fixed versus random effects was then run for all sub samples which indicated that we should choose fixed effects in almost all cases. Accordingly, the FE-model seems to be the most suitable because we have endogeneity. For simplicity all the results below are for fixed effects regressions. The results for the fixed and random effects for each equation were extremely similar in size and sign.2

Results: Full Sample

Results for the full sample are available in appendix A and for all subsamples are available on request.

Using only 2021 as a dummy was also tested but only has a marginal effect on the results.

What Drives on- Versus Off-Trade Beer Consumption? …

77

Table 1 Descriptive statistics for 2021 Units

Average

GDP per capita

Domestic currency units

On trade volume Off trade volume

Standard deviation

2427

7724

Million litres

689

2512

Million litres

1163

3057

On trade retail sales price

Domestic currency units

541

1968

Off trade retail sales price

Domestic currency units

378

1464

Population (15+)

Thousands

24,491

96,744

Inflation index

Base year 2006

242

252

Source Euromonitor

Table 2 On-trade sales volume per capita—full sample (1) Constant Ln Real on-trade price Ln Real off-trade price Ln Real per capita

(3)

(4)

(5)

−4.088

−4.156

−5.450

−6.159

−5.999

0.000

0.000

0.000

0.000

0.000

−0.162

−0.054

−0.235

−0.140

−0.148

0.000

0.174

0.000

0.000

0.0003

−0.223

−0.289

−0.232

−0.315

−0.332

0.000

0.000

0.000

0.000

0.000

−

−

0.341

0.499

0.472

0.000

0.000

0.000

−

−0.337

−

−0.287

Covid dummy (2020–1) Ln Real on-trade price, Covid dummy

(2)

−

0.000

−

−

0.000 −

−0.113 −

Ln Real off-trade price, Covid dummy

−

−

−

0.144 −

Ln Real GDP per capita, Covid dummy

−

−

−

0.000

−

0.000 −0.067 0.000

Log-likelihood

171.190

Likelihood ratio test −

334.450

217.830

456.650

423.920

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (2)

0.000

0.000

0.000

0.000

Note Coefficients with P-values below in italics, fixed effects panel regression

pre-pandemic to −0.261 during Covid-effected periods, making them much more price sensitive. Finally, we see a large reduction in the sensitivity of on-trade sales to off-trade real prices, falling from −0.33 to −0.188 post pandemic. Table 3 gives the own price elasticity of demand for off-trade beer in the third row (Ln off-trade price). Regardless of specification, off-trade sales follow the law of demand —a rise in price causes a fall in the volume of demand. Off-trade consumers are more price sensitive than on-trade customers with a 1% price rise resulting in between a 0.5 and 0.59% decrease in demand. While these consumers are more price sensitive, it would still be sensible for an off-trade to rise prices under this analysis as the percentage rise in price will be larger than the fall in sales.

The cross-price elasticity of demand for off-trade sales are as expected. A 1% rise in on-trade prices (showing in row 2 of Table 3) are all positive and statistically insignificant— indicating as weak substitution effect with a 1% rise in real on-trade prices resulting in between a 0.09–0.2% increase in off-trade consumption. The difference shown here indicates that consumers of off-trade beer act differently to those consuming on-trade beer.4 The income elasticity of demand for beer for off-trade sales are similar but are generally slightly more elastic with a larger response from a change in income. A 1% increase in

4

See “Prinks” above.

78 Table 3 Off-trade sales volume per capita—full sample

F. O’Connor and N. Waehning

Constant Ln Real on-trade price Ln Real off-trade price

(1)

(2)

(3)

(4)

(5)

−3.364

−3.342

−5.401

−5.318

−5.280

0.000

0.000

0.000

0.000

0.000

0.196

0.162

0.087

0.076

0.103

0.000

0.000

0.008

0.022

0.004

−0.570

−0.549

−0.584

−0.575

−0.589

0.000

0.000

0.000

0.000

0.000

0.510

0.492

0.477

Ln Real per capita − Covid dummy (2020–1)

−

0.089

0.000

0.000

0.000

−

0.040

−

0.000 Ln Real on-trade price, Covid dummy Ln Real off-trade price, Covid dummy Ln Real GDP per capita, Covid dummy Log-likelihood

0.003 −0.043

−

−

−

−

0.097 0.047

−

−

−

−

0.082 0.011

−

−

−

−

0.004

459.010

479.860

620.140

624.850

631.270

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

0.000

0.000

0.001

0.000

Likelihood ratio test −

Note Coefficients with P-values below in italics, fixed effects panel regression

GDP per capita will on average across the world lead to a 0.477% increase in the volume of beer sold off trades per model (5) in Table 3. Similar to the estimations for on-trade beer, adding in dummies to account for Covid-effected periods improves the model as we move from specification (1) to (5) as shown by the significances of the likelihood-ratio tests. Here the constant dummy in (2) and (4) shows that the average consumption of beer per capita rose by between 1 and 2 L across the world during Covid. If we look at the slope dummies, we can see that the size of the coefficients is much smaller for own and cross price elasticities, and they are statistically insignificant. However, the effect of Covid on spending from increases in income is the opposite of that seen on the on-trade estimations. Off-trade consumers spend more of any increase in income during Covid.

Results: Regional Analysis—Income Elasticities Next, we now turn our attention to geographic differences we find in these relationships depending on what region we are looking at. Detailed results for each region following the same pattern as the tables above for the whole sample are given in the Appendix. We visualise the results in this section here for easier comparison.

The sensitivity of on-trade beer consumption per capita across the regions with respect to a change in income is wide, as shown in Fig. 4. For Asia we see almost a unit elasticity, where a 1% rise in income sees an almost 0.9% increase in the volume of beer consumed on-trade. African and South American countries show a similar income elasticity of demand to the world average, while eastern European countries are lower. Western Europe shows no significant income elasticity with increases or decreases in income having no real effect on the volume of on-trade beer consumed per capita. Specification (3) does not account for Covid years and shows a negative relationship, which we believe can be discounted as model (4) is shown to be a superior model through the likelihood-ratio test. Covid did reduce the income elasticity of demand for on-trade beer across all regions by 0.1 on average. The outlier is Africa, where the relations stayed the same as pre-Covid, this can be explained by the different durations of the “stay-at-home” lock down requirements between all regions in comparison with Africa (Hale et al., 2021). The relationship between income and off-trade consumption follows a similar pattern with consumption rising with income in all regions bar Western Europe. Here the relationship is negative and significant, if small economically. A 1% rise in GDP per capita in Western Europe see off-trade beer consumption fall by 0.1% approximately. This implies that off-trade beer is an inferior good in Western

What Drives on- Versus Off-Trade Beer Consumption? …

79

0.9 0.7 0.5 0.3 0.1 -0.1 -0.3 Full Sample

Asia

Eastern Europe Western Europe

(3)

(4)

Africa

South America

(5)

Fig. 4 On-trade income elasticities of demand

Europe—with either reductions in alcohol consumption in general as income rises or switching into other forms of alcohol (Fig. 5). Across all the regions, the effect of Covid on the income elasticity of demand for off-trade beer was insignificant statistically and economically. No significant differences here can be justified due to the nature of continued availability of the off-trade market in comparison with on-trade.

Results: Regional Analysis—Own Price Elasticities Consumers price sensitivities for on-trade beer were found to be very low in the full sample—coming in at a 0.1% fall in consumption for a 1% increase in price, however the picture is very variable across regions with only Europe following that number closely. In South America, the number varies quite a lot depending on the model specification but as (4) has the highest explanatory power, the true own price elasticity seems to be about −0.22—larger but not too different to Europe. Asia offers a different answer where consumers are found to be price insensitive. The measure of the own price elasticity is small and statistically insignificant—indicating significant room for on-trade sellers to increase prices, while also increasing their revenue. Africa is very unusual with a positive and statistically significant own price elasticity of over 0.1. This means that consuming beer on-trade is seen in

Africa as a form of conspicuous consumption—a way of showing your prosperity and consuming more as prices increase. During Covid, these numbers change for Africa and move to a small negative own price elasticity of on-trade consumption. In Asia, there is a large increase of 0.5 so that they consume more even as prices rise, or less even with price falls (Fig. 6). Consumers of off-trade beer are more homogenous across regions, as can be seen in Fig. 7 bar Eastern Europe. They are insensitive to price changes in off-trade beer, as the estimates are small and statistically insignificant regardless of the model specification. Western Europe are less price sensitive than the average, while Asia is the most price sensitive—with an almost unit elasticity. This implies that off-trade price increases in Asia would not increase revenue, as the decrease in the volume of their sales would be of a similar magnitude. During Covid, Eastern European consumers of off-trade beer saw a significant increase in their price elasticity to +0.15, meaning that they consumed more beer even as prices rose. In contrast, Asian consumers became even more price sensitive increasing to over −1.1. This can be explained by combining the lock down policies and checking for the income support during COVID. Meaning that especially in Europe in comparison with the Asian region, there was more income support during the Covid pandemic (Hale et al., 2021).

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0.9 0.7 0.5 0.3 0.1 -0.1 -0.3 Full Sample

Asia

Eastern Europe Western Europe

(3)

(4)

Africa

South America

Africa

South America

(5)

Fig. 5 Off-trade income elasticities of demand

0.3 0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 Full Sample

Asia

Eastern Europe

(1)

(2)

Western Europe

(3)

(4)

(5)

Fig. 6 On-trade own price elasticity of demand

Results: Regional Analysis—Cross Price Elasticities For the full sample results above, we saw a “prinks effect” where increases in the price of off-trade beer had a negative impact unlicenced consumption. Breaking this down by region this effect holds true everywhere except Eastern

Europe, where off-trade beer is a substitute for on-trade beer consumption. A 1% increase in the cost of off-trade beer causes on-trade beer sales volumes to fall by about 0.4%. Asia and Western Europe see a much larger prinks effect, between −0.6 and −0.8, South American cross price elasticities of demand are similar to the full sample. This again points to Eastern Europe as being a very different market for beer sales compared with the others (Fig. 8).

What Drives on- Versus Off-Trade Beer Consumption? …

81

0.1 -0.1 -0.3 -0.5 -0.7 -0.9 -1.1 Full Sample

Asia

Eastern Europe

(1)

(2)

Western Europe

(3)

(4)

Africa

South America

Africa

South America

(5)

Fig. 7 Off-trade own price elasticity of demand

0.6 0.4 0.2 0 -0.2 -0.4 -0.6 -0.8 -1 -1.2 Full Sample

Asia

Eastern Europe

(1)

(2)

Western Europe

(3)

(4)

(5)

Fig. 8 Cross price elasticities of demand—on-trade

While for the full sample Covid reduced cross price plasticity demand to near zero for on-trade consumption, some regions did see some significant changes. Asia saw a significant increase to approximately −1.3. Western Europe saw small reduction in sensitivity to −0.5 and African cost prices elasticities halved to −0.2. These numbers are somewhat difficult to interpret as in many cases consumers were barred from on-trade consumption. This difference might be explained by the level of enforcement of local policies, during COVID lock down restrictions, but also the longer effect on people working

from home (Hale et al., 2021), but is beyond the scope of this chapter. Cross price electricity demand for off-trade beer again sees Eastern Europe as an outlier. Increases in on-trade prices in Eastern Europe cause a fall in off-trade demand. In Western Europe we see an insignificant relationship between the two, so the off-trade consumption is unaffected by on-trade prices. For Africa and South America, there is a much larger substitution effect. An increase in on-trade prices of 1% results in an increase in off-trade demand of approximately 0.4% in both cases (Fig. 9).

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0.6 0.4 0.2 0 -0.2 -0.4 -0.6 Full Sample

Asia

Eastern Europe

(1)

(2)

(3)

Western Europe

(4)

(5)

Africa

South America

Fig. 9 Cross price elasticities of demand—off-trade

The cross price elasticity of demand for off-trade beer in Eastern Europe almost doubled to −0.6 during Covid-effected periods. Asia sees an increase to approximately 0.5, a similar level to South America, heightening the substation from on to off-trade beer in those two markets.

Conclusion The above findings show that calculating any of the three types of elasticities here for beer requires the on- and off-trade markets to be separated and one region’s results are not necessarily generalisable to another, as we see a difference in sensitivities where the sign is different from one region to the next. The own price elasticity for off-trade beer is about four times greater than for on-trade beer. For businesses, this implies that on-trade premises have much more room to increase prices than their off-trade competitors. The reasons for this are not investigated here but may relate to the ability of on-trades businesses being able to differentiate themselves more and attract customers for reasons beyond simple consumption of beer. On-trade premises are a hub for socialising, consumers receive more than just a drink, they are a space to meet friends, go with their partner or meet work colleagues outside the office. In on-trade premises, customers have the chance to enjoy a conversation, maybe over a meal and a drink, play some games or even find a group of people to open up about personal problems (Mount & Cabras, 2016; Wells & Waehning, 2022). For policymakers, the own-price elasticities of beer above indicate that for these beverage types introducing minimum unit pricing will have a larger effect on total off-trade

consumption. However, studies such as Meng et al. (2014) who use individual-level data rather than the macro-level data used here give more useful conclusions if the policy is about targeting particular types of drinkers rather than the national level of consumption. Hence the importance of adopting a stricter approach for off-trade alcohol sales to not only kick start a behaviour change away from drinking alone at home and towards a more sensible and social behaviour of drinking on-trade. Post 2022 it will be interesting to see whether the old estimates of the three elasticities measure here reassert themselves. Will on-trade consumers remain more sensitive to increases in price than off-trade consumers, less willing to spend income increases on-trade, and more affected by changes in off-trades prices. The insignificance of income as an explanatory variable for beer consumption in Western Europe and lower significance in Eastern Europe relative to the other regions highlights the importance of not assuming that these patterns will hold in all regions. Income elasticity is much higher outside of Europe and always significant. This shows that while Grosova et al. (2017) are correct, their results are not generalisable across the world. Future studies should look to assess other factors impacting the hospitality industry, such as the intersection of non- and low-alcoholic products and cannabis legalisation which according to Euromonitor (2022b) is holding great potential for the industry relevance and direction, especially considering more countries are considering the legalisation of cannabis. A similar examination of regional patterns of elasticities for other forms of alcoholic and non-alcoholic drinks would allow business and policy makers where the patterns identified here also exist for other beverages.

What Drives on- Versus Off-Trade Beer Consumption? …

83

Appendix See Tables 4, 5, 6, 7, 8, 9, and 10.

Table 4 All countries and sub-group Africa Algeria

Asia Azerbaijan

Eastern Europe Belarus

Western Europe Austria

South America Argentina

Advanced economies Australia

Angola

Bangladesh

Bosnia

Belgium

Bolivia

New Zealand

Cameroon

Cambodia

Bulgaria

Denmark

Brazil

Canada

Côte d’Ivoire

China

Croatia

Finland

Chile

USA

Egypt

Hong Kong China

Czech Republic

France

Colombia

Ethiopia

India

Estonia

Germany

Costa Rica

Ghana

Indonesia

Georgia

Greece

Dominican Republic

Iraq

Japan

Hungary

Ireland

Ecuador

Israel

Kazakhstan

Latvia

Italy

El Salvador

Jordan

Laos

Lithuania

Netherlands

Guatemala

Kenya

Malaysia

North Macedonia

Norway

Honduras

Kuwait

Myanmar

Poland

Portugal

Mexico

Lebanon

Pakistan

Romania

Spain

Panama

Morocco

Philippines

Russia

Sweden

Paraguay

Nigeria

Singapore

Serbia

Switzerland

Peru

Oman

South Korea

Slovakia

Turkey

Uruguay

Qatar

Sri Lanka

Slovenia

United Kingdom

Saudi

Taiwan

Ukraine

South

Thailand

Tanzania

Uzbekistan

Tunisia

Vietnam

Uganda United Arab Emirates

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Table 5 Test for model specification—full sample On-trade volume per capita Pooled Constant Ln Real on-trade price

Random effects

Pooled

Random effects

4.683

3.310

3.423

5.594

3.559

3.685

0.000

0.000

0.000

0.000

0.000

−1.335

−0.235

−0.236

−1.145

0.067

0.067

0.000

0.000

0.000

0.001

0.085

0.087

1.226

−0.245

−0.174

1.047

−0.496

−0.434

0.001

0.000

0.002

0.003

0.000

0.000

Ln Real per capita

0.138

0.530

0.475

0.107

0.612

0.558

0.074

0.000

0.000

0.126

0.000

0.000

113.129

95.585

0.000

0.000

55.341

30.068

0.000

0.000

Breusch Pagan LM Stat

Fixed effects

0.000

Ln Real off-trade price

White test LM Stat

Off-trade volume per capita

Fixed effects

DW-Stat

0.133

Hausman test

0.135 11.169

43.455

0.024

0.000

Note Coefficients with P-values below in italics

Table 6 On- and off-trade sales volume per capita—Asia On-trade vol per capita Constant

Off-trade vol per capita

(1)

(2)

(3)

(4)

(5)

(1)

(2)

(3)

(4)

(5)

−3.997

−4.052

−7.723

−9.109

−8.888

−3.014

−2.956

−8.038

−7.890

−7.846

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

Ln Real on-trade price

0.021

−0.014

0.069

0.020

0.046

0.141

0.177

0.205

0.210

0.152

0.887

0.926

0.616

0.876

0.711

0.316

0.194

0.072

0.065

0.177

Ln Real off-trade price

−0.708

−0.641

−0.829

−0.745

−0.849

−0.893

−0.963

−1.056

−1.065

−1.018

0.001

0.003

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

Ln Real per capita Covid dummy (2020–1)

0.647

0.870

0.867

0.873

0.849

0.849

0.000

0.000

0.000

0.000

0.000

0.000

−0.205

−0.382

0.214

0.041

0.000

0.000

0.000

0.338

Ln Real on-trade price, Covid dummy Ln Real off-trade price, Covid dummy Ln Real GDP per capita, Covid dummy Log-likelihood Likelihood ratio test

−78.925

0.507

0.313

0.006

0.059

−0.459

−0.271

0.012

0.102

−0.089

−0.020

0.000

0.036

−70.751

−48.366

−16.013

−8.663

(1) versus (2)

(1) versus (3)

(3) versus (4)

0.000

0.000

0.000

−45.445

15.875

16.371

22.833

(3) versus (5)

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

0.000

0.000

0.000

0.244

0.001

Note Coefficients with P-values below in italics, fixed effects panel regression

−55.789

What Drives on- Versus Off-Trade Beer Consumption? …

85

Table 7 On- and off-trade sales volume per capita—Eastern Europe On-trade vol per capita (1) Constant

(2)

Off-trade vol per capita (3)

(4)

(5)

(1)

(2)

(3)

(4)

(5)

−4.451

−4.540

−4.172

−5.139

−5.142

−2.447

−2.416

−3.424

−3.342

−3.2952

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

Ln Real on-trade price

−0.321

−0.125

−0.285

−0.171

−0.237

−0.273

−0.342

−0.403

−0.412

−0.3428

0.001

0.116

0.003

0.031

0.005

0.000

0.000

0.000

0.000

0.000

Ln Real off-trade price

0.514

0.405

0.537

0.339

0.371

0.023

0.061

−0.058

−0.042

−0.0939

0.001

0.002

0.001

0.009

0.004

0.828

0.543

0.519

0.648

0.311

−0.101

0.212

0.227

0.355

0.328

0.307

0.123

0.001

0.000

0.000

0.000

0.000

Ln Real per capita Covid dummy (20,201)

−0.265

−0.308

0.093

0.026

0.000

0.000

0.000

0.174

Ln Real on-trade price, Covid dummy

0.249

−0.2544

0.052

0.007

Ln Real off-trade price, Covid dummy

−0.172

0.2506

0.178

0.007

Ln Real GDP per capita, Covid dummy

−0.120

0.0202

0.000

0.038

Log-likelihood

135.53

Likelihood ratio test

187.790

136.820

194.380

206.930

(1) versus (2)

(1) versus (3)

(3) versus (4)

0.000

0.068

0.000

251.780

264.470

292.490

293.490

298.520

(3) versus (5)

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

0.000

0.000

0.000

0.104

0.003

Note Coefficients with P-values below in italics, fixed effects panel regression

Table 8 On- and off-trade sales volume per capita—Western Europe On-trade vol per capita Constant Ln Real on-trade price Ln Real off-trade price

Off-trade vol per capita

(1)

(2)

(3)

(4)

(5)

(1)

(2)

(3)

(4)

(5)

−2.611

−3.089

−1.855

−3.022

−3.127

−2.980

−2.896

−2.633

−2.411

−2.4313

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

−0.244

−0.150

−0.204

−0.147

−0.202

−0.025

−0.042

−0.007

−0.017

−0.0562

0.000

0.001

0.002

0.002

0.024

0.294

0.071

0.795

0.473

0.2101

−1.137

−0.613

−1.132

−0.614

−0.648

−0.217

−0.309

−0.215

−0.313

−0.272

0.000

0.000

0.002

0.000

Ln Real per capita

0.000

0.000

0.000

−0.210

−0.018

0.030

0.840

0.749

0.093 Covid dummy (2020–1)

−0.390

−0.389

0.000

0.000

0.002

0.000

0.000

−0.097

−0.133

−0.1266

0.004

0.009

0.047 0.069

0.074

0.000

0.000

Ln Real on-trade price, Covid dummy

−0.020

0.0504

0.770

0.150

Ln real off-trade price, Covid dummy

0.138

−0.0745

0.066

0.050

Ln Real GDP per capita, Covid dummy

−0.122

0.0209

0.000

0.000 (continued)

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Table 8 (continued) On-trade vol per capita (1) Log-likelihood

98.43

Likelihood ratio test

(2)

Off-trade vol per capita (3)

(4)

(5)

(1) 353.620

(2)

(3)

(4)

(5)

189.850

99.964

189.870

185.510

367.890

355.750

372.330

370.680

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

0.000

0.049

0.000

0.000

0.000

0.023

0.000

0.000

Note Coefficients with P-values below in italics, fixed effects panel regression

Table 9 On- and off-trade sales volume per capita—Africa On-trade vol per capita Constant

Off-trade vol per capita

(1)

(2)

(3)

(4)

(5)

(1)

(2)

(3)

(4)

(5)

−5.459

−5.348

−6.938

−6.734

−6.593

−5.256

−5.272

−6.465

−6.505

−6.596

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

Ln Real on-trade Price

0.250

0.270

0.125

0.153

0.164

0.562

0.559

0.461

0.455

0.490

0.006

0.001

0.158

0.064

0.043

0.000

0.000

0.000

0.000

0.000

Ln Real off-tade Price

−0.424

−0.488

−0.356

−0.422

−0.442

−0.733

−0.723

−0.677

−0.664

−0.686

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.317

0.322

0.331

0.000

0.000

Ln Real per capita Covid dummy (2020–1)

0.000

0.000

0.000

0.387

0.362

0.332

0.000

0.000

0.000

−0.243

−0.233

0.000

0.000

0.000 0.036

0.045

0.207

0.095

Ln Real on-trade Price, Covid dummy

−0.239

−0.089

0.000

0.012

Ln Real off-trade Price, Covid dummy

0.226

0.054

0.000

0.154

Ln Real GDP per Capita, Covid Dummy

−0.008

0.044

0.398

0.000

Log-likelihood Likelihood ratio Test

54.926

83.556

73.504

102.480

112.990

130.130

147.920

149.420

162.700

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

0.000

0.000

0.000

0.000

0.129

0.000

0.051

0.000

Note Coefficients with P-values below in italics, fixed effects panel regression

129.270

What Drives on- Versus Off-Trade Beer Consumption? …

87

Table 10 On- and off-trade sales volume per capita—South America On-trade vol per capita (1) Constant Ln Real on-trade price Ln Real off-trade price

(2)

Off-trade vol per capita (3)

(4)

(5)

(1)

(2)

(3)

(4)

(5)

−3.151

−3.634

−4.294

−5.045

−4.9991

−3.290

−3.202

−4.958

−4.874

−4.757

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

−0.448

−0.088

−0.574

−0.221

−0.4201

0.673

0.607

0.490

0.450

0.405

0.000

0.236

0.000

0.002

0.000

0.000

0.000

0.000

0.000

0.000

−0.058

−0.186

−0.172

−0.330

−0.2641

−0.752

−0.728

−0.917

−0.900

−0.862

0.547

0.020

0.076

0.000

0.001

0.000

0.000

0.000

0.000

0.000

Ln Real per capita Covid dummy (2020–1)

0.362

0.439

0.4917

0.529

0.520

0.498

0.000

0.000

0.000

0.000

0.000

0.000

−0.329

−0.347

0.060

0.039

0.000

0.000

0.065

0.184

Ln Real on-trade price, Covid dummy

−0.0188

0.114

0.749

0.059

Ln Real off-trade price, Covid dummy

0.0475

−0.108

0.415

0.072

Ln Real GDP per capita, Covid dummy

−0.0696

0.009

0.000

0.304

Log-likelihood Likelihood ratio test

98.198

151.560

108.360

175.230

169.770

(1) versus (2)

(1) versus (3)

(3) versus (4)

0.000

0.000

0.000

128.090

129.940

157.580

158.540

164.170

(3) versus (5)

(1) versus (2)

(1) versus (3)

(3) versus (4)

(3) versus (5)

0.000

0.033

0.000

0.110

0.002

Note Coefficients with P-values below in italics, fixed effects panel regression

References Anderson, P., O’Donnell, A., Jané Llopis, E., & Kaner, E. (2022). The Covid-19 alcohol paradox: British household purchases during 2020 compared with 2015–2019. PLoS ONE, 17(1). https://doi.org/ 10.1371/journal.pone.0261609 BBC. (2022). Cost of living crisis’ worse than Covid-19 for hospitality sector. Available at https://www.bbc.co.uk/news/uk-englandmanchester-62468609. Accessed: 20/12/2022 Cabras, I., Lorusso, M., & Waehning, N. (2020). Measuring the economic contribution of beer festivals on local economies: The case of York, United Kingdom. International Journal of Tourism Research, 739–750. https://doi.org/10.1002/jtr.2369 Eakins, J. M., & Gallagher, L. A. (2003). Dynamic almost ideal demand systems: An empirical analysis of alcohol expenditure in Ireland. Applied Economics, 35(9), 1025–1036. Euromonitor. (2022a). Global Economic Forecasts—Q2 2022a. Available at https://go.euromonitor.com/rs/805-KOK-719/images/ebGlobal EconomicForecastQ2-22-v0.1_final.pdf?mkt_tok=ODA1LUtPSy03 MTkAAAGE3I2uUGUhXZkDtdUaTbHbOqJOTAn1pS_1h1Q18d TDLW2Z9GyWB9B04Ug0agydm_ilz56er_0kcvuj-DMX0dphgPQ qKB2iPJ7xJZkS2_cuP2UnJdYV1A Accessed: 13/06/2022a. Euromonitor. (2022b). Voice of the Industry: Alcohol drinks. https:// go.euromonitor.com/rs/805-KOK-719/images/ebGlobalEconomic ForecastQ2-22-v0.1_final.pdf?mkt_tok=ODA1LUtPSy03MTkAA

AGE3I2uUGUhXZkDtdUaTbHbOqJOTAn1pS_1h1Q18dTDLW2 Z9GyWB9B04Ug0agydm_ilz56er_0kcvuj-DMX0dphgPQqKB2iP J7xJZkS2_cuP2UnJdYV1A Accessed: 13/06/2022b. Fogarty, J. (2010). The demand for beer, wine and spirits: A survey of the literature. Journal of Economic Surveys, 24(3), 428–478. Forsyth, A. J. M. (2010). Front, side, and back-loading: Patrons’ rationales for consuming alcohol purchased off-premises before, during, or after attending nightclubs. Journal of Substance Use, 15 (1), 31–41. https://doi.org/10.3109/14659890902966463 Gell, L., & Meier, P. (2011). The nature and strength of the relationship between expenditure on alcohol and food: An analysis of adult-only households in the UK. Drug and Alcohol Review, 31(4), 422–430. https://doi.org/10.1111/j.1465-3362.2011.00330.x Grosova, S., Masar, M., Kutnohorska, O., & Kubes, V. (2017). The demand for beer in the Czech Republic: Understanding long-term on- and off-trade price elasticity. Czech Journal of Food Sciences, 35(2), 165–170. https://doi.org/10.17221/365/2016-CJFS Hale, T., Angrist, N., Goldszmidt, R., Kira, B., Petherick, A., Phillips, T., Webster, S., Cameron-Blake, E., Hallas, L., Majumdar, S., & Tatlow, H. (2021). A global panel database of pandemic policies (Oxford COVID-19 Government Response Tracker.). Nature Human Behaviour. https://doi.org/10.1038/s41562-021-01079-8. Hampson, L. (2022). Tom Keerridge says energy bill at his pub has jumped from £60,000 to £420,000. Available at https://www. independent.co.uk/life-style/food-and-drink/tom-kerridge-energybills-pub-b2158245.html. Accessed: 21/12/2022.

88 Hardie, I., Stevely, A. K., Sasso, A., Meier, P. S., & Holmes, J. (2021). The impact of changes in Covid-19 lockdown restrictions on alcohol consumption and drinking occasion characteristics in Scotland and England in 2020: An interrupted time-series analysis. Addiction, 117(6), 1622–1639. https://doi.org/10.1111/add.15794 Jiang, H., Livingston, M., Room, R., & Callinan, S. (2016). Price elasticity of on- and off-premises demand for alcohol drinks: A Tobit analysis. Drug and Alcohol Dependence, 163, 222–228. https://doi.org/10.1111/add.15794 Lee, S. K, Jee, W. S. F., Funk, D. C., & Jordan, J. S. (2015). Analysis of attendees’ expenditure patterns to recurring annual events: Examining the joint effects of repeat attendance and travel distance. Tourism Management, 46, 177–186. Meng, Y., Brennan, A., Purshouse, R., Hill-McManus, D., Angus, C., Holmes, J., & Meier, P. S. (2014). Estimation of own and cross price elasticities of alcohol demand in the UK—A pseudo-panel approach using the Living Costs and Food Survey 2001–2009. Journal of Health Economics, 34, 96–103. https://doi.org/10.1016/j. jhealeco.2013.12.006 Mount, M., & Cabras, I. (2016). Community cohesion and village pubs in Northern England: An econometric study. Regional Studies, 50 (7), 1203–1216. https://doi.org/10.1080/00343404.2014.989150 Nave, E., Duarte, P., Rodrigues, R. G., Paço, A., Alves, H., & Oliveira, T. (2021). Craft beer—Asystematic literature review and research agenda. International Journal of Wine Business Research, 34(2), 278–307. https://doi.org/10.1108/IJWBR-05-2021-0029 (forthcoming) Page, N., Sivarajasingam, V., Matthews, K., Heravi, S., Morgan, P., & Shepherd, J. (2017). Preventing violence-related injuries in England and Wales: A panel study examining the impact of on-trade and off-trade alcohol prices. Injury Prevention, 23, 33–39. https://doi. org/10.1136/injuryprev-2015-041884 Plata, A., Motoki, K., Spence, C., & Velasco, C. (2022). Trends in alcohol consumption in relation to the Covid-19 pandemic: A cross-country analysis. International Journal of Gastronomy and Food Science, 27, 1–6. https://doi.org/10.1016/j.ijgfs.2021.100397 Pomarici, E., Boccia, F., & Captapano, D. (2012). The wine distribution systems over the world: An explorative survey. New Medit N, 4, 23–32. Rabinovich, L., Hunt, P., Staetsky, L., Goshev, S., Nolte, E., Pedersen, J. S., & Tiefensee, C. (2012). Further study on the affordability of alcoholic beverages in the EU: A focus on excise duty pass-through, on- and off-trade sales, price promotions and statutory regulations. Rand Health Quarterly, 2(2), 17. Ritchie, C. (2011). Young adult interaction with wine in the UK. International Journal of Contemporary Hospitality Management, 23(1), 99–114. https://doi.org/10.1108/09596111111101698 Ritchie, C., Ritchie, F., & Ward, R. (2009). A good night out: Alcohol-related behaviours in young adults. Worldwide Hospitality and Tourism Themes, 1(2), 169–193. Robinson, M., Mackay, D., Giles, L., Lewsey, J., Richardson, E., & Beeston, C. (2021). Evaluating the impact of minimum unit pricing (MUP) on off-trade alcohol sales in Scotland: An interrupted time-series study. Addiction, 116, 2697–2707. https://doi.org/10. 1111/add.15478 Robinson, M., Shipton, D., Walsh, D., Whyte, B., & McCartney, G. (2015). Regional alcohol consumption and alcohol-related mortality in Great Britain: Novel insights using retail sales data. BMC Public Health, 15, 1–9. https://doi.org/10.1186/1471-2458-15-1 Robinson, M., Geue, C., Lewsey, J., Mackay, D., McCartney, G., Curnock, E., & Beeston, C. (2014). Evaluating the impact of the

F. O’Connor and N. Waehning alcohol act on off-trade alcohol sales: A natural experiment in Scotland. Addiction (Abingdon, England), 109(12), 2035–2043. https://doi.org/10.1111/add.12701 Shakina, E., & Cabras, I. (2021). How do beer prices vary across different pubs? An empirical study. International Journal of Contemporary Hospitality Management, 34(5), 1984–2003. https://doi.org/10.1108/IJCHM-08-2021-0981 Sousa, J. (2014). Estimation of price elasticities of demand for alcohol in the United Kingdom. Available at https://www.gov.uk/ government/publications/estimation-of-price-elasticities-ofdemand-for-alcohol-in-the-uk. Accessed: 13/06/2022. Stevely, A. K., Sasso, A., Alava, M. H., & Holmes, J. (2021). Changes in alcohol consumption in Scotland during the early stages of the Covid-19 pandemic: Descriptive analysis of repeat cross-sectional survey data. Available at https://www.publichealthscotland.scot/ publications/changes-in-alcohol-consumption-in-scotland-duringthe-early-stages-of-the-covid-19-pandemic-descriptive-analysis-ofrepeat-cross-sectional-survey-data/. Accessed: 13/06/2022. Tomlinson, P. R., & Branston, J. R. (2014). The demand for UK beer: Estimates of the long run on- and off-trade beer price elasticities. Applied Economics Letters, 21, 209–214. https://doi.org/10.1080/ 13504851.2013.848022 Wang, J., Gao, X. M., Wailes, E. J., & Cramer, G. L. (1996). US consumer demand for alcoholic beverages: Cross-section estimation of demographic and economic effects. Review of Agricultural Economics, 477–489. Wells, V. K., Ellis, N. T., Slack, R., & Moufahim, M. (2019). “It’s us, you know, there’s a feeling of community”: Exploring notions of social sustainability in a consumer co-operative. Journal of Business Ethics. https://doi.org/10.1007/s10551-017-3747-4 Wells, V. K., & Waehning, N. (2022). British pubs are closing at an alarming rate—But the hospitality sector is fighting back. Available at https://theconversation.com/british-pubs-are-closing-at-analarming-rate-but-the-hospitality-sector-is-fighting-back-193993. Accessed: 20/12/2022.

Fergal O’Connor is a Senior Lecturer in Economics at Cork University Business School, Ireland and holds a PhD from Trinity College Dublin, Ireland. His research specialises in applied time series econometrics and the financial economics of precious metals markets. He has received research grants from the London Bullion Market Association and the Rothschild Archive to develop historical datasets on the London Gold and Silver Markets. Fergal is also a Fellow of the Higher Education Academy and is Head of Programme for the MSc. Finance in Cork University Business School.

Nadine Waehning is a Senior Lecturer in Marketing at the University of York, specializing in the pub and craft brewery industry. Her work is interdisciplinary bringing together marketing, entrepreneurship, regional studies with a focus on consumer behaviour and marketing strategies, with a current project evaluating responsible drinking and the impact of nudges on pub visitors’ alcohol consumption. She has received funding from the Scottish University Insights Institute and multiple internal funds. Nadine is a Fellow of the Higher Education Academy and a Chartered Marketer.

Questioning the Cluster Imperative: Why Danish Craft Breweries Choose not to Cluster Geographically, and What (not) to Do About It Jesper Lindgaard Christensen and Poul Houman Andersen

Abstract

Introduction

We investigate location factors of craft beer firms in the North Jutland region of Denmark and find that firms are located far away from each other rather than agglomerate. Traditional theories on firm location better explain these location patterns compared to theories that prescribe that small, resource-constrained firms should cluster to leverage knowledge exchange and other agglomeration advantages when they source knowledge for innovation and business development. We contribute to the constructive criticism of the universal application of the idea of clusters in regional development policy. We discuss unique features of the beer market and products that explain why firms in this industry seem to abstain from clustering. We forward the proposition of breweries simultaneously locating according to a ‘sharing of market’ logic and still pursuing knowledge exchange activities through ‘temporary clustering’; however, the latter being located away from the physical production facilities. Keywords











Beer industry Denmark Clusters Location Regional embeddedness Regional policies

J. L. Christensen (&)
P. H. Andersen Aalborg University Business School, Aalborg University, Fibigerstraede 11, 9220 Aalborg, Denmark e-mail: [email protected] P. H. Andersen e-mail: [email protected]




The drivers and consequences of local concentration of specialized economic activity and related firms are a century-old topic in economics (Marshall, 1920). The colocation of potentially competing firms operating at the same production stage is referred to as horizontal co-location (Brenner & Greif, 2006). Conventional wisdom on location of industries (Hoover, 1948; Moses, 1958; Weber, 1929) has been dominated by a perception of location choices that follows a logic of locating close to low-cost and/or high-quality production factors, close to customers and collusively agreeing among each other to share geographical markets (not to approach each other’s customers or sell to those in a particular area). The market-sharing logic is predominant in horizontal co-location thinking. More recent theories within industrial dynamics and economic geography prescribe small firms to co-locate to leverage on scale advantages of clusters, such as supply-side benefits related to knowledge exchange, shared resources and access to local, specialized labor (Asheim et al., 2006; Bathelt et al., 2004; Malmberg & Maskell, 2002; Maskell & Malmberg, 1999; Porter, 1998, 2000). Whereas clusters are often described, measured and identified by their horizontal co-location, it is part of cluster theories to incorporate buyer– supplier collaboration and interaction. Both types of theories emphasize the importance of institutions that facilitate links between actors and their formal and informal interactions. Recent perspectives on economic development specifically address the role of interactive learning and innovation as critical (Lundvall, 2016). Similarly, the dominant view on location factors is that the co-location approach has gained relative more importance (Christensen & Drejer, 2005). Hence, according to the established view, resourceconstrained firms compensate for liabilities of newness and smallness (Stinchcombe, 1965) by engaging in resource pooling and external collaboration, often with other small, young firms, rather than solely internal buildup of this

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_7

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knowledge (Hewitt-Dundas, 2006). They co-locate to facilitate a smooth exchange of codified and especially tacit knowledge. Although spatial analyses and mapping show actual locations at a specific time, they do not reveal explanations behind location choices (Dennett & Page, 2017). Moreover, location dynamics are rarely studied; that is, to what extent do location decisions in an industry vary over time? More fine-grained analyses of location decisions are called for to capture what links the general descriptive picture of locations to the underlying choices by individual actors, their interactions and the consequences of these interactions. Consequently, we follow a call for studies that allow us to capture the individual firm (micro) foundation of spatial (macro) conditions and events (Ylikoski & Zahle, 2019). It leads us to complement spatial descriptions with qualitative methods to investigate further what is behind the location decisions of craft beer firms we observe. Firms in this industry are all small, innovative and often resource-constrained, which would prescribe them to co-locate according to the above-mentioned established belief. We contrast underlying assumptions in the abovementioned general theories on location with stylized facts on the craft beer market in a region in Denmark. We map the location and co-location of the main microbrewing1 firms in the craft beer industry in the North Jutland region in Denmark. Contrary to what cluster theories prescribe, these firms locate geographically far away from each other and hence do not seem to search knowledge for innovation through co-location and clustering. This apparent paradox spurs a discussion on whether the imperative that firms should cluster holds for this industry or if traditional location theories are still valid in the context of our study and the industry we focus on, by implication, perhaps in other industries as well. Based on firm-level interviews, we reveal that the location decisions seem to follow traditional location choice parameters. In contrast, more recent perceptions of how small firms tend to cluster appear to have little support at first 1 The definition of ‘microbrewing’ often follows the brewery size and/or ownership. Moreover, the term is used to characterize the mode of brewing, related to the fact that microbreweries in many cases define and market themselves in opposition to the large breweries (Verhaal et al., 2015). The microbreweries’ self-perception is related to their creativity, originality, heterogeneous products, ingredients, and flavors (Mathias et al., 2018; Pozner et al., 2022; Verhaal et al., 2015). The term also covers brewing other beverages; but in our case, we focus on beer production. 2 The terms agglomeration, co-location and clustering are often used interchangeably in the literature. In this paper, we distinguish between a cluster of firms in a specific geographical area and collaborating and exchanging knowledge (Porter, 1998, 2000). Contrary, firms can be co-located without having solid and frequent interactions.

J. L. Christensen and P. H. Andersen

sight. We point out why the craft beer industry case may deviate from these general theories on small firm concentration and clustering.2 Interestingly, we also find that firms do pursue activities resembling what produces the knowledge exchange facilitated by physical co-location, precisely what the literature denotes ‘temporary clusters’ (Bathelt & Schuldt, 2008; Maskell et al., 2006). These activities, which come in a wide variety but support trust-building, vicarious learning and knowledge exchange purposes, typically also discussed in the co-location literature, compensate for the lack of physical proximity that could facilitate face-to-face interaction and knowledge exchange. Our exploration of the location decisions of Danish craft brewers contributes to the sparse literature on location and co-location factors and drivers in this particular industry. More generally, we contribute to the economic geography literature by proposing explanations for why firms may deliberately choose not to co-locate even if they recognize the need for knowledge sourcing and knowledge exchange for innovation. We propose a novel conceptualization of the simultaneous distant location and ‘cluster’ leveraging that we observe in this industry. We organize the paper as follows. The second section describes the context of the Danish beer market. Section three outlays theoretical explanations of firms’ location choices, emphasizing location decisions as portrayed in recent literature. This discussion is followed in section four by explaining our empirical methodology. The fifth and sixth section explains our results, respectively, reasons behind location choices and disadvantages of clustering, before discussion, implications and conclusions in section seven.

The Danish Beer Market—Structure, Evolution, Innovation and Location of Firms Evolution and Market Structure The number of breweries is a key indicator in studies of the beer industry. The Danish microbrewing industry has seen remarkable development since the 1950s when Denmark had numerous small breweries. However, in the year 2000, the number of breweries had dropped to only 12. Subsequently, the total number of breweries increased. Figure 1 displays the development from the year 2000 to the end of 2022 in the number of breweries3 The dotted line illustrates all breweries, including ‘ghost’-breweries, ‘contract'-

We thank Martin Emtekjær Andersen and Trine Olesen Østergaard, both Aalborg University Business School, for assistance with data collection.

3

Questioning the Cluster Imperative: Why Danish Craft Breweries …

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Fig. 1 Development in the number of breweries in Denmark. 2000–2022. Contract breweries and total numbers (dotted line)

breweries and those who do not themselves have production facilities but instead use established breweries’ equipment. The solid line indicates breweries with physical facilities. Denmark had a relatively small number of breweries and a slow industrial growth after the beginning of the century. Between 2000 and 2004 the number of breweries went up from 12 to 26, and from 2004 to 2008 the number went up from 26 to 114 existing firms. This development was followed by four years of stable, slow growth, but from 2012 there was another period with high growth in the number of breweries. By the end of 2022, there are 270 breweries. Another market characteristic is the size of firms. The structure of the Danish market resembles an oligopoly as it is dominated by a few strong incumbents, in particular Carlsberg and Royal Unibrew, who are both among the largest 40 global breweries, Carlsberg being number three measured by produced volume of beer in 2021, Royal Unibrew number 38 (https://www.craftbrewingbusiness.com). They have a combined market share of 80% of the Danish beer market. Despite the dominance of these two large breweries,

Denmark has the second-largest number of breweries per million inhabitants in Europe (Hana et al., 2020). Figure 1 could indicate that the market is growing over the whole period, but this is not the case when measured in volumes rather than the number of breweries. Throughout the period covered in Fig. 1, total beer consumption decreased (in the same period, wine consumption remained constant). However, the specialty beer share of total beer sales increased from 6 to 10% of the total market. Hence, the beer specialty market remains relatively small but has an increasing share of the total beer market. A similar development has occurred in other countries (Baiano, 2021). Earlier studies, such as Audretsch and Feldman (1996), point out that high heterogeneity and innovation can postpone industry maturity and decline. Structures and behaviors such as clustering and firm regional embeddedness enhance adaptability. Building firm-level resilience depends on managerial recognition of the resource mobilization possibilities linked to specific places and geographies. This accentuates the present study of possible clustering (or not) in this industry.

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Location Patterns Figures 2 and 3 shows locations of breweries in the North Jutland region in 2022 distributed on size (Fig. 2) and type (Fig. 3). The number of observations in our sample is too small (25) to justify robust statistical complete spatial randomness (CSR) analyses. For robustness, we instead produced maps for every second year and with different samples (e.g., excluding nano-breweries). We found no changes in the overall conclusions from either of these other forms of disaggregation (available upon request). The maps provide a visual impression rendering the conclusion that the location of these firms seems to be geographically dispersed, hence, to follow a market-sharing logic (Fig. 4).

J. L. Christensen and P. H. Andersen

As a second step, we mark breweries that, in addition to production facilities, also have a brewpub, taproom or similar at the location. We do so because the literature (Cabras, 2018; Dennett & Page, 2017) has mentioned that this is an essential parameter in location decisions, brewpubs being more inclined to locate in urban areas and to co-locate because they can benefit from the fact that customers will often choose to visit brewpubs if they are in walking distance from each other. The conclusion also holds for this disaggregation, as the brewpubs are also dispersed geographically. We included relatively small breweries in Fig. 2. One could argue that small businesses do not contribute to representing the market as their production volume is marginal, but as we are interested in location decisions (and all large breweries started small) it is just as (or even more) interesting to include new, small firms than older, wellestablished firms that perhaps are embedded in the regional context for historical, owners’ personal reasons, and who faces large switching costs if re-locating. Again, for robustness, we also map locations without the very small firms and do not find differences. In the following section, we search for established, general theoretical explanations for firms’ locations, and we link these to the specificities of breweries’ location choices.

Theoretical Background and Earlier Literature on Location and the Beer Industry Traditional Location and Co-location Theory Fig. 2 Breweries in North Jutland by size—regional (blue), micro (red), and nano (yellow)

Fig. 3 Breweries in North Jutland 2022 by type—production only (purple), brewpub/-restaurant (green), and ghost brewery (yellow)

The choice of location of production is a classic problem in economics. Theories in this domain (Hoover, 1948; Hotelling, 1929; Moses, 1958; Weber, 1929) generally link the location to the costs of transporting raw inputs to production facilities, transportation of goods and distance to the consumers at the market and relative prices and qualities of inputs and labor. For example, addressing an essential balance between the costs of transportation of inputs to production facilities and costs of transportation of final goods to the market Weber (1929) and Hoover (1948) modeled this trade-off by pointing out that in industries with heavy, costly to transport inputs this would be an essential location factor, whereas location would rather be close to market if final products are relatively costly to distribute. Stigler (1951) specifically linked transportation costs with the extent of the market, as illustrated below. Another influence of co-location comes from the assumed scale and scope benefits of co-location on inter-firm cooperation (Storper & Harrison, 1991). According to Porter

Questioning the Cluster Imperative: Why Danish Craft Breweries … Fig. 4 An illustration of the market-sharing logic in traditional location theory

Combined production and transportation costs

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Market area where brewery a has a cost advantage

Brewery a

(1998, 2000), co-location in clusters entails a form of social glue where the proximity of firms ensure commonality and increases the frequency and impact of interaction. Also, colocation may enhance the chances of repeated face-to-face interaction, observation and learning. Related, the physical co-location of entrepreneurs strengthens social ties and reduces the risk of moral hazard (Dei Ottati, 2002). For instance, Kristensen (1994) underscores the role played by local social sanction mechanisms among co-located entrepreneurs in cases where the consequences of business behavior are transparent. Even if transportation costs have recently increased significantly, observers regard this as a temporary phenomenon, and over the longer term, costs of transporting goods have decreased substantially. Moreover, although heavy goods are still moved over distance and used in production, resources have generally become increasingly knowledge-based, hence easily transferred over distance and less restricted in space. These two stylized facts indicate a more minor explanatory power of the traditional location theories compared to more recent theories in economic geography emphasizing agglomeration and clustering.

Clusters and Agglomerations As explained above, it was previously regarded as self-evident that an industry is closely affiliated with its natural endowment bases. However, in economic geography, recent theorizing has emphasized that co-location can create positive spillovers but also that the reverse causality is in place, the agglomeration effects have a role as factors for location, especially for certain types of firms. New, small firms compensate for liabilities of newness and smallness (Stinchcombe, 1965) by engaging in external collaboration

Market area where brewery b has a cost advantage

Brewery b

Distance

with other small, young firms rather than an internal buildup of this knowledge (Hewitt-Dundas, 2006). By pooling resources, they alleviate the challenges of knowledge sourcing and innovating. For some firms, these possibilities in specific locations are essential for their choices of location/ re-location (think of IT firms flocking to Silicon Valley or film production concentrating in and around Hollywood) (Scott, 2005). The cluster literature suggests several reasons why firms cluster in space. It is generally assumed that firms enjoy strategic benefits from belonging to a geographically defined cluster, comprised of potential rivals, suppliers, customers and complementors (Porter, 1998, 2000). Potential benefits include, among other things, critical mass for attracting and growing specialized resources and skills, knowledge exchange through collaboration and face-to-face interactions, non-traded inputs, access to lead users and to supportive local institutions, local markets as test beds for ideas, vicarious learning and other forms of knowledge spillovers (Asheim et al., 2006, Bathelt et al., 2004; Krugman, 1991; Malmberg & Maskell, 2002; Maskell & Malmberg, 1999, Porter, 1998, 2000). Although the horizontal co-location of business actors has been proposed as a part of the rationale for agglomeration advantages arising from clusters (Malmberg & Maskell, 2002), the extent to which empirical evidence generally supports that cluster advantages for the individual firm hinges on close physical co-location to competitors, has also been questioned (Duranton, 2011; Felzensztein et al., 2010). For instance, it is questioned whether the relative communication benefits of physical co-location fade in importance with the adaptation of digital technologies (Ganesan et al., 2005). Issues related to population density and possible saturation and fading of co-location benefits have also been pointed out, suggesting a reverse u-shaped rather than a

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linear association between agglomeration benefits and colocation (Chang & Park, 2005). Some parts of the literature challenge whether the potential benefits of competitor colocation are a catch-all for all business activities and across all sectors. A similar question can be raised concerning variations in cluster co-location benefits across industries and sectors, given their differences in technology forms, factor endowments and knowledge independencies (Andersen, 2006; Buciuni & Pisano, 2018). Such industry differences justify a closer look at the location patterns in our case industry.

Location and Co-location of Breweries—A Special Case? As indicated above, location decisions and patterns may be industry dependent. With a focus on the craft beer industry, location studies are sparse. Overall research finds that microbreweries benefit from clustering and do in fact cluster in space (Dennett & Page, 2017; Moore et al., 2016; Nielsson et al., 2018; Wojtyra et al., 2020). It has also been shown that business closures occur relatively more often outside clusters (Nielsson et al., 2019), although the literature generally is inconclusive regarding whether beer firm clustering increases the likelihood of survival (ibid.). When it comes to location-based resources and benefits, more microbreweries often mobilize cultural representations from the local space to support and differentiate their beer brand narratives (Bowen & Miller, 2022; Gatrell et al, 2018; Taylor & DiPietro, 2020). This does not necessarily contribute to co-location benefits, in fact it can be argued that, on the contrary, breweries may take provenance and ownership of being the unique representative of a specific social terroir (Bowen & Miller, 2022). However, consistent with general cluster theory, co-location benefits for microbreweries include improved access to knowledge and learning opportunities, access to resources, equipment and specialized labor (Brown, 2015; Nielsson et al., 2018). Barajas et al. (2017) show that the strongest predictor of a craft brewery entering a neighborhood is the presence of an already existing brewery. Tremblay et al. (2005) ascribe this to the informational opacity of breweries’ financial performance, which leads to a more vital second waive entry. In addition, research has pointed out that horizontal co-location can create demand-side benefits. For instance, helping customers sample offerings by foot is an important co-location benefit for the so-called brew mile in London (Wallace, 2019). This point is consistent with our separation of breweries into production facilities only and combined brewpub/restaurant/tasting facilities. As the sparse evidence shows, there is no consistent line of research unilaterally documenting horizontal co-location

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of brewery clusters. In fact, an argument can be made that inconsistencies in the research and the partly exclusive access to some of the local affordances (such as branding a space), combined with possible restriction in the ability to branch out and reach alternative customers with acquired skills from co-location, speaks for more mixed benefits and challenges from physical co-location. Research on co-location in other industrial contexts has shown similar results. Shaver and Flyer (2000) suggest that the net value (benefits– costs) derived from a co-location decision depends on the firm’s core competencies. Likewise, a study of the hotel business in the Manhattan area in New York suggested that the growing density of middle-class hotels in the area reduced the chances of survival, due to increasing factor and market costs (Baum & Mezias, 1992). Hence, research into both brewery co-location and co-location in clusters more generally shows that the net costs of positive and negative benefits from co-location are no panacea. In the following, we seek to investigate this further.

Data and Methodology There is no established methodological convention for cluster-based research (Komorowski, 2020). Instead, given their multidimensional nature, approaches that combine qualitative and quantitative data, reflecting the multidimensional nature of clusters seems to be the norm (Brachert et al., 2011). Consistent with other approaches to industrial field- and cluster-based research, we have followed a multi-method approach to triangulate between different panel data sets, interviews and observations (Illeris, 1992; Staber, 1998). This approach has helped develop a sufficiently thick dataset to explore deeper the dynamics of location and clustering unfolding in the industry over time. Above, in Fig. 1 and in the maps of the location of breweries, we used a database that entails detailed information on individual firms, including their products, location etc., to illustrate the evolution of the industry and the location of firms in the industry. We obtained these data from Statistics Denmark, from our own data collection and from www.beerticker.dk, an independent consultant who monitors the Danish microbrewery industry and provides data to The Danish Brewer's association. Moreover, we searched specialized magazines, especially ‘The Beer Enthusiast’, that report on recent developments in the industry, including new establishments and closures. Our data have several advantages over other existing data. One is that we combine, as a criterion for being an active firm, not only the company register number but also that the firm has launched a beer on the market combined with having operational approval as a producer of goods for consumption. By doing so, we avoid the flaw in publicly available databases, such as that of

Questioning the Cluster Imperative: Why Danish Craft Breweries …

Statistics Denmark, where several inactive firms are included. We have detailed information on all 316 firms over 20 years from the different data sources we combine, including those who closed and why they closed. In addition to these data used to map where breweries are located, our primary empirical bases for digging deeper into what is behind the location decisions of breweries is data derived from interviews with managers and brewers in the industry. This fieldwork started in 2019 when we did nine semi-structured interviews at the site with brewers (six interviews) and key informants (3 interviews), each lasting more than an hour. The interviews were conducted at their location, with owners and executive brewers with detailed insights into their companies’ history and operations. Interviews were recorded, transcribed and subsequently thematically grouped and coded. When processing the data, we focused mainly on parts of interviews with information on location decisions. Traditional location theories encompass both input factors and output factors. On the input side, there are few restrictions to location in the Danish craft beer industry. Inputs include access to high-quality water, hops, yeast and malt. In Denmark, water quality is good all over, and other ingredients are easily transported through developed transport facilities. In some cases and localities, it can be questioned if water is ubiquitous and of equal and sufficient quality. Water chemistry differs between localities, but in Denmark, it is possible to adjust the water quality without influencing taste. Moreover, Nesse et al. (2019) report cases where breweries are restricted in their access to water due to drought in some areas, but these cases are from the Western U.S. and are not applicable to our case. Therefore, location decisions are, to a large extent, driven by output-/market logic and by history (non-economic factors (Reid and Gatrell, 2017)). Hence, these are our focus points in the analysis, although we generally ‘keep eyes open’ for unexpected inputs during interviews as these were planned as semi-structured but often deviated from the plan according to the respondents’ stories.

Results The spatial analysis and mapping indicated few incidences of co-location of microbreweries. In contrast to established literature, this was also the case for breweries with a pub/restaurant/taproom associated with the production facilities. Based on our interviews, we find several explanations for why microbreweries do not co-locate. These explanations surface from conducting a grounded analysis of the interview data and organizing our findings around three emergent themes relating to factors influencing spatiality and location choice of microbreweries.

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Territoriality and Local Branding One theme related to location is a shared notion among microbrewers concerning market territory. Although we saw various market categorizing efforts, markets and the consumers and resources they represent are typically described and delineated by microbrewers in spatial terms. The brewers interviewed brought up arguments suggesting several elements of territoriality that played a role in location choices. Both concerning their choice of location and how that was influenced by the fact that all owners interviewed originate from the area or have a strong connection to it. There was a general sense of localized microbrewing as a local signifier and microbrewing consumption as a localized social experience that links to other local touristic events. Brewer C: ‘(…) tourism links are also about attracting cruise ships, which we clearly feel in our shop when they come, hence we are very interested in supporting this.’ Brewer D: ‘Then some local summerhouse owners heard that the brewery went bankrupt, which spurred them to have a quick talk here, out on the parking lot, and they thought the brewery was a valuable place when they are here. Consequently, they invested.’ One issue frequently mentioned during interviews and reflected in our secondary data was the notion of a local microbrewery representing the specific location and drawing from its unique characteristics in terms of history or other localized affordances. Hence, the name of the microbrewery also typically reflects a strong presence of locational aspects in the branding of beers. This finding is consistent with the fact that innovation in this industry largely is marketing innovation. However, there is also an element of entitlement, which suggests that rivalry over differential advantages from localized microbrewing is also present along with local support. Brewer C: ‘(…) one thing not to do, at least not in Aalborg, is when you have a restaurant associated with your brewery, then other restaurants are not particularly interested in your beer. This obstacle for sales is something we did not foresee.’ Also, two microbreweries sharing the name of a location are not found in our material. And there is an element of entitlement here as well. Owner B: (…) the name of the beer and brewery is a local and regional specialty limiting the geographical scope of the market. If we tried to sell in Skagen or Fur or similar, it would be difficult, people buy the local brand when they are

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themselves regionally embedded. When we took over the brewery, we knew very little about sales and distribution, but we quickly learned that we should brew for the local market, penetrating markets in Skagen, Løkken, or Thisted would be difficult. These considerations by the respondents also point to limits to expansion as home markets can be limited, and entering other markets can be difficult. This is illustrated by Hadsund Brewery, which is located in a small town with a limited population in the surrounding towns. Attempts to sell their produce in the larger Aalborg city are pursued by naming the beers after areas in Aalborg city (Gug, Vejgaard etc.).

Consumer Hinterland and Spatial Distance to Competitors A second issue in the interviews relates to the notion of a consumer hinterland for maintaining a viable production and sale of local beer. The general idea behind the espoused views is that domestic and sufficiently large local demand is required for a local microbrewery to thrive and prosper. One of the interviewees overheard the researchers identifying which microbrewery in Denmark we thought would have the most extensive domestic market attached to it and linked this directly to the brewery's survival chances and long-term viability. Another brewery related the size of their hometown and the number of visiting tourists to the case for a market.

J. L. Christensen and P. H. Andersen

Owner x: ‘We thought there was a hole in the market. Our new brewery is 20 minutes drive from nn, a little less than 30 minutes drive from mm, 40 minutes drive from bb, 30 minutes drive from vv, and just under 60 minutes drive from cc. (…).

Use of Limited Resources to Serve Markets A third issue that surfaced from the discussions with microbrewers related to the limited branding, distribution and marketing resources of microbrewers. Most microbreweries have restricted capacity and produce and sell in modest amounts. Maintaining a steady distribution flow represents a specific challenge since an essential part of the sales of microbrewing is based on creating variety and novelty, which calls for an ongoing sales and development activity. Stiff competition, particularly with the large breweries, who also have taken an interest in craft beer types and have resources to exclude smaller breweries from the pub taps, means that the resources needed for marketing and selling craft beer are increasing rapidly, as compared to heydays of the microbrewing ‘Movement’. The intensified competition also affects the market relationship between microbrewers, who are increasingly fighting over access. Sales, in the form of maintaining relationships with local bars and pubs, canvassing beer, and repleting the empty beer kegs, is resource demanding, which implies that there is a natural geographical limit to the sales area covered.

Owner A: there isn’t space for more (breweries) in Frederikshavn, in fact we have two here as one is brewing to own consumption and a restaurant here. (…)We didn’t have one, even if any town of a decent size has a brewery, in fact it is 70 years since we had one in Frederikshavn (…).

Owner B: This is in the periphery of Aalborg municipality, and except for a few cases where people have special relations to our beer, we are in fact only active in a radius of 50 kilometers from our brewery

Brewer D: ‘(…) when I agreed with Lars that we should establish Frederikshavn Bryghus, we looked into how many arrive with the ferry every year and how many hotel nights sold in Frederikshavn municipality, which is 1.8 million, hence there is a market potential. I know the saying goes that Frederikshavn is not a tourist town, on the other hand, there are 1.8 million people potentially buying a beer, then this should be your brewery location. If you include the municipalities of Jammerbugt and Hjørring then you have 2.3 million, hence if I tell the local story here then tourists pay attention to it, whereas if I go and sell our beer in Aalborg I’ll amend the storytelling, (…).’ An explicit reference to the spatial distance to competitors came from the owners of brewery X when explaining the location decision behind a new establishment.

Cons of Considering Clustering and Alternatives Disadvantages of Clusters The apparent paradox that sparked this paper, that small, resource-constrained firms do not seem to cluster, called for explanations why breweries locate as they do. In turn, viewed from a cluster perspective, one can ask what the flipsides of the many benefits that clusters have been said to entail are. For this industry, we point to four such disadvantages. First, clusters can create an oversaturation of demand and exhaustion of scarce resources locally if too many firms of the same type co-locate. In essence, this is a question of

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whether firms balance the location decision between, on the one hand seeking to leverage on an agglomeration effect (supply-side effects) and, on the other hand, the presence in the market (demand). Secondly, we propose that many firms base their marketing and branding on local storytelling, ingredients, ownership, voluntary engagement of citizens or history (Flack, 1997; Hasman et al., 2022; Mathias et al., 2018; Verhaal et al., 2015). This limits how many craft breweries can be in one place (Dennett & Page, 2017), two firms in one place need two stories for marketing, and outside large cities, this limits the possible number of firms in the market. Third, networking is one significant cluster benefit, but firms consider the costs of networking, something often neglected in the established literature. These costs have to do with the fact that network activities are time-consuming and involve the risks of myopia and lack of long-term planning spurred by herd mentality and groupthink. These costs outweigh the gains from networking, and alternative, ‘cheaper’ ways of obtaining knowledge and other network benefits are sought, cf. our explanations of these rationales later in the paper. Finally, we point out that in addition to operational costs, networking requires investments in competencies, trust-building and recognition of reciprocity (Mcgrath & O’Toole, 2013; Ritter & Gemünden, 2003). In the literature on clusters, it is often implied that such investments are integral when companies physically co-locate. However, our research underlines that social interaction and co-location are not necessarily interdependent. This suggests that craft brewing firms enjoy business advantages from social interaction, decoupled from physical co-location. An argument can be made here for a potential trade-off between the colocation benefits and the market-sharing (and differentiation) logic being active. Among microbreweries, there is a sense of competition but also of cooperation. Balancing these two interests depends on how close substitutes their brands, value proposals and products are from the consumers’ perspective.

(Bathelt & Schuldt, 2008; Maskell et al., 2006), such as beer festivals and other similar events. Often these events are attended by the brewers rather than the owners (where they are separate persons), as illustrated by this quote:

Alternatives to Clustering The above explanations could leave the impression that Danish microbreweries do not need and seek the benefits of clustering, such as knowledge sourcing through collaboration and informal exchange of information and knowledge, and that cluster theories have no explanatory power concerning location decisions in this industry. However, importantly, we find that firms do also undertake network activities. Frequently, firms undertake some of the same activities as in ‘ordinary’ clusters, specifically informal knowledge sharing through participating in ‘temporary cluster’ activities

Interviewer: How is your network and collaboration with other breweries and owners of breweries? Owner: We honestly do not. I rarely talk to other breweries and owners. He does (pointing to his master brewer). He goes to fairs, network meetings, and informal exchange of brewing – and obtains relevant information, right? (brewer confirming) (owner, brewery d)

These activities compensate for the lack of physical proximity that could facilitate face-to-face interaction and knowledge exchange. In this sense, network activities in the industry are often informal and not associated with the physical location of the individual brewery. Brewers describe the leading international beer festival as a giant ‘cousin-cousin party’. The knowledge obtained at these temporary clusters is helpful for several things, not least innovation. What is learned in customer interaction includes observations of changes in consumer preferences, and they function as a testbed for ideas. In interaction with other breweries, there is an exchange of experiences with brewing techniques, new apparatus, ingredients, etc. This knowledge contributes to the incentives to raise quality, continuously change beers and introduce new processes and especially product innovations. Another example of an event type that qualifies as a temporary cluster is the craft brewing competitions, typically organized by local chapters of craft brewer guilds. These serve as an additional place for knowledge exchange and vicarious learning, specifically among brewers. Further research into the effects on knowledge generation of such events would be useful (Cabras et al., 2020). Thus, even if we question the universal application of the idea of clusters of firms, we discuss particular features of the beer market and products that contribute to explaining why firms in this industry seem to abstain from clustering. On the other hand, we point out that firms, despite being physically distant—or perhaps because of this—pursue activities that resemble the close interactions seen in clusters. In this sense, we forward the proposition of breweries simultaneously locating according to a ‘sharing of market’ logic and still pursuing knowledge exchange activities supporting innovation activities; however, such activities are located away from the physical production facilities.

Discussion, Implications and Conclusions Our discussion derived from the results in this paper contributes not only to understanding beer industry dynamics and its economic geography but also to assessing the generalization of network and cluster theories and policies.

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Our findings indicate that dispersed physical location does not rule out agglomeration effects; however, in our case the benefits usually associated with agglomeration are sought in a more ‘footloose’ manner than hitherto discussed in the literature. Danish microbreweries did not co-locate and did not, to a large extent, engage in formal collaboration, but we found indications that they nevertheless exchanged knowledge through temporary, distant interactions at beer festivals and similar events. We question if agglomeration effects and physical co-location need to be tied together. This provides an interesting avenue for further research; the off-location search for agglomeration effects seems to be a widespread and important source of the buildup of social capital and knowledge exchange in this industry, even if not bounded in space. Extending the search for this perspective to other industries and researching motivations for participating in fairs and festivals would be one strategy to obtain more solid knowledge. The conclusions from the studies reported in this paper are not independent of the context. For example, the COVID-19 pandemic spurred a higher consumer loyalty for locally produced beer. Further on that case, the share of Danish microbreweries that sell their produce in cans tripled during COVID-19, which renders new possibilities for distribution. This could affect location decisions. The former trend, higher consumer loyalty, will point to the more significant importance of the local environment in location decisions the latter, the opportunity to reach remote markets through online sales and distribution, to less importance. Our position in this paper is a skeptical perspective on the universal use of cluster theories; however, we are not opposing cluster thinking altogether; in fact, we show that even when firms do not cluster in space, they comply with the basic ideas in cluster theories regarding the informal exchange of knowledge and the importance of geographical proximity in this. Regional cluster policies have involved extensive discussions on identifying the ‘winning policies’, often aided by policy consultants, and what would likely be expedient future focus areas. There has been much less attention toward identifying what contextual issues characterize different types of clusters and consequently what policies to pursue or not by regional authorities. In an era where regional actors are flocking to embark on certain policy domains (Duranton, 2011; Martin & Sunley, 2003), spurred by fashion, consultants, even regulators (RIS3 etc.), it is timely to discuss when and why industries sometimes appear not to follow established logic and perceptions, and what this implies for conventional industry policy. Cluster policies have been criticized (Duranton, 2011; Vom Hofe, & Chen, 2006), but generally they have been closely tied to localities. Related, proponents argue that they are important drivers of regional growth and innovation. We

J. L. Christensen and P. H. Andersen

do not dispute the general assertion that clusters contribute to growth and innovation, and we recognize the importance of place and location for growth and resilience in this industry, but our study demonstrates that in some cases, the positive agglomeration effects need not be locally embedded. This introduces a dilemma for regional development policies. Such policies are usually organized and governed by regional entities that aim to enhance regional innovation and industry development, such as by stimulating networking and better knowledge flows inside the region. In a situation where vital parts of the knowledge exchange are not regionally embedded but rather part of the way it takes place on an industry level, it becomes difficult for policy actors to engage heavily in such support (aside from the fact that policy organizations generally do not have a long tradition for promoting beer or other alcohol, neither regionally nor at a national level). In a policy context, this paper provides a think-point for policymakers and policy consultants who, by backbone reactions, would tend to derive conclusions around that when the location of firms is dispersed, there is a potential for policies to enhance co-location in this industry (as in other parts of the food and drink industry). The discussion above indicates that effective policy and rationales for support need not follow the crowd, rather there might be a case for non-intervention in this industry, at least regarding supporting regional clusters.4

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This is not to say that regulatory changes and policies are irrelevant to the industry, we only comment on the part that entails cluster policies.

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J. L. Christensen and P. H. Andersen Wojtyra, B., Kossowski, T. M., Brezinová, M., Savov, R., & Lancaric, D. (2020). Geography of craft breweries in Central Europe: Location factors and the spatial dependence effect. Applied Geography, 124, 1–11. Ylikoski, P., & Zahle, J. (2019). Case study research in the social sciences. Studies in History and Philosophy of Science, 78, 1–4. https://doi.org/10.1016/j.shpsa.2019.10.003

Jesper Lindgaard Christensen is Associate Professor in Industrial Dynamics at Aalborg University Business School, Denmark, where he is part of the IKE research group. JLC has researched and published within SME development and entrepreneurial finance, economic geography, innovation systems, entrepreneurship, renewable energy statistics and innovation, and innovation policy. He has a long experience in policy analyses and advice. His most recent book is on Small Country Innovation Systems in transition.

Poul Houman Andersen is Professor in Business Marketing at Aalborg University Business School and affiliated with NTNU (Norway). His research concerns organizing and managing strategic innovation in buyer– supplier relationships and wider business networks, from both the buying (purchasing) and the selling (marketing and sales management) side. This research interest also includes the impact of varieties of industrial and geographical contexts. He has published in management, strategy, and marketing journals as well as in economic geography.

Adaptive Reuse in the Canadian Craft Beer Sector Roger M. Picton and Vanessa Mathews

Abstract

This chapter presents the main findings from an extensive study of craft breweries and adaptive reuse across Canada. We begin with an overview of the distribution of craft breweries across the Canadian urban hierarchy, from small towns to large metropolises, to highlight broad spatial patterns. We then document the building locations of Canadian craft breweries, from main street commercial sites to peripheral industrial locations, and from former residences to large format retail sites, to highlight the extent of adaptive reuse across the sector. We conclude with a set of policy directions municipalities could implement to encourage building reuse by the craft beer sector. Keywords









Craft breweries Adaptive reuse Sustainability Canada Spatial patterns Municipal policy




Introduction The rise of small-scale breweries has defined the last decade of beer-making in Canada. The 1017 breweries in operation in 2022 represents a phenomenal increase from the 40 Canadian breweries that remained in the 1980s (CCBA, 2022; Coutts, 2010). The vast majority of these new craft breweries (brewpubs, microbreweries, and nanobreweries) produce less than 15,000 hectoliters per annum and are R. M. Picton (&) School of the Environment, Trent University, Peterborough, Canada e-mail: [email protected] V. Mathews Department of Geography and Environmental Studies, University of Regina, Regina, Canada e-mail: [email protected]

defined by their small scale, independent ownership, and local production (OCB, 2020; CCBA, 2022). The recent growth in the sector raises important questions surrounding the effects of these sites of alcohol production/consumption across the urban hierarchy. While craft breweries are increasingly engaging in sustainable and environmentally responsible practices relating to ingredient sourcing, production processes, and product distribution (Garavaglia & Mussini, 2020; Hoalst-Pullen et al., 2014), little is known about the geography of building reuse and adaptation in the sector. The increasing variety of building types and locations housing craft breweries, including disused and distressed sites, reflects the engagement of the sector in sustainable building practices (Mathews & Picton, 2023). This chapter was motivated by a desire to identify building reuse patterns by the craft beer sector across all Canadian provinces and territories. Our analysis of these geographies of adaptive reuse provides insight into the value of existing buildings for Canadian craft breweries and offers local policy options to encourage building reuse by the craft beer sector.

Adaptive Reuse and Sustainability There is a growing body of research espousing the benefits of reusing existing buildings as part of a sustainability framework (Foster, 2020; Kalman, 2014; Love & Bullen, 2009; Yung & Chan, 2012). Building conservation and sustainability, while often engaged separately, are necessary components in contemporary development practices (Stubbs, 2004). Adaptive reuse is a key strategy in the rehabilitation of existing buildings subject to a change of use required by new or existing owners. During this process, an existing building may simply require minor restoration but can also entail major refurbishment and/or complete renovation, while likely encompassing major or minor internal space reorganization (Latham, 2000; Wilkinson et al., 2009).

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The result is a building that is adapted to another purpose while retaining its value (economic, social/cultural, and environmental). Despite the advantages of reuse, the demolition of buildings is often framed as a necessary response to the declining operating performance of older structures (Pearce et al., 2004). Energy efficiency is used as a rationale for new construction, despite the amount of energy that is expended during the processes of demolition, hauling, fabrication, and construction (Kalman, 2014). This energy that is embodied in existing buildings is lost when buildings are prematurely demolished (Assefa & Ambler, 2017). The new building replacing the existing structure often has a shorter lifespan based on inferior quality of construction (Ball, 2002). Beyond energy considerations, the materials required for new construction and the associated carbon emissions are significant (Yung & Chan, 2012). For example, one study found that it takes between 10 and 80 years for a new building that is energy efficient to reach carbon equivalency with an existing building (dependent on building type) (National Trust for Historic Preservation, 2011). Conversely, adaptive reuse results in significant energy and material efficiencies (Lynch, 2022) with repurposing leading to a 20– 41% reduction in selected environmental impacts (Assefa & Ambler, 2017). Rehabilitation can also minimize the disturbance of potential ground contaminants and hazardous building materials (Bullen & Love, 2011). The reuse of existing buildings is beneficial across several factors. Older buildings can be retrofitted to achieve energy cost savings while minimizing environmental impacts during the life cycle of the building (Rodrigues & Friere, 2017). The conservation of existing buildings is shown to contribute to tourism (Smith, 2015), sense of place (Tweed & Sutherland, 2007), economic development (Shipley & Snyder, 2013), lowered costs compared to new construction (Kohler & Yang, 2007), and increased property values (Shipley et al, 2011). While much of the attention in scholarly literature has focused on historic properties (Bullen & Love, 2011), commercial and industrial buildings regardless of age, constitute over a quarter of the building stock in Canada, and repurposing these would result in a significant reduction in the emission of CO2 (Assefa & Ambler, 2017). In short, retaining and repurposing existing buildings of all types contributes directly to sustainable building practices. Despite the broad array of benefits, and the importance of building reuse to sustainable urban policy, much of the existing research on adaptive reuse continues to focus on a technical or economic angle with the result that “economic outcomes still tend to be the benchmarks that determine whether buildings are considered suitable for reuse” (Bullen & Love, 2010, p. 221). A focus on narrow economic and technical outcomes can lead to the detriment of action.

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Recognizing the benefits of reuse, many municipalities are enacting policies that target-specific areas of the city and specific parcels of land for adaptive reuse (Vecchio et al., 2020). Effective adaptive reuse policies can help counter global climate change (Lynch, 2022), but such policy making requires an understanding of building values beyond operational issues. Specifically, it requires the development of a “framework for an embodied-energy-conscious decision-making” to understand the value of reuse interventions (Guidetti & Ferrara, 2023, p. 14). In the subsequent section, we outline research on adaptive reuse in the craft beer sector before turning to the findings of our study on the location of craft breweries.

Adaptive Reuse in the Craft Beer Sector Now a common practice among craft breweries, adaptive reuse rehabilitates historic buildings and contributes to the revitalization of neighbourhoods in distress (Reid & Nilsson, 2023; Reid et al., 2019; Jones & Franck, 2019). Indeed, inexpensive start-up and operational costs combined with the potential for property value increases have positioned craft breweries as ideal participants in the transformation of urban spaces (Nilsson & Reid, 2019). Craft breweries have tended to locate and concentrate in certain areas, such as downtowns or former manufacturing and warehouse districts (Reid & Nilsson, 2023; Mathews, 2022; Reid, 2020), often clustering near competitors to take advantage of foot traffic and the reputation of rivals (Nilsson et al., 2018). Initially, as part of the recalibration of distressed downtowns into consumable spectacle, main streets were a preferred location for breweries (Hubbard, 2016). In later cases, developmentoriented municipal authorities actively solicited craft breweries to foster a hip vibe and to accelerate capital investments in old manufacturing and warehouse districts (Andersen et al., 2020). Adaptive reuse by breweries has expanded to encompass a range of building types including former institutional buildings (e.g., churches, schools, hospitals, jails, and firehalls) and commercial buildings (e.g., hardware stores, auto dealerships, strip malls, and banks) (Reid et al., 2019; Lynch, 2022). A common thread in this settlement of locales is an attraction to “economically peripheral” locations, where the affordability of land and buildings is desired by craft beer investors (Nilsson & Reid, 2019). In some cases, breweries have preferred peripheral suburban locations as they offer larger building footprints and the possibility to adapt for growth (Mathews & Picton, 2023). Overall, economically peripheral locations tend to provide spaces to mix retail, restaurants, and manufacturing, which is often not permitted in zoning and land use bylaw regulations in core areas (Nilsson et al., 2018).

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Research exploring the perspectives on adaptive reuse by breweries highlights how brewery owners utilize existing buildings due to lower land costs, heritage value, and unique spaces and experiences for consumers, thus providing not only economic but also cultural benefits (Reid, 2018). Existing buildings provide the potential for brewery owners to engage in architecturally creative transformations and to activate branding by linking to the memory of place (Holtkamp et al., 2016). Mathews and Picton (2023) found that the timing and costs associated with purpose-built facilities (while often preferred buildings for craft breweries) were key factors driving the reuse of existing built forms. According to the research, while some breweries opted for buildings offering customization of interior spaces and/or scalability, others selected building sites based on their historic/cultural value. Irrespective of the building type and location, the presence of craft breweries generates new identities and lifestyles, often with spillover from the rehabilitation of the brewing site itself (Schroeder, 2020). As Lynch (2022, p.7) has recently argued, “geographers are challenging the conceptual boundaries of adaptive reuse… engaging in debates about reuse as an ‘affective’ placemaking practice,” recognizing for example how architecture has become part of the place and branding narrative of craft brewers. The location and design features of buildings are both closely linked with the vocabulary and identity of a particular brewery (Mathews & Picton, 2023). Numerous researchers highlight how craft breweries activate a sense of place and local attachment and how craft breweries place a strong emphasis on the local, including the revaluation of built form (Fletchall, 2016; Holtkamp et al., 2016; Schnell & Reese, 2014). Given the evolving locational choices, building type preferences, and stylistic expression of craft breweries, our research provides evidence of how and to what extent these trends are playing out in the Canadian craft beer scene. This charting of building type and location across the country allows for an analysis of how craft breweries contribute to a broader strategy of sustainable building practice through their reuse interventions across a diversity of structures.

Methods In order to evaluate the extent to which craft breweries engage in adaptive reuse practices, we explored the distribution and adaptive reuse of craft breweries across provinces and territories using a multi-method approach to data collection. First, to collect data on active craft breweries across provinces and territories, we drew on the respective craft brewery association/guild, alongside secondary data from a range of beer-related information sources including official provincial tourism Websites and pages updated by beer

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enthusiasts (e.g. beer historian Websites, rate beer, just beer). We used newspaper and magazine articles in instances where there was no active association or guild for craft breweries in a province/territory. The supplementary datasets and lists are necessary as not all craft breweries apply for membership in their respective association/guild. We eliminated contract craft breweries as these businesses do not have a bricks and mortar location which is a necessary component in an analysis of adaptive reuse patterns. Instead, these businesses rely on equipment and space at another brewery to manufacture their products. The extensive data collection took place between 2021 and 2022 and resulted in an analysis of 1017 craft breweries across provinces and territories. To categorize the location of craft breweries according to population size, we used Statistics Canada’s definition of population centres (large urban population centres 100,000+; medium population centres 30,000–99,999; small population centres 1000–29,999; dissolved/rural less than 1000). Where available, we used the population centre as the geographic level. In instances where there was no record of the population centre, we utilized the census subdivision geographic level. Finally, we classified the land use and adaptive reuse for each craft brewery using Google Street View image searches and the archive function. In instances where the craft brewery was added to a site (either as a new build or a new use) after the last Google Street View time marker, we searched newspaper articles, craft brewery Websites, and social media images (Facebook and Instagram) to determine reuse versus new build. We recorded the land use classification based on original usage. In other words, if the building was constructed as a school, it would be classified as an institutional use. These sources allowed us to determine prior functions. Data on land use and adaptive reuse highlight broader trends with respect to land use policies and building reuse across the sector.

Spatial Distribution Overview As alcohol is government regulated at the provincial/ territorial level in Canada, there are substantive differences that emerge across provincial/territorial lines. The spatial distribution of craft breweries according to population size (large urban population centre, medium population centre, small population centre, and dissolved/rural) presents some interesting differences across provinces and territories. While Reid (2018: 6) found that, in the United States, craft breweries are an urban phenomenon with 72% located in cities above 250,000, this prevalence is not consistent with breweries in Canada. Based on our analysis of craft beer locations in relation to size of population centre, there is a

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much greater distribution of craft breweries across a diversity of urban centres in Canada: craft breweries in large urban population centres (above 100,000 people) account for 39% of the sector, with 41% located in small population centres (1000–29,999), indicating a broad mix of localities. There is a great deal of unevenness in the distribution of Canadian craft breweries. British Columbia and the Central provinces (Ontario and Quebec) account for close to 68% of the national share. The smallest share of craft breweries is found in the Atlantic provinces (Newfoundland & Labrador, Nova Scotia, Prince Edward Island, New Brunswick) and the Territories (Nunavut, Northwest Territories, Yukon) (13% share combined). These broad patterns of spatial distribution amongst craft breweries are consistent with population distribution trends more generally in Canada. Adjusting for population, the Atlantic provinces contain high rates of breweries per capita with New Brunswick leading the pack at 7.48 craft breweries per 100,000 people. This rate is comparable to well-established craft beer markets in the United States (see Reid & Nilsson, 2023). Below, we provide some broad analysis of the spatial patterns of craft breweries between and across provinces and territories, paying particular attention to pockets of concentration within selected local geographies.

British Columbia Craft breweries in British Columbia represent 21% of the national share. There is a consistent distribution of brewing sites across small, medium, and large population centres (37%, 29%, and 33%, respectively) in the province. There are two key factors explaining the success of the craft beer sector in this province. First, British Columbia’s first craft brewery was established in 1984 (Canadian Beer News, 2009). Second, the British Columbia government has directly supported the sector through tourism initiatives and marketing strategies. This has allowed the craft beer segment to grow to a market share of 30% of the province’s total beer sales (far outpacing all other provinces) (British Columbia, 2021) and resulting in an above average breweries per capita ratio (4.36 craft breweries per 100,000 people).

Prairie Provinces (Alberta, Manitoba, Saskatchewan) Craft breweries in the Prairie provinces are concentrated in large population centres. This trend is especially pronounced in Manitoba where 86% (18/21) of craft breweries are housed in Winnipeg, the province’s only large urban population centre. Alberta and Saskatchewan similarly reflect a spatial concentration of craft breweries in large urban

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population centres (49% and 59%, respectively). The three provinces account for 19% of craft breweries in Canada (Fig. 1).

Central Provinces (Ontario, Quebec) Ontario and Quebec each display higher concentrations of craft breweries in small and large population centres (38% and 48%, respectively, in Ontario and 47%, and 32%, respectively, in Quebec). Both markets are established and were early onto the craft brewing scene with the first craft brewery opening in Ontario in 1984 and 1986 in Quebec (Beer Canada, 2022; Association des microbrasseries du Québec, 2023). The two markets account for close to 47% of Canadian craft breweries, marking this as the highest concentration nationally (Fig. 2).

Atlantic Provinces (New Brunswick, Newfoundland & Labrador, Nova Scotia, Prince Edward Island) Spatial concentration in the Atlantic provinces is found in small population centres which house the majority of craft breweries (New Brunswick, 58%; Newfoundland and Labrador, 67%; Nova Scotia, 67%; and Prince Edward Island, 44%). These four provinces account for 13% of craft breweries nationally. The three highest brewery per capita provinces are also located in the Atlantic region (New Brunswick at 7.48 craft breweries per 100,000 people, Nova Scotia at 5.83 craft breweries per 100,000 people, and Prince Edward Island at 4.75 craft breweries per 100,000 people) (Fig. 3).

Territories (Northwest Territories, Nunavut, Yukon) The small number of craft breweries in the Canadian territories (Northwest Territories, Nunavut, Yukon) are spatially concentrated in the capital cities. While Nunavut and the Northwest Territories each have one craft brewery, Yukon’s beer scene has expanded to five craft brewing sites in recent years, all concentrated in the capital city of Whitehorse. Regulations and cultural conditions limit the availability of alcohol more generally in the territories. While the Yukon has two dry communities, both Nunavut and the Northwest Territories contain dry communities as well as communities that require permissions and/or limitations surrounding the purchase of alcohol. Given the small number of craft breweries located in the territories, and the anomalous nature of the governance around alcohol more generally, we have

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Fig. 1 Map of Breweries in Western Canada

concentrated discussion on provincial reuse patterns in the next section.

Housing Craft Breweries: New Builds and Building Reuse Craft breweries are housed in a diversity of building types across land uses, from newly constructed and purpose-built configurations to historic and contemporary pre-existing forms. Based on our analysis on the Canadian craft beer scene, a significant percentage of craft breweries are transforming existing buildings as opposed to building or being located in new ones.

New Construction Newly constructed buildings account for between 0 and 33% of craft brewing locations across all provinces. These are

mainly purpose-built facilities designed and owned by the brewery. The highest rates of new build construction are found in the Prairie provinces with Saskatchewan leading the pack at 33%, and Manitoba and Alberta closely behind with the next two highest rates across provinces (23% and 21%, respectively). The higher rates of new construction in the Prairies reflect lower land competition and a lack of supply for appropriate existing buildings. There is a notably higher rate of new construction in small and medium population centres in Saskatchewan, where building and land costs are lower. On the other side of the scale, Prince Edward Island has a small number of breweries (9)—all of which made use of existing forms. Most breweries in Ontario and Quebec repurposed existing buildings, reflected in lower rates of new construction (6% and 11%, respectively). Beyond buildings constructed and owned by the breweries themselves, there is a small proportion of breweries within this data set that are entering into newly constructed buildings as first lease holders. This allows breweries greater flexibility in the renovation process, ensuring that the

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Fig. 2 Map of Breweries in Ontario and Québec

building can be modified to fit their specific needs, and provides economic feasibility through lease agreements. Based on our visual analysis using Google Street View, these spaces are often part of an industrial bay, or a commercial strip mall on the periphery of an urban centre and may reflect a lack of appropriate existing buildings or high competition for existing structures in established locations. These breweries lack a surrounding residential base and function more as destination sites than social spaces.

Reuse Building reuse rates amongst Canadian craft breweries (n = 1017) average 86% across all provinces and territories. This rate is consistent with recent research on building reuse in the craft beer sector in small-town Ontario (83%) (Mathews & Picton, 2023), and in large urban population centres in Saskatchewan (85%) (Mathews, 2022). Based on our data collection on the types of buildings breweries are

transforming / entering into, there is some variation in terms of the extent of reuse across provinces. Adaptive reuse rates are less consistent in smaller craft beer markets (where changes in one or two breweries can greatly skew the data), whereas higher reuse rates in the larger markets in Ontario, British Columbia, and Quebec highlight the importance of an available existing building supply for the sector. Ontario displays one of the highest rates of building reuse across provinces at 91%. When the rate is broken down according to population size across urban centres, the rate increases to 95% in medium population centres and 97% in large urban centres, respectively. Quebec and British Columbia display higher overall rates of reuse at 89% and 81%, respectively. Across the remainder of provinces, most have rates of reuse between 67% (Saskatchewan) and 94% (Newfoundland), with the exception of Prince Edward Island which has a 100% reuse rate with a small number of craft breweries. Our findings indicate that craft breweries in large urban population centres are more likely to engage in reuse practices (88%) compared to craft breweries in small or medium

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Fig. 3 Map of Breweries in Atlantic Canada

population centres (83% and 86%, respectively). The land value is typically higher in larger centres making new builds more expensive comparatively. In addition, existing buildings present more opportunities and selection for breweries to find a good conceptual fit. Commercial and industrial buildings make up the bulk of reuse types across provinces, with small proportions of breweries entering into institutional, residential, and/or agricultural lands (Fig. 4).

Commercial Existing commercial buildings make up the largest share of reuse type across provinces with a rate of 54%. Manitoba has the highest percentage of commercial buildings housing craft breweries at 77%. The reuse of commercial buildings from craft brewing includes downtown main street retail, highway sites, mixed use, shopping malls and strip malls, and large format retail. During the analysis of building types and locations through Google Street View, there were a significant number of commercial structures that were vacant prior to being repurposed by craft breweries. Craft breweries are

re-anchoring malls and strip malls and transforming difficult to transition spaces such as large, abandoned retail sites across urban centres.

Industrial Outside of commercial buildings, industrial reuse is the second most common conversion type across Canada with a rate of 33% among provinces. The buildings included former manufacturing and processing plants, automotive sites, and warehouse spaces. They range from historic to contemporary, and from heavy industrial districts to mixed-use areas. In several large cities, such as Winnipeg and Regina, there are distinct brewing clusters in historical warehouse and manufacturing districts. Only in the large centres of Alberta and British Columbia did industrial conversions outnumber commercial reuse (46% in Alberta and 49% in British Columbia). Conversely, large cities in Québec were noticeable for their lower rate of industrial conversions (18%). There is an excess supply of use-specific and toxic post-industrial properties in many small- and medium-sized

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Fig. 4 Reuse by building type (National)

cities (Vecchio et al., 2020). The significant retrofit of industrial buildings from our study shows the positive impact craft breweries have on the rehabilitation and reuse of industrial buildings and lands that hold the real and/or perceived threat of contamination.

Institutional Institutional reuse makes up a relatively small share of building types at 3% among provinces. While the rate is significantly lower compared to commercial and industrial uses, the reuse of institutional buildings offers the most powerful displays of the creativity and adaptability of craft breweries to transform space. Across provinces, craft breweries have transformed a diversity of former institutions including numerous churches, firehalls, schools, and train stations. The largest cluster of institutional conversions was in small population centres in Ontario, representing 13% of all building use in that population category provincially. These twelve sites reflect previous research showing the value attributed to institutional sites in small towns, the considerable efforts made to preserve them, and their attractiveness to Ontario craft breweries (Mathews & Picton, 2023). These institutional sites offer a strong sense of history and place that is capitalized upon by craft breweries as part of their brand identity. Institutional spaces are at times difficult to adapt into alternative uses and will often sit vacant for large periods of time making the retention and capture of the existing forms important from a sustainability standpoint.

Residential Residential forms make up 6% of building types across provinces and include the adaptive reuse of former single-family dwellings and apartments. New Brunswick has the highest proportion of home-based breweries with 28% of breweries in the province making use of residential buildings: a product of licensing which is controlled at the provincial level as well as municipal zoning. Most municipalities across Canada prohibit breweries from locating in residential zones within zoning bylaws. As such, the rates of reuse for this building type are largely a product of mixed-use areas. Agricultural Agricultural land uses account for 4% of building types across provinces, with most agricultural adaptation found in small population centres. A distinct concentration is present in Ontario where reuse of agricultural properties makes up 11% of total reuse in small population centres provincially. Agricultural adaptive reuse reflects farming structures (barns or accessory buildings) and/or farmhouses converted into brewing sites. There are a small but growing number of farm-based craft breweries that grow, harvest, and process ingredients for brewing on location. These sustainable breweries highlight the potential to close the gaps between supply, production, and distribution by combining all three in one location. Craft breweries in Canada participate in a high level of reuse interventions in the built environment. Their flexibility

Adaptive Reuse in the Canadian Craft Beer Sector

in adapting a diversity of building types and locations extends the life cycle of buildings. Municipalities and provinces can work to direct policy measures within the sector to encourage continued conservation and to increase rates of reuse.

Policy Dimensions The building types and locations of craft breweries are not universal across urban centres, making the identification of in situ brewery characteristics an important element in devising policies that are sensitive and responsive to place. For example, the reuse of institutional and agricultural forms is more prevalent in small centres, while clustering of breweries in downtown or warehouse districts is more common in large centres. Identifying the types of buildings and locations that craft breweries are reusing directs policy makers to appropriate policy incentives, such as helping to encourage development in distressed areas. To incentivize activity, tax credits directed towards select land use classifications allow development activity to become more affordable and/or attractive to craft breweries. Financial incentives may offset the costs of upgrades needed to meet building codes (Zuk, 2015: iii) and can be geared towards sustainable building retrofits. The use of demolition controls and heritage protection bylaws can similarly work to conserve structures through a set of standards and assessments, ensuring that a supply of diverse spaces remains available for reuse. Still, given the lack of alignment between public interests generated from building conservation with broader planning goals at the municipal level (Uhera, 2016), effective communication between municipal planning departments and brewery owners, alongside clear definitions of small-scale breweries in the zoning bylaws are critical elements to encourage building reuse (Zuk, 2015: iii). This reinforces the importance of creating building reuse policies that can be scaled-up to the provincial and national levels (Assefa & Ambler, 2017). Land use policy is a useful tool in directing the locational decisions of craft breweries (see Mathews, 2022; Barajas et al., 2017; Nilsson et al, 2018). Zoning can be utilized by municipalities to contain and guide breweries into unique geographies by marking areas of permitted, discretionary, and prohibited use and channeling breweries into locations where building stock might require reuse intervention. Our findings support research evidence of how food entrepreneurs are making creative use of a wide range of underutilized commercial and industrial sites (Jones & Franck, 2019). However, to fully activate this ingenuity, adaptive reuse policy needs to extend beyond designating specified zones and sectors for craft beer

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production. Ideally, adaptive reuse policy would provide the flexibility to allow for co-location of similar food or craft-based production, beyond production type and zoning rules, to create additional flexibility for food and drink producers to establish dynamic destinations. In this realm, developing understanding of the (economic, social, and cultural) effects of craft breweries on surrounding lots according to brewery orientation (production/consumption oriented), building types and location (commercial, industrial, institutional, mixed-use, and residential) is needed (see Mathews, 2022). Taken together, financial incentives that support breweries transforming particular building types (e.g. historic, industrial, and mixed use) and extending zoning parcels where breweries are a permitted use, can function as an attractive set of policy directives that result in sustainable urban development. It is worth noting that these policy options, while specific to craft breweries, also hold relevance for craft production and consumption more broadly across urban centres.

Conclusion Rehabilitation of existing building stock through adaptive reuse is an important component of sustainable building practices. Adaptive reuse by breweries takes advantage of serviced areas, conserves previously expended energy and resources, reduces carbon emissions, and minimizes disturbance of contaminants. It also redirects activity to existing urban areas and away from greenfield sites, thereby working to contain urban development. Ultimately, the environmental impacts of demolition need to be better understood (with policies enacted to support an urban sustainability mandate), and the potential for reuse (social/cultural, economic, and environmental) needs to be laid out. As buildings age, they tend to go through a process of down-filtering. Protecting these buildings (and in the process ensuring that they won’t be demolished) ensures a supply of affordable spaces. The value of building conservation to all dimensions of sustainability is clear, yet these ideas are not always translated on the ground. Part of the issue is a lack of understanding of the value that is stored in existing buildings through embodied energy (Guidetti & Ferrara, 2023). Further research will need to assign a quantifiable measure for the materials, fabrication, and building processes that are embodied in existing built form. The craft beer sector reflects an important opportunity for municipalities to demonstrate the value of building reuse within a broader set of sustainability goals. With an average reuse rate amongst craft breweries of 86% across provinces and territories, there is potential to further incentivize building reuse. In particular, the Prairie Provinces (Alberta,

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Saskatchewan, Manitoba) and small population centres across the country reflect higher levels of new construction amongst craft breweries. The presence of craft breweries in established areas works to shift the meaning and identity of space, beyond an individual site. There are a significant number of buildings now occupied by craft breweries that were previously vacant, highlighting the potential for the sector to rehabilitate difficult to transition sites. The reuse interventions work to extend the life cycle of buildings while catalyzing new places along the urban hierarchy. Acknowledgements We would like to thank our fantastic team of research assistants for their help with this project. Jessica Merk and George Danso helped with the task of documenting craft brewing locations and building types across provinces and territories, Ama Boateng helped develop the comprehensive maps, and Sarah Sattar helped with data updates. This research was funded by the Social Sciences and Humanities Research Council (SSHRC), Canada [Insight Development Grant #430-2019-00172].

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R. M. Picton and V. Mathews Canadian Craft Beer Association. (CCBA, 2022). Provincial cross-border beer sales. https://ccba-ambc.org/provincial-crossborder-beer-sales/ Coutts, I (2010). Brew North: How Canadians made beer & beer made Canada. Greystone Books. Fletchall, A. (2016). Place-making through beer-drinking: A case study of Montana’s craft breweries. Geographical Review, 106(4), 539– 566. https://doi.org/10.1111/j.1931-0846.2016.12184.x Foster, G. (2020). Circular economy strategies for adaptive reuse of cultural heritage buildings to reduce environmental impacts. Resources, Conservation and Recycling, 152 (Complete). https:// doi.org/10.1016/j.resconrec.2019.104507 Garavaglia, C., & Mussini, M. (2020). What is craft? An empirical analysis of consumer preferences for craft beer in Italy. Modern Economy, 11, 1195–1208. https://doi.org/10.4236/me.2020.116086 Guidetti, E., & Ferrara, M. (2023). Embodied energy in existing buildings as a tool for sustainable intervention on urban heritage. Sustainable Cities and Society, 88.https://doi.org/10.1016/j.scs. 2022.104284 Hoalst-Pullen, N., Patterson, M., Mattord, R., & Vest, M. (2014). Sustainability trends in the regional craft beer industry. In M. Patterson & N. Hoalst-Pullen (Eds.), The geography of beer: Regions, environment, and societies (pp. 109–116). Springer. Holtkamp, C., Shelton, T., Daly, G., Hiner, C., & Hagelman, R., III. (2016). Assessing neolocalism in microbreweries. Papers in Applied Geography, 2(1), 66–78. https://doi.org/10.1080/ 23754931.2015.1114514 Hubbard, P. (2019). Enthusiasm, craft and authenticity on the high street: Micropubs as ‘community fixers.’ Social and Cultural Geography, 20(6), 763–784. https://doi.org/10.1080/14649365. 2017.1380221 Jones, J., & Franck, K. (2019). A brewery in a foundry, a winery in a strip mall: Adaptive reuse by food enterprises. Urban Design International, 24(2), 108–117. https://doi.org/10.1057/s41289-01900085-7 Kalman, H. (2014). Heritage planning: Principles and processes. Routledge. Kohler, N., & Yang, W. (2007). Long-term management of building stocks. Building Research & Information, 35(4), 351–362. https:// doi.org/10.1080/09613210701308962 Latham, D. (2000). Creative re-use of buildings. Donhead Publishing Ltd. Love, P., & Bullen, A. (2009). Toward the sustainable adaptation of existing facilities. Facilities, 27(9/10), 357–367. https://doi.org/10. 1108/02632770910969603 Lynch, N. (2022). Remaking the obsolete: Critical geographies of contemporary adaptive reuse. Geography Compass, 16, e12605. https://doi.org/10.1111/gec3.12605 Mathews, V. (2022). Planning for craft breweries: Neolocalism, third places and gentrification. Urban Geography. https://doi.org/10. 1080/02723638.2022.2126143 Mathews, V., & Picton, R. (2014). Intoxifying gentrification: Brew pubs and the geography of post-industrial Heritage. Urban Geography, 35 (3), 337–356. https://doi.org/10.1080/02723638.2014.887298 Mathews, V., & Picton, R. (2023). Craft breweries as hermit crabs: Adaptive reuse and the revaluation of place. Local Development & Society, 4(2), 326–347. https://doi.org/10.1080/26883597.2022. 2163918 National Trust for Historic Preservation. (2011). The greenest building: quantifying the environmental value of building reuse. https:// forum.savingplaces.org/viewdocument/the-greenest-buildingquantifying Nilsson, I., Reid, N., & Lehnert, M. (2018). Geographic patterns at the intraurban scale. The Professional Geographer. 70(1), 114–125. https://doi.org/10.1080/00330124.2017.1338590

Adaptive Reuse in the Canadian Craft Beer Sector Nilsson, I., & Reid, N. (2019). The value of a craft brewery: On the relationship between craft breweries and property values. Growth and Change, 50(2), 689–704. https://doi.org/10.1111/grow.12292 Ontario Craft Brewers. (2020). About Ontario craft brewers. http:// www.ontariocraftbrewers.com/About.html Pearce, A., DuBose, J., & Vanegas, J. (2004). Rehabilitation as a strategy to increase the sustainability of the built environment. http://maven.gtri.gatech.edu/sfi/resources/pdf Reid, N. (2018). Craft breweries, adaptive reuse, and neighborhood revitalization. Urban Development Issues, 57(1), 5–14. Reid, N., & Nilsson, I. (2023) From mill district to Brewery district: Craft beer and the revitalization of Charlotte’s NoDa neighbourhood. In: D. C. Harvey, E. Jones, & N. G. Chapman (Eds.), Beer places: The microgeographies of craft beer (pp. 71–92). University of Arkansas Press. Reid, N., Gripshover, M., & Bell, T. (2020). Craft Breweries and adaptive reuse in the USA: The use and reuse of space and language. In: S. Brunn, & R. Kehrein (Eds.), Handbook of the changing world language map (pp. 4083–4101). https://doi.org/ 10.1007/978-3-030-02438-3_76 Rodrigues, C., & Freire, F. (2017). Adaptive reuse of buildings: Eco-efficiency assessment of retrofit strategies for alternative uses of an historic building. Journal of Cleaner Production, 157, 94–105. https://doi.org/10.1016/j.jclepro.2017.04.104 Rypkema, D. (2002). Historic preservation and affordable housing: The missed connection. National Trust for Historic Preservation. http:// www.placeeconomics.com/wp-content/uploads/2016/08/ placeeconomicspub2003b.pdf Schnell, S., & Reese, J. (2014). Microbreweries, place, and identity in the United States. In M. Patterson & N. Hoalst-Pullen (Eds.), The geography of beer: Regions, environment, and societies (pp. 167– 187). Springer. Schroeder, S. (2020). Crafting new lifestyles and urban places: The craft beer scene of Berlin. Papers in Applied Geography, 6(3), 204– 221. https://doi.org/10.1080/23754931.2020.1776149 Shipley, R., & Snyder, M. (2013). The role of heritage conservation districts in achieving community economic development goals.

111 International Journal of Heritage Studies, 19(3), 304–321. https:// doi.org/10.1080/13527258.2012.660886 Shipley, R., Jonas, K., & Kovacs, J. (2011). Heritage conservation districts work: Evidence from the Province of Ontario, Canada. Urban Affairs Review, 47(5), 611–641. https://doi.org/10.1177/ 107808741140055 Smith, S. (2015). A sense of place: Place, culture and tourism. Tourism Recreation Research, 40(2), 220–233. https://doi.org/10.1080/ 02508281.2015.1049814 Stubbs, M. (2004). Heritage-sustainability: Developing a methodology for the sustainable appraisal of the historic environment. Planning, Practice and Research, 19(3), 282–305. https://doi.org/10.1080/ 0269745042000323229 Tweed, C., & Sutherland, M. (2007). Built cultural heritage and sustainable urban development. Landscape and Urban Planning, 83 (1), 62–69. https://doi.org/10.1016/j.landurbplan.2007.05.008 Uhera, S. (2016). Heritage properties—Demolition by neglect and the public interest. http://www.uwindsor.ca/law/asmit/sites/uwindsor. ca.law.asmit/files/uhera_research_paper_version_2.pdf Vecchio, M., & Arku, G. (2020). Promoting adaptive reuse in Ontario: A planning policy tool for making the best of manufacturing decline. Urban Planning, 5(3), 338–350. https://doi.org/10.17645/ up.v5i3.3188 Wilkinson, S., James, K., & Reed, R. (2009). Using building adaptation to deliver sustainability in Australia. Structural Survey, 27(1), 46– 61. https://doi.org/10.1108/02630800910941683 Yung, E., & Chan, E. (2012). Implementation challenges to the adaptive reuse of heritage buildings: Towards the goals of sustainable, low carbon cities. Habitat International, 36, 352–361. https://doi.org/10.1016/j.habitatint.2011.11.001 Zuk, D. (2015). Old buildings, great beer: Lessons of adaptive reuse and microbreweries in the City of Toronto [Master’s Thesis, Queen’s University]. https://qspace.library.queensu.ca/bitstream/ handle/1974/13150/Old%20Buildings%20Great%20Beer.pdf? sequence=1

The Geography of Brewery Entry After Beer Relegalization in Spring 1933 Jason E. Taylor

Abstract

While the United States was under the federal Prohibition of alcohol between January 1920 and December 1933, 3.2% alcohol beer was legalized beginning in April of 1933. More than 600 breweries commenced legal sales at some point during 1933. We explore whether Prohibition created any major shift in the geographic location of breweries. While we find that the relative geographic distribution of breweries was largely unchanged from the immediate pre-Prohibition era, there were some subtle differences—Wisconsin was the largest winner and California the biggest loser in terms of shifting brewery shares between 1914 and 1933. We also explore brewery entry across various time periods within 1933 and find that high-income states, as well as those that were hit harder by the downturn of 1929 to 1933, were associated with having a higher percentage of the nation’s breweries beginning sales across each of our 1933 subperiods. Keywords






Prohibition Beer 3.2 Beer Repeal

Legalization




Brewery location




Introduction The 18th Amendment established the prohibition of intoxicating beverages—defined by the Volstead Act as anything above 0.5% alcohol by volume—in the United States beginning on January 17, 1920. The 21st Amendment, which was ratified on December 5, 1933, repealed Prohibition, thus throwing the issue of alcohol’s legality back to the J. E. Taylor (&) Department of Economics, Central Michigan University, Mount Pleasant, MI, USA e-mail: [email protected]

state and local levels where it had traditionally been. However, eight months prior to this date—on April 7, 1933— Congress amended the legal definition of “intoxicating” to be above 3.2% alcohol by weight (4% by volume) so that beer would become legal in those states or municipalities that did not have their own prohibition of alcohol in place. According to the American Breweriana Association (ABA) database, over 600 breweries commenced legal production in the United States (US) across 1933. This chapter documents the spatial location of brewery entry across 1933 and analyzes the factors associated with it. We are particularly interested in how the geographic distribution of breweries in 1933 compared to the same distribution just prior to federal Prohibition. Did Prohibition bring a locational realignment in the US brewing sector? We also explore the geography of brewery operations within the year 1933. While the ABA database can say nothing about the speed or pattern of brewery entry within 1933, we take advantage of information in local newspapers to estimate the temporal pattern of entry across that year. As brewery openings were noteworthy after more than a decade of prohibition, local newspapers often reported on them. We pinpoint the date that a large sample—around 44% of all 1933 breweries—commenced legal beer sales. Our sample suggests that around a third of the breweries that commenced legal operations in 1933 were selling on April 7. Many of these early sellers were breweries that were already in operation making near beer during Prohibition. In addition to looking at the geographic distribution of breweries at the national level, we also document brewery locations in both Chicago and New York, the two cities with the most breweries in 1933. One of the most striking findings is the very strong correlation between brewery location in 1933 and brewery location in 1914. While the number of breweries in operation in 1933 (607) was less than half the number operating in 1914 (1365), just prior to a wave of state-level prohibitions taking effect, the geographic spread of these breweries was

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_9

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largely unchanged just prior to and after federal Prohibition. The correlation coefficient on the percentage of the nation’s breweries located in a state in 1914 versus the same measure in 1933 is an astounding 0.98. Still, there were some slight changes with Wisconsin and Pennsylvania being the biggest gainers, while California and Minnesota were the two states that lost the largest share of breweries between these years.

Beer Legalization and the Location of Breweries Operating in 1933 The US economy hit its lowest point of the Great Depression in March of 1933. President Franklin D. Roosevelt took office on March 4, and he quickly asked Congress to reform federal Prohibition to allow for legal beer. Proponents of legalization touted the economic benefits that beer could bring, particularly with respect to employment in the production, distribution, and service of beer. On March 22, 1933, Roosevelt signed the Cullen-Harrison Act, which was colloquially known as “the beer bill.” While Prohibition was still constitutionally in effect, the legal definition of “intoxicating” beverages was amended to allow for beer that was up to 3.2% alcohol by weight. Under the new federal law, brewers could immediately produce 3.2 beer and could begin to sell it on April 7, 1933. Still, most states (and many municipalities) had their own prohibitions and “mini Volstead” enforcement acts in place —either from prior to 1920, or in some cases added post-1920 to supplement the federal Volstead Act—and thus beer would remain illegal in these locales until their laws were likewise amended or repealed (see Poelmans et al., 2022a, 2022b, for details about state-level prohibitions enacted and in effect prior to 1920). Politicians went into frenetic action and many states successfully cleared their legal hurdles for beer and developed systems to tax and regulate its sale. On April 7 beer was legally sold for the first time in more than 13 years in 20 states, and 3.2 beer was legal in 43 states by November 1933, just prior to the end of

federal Prohibition. Poelmans et al. (2022) use the state-level variation in the timing of legalization to estimate that beer legalization created as many as 100,000 production and service jobs between April and June and of 1933, which accounts for around 6% of the nation’s employment gains during the spring recovery surge. In April, when the nation turned the corner from the Great Depression, Poelmans, Taylor, Raisanen, and Holt found that beer legalization accounted for 15% of US job gains. The American Breweriana Association (ABA) database reports information about every brewery in the US from colonial times to the present. Specifically, the database provides the brewery’s location (city, state, and often street address), name changes, years when the brewery ceased or restarted operation, and sometimes specific information about ownership, among other items. We employ this database, as well as Van Wieren (1995) from which the ABA database is formed, to gain information about the location of all breweries that operated in 1933. Batzli (2014) provides detailed background about the ABA Database and its creation. To illustrate, Table 1 shows the entry from Van Wieren for the Two Rivers Beverage Co. from Two Rivers, Wisconsin, which is coded in the database as WI498. We can see that this brewery first opened in 1848 and last operated in 1966. It was located at 1608 Adams St. New iterations, given by the letters a through e, denote a change in ownership, a change in name or address, or a period of hiatus. The entry notes that the Two Rivers Beverage Co. began to sell beer in 1933, but the “L-80 during prohibition” means that the company operated at some point during Prohibition selling non-alcoholic beer under the permit number 80. Permits were required to produce and sell near beer as it was generally made as regular beer and the alcohol was removed —usually by boiling—after the brewing process (Okrent, 2010, p. 249). Indeed, an October 25, 1929 advertisement in the Green Bay Press-Gazette shows that Two Rivers Beverage was selling a near beer named “Old Manhattan Special Brew,” which it claims had “the same old flavor and aroma”

Table 1 Example of an entry in the ABA brewery database Two rivers WI

498a

Edward Mueller, City Brewery (1608 Adams St)

1848–1871

498b

Richard E. Mueller, City Brewery

1871–1895

498c

Mueller Bros., City Brewery

1895–1896

498d

Mueller Bros. Brewing Co. (Charles E. & Edward R.)

1896–1920

498e

Two Rivers Beverage Co. (L-80 during prohibition)

1933–1966

Notes Above is information from Van Wieren (1995, p. 420) showing information on the history of the Two Rivers Beverage Company— previously known as the City Brewery and Mueller Bros. Brewing Co.—located at 1608 Adams St, Two Rivers, Wisconsin, which commenced legal beer sales in 1933. The notation “L-80 during prohibition” refers to the brewery having a permit (number 80) to brew non-alcoholic beer at some point (we cannot know when) during Prohibition

The Geography of Brewery Entry After Beer Relegalization in Spring 1933

Fig. 1 Prohibition era advertisement for Two Rivers Beverage Co. Source Wisconsin Jewish Chronicle, January 30, 1925, p. 15

as real beer as the brewery employed the “old European mashing and fermenting process.”1 Two Rivers appears to have entered the near beer market only in the late 1920s as a 1925 advertisement, duplicated in Fig. 1, suggests that the brewery was only making ice cream and soft drinks in the mid-1920s, as there is no mention of malted brews or near beer. The ABA database suggests that around 650 breweries operated in 1933. Upon closer inspection, however, several of these breweries are noted in the database as “NP” which the database codes as “No federal permit was issued, or simply non-producing.” We dropped these from our brewery database. It also remains possible that some breweries listed as open in 1933 in the database were incorporated, or perhaps even obtained a permit during that year, but that they did not actually make or sell beer in 1933. As we are concerned with breweries that were actually operating and selling in 1933, we also want to exclude such breweries from our dataset. We searched the name of each brewery in Newspapers.com, an online database that consists of hundreds of US newspapers, both large and small, to see whether we could obtain further information about when the brewery opened for sales. We found a handful of breweries that ABA lists as operating in 1933 but which clearly did not begin production or sales until 1934 or later. After eliminating them, our data suggest that 607 breweries engaged in

1

Green Bay Press-Gazette, October 25, 1929, p. 2.

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legal beer sales in 1933. Furthermore, we were able to pin down the precise date of initial sales for 270 (44%) of these breweries within 1933. We will use this to better explore the determinants of the location of brewery entry for various time periods within 1933. As suggested by the above discussion of the Two Rivers Beverage Co., the US brewing industry was not starting entirely from scratch in the spring of 1933 as many breweries were already in operation making (at least officially) something besides alcoholic beer. Batzli (2014) created a series of maps that showed the location of all breweries that operated between various points in time such as 1842 to 1865 and 1933 to 1985. One of the maps he produced showed the locations of breweries that operated in the United States at some point during the Prohibition era (1920 and 1933). Batzli finds that the cities that Okrent (2010) suggested were most “wet”—i.e., they had high amounts of illegal alcohol consumption—which included, Chicago, New York, Brooklyn, Detroit, Baltimore, San Francisco, and New Orleans, were also those that had a relatively large contingent of breweries. While these breweries were ostensibly making legal products, some were likely engaged in illegal beer production. Chicago had the most Prohibition era breweries with 31, while New York City and Brooklyn combined to have the second most with 19 breweries. The ABA database suggests that 255 of the 607 breweries (42%) selling in 1933 legally operated at some point during Prohibition. Many breweries switched away from beer—near or otherwise—and toward the production of other products that could broadly employ the same capital used to make beer. For example, breweries commonly made ginger ale or other types of carbonated soda during Prohibition. Additionally, taking advantage of their refrigeration and pasteurization equipment, several breweries—Anheuser-Busch, Stroh’s, and Yuengling among them—made ice cream, which surged in popularity during the 1920s as an alternative to alcohol (Funderberg, 1995). Malt syrup, touted officially for its potential use in baking, though also a key ingredient in homebrewed beer, was another product commonly produced and sold by Prohibition-era breweries (Okrent, 2010, p. 251). Perhaps the most common product that Prohibition-era breweries made, however, was dealcoholized beer such as the “Old Manhattan Special Brew” made by the Two Rivers Beverage Co. The ABA database suggests that 73% of the 255 breweries that operated at some point during Prohibition produced near beer that was below 0.5% alcohol. Unfortunately, there is no way to tell from the database how many of the 255 breweries that were in operation for at least some of the Prohibition era, were in operation when beer was legalized in April 1933. A nationally syndicated news article of March 22 suggested that there were around 180 breweries in operation in the United States on that date— although some of these breweries may have been producing

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things other than malt beverages.2 This suggests that around 70% (427 breweries) of the 607 breweries in operation across 1933 were newly started up while 30% simply had to switch from making other products to making beer. For those who made near beer, this transition was relatively seamless. It is important to note that the vast majority of 1933 breweries were located in the facility of a former brewery. Only 53 of the 607 breweries that commenced legal sales across 1933 were operating in a facility that was not associated with a pre-Prohibition brewery—i.e., 1933 was the first entry for that brewery in the ABA database. It was very common that an entrepreneurial brewing interest would purchase the building of a former brewery, often long abandoned, and then upgrade and modernize the capital within. In other cases, owners that had held onto—and in some cases maintained—their shut-down pre-Prohibition brewing facilities brought them back to life in 1933. For example, Muessel Brewing of South Bend, Indiana, was founded in 1852. The brewery shut down in 1918 with the onset of Indiana’s prohibition, and it remained closed for 15 years. On March 28, 1933, Robert Muessel noted that, “While we have not been operating our plant during Prohibition, we have kept it intact.”3 Rather than keep the brewery as a private family concern, the Muessel Brewing Company incorporated in June of 1933 and issued 150,000 shares of stock, around a third of which would be retained by the family, with the intention of raising $450,000 (11 million in 2023 dollars) for upgrades and improvements including a new stock house, bottling plant, boiler works, and new vats.4 Rhinelander Brewing of Rhinelander, Wisconsin, took a slightly different route. The brewery (founded in 1893) closed its facility in 1919 in response to Prohibition and sold all its equipment to brewing concerns in Mexico. In the summer of 1933, now under the leadership of the original founder’s son, George Hilgerman, Rhinelander underwent a complete renovation. “The old brewery building has been enlarged and remodeled, and completely equipped with the latest and most sanitary of modern brewery equipment. Not a single pipe, boiler, or machine from the pre-prohibition brewery is in the new brewery; every bit of equipment is new.”5 Rhinelander began selling its reworked product, under the direction of new brewmaster Peter Etzweiler, on November 17, 1933.6 “Beer Scarcity Looms for Villages” The Cincinnati Inquirer, March 22, 1933, p. 12. 3 “Muessel Brewery Will Reopen.” The South Bend Tribune, March 28, 1933, p. 9. 4 “Muessel Plant to Open Monday.” The South Bend Tribune, June 23, 1933, p. 24. 5 “Rhinelander Beer on Market Soon.” The Rhinelander Daily News, November 1, 1933, p. 2. 6 Rhinelander Advertisement. The Bessemer Herald (Michigan), November 17, 1933, p. 14. 2

J. E. Taylor

The Geography of 1933 Breweries While the discussion above suggests that the vast majority of the 1933 breweries operated in the same location as a preProhibition brewery, this does not necessarily mean that the relative geographic composition of the immediate pre- and post-Prohibition breweries was unchanged. After all the ABA database suggests that there were 1365 breweries in operation in 1914—just prior to a wave of state-level prohibitions that preceded the federal one—which is 125% more than the 607 that operated in 1933, so that the regional geography of brewery locations could still have shifted. For example, perhaps state A had 6% of all breweries in 1914, but had 10% of the nation’s breweries in 1933, while state B saw its share of the nation’s breweries fall from 4% in 1914 to 2% in 1933. Figure 2 shows the city-level location of the 607 breweries that commenced legal sales of beer at some point in 1933. Breweries were heavily concentrated in the Great Lakes region. Pennsylvania’s 118 breweries—which constituted 19.4% of the total number of breweries in the US in 1933—were the most of any state. Pennsylvania had, in fact, gained in this measure of “market share” as it had only 16.5% of the nation’s breweries in 1914. Pennsylvania’s breweries were generally located in the eastern portion of the state, though there was also a large grouping within a 30-mile radius of Pittsburg in the southwestern part of the state. Wisconsin ranked second in terms of number of breweries with 84, but it is interesting to see how spread out these were. Milwaukee had 12 breweries, but no other city in Wisconsin had more than 3 breweries in 1933. It is also notable that within Wisconsin the beer production belt was heavily along the coast of Lake Michigan. Wisconsin gained even more “market share” than Pennsylvania did between 1914 and 1933, as its share of the nation’s breweries rose from 10.7% in 1914 to 13.8% in 1933. New York ranked third with 74 breweries, which was 12.2% of the nation’s total, a share largely unchanged from the 11.6% of the nation’s total in 1914. Looking at the broader picture, 1933 breweries were primarily located within an approximate trapezoid between Boston, Washington DC, St. Louis, and Minneapolis. Another group of breweries follows almost perfectly the eastern front of the Rocky Mountains between Colorado and Montana. Breweries also populated large West Coast cities such as Seattle, Portland, Los Angeles, and particularly the San Francisco Bay area. Within the state of New York, there is a clearly defined line of breweries from Albany to Buffalo, following the Mohawk River Valley and the area just north of the Allegany Plateau. There were strikingly few breweries operating in the American South in 1933. With the exception of three in Tennessee, four in

The Geography of Brewery Entry After Beer Relegalization in Spring 1933

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Fig. 2 1933 brewery locations. Notes Shows the location of the 607 breweries that operated during 1933 in the United States. The source of this data is the American Breweriana Association Database. See text for more details

Florida, and six in New Orleans, the South was completely devoid of breweries. It is notable that Southern states were generally slower to legalize beer in 1933 and were also more likely to have dry counties under their state’s local option rules, and this may account for some of the dearth of Southern breweries. How much does the 1933 spatial location of breweries reflect that which the nation experienced prior to Prohibition? Figure 3 shows the city-level location of the 1365 breweries in the US in 1914. Comparing Figs. 2 and 3, there is clearly a great deal of overlap—we will formally test this later in the paper. To compare to the discussion above, in 1914 Pennsylvania was still the state with the most breweries in the nation with 230. In 1914, New York, not Wisconsin, had the second most breweries with 163, while Wisconsin ranked third with 145 breweries. The same regional patterns can be seen in New York state, along the eastern slope of Rocky Mountain range, and along the Great Lakes bordering

states. Another distinct cluster of breweries follows along the Missouri River from Kansas City, Missouri to Omaha, Nebraska. Interestingly, only a small remnant of this cluster existed in 1933. While we see a smattering of breweries across the South in 1914—and certainly more than were there in 1933—compared to the rest of the nation, the south was largely a dry oasis.7

7

It is important to note that by 1914 some Southern states were dry and, even if they were not, many counties across the South were dry by local option. Also note that some of the breweries showing up in the 1914 map may have been operating in dry areas and hence were (legally anyway) producing near beer or some other product besides beer.

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Fig. 3 1914 brewery locations. Notes Shows the location of the 1365 breweries that operated during 1914 in the United States. The source of this data is the American Breweriana Association Database. See text for more details

The Geography of Brewery Entry Across 1933 Next, we consider the geography of brewery entry at different temporal stages within 1933. Did breweries entering later in 1933 do so in a geographically different pattern than those that commenced legal sales right after legalization? We begin by examining the breweries that commenced legal sales on April 7, 1933, the first day that beer became legal at the federal level. Our systematic search of newspapers.com, which contains searchable content from thousands of newspapers across the United States from the 1930s enables us to pinpoint the date that 44% (270 out of 607) of breweries from 1933 commenced sales.8 We find that 89 of these 270 (33%) 8

For more details about brewery entry within 1933 see Taylor, Poelmans, and Hayne (forthcoming), which focuses on the speed of the entrepreneurial response to beer legalization.

were selling beer on April 7. If our sample is representative of all 1933 breweries, this would suggest that around 200 US breweries were legally selling beer on April 7. Our newspaper searches confirm that several breweries had grand openings (or re-openings) on or around April 7. This was true even for many breweries that were not selling near beer at the time of the beer bill’s passage a couple of weeks earlier. The 1932 Democratic Party platform had explicitly called for Prohibition reform and particularly had mentioned the relegalization of beer. Thus, expectations for beer legalization surged after the Democrat’s strong showing in the election of November 8, 1932, and entrepreneurs responded accordingly. For example, on November 25, 1932, The Brooklyn Daily Eagle reported that Kings Brewery Inc. had purchased the vacant facility of the former Excelsior Brewery on Pulaski St., in anticipation of beer’s pending relegalization and commissioned architects to undertake a $1.5 million ($35 million in 2023 dollars)

The Geography of Brewery Entry After Beer Relegalization in Spring 1933

reconstruction of the brewery. “The work will consist of rebuilding the bottling plant dismantled when oldtime beer was outlawed, the construction of a new storage building for the bottles, … and a new brewhouse and new power plant.”9 Of course, existing breweries, particularly those making near beer, also responded proactively to the November election. Post-election day newspapers led with Roosevelt’s landslide victory, but many had secondary articles about how breweries in various regions of the nation were responding to the election with plans to retool and ramp up so as to be ready to sell beer once it became legal. An International News Service syndicated article from November 10 titled “Breweries Looking Ahead” reported comments from breweries in Pittsburgh, Chicago, Milwaukee, and Philadelphia noting that they would immediately spend tens of millions of dollars on upgrades to their facilities to prepare for legal beer.10 As further evidence of a clear shift in expectations, hops prices jumped 20% in Sonoma County, California the day after the election reflecting the bet that they would soon be in much higher demand.11 These anticipatory effects, five months before beer would be legal on April 7, were key in allowing breweries to have product to sell immediately upon legalization. Since it typically takes a month or so (less for ales but more for lagers and pilsners) to age beer before it can be sold and consumed, absent any such anticipatory actions, no beer could have been available on April 7 if production only began after the beer bill’s passage on March 22. Figure 4 shows two maps, one showing the location of breweries that were legally selling on April 7 and the other showing the location of breweries that commenced sales in 1933 on a date after April 7. While these maps are based on our 265-brewery subsample of those breweries for which we were able to confirm the first date of sales, we believe them to be geographically representative of the national pattern. Note that newspapers.com, from where we searched for information about brewery openings, contains over 21,000 newspapers from cities both large and small. The majority of breweries operating on April 7 were located in large cities, and large clumps were in traditional beer producing cities such as Chicago, Milwaukee, New York, and Philadelphia. One notable difference in the two maps is the absence of any breweries on April 7 in Michigan, Connecticut, Florida, or Texas, even though all these states had several breweries that subsequently commence sales after that date. This reflects

“Excelsior Brewery Rebuilding Planned.” Brooklyn Daily Eagle, November 25, 1932, p. 12. 10 “Breweries are Looking Ahead.” New Castle News (New Castle, PA), November 10, 1932, p. 8. 11 “Hops Prices are Higher as Legalizing of Beer Seems Near.” The Sacramento Bee, November 10, 1932, p. 16.

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the fact that beer did not become legal in Michigan, Connecticut, or Florida until May, and not until September in Texas. Thus, some of the variation in the geography of breweries within the year 1933 clearly reflects the variation in the timing of legalization within that year. As noted earlier, the vast majority of 1933 breweries operated in a pre-Prohibition brewery location/facility. Figure 5 shows the location of the relatively small group of “new entrants,” i.e., those breweries that did not have any pre-1933 history. This map suggests that new breweries were far less geographically tied to the pre-Prohibition locational tradition. Michigan, in particular, was a large outlier in terms of receiving a disproportionate number of new entrants. The state had only 5% of the nation’s breweries in 1914, but it was home to 17% of the 1933 breweries that had no prior history.

Case Studies of City-Level Brewery Location in 1914 and 1933: New York and Chicago As the ABA database generally reports street-level addresses, some city-level maps of brewery locations prior to and just after Prohibition may be instructive. While Chicago was ranked third in terms of brewing just prior to Prohibition, behind Milwaukee and New York City, Richard Griesser, one of the nation’s leading “brewery architects,” predicted in January 1933 that Chicago would quickly become the nation’s top brewing city after the government legalized beer.12 Chicago was in a prime position, he claimed, because it had several large breweries making near beer during Prohibition, and many entrepreneurs were already in the process of recapitalizing and refurbishing some brewing facilities that had been in hibernation since Prohibition. A Chicago Tribune article noted that “The first stage in the return of any industry usually is the whipping into shape of dismantled or abandoned factories.”13 Such actions had been underway since the fall, and particularly since the results of the November election which strongly signaled a possibility for Prohibition reform. Griesser’s architecture firm had reportedly supplied plans for refurbishment of several Chicago breweries including a $75,000 (around $1.8 million in 2023 dollars) remodel of the Stenson Brewing company plant at 1748 North Winchester Ave and another major renovation for the Gambrinus Brewing Company at 3040 Fillmore St. The White Eagle Brewing Company was another brewery reportedly engaged in $25,000 worth of renovations to its plant on 3757 South

9

“Predict Chicago Will Become Brewing Center of the United States.” Chicago Tribune, January 8, 1933, p. 18. 13 Ibid. 12

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Fig. 4 Location of breweries confirmed selling on April 7, 1933 (Top) and confirmed commencing sales post April 7 (Bottom). Notes The top panel shows the location of the 87 breweries that we could confirm through our search (see text for details) were selling on April 7,

J. E. Taylor

1933. The bottom panel shows the location of the 178 breweries for which we could confirm data of initial sales that was after April 7, but occurred at a later date in 1933. Location source is the American Breweriana Association Database

The Geography of Brewery Entry After Beer Relegalization in Spring 1933

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Fig. 5 Location of breweries with no prior history. Notes Shows the location of the 53 breweries that opened in 1933 and had no prior history according to the American Breweriana Association Database.

These were “new entrants,” whereas the other 554 breweries that operated in 1933 were either open during Prohibition or were brewing in a facility that had a pre-Prohibition brewing history

Racine Ave. These actions taken in late 1932 and early 1933 would be instrumental in allowing the city to engage in high volumes of beer production and sales after legalization in the spring of 1933. Figures 6 and 7 show the location of breweries at the street level in both Chicago and New York City/Brooklyn. These are shown side by side for both 1914 and 1933. These city-level figures show the same broad pattern as the national maps—brewery locations were largely correlated across these two years. In 1914, Chicago breweries were heavily concentrated on the Lower West Side, the Near North Side, and in Lincoln Park. While there were around 50% fewer breweries in Chicago in 1933 (only 23 versus 45 in 1914), their location was roughly dispersed in the same pattern. In New York City/Brooklyn—which likewise had far fewer breweries in 1933 versus 1914 (24 versus 54), we can see concentrations of breweries between the Williamsburg and Bushwick neighborhoods of Brooklyn which persisted in

both time periods.14 In Manhattan, both periods see breweries spread relatively evenly along the east and west coasts of the island.

Empirical Analysis: The Determinants of the Geography of Brewery Entry in 1933 The maps presented above strongly suggest that one of the most important factors driving the geographical location of 1933 breweries was the location of breweries in the preProhibition era. The results of a simple bivariate OLS regression (t-stats in parentheses) relating a state’s percentage

14

It is interesting to note that the Williamsburg area of Brooklyn continues to host a disproportionate amount of the area’s craft breweries today.

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Fig. 6 Street-level map of Chicago breweries in 1914 and 1933. Source American Breweriana Association Database

Fig. 7 Street-level map of New York City breweries in 1914 and 1933. Source American Breweriana Association Database

J. E. Taylor

The Geography of Brewery Entry After Beer Relegalization in Spring 1933

of the nation’s total breweries in 1933 to its percentage of the nation’s breweries in 1914 confirm this notion: %1933BrewStatei ¼

0:234 ð3:31Þ

þ

1:13  %1914BrewStatei ð22:83Þ

The results suggest that a 1% increase in a state’s percentage of the nation’s breweries in 1914 resulted in the state having a 1.13% increase in that state’s national percentage allocation of breweries in 1933. Furthermore, the correlation coefficient between these two variables is 0.98. Thus, while there were only around 44% as many breweries in operation across the United States in 1933 as there were during 1914, their geographic locational pattern was largely unchanged. But there was some variation. As noted earlier, Wisconsin and Pennsylvania saw the largest gains in hosting the percentage of the nation’s breweries, seeing their shares rise by 3.1 and 2.9% points, respectively. Michigan and Illinois ranked 3rd and 4th by this measure, with Michigan rising from 5.0 to 6.4% and Illinois rising from 6.9 to 8.1%. California was the biggest loser by this measure, falling from hosting 5.7% of the nation’s breweries in 1914 to only 4.1% in 1933. And, notably, this was true even despite California’s population rising 139% between the 1910 and 1930 Census counts—three times as much as the national population jump of 44% across the period. Minnesota was second to worst with a 1.5% point drop from 4.8 to 3.3. Missouri was third worst, dropping from 3.3 to 2.1% of the nation’s breweries. Iowa was the only other state to see a 1% point drop as it fell from 1.3% in 1914 to only 0.3% of the nation’s breweries in 1933. We employ some regression analysis to further explore what factors might be responsible for the variation in state brewery shares just before and after Prohibition. For example, we might expect states that legalized beer earlier in 1933— recall that beer was legal in only 20 states on April 7, and 23 other states legalized on a later date during that year—to have seen more entry, ceteris paribus. Furthermore, as beer legalization was touted as an economic stimulus measure in what was a highly depressed economy at the time of the bill’s passage in March, we may expect a state’s economic conditions and performance to have driven brewery location at the margin. There was also some variation in how much states taxed beer production, and thus, we may expect to see this have some effect on brewery entry patterns, ceteris paribus. To analyze the determinants of where breweries operated in 1933, we estimate variations of the following OLS equation: Change in % of Breweries 1914 to 1933i ¼ B0 þ B1 LegalStatusi þ B2 Taxi þ kEi þ dDi þ e

The dependent variable represents the change in a state’s percentage of total breweries nationwide in 1933 minus its

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percentage of the nation’s breweries in 1914. This would correspond to the numbers discussed above of whereby Wisconsin had the highest at 3.1 (rising from 10.7 to 13.9% of the nation’s breweries) while California the lowest at −1.4. We use the change in the percentage of all nationwide breweries located in a state in 1933 and 1914, rather than the change in the raw number of breweries, because we are most interested in what factors were correlated with the change in the relative geographic distribution of breweries between these time periods. LegalStatusi is a measure (varying by specification) related to when state i legalized beer. Taxi refers to the rate at which state i taxed beer (cents per gallon).15 Ei is a vector of state-level economic controls. These include the percentage change in the value of manufacturing output between 1929 and 1933 (a measure of how hard hit the state was by the Depression) and the log of state income in 1933.16 Finally, Di is a vector of agricultural and demographic state controls such as the per capita value of production of barley in 1929 and the change in a state’s share of the nation’s total population between 1910 and 1930 (mirroring our process for constructing the dependent variable), as these measures could also have influenced brewery location decisions. Table 2 reports summary statistics for our key variables. Table 3 reports the results of two regressions. Specification (1) suggests that economic factors appear to have been important determinants in the variation (what little there was) in the state-level location of breweries between 1914 and 1933. Higher income states as well as states that were generally hit hardest by the Great Depression experienced larger gains in national “brewery share” in 1933. This combination may have been particularly attractive for entrepreneurs interested in jumping back into the beer industry after re-legalization. Hard hit manufacturing states likely had more low-cost excess capacity of labor and capital that could be employed in a new brewery venture. At the same time, the higher income per capita meant that there was

15

Beer tax in each state (cents per gallon) is assembled from the 1970 United States Brewers Association (1970, pp 101–105). While this reported cents per gallon for most states, some reported tax per barrel. For these, we divided by 31 to convert to per gallon since there are 31 gallons in a barrel of beer. 16 The state-level manufacturing output data are from the 1929 and 1933 Census of Manufacturing. Our measure of state income per capita is from the United States Treasury Department (“Table 1, Statistics of Income,” p. 67, 1935), and it reflects net income in the state by those who had to file income tax returns. Only three percent of Americans earned enough so that they had to file an income tax return, but this measure should capture the variation in the level of income in each state. An alternative would be to measure the state’s growth in value of manufacturing across 1933, but the state income data will better capture the entire economy rather than just the manufacturing sector. Population data, to convert variables to per capita, were from the 1930 Census of Population.

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J. E. Taylor

Table 2 Summary statistics State-level variable

Obs

Mean

Std. dev.

Min

Max

State’s percentage of breweries on April 7

49

2.04

5.13

0.00

25.29

Percentage new breweries April 8 to May 30

49

2.04

4.23

0.00

19.08

Percentage new breweries June 1 to Aug 30

49

2.01

4.12

0.00

19.12

Percentage new breweries Sept 1 to Dec 31

49

2.79

5.71

0.00

32.65

State’s percentage breweries in 1914

49

2.04

3.44

0.00

16.52

State’s percentage of breweries in 1933

49

2.04

3.95

0

19.44

State’s percentage of “New Entrant” Brws 1933

49

2.04

4.09

0

16.98

State’s change in % of breweries,1933–1914

49

0.00

0.83

−1.62

3.13

State’s beer tax (cents per gallon)

49

3.97

2.52

0.00

15.00

State value of barley per capita 1929

49

4.38

11.07

0.00

56.04

State net income 1933 from federal tax data

49

77.74

66.23

11.95

395.80

State’s % change in value of MFG 1929 to 1933

49

−54.59

11.42

−85.71

−23.40

% Change in value of MFG March to July 1933

49

24.75

13.95

−4.89

68.32

State’s change in % of US population 1933–1914

49

0.00

0.40

−0.62

2.04

State’s population in 1930

49

2,505,613

2,519,982

91,058

12,600,000

Table 3 Determinants of the variation in a state’s share of the nation’s breweries just prior to and after prohibition

Days past April 7 until Legalized State beer tax (cents per gallon) Log state income 1933 (IRS Data) Percentage change value MFG 1929–1933 Barley production per capita 1929

(1)

(2)

Change in percentage of nation’s breweries located in state 1914 to 1933

Only the 53 new entrant breweries

−0.0000265

0.000538

(−0.15)

(0.79)

0.0702+

−0.162

(1.86)

(−1.13)

0.869*

−3.157

(2.04)

(−1.49)

−0.0156 +

0.0348

(−2.00)

(1.40)

0.000400

−0.0323+

(0.05)

(−1.70)

Change in percentage of population b/t 1910–1930

−0.364

6.079**

(−0.74)

(4.00)

Constant

−2.672*

8.232

(−2.30)

(1.66)

N

49

49

R2

0.088

0.371

Notes t statistics in parentheses. The dependent variable for the first specification is the percentage of the nation’s 607 breweries that were located in the state in 1933 minus the percentage of the nation’s 1365 breweries that were located in that state in 1914. The second specification is the percentage of the nation’s 53 “new entrant” breweries (i.e., those that had no brewing history prior to 1933 and thus were entered in the ABA database as starting in 1933) that were located in a state in 1933 minus the percent of the nation’s 1365 breweries that were located in that state in 1914. +p < 0.10, *p < 0.05, **p < 0.01

more money available to potentially be deployed in such ventures. The coefficient on a state’s beer tax is positive and statistically significant at the 10% level. No other variables

are statistically related to changes in a state’s share of the nation’s breweries in the years immediately prior to and after the prohibition of beer.

The Geography of Brewery Entry After Beer Relegalization in Spring 1933

Specification (2) exams the locational determinants of the 53 “new entrant” breweries—i.e., those breweries whereby 1933 was their first into the ABA brewery database, meaning that they were not operating in a facility that had any prior brewing history. Specifically, the dependent variable is the percentage of these 53 new breweries located in each state minus the state’s share of the nation’s 1365 breweries in 1914. Michigan, California, and Rhode Island lead the way in this measure with 11.9, 9.4, and 7.1, respectively. Pennsylvania, Ohio, and New York were the three states with the lowest values of this measure with negative values of 12.7, 8.3, and 6.0, respectively. Interestingly, but not surprisingly, this regression strongly suggests that population growth between 1910 and 1930 was the largest driver of “new entrant” brewery location. While the average state saw population rise 33.3% across these two decades, California experienced 138.8% population growth, ranking it first in the nation. Florida and Michigan, both of which were in the top six in terms of new entrant breweries ranked 3rd and 4th, respectively, in population growth with Michigan up 72.3% and Florida up 95.1%. On the other hand, Pennsylvania, which came out worst in terms of its share of new entrants compared to its 1914 overall share of breweries, experienced below average population growth of only 25.7%. We are also interested in the locational distribution of breweries at different time periods within 1933. We break this year into four distinct periods to look at the number of breweries beginning legal beer sales—April 7, April 8 through May 31, June 1 to August 31, and September 1 through December 31. Our findings from newspaper searches (discussed earlier) suggest that around 33% of 1933 breweries were operating on April 7, 17% of all 1933 breweries began sales later in April or May, and around 25% began sales in each of the final two windows mentioned above. Correlation coefficients continue to suggest a very strong relationship between a state’s share of breweries in 1914 and a state’s share of breweries that commenced operations across each of these four 1933 subperiods.17 Clearly, one of the most important determinants of brewery entry across each of these subperiods was the number of breweries a state had in the pre-Prohibition era.

17

Specifically, the correlation coefficients between a state’s share of the nation’s breweries in 1914 and its share of the nation’s breweries starting during these four periods were: 0.90 (April 7), 0.74 (later in April and May), 0.96 (June through August), and 0.84 (September through December).

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For our empirical analysis of these four 1933 subperiods, we take a different approach.18 We acknowledge that there is a strong omitted variable—the share of breweries a state had in 1914—but we want to explore what state attributes were correlated with brewery entry in each of these four separate subperiods. Thus, Table 4 reports the findings of regressions exploring the correlates of brewery entry across 1933. The results suggest that barley production per capita in the state was positively correlated with brewery entry across all four time periods. As barley production was also positively correlated with a state’s allocation of breweries in 1914, we are not claiming this to be causal. We are simply examining correlates with a state’s share of brewery growth to see whether any of these changed notably across the four periods. It is also notable that across each of the four periods, states that were hit hardest by the downturn from 1929 to 1933 experienced higher shares of the nation’s brewery entry, and, interestingly, the magnitude of these coefficients suggests that this factor strengthened as the year went on. We also find that high-income states experienced a larger share of the nation’s brewery entry, but that this relationship was strongest for the period between April 8 and August 31. It is also notable, although not surprising, that high population states consistently received a higher share of brewery entry across 1933, and again, this relationship strengthened as the year progressed. In terms of legalization date, we find a strong correlation between a state’s share of breweries on April 7 and whether it was legal on that date, however, we find no such correlation between, for example, whether the state turned legal between June 1 and August 31 and the state’s share of new brewery openings between those same dates.

Conclusion Between January 17, 1920, and April 7, 1933, the production and sale of alcoholic beverages above 0.5% ABV were prohibited in the United States. Federal Prohibition was repealed on December 5, 1933; however, eight months prior to this date, beer at or below 3.2% alcohol by weight was

18 We ran regressions for each subperiod that duplicated what we did in Table 3—i.e., made the dependent variable the change in a state’s share of breweries between 1914 and the period in question—and the results were not interesting as few of the independent variables were statistically significant. Likewise, when we duplicate the regressions we report in Table 4 but include the state’s brewery share in 1914 as a control, the coefficients on the key independent variables, aside from brewery share in 1914, are largely insignificant.

126

J. E. Taylor

Table 4 Correlates of brewery entry across various periods within 1933 Dependent variable: state percentage of breweries starting up in time subperiod

State turned legal in time period examined State beer tax(cents per gallon) Log state income 1933 (IRS data) Percentage change value MFG 1929–1933 Barley production per capita 1929 Log of population 1930 Constant

(1)

(2)

(3)

(4)

% Breweries April 7

% New breweries April and May

% New breweries June to August

% New breweries Sept to Dec

3.038*

1.309

−0.146

1.000

(2.19)

(1.60)

(−0.16)

(1.28)

0.207

0.177

0.113

0.0395

(1.24)

(1.42)

(0.80)

(0.17)

3.349

4.511**

5.453**

4.758

(1.64)

(3.53)

(3.78)

(1.64)

−0.0916+

−0.103**

−0.104**

−0.159**

(−1.94)

(−3.71)

(−2.85)

(−2.72)

0.0609*

0.0688**

0.0706**

0.0531+

(2.56)

(3.75)

(3.08)

(1.72)

4.875*

4.450**

5.680**

6.683*

(2.59)

(5.13)

(4.09)

(2.55)

−41.49*

−41.06**

−49.27**

−56.16*

(−2.57)

(−5.91)

(−4.12)

(−2.42)

N

49

49

49

49

R2

0.381

0.506

0.480

0.335

Notes Dependent variables, which vary by specification, examine the state’s percentage of the nation’s total breweries that commenced sales across each time period. Standard errors in parentheses. +p < 0.10, *p < 0.05, **p < 0.01

allowed in those states that did not have their own prohibitions in place. In response to the relegalization of beer, 607 breweries commenced legal sales at some point in 1933. This study examines the geographic distribution of these 607 breweries. We are particularly interested to see whether Prohibition brought any major shift in the geographic location of breweries by comparing these patters just prior to, and after, its reign. Maps showing brewery locations suggest that the relative geographic distribution of breweries was largely unchanged. While the nation had only around 44% as many breweries in 1933 as it did in 1914, just prior to a wave of state-level prohibitions were enacted, the breweries that commenced legal sales in 1933 were operating in roughly the same relative locations as were present two decades before. But there were some subtle differences. Wisconsin, Pennsylvania, and Michigan were the states that saw the largest gains in the share of the nation’s breweries within their borders in 1933 relative to 1914. Michigan, in particular, saw a large surge in new breweries—i.e., breweries that did not have any pre-1933 history. California was the state that saw the largest decline in its share of the nation’s breweries in the years just prior to and after beer prohibition, and this finding is made all the more surprising when one considers that California saw the largest gain in population between these periods.

Thus, when viewed in per capita terms, California experienced a substantial decline in brewery share immediately before and after Prohibition. While the ABA Brewery Database can only tell us about the year in which a brewery operated, we systematically searched historical newspapers to better document the temporal pattern of brewery entry within 1933. The results suggest that around a third of 1933 breweries were selling on April 7, and around half were selling by June 1. Another quarter of 1933 breweries entered between June and August, and the final quarter entered between September and December. While brewery entry across each of these periods is strongly tied to the state’s share of breweries just prior to Prohibition, we examine the correlates of a state’s percentage share of breweries separately for each of these sub-time periods. We show that states that grew more barely per capita, as well as those that were hit harder by the downturn of 1929 to 1933, were associated with having a higher percentage of the breweries beginning sales across each of these subperiods. Finally, we find that the geographic location of the 53 “new entrant” 1933 breweries, i.e., those whose facilities were new in 1933 rather than their operating in a facility with some brewing history, were far less correlated with a state’s pre-Prohibition share of breweries. These breweries tended to open in states that saw faster

The Geography of Brewery Entry After Beer Relegalization in Spring 1933

127

References

spring 1933. Explorations in Economic History, 84, Article 101427. https://doi.org/10.1016/j.eeh.2021.101427. Poelmans, E., Dove, J. A., Taylor, J. E., & Dighe, R. S. (2022b). Factors influencing the timing and type of state-level alcohol prohibitions prior to 1920. Public Choice, 192, 201–226. https://doi. org/10.1007/s11127-022-00977-3 Taylor, J. E., Poelmans, E., & Hayne, E. (Forthcoming). The entrepreneurial response to beer legalization in 1933 prior to the end of Prohibition. Business History. https://doi.org/10.1080/ 00076791.2023.2207011 The United States Brewers Association. (1970). Brewers almanac. United States Brewers Association. United States Treasury Department. (1935). Statistics of income for 1933. Government Printing Office. Van Wieren, D. P. (1995). American breweries II. Eastern Coast Breweriana Association, West Point.

Batzli, S. (2014). Mapping United States breweries 1612 to 2011. In: M. Patterson, & N. Hoalst-Pullen (Eds.), The geography of beer. Springer. https://doi.org/10.1007/978-94-007-7787-3_4 Funderburg, A. C. (1995). Chocolate, strawberry, and vanilla: A history of American ice cream. Bowling Green State University Popular Press. Okrent, D. (2010). Last call: The rise and fall of prohibition. Scribner. Poelmans, E., Taylor, J. E., Raisanen, S., & Holt, A. C. (2022a). Estimates of employment gains attributable to beer legalization in

Jason E. Taylor is the Jerry and Felicia Campbell Professor of Economics at Central Michigan University. He is an authority on 20th century economic history in the United States, with a focus on the Great Depression era. His current work focuses on the economic impact that beer legalization played in the early stages of the economic recovery from the Great Depression in 1933 as well as the heterogeneity of state level alcohol restrictions after Prohibition’s end.

population growth in the years in which the nation was covered by Prohibition. While Prohibition did not bring a major geographic realignment in brewery location in the immediate pre and post periods, the entrepreneurial response of the brewing community was both rapid and substantial. It also appears to have been driven, at least at the margin, by the factors that we would expect to be of importance to rational economic factors such as population growth and economic conditions.

Brews and Rules: Geospatial Aspects of State Beer Laws in the United States Matthew Balentine and Michael Pretes

Abstract

Introduction

Scholarly interest in beer has increased in the United States, yet geographic research on beer law and the politics of beer in the United States is in its infancy. This chapter examines the geospatial aspects of beer laws in the United States. We first examine the legal basis for state beer laws, which largely stems from the Twenty-First Amendment to the Constitution and from the Commerce Clause. The Twenty-First Amendment gives states the right to regulate beer and other alcoholic beverages in a way that states are not able to regulate other products, and therefore, post-Prohibition state beer laws vary considerably from state to state. Today, more than 40,000 governments in the United States have the potential power to regulate beer. After reviewing the status of state beer laws, we describe four vignettes, each introducing a political and geospatial aspect of beer law: beer excise taxes, homebrewing restrictions, “blue laws” and Sunday sales, and grocery sales. Our conclusions indicate weak to limited regional geographic patterns for these laws, suggesting that the explanation for each state’s laws is to be found in a myriad of factors, rather than in overarching regional characteristics. Keywords









Beer regulations Beer taxes Homebrewing Retailing Political culture United States

M. Balentine
M. Pretes (&) Department of Geoscience, University of North Alabama, Florence, AL, USA e-mail: [email protected]




As all American beer drinkers know, beer is a heavily regulated product. Beer regulations include those on production, shipping, wholesaling, materials sourcing, homebrewing, alcohol levels, Sunday sales, drinking age, happy hours, and of course a variety of taxes. In the United States, over 40,000 federal, state, county, municipal, and tribal governments have the authority to regulate beer, with more than 10,000 different beer regulations on average per state (Staples et al., 2021). Beer regulations are driven by a variety of factors, including political views, religious attitudes, health concerns, economic and industrial policies, and the political clout of producers and consumers. Are there any geographic patterns for these regulations? Do some parts of the country regulate beer more heavily than others? If so, what might account for these spatial patterns? This chapter explores these questions, using some specific cases to illustrate geographical disparities in beer regulation. Our results suggest that beer regulations are complex and do not follow clear regional lines. In recent decades, beer has surged to a position of prominence in American culinary culture (Elzinga, et al., 2015; Patterson & Hoalst-Pullen, 2014; Reid et al., 2014). An increase in public acceptance and interest in beer has increased beer production, beer tourism, and public desire for access to a wide variety of beers. Beer production and distribution can be a significant asset to a state, but persistence of the control policies of the past can present significant obstacles to benefiting from the opportunities presented (Anholt, 2016; Malone & Chambers, 2017; Staples et al., 2021; Wagenaar et al., 2005; Williams, 2017). There is substantial variation in state policies concerning beer production and distribution. The Twenty-First Amendment, which repealed Prohibition in the United States, gave states regulatory powers over alcoholic beverages that they did not have over other products. From a clause in the Constitution,

M. Balentine e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_10

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derived the patchwork of varying state regulations governing beer (and wine and spirits) in the United States today. In this chapter, we investigate the landscape of state-level beer regulation in the United States through selected aspects of beer legislation: we identify some emergent patterns, and attempt to explain the causes of these patterns. We describe the kinds of state beer legislation in the United States and conflicts therein and provide four short vignettes for major areas of beer law (beer excise taxes, homebrewing laws, “blue laws,” and grocery store sales). We hypothesize that regional and sectional patterns are minimal or non-existent, as beer legislation is based on myriad factors and not on cross-cutting ones such as religion or revenue dependence. We conclude that while some state beer laws exhibit regional or sectional patterns, most do not. Beer regulation cannot be connected to spatial patterns of religiosity, conservative or liberal social views, need for state revenues, or other broad perspectives that often explain the spatiality of other state policies. Except for a thirteen-year period of national prohibition (1920–1933) established by the Eighteenth Amendment to the U.S. Constitution and repealed by the Twenty-First, states have had relatively free reign to create and enforce policies relating to the manufacture, distribution, and consumption of alcoholic beverages. As a result, alcohol policies have tended to reflect the geographic, social, economic, political, and historical diversity of the states. However, in making policy, states have tended to treat alcoholic beverages primarily as a problem to be controlled, with substantial variation in control systems among the states. Even during the late nineteenth century laissez-faire period of economic policy, alcohol production and distribution continued to be highly regulated by state governments, to the point of prohibition in several states before the adoption of national prohibition. Tight state control systems have persisted to the present.

Federalism and Interstate Commerce From the Articles of Confederation to the present, states have been tempted to use their regulatory powers to protect their markets from producers and sellers in other states. To limit trade disputes and balkanization of markets in the new nation, the Framers of the U.S. Constitution incorporated language to recognize federal authority over commerce among the states (Article I, sect. 8, known as the Commerce Clause: “The Congress shall have power... to regulate Commerce with foreign nations, and among the several states, and with the Indian tribes”). Federal power is not exclusive, however, federal courts have upheld state authority to regulate commerce affecting other states in several situations. For example, as early as 1847, the

M. Balentine and M. Pretes

Supreme Court recognized state authority to require a state license for anyone who sells liquor imported into the state (The License Cases, 46 U.S. [5 How.) 504 [1847]). Apparent authority for the states to prohibit all importation of alcoholic beverages from other states was written into the Twenty-First Amendment, which ended nationwide prohibition. Section 2 states: “The transportation or importation into any State, Territory, or possession of the United States for delivery or use of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.” Competing with Section 2 is a principle recognized by courts since the nineteenth century, often referred to as the “Dormant Commerce Clause.” Courts have held that a state may not impose an inordinate burden on interstate commerce to favor its own producers (e.g., Wabash, St. Louis & Pacific Ry. Co. v. Illinois, 118 U.S. 557 [1886], Dean Milk Co. v. City of Madison [340 U.S. 349 [1951]). Within this context, controversy has arisen in recent years concerning whether laws through which states favor their own alcoholic beverage producers over producers in other states violate the Commerce Clause or whether such laws are protected by Section 2 of the Twenty-First Amendment. The U.S. Supreme Court issued a conclusive ruling in the 2005 case of Granholm v. Heald, 544 U.S. 460 (2005).1 This case was interesting in that it relied on interpretations of the Twenty-First Amendment to the Constitution (which repealed Prohibition). The subject in this case was wine, not beer, but the general principle established was that states could not favor their own producers over out-of-state producers in the regulation of alcoholic beverages. The three-tier system of distribution of alcoholic beverages is a mainstay of state alcohol control systems. This regulatory framework following prohibition was intended to disrupt vertical integration in the brewing industry, limit the marketing tactics of pre-prohibition, discourage the increase in number of breweries, and encourage drinking in moderation (Kurtz & Clements, 2014; Sauer, 2017). In theory, producers of alcoholic beverages, in-state or out-of-state, could sell their product only to wholesale distributors licensed by the state. Direct sales to consumers are generally prohibited, though most states have statutory provisions allowing out-of-state manufacturers to ship alcoholic beverages directly to consumers (Direct Shipment of Alcohol State Statutes, 2021). Several states made an exception for wine (and beer and spirits) producers permitting them to acquire licenses to sell directly to consumers in their own state, while requiring out-of-state producers to sell only to wholesalers. For example, when such laws in Michigan and

1

The second author of this chapter attended high school and university in California with Jennifer Granholm, formerly Governor of Michigan and now U.S. Secretary of Energy.

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New York were challenged in federal courts (as a test case for all alcoholic beverages), federal appellate courts reached opposite conclusions on the constitutionality of the Michigan and New York laws. On appeal from the district court, the U.S. Court of Appeals for the Sixth Circuit overturned the Michigan law as a violation of the Interstate Commerce Clause, Heald v. Engler, 342 F. 3d 517 (2003). The following year, the U.S. Court of Appeals for the Second Circuit reached the opposite conclusion concerning the New York law. The court held that New York’s law was valid under Section 2 of the Twenty-First Amendment, 358 F. 3d 223 (2004). The U.S. Supreme Court granted certiorari, heard arguments, and issued a decision overturning the laws of both states as violations of the Commerce Clause, Granholm v. Heald, 544 U.S. 460 (2005). The decision in Granholm v. Heald had a significant impact on the wine industry in the United States, as it opened new markets for out-of-state wineries and allowed consumers to have greater access to a wider range of wines.

State Beer Laws Beer laws in the United States—and laws regulating all kinds of alcohol products—exist at the federal, state, county, tribal, and municipal levels (Malone & Chambers, 2017; Staples et al., 2021). The federal government imposes taxes on beer and other alcoholic beverages, and production statistics must be reported to the Alcohol and Tobacco Tax and Trade Bureau (TTB) (formerly known as the Bureau of Alcohol, Tobacco, and Firearms). Breweries must keep detailed records of production and keep data on materials sourcing (the latter are required to comply with bioterrorism laws). Sourcing regulations, as they pertain to bioterrorism, are authorized by Public Law 107–188 (Public Health Security and Bioterrorism Preparedness and Response Act of 2002). One of its provisions authorizes the Secretary of Health and Human Services, acting through the Food and Drug Administration (FDA), to issue regulations to protect the nation's food and drug supplies against bioterrorism and food-borne illness. Under the Bioterrorism Act, the term “food” includes alcoholic beverages. Moreover, the federal government must approve all beer labels, including text and graphics; this includes statements and claims made about the product as well as ingredient disclosure. Many of the laws that apply to beer also apply to wine and spirits—there are general alcoholic beverage laws as well as some that are specific to beer, wine, or spirits. State governments impose additional laws on all entities involved in the beer industry. As noted above, the power of state governments derives from the Twenty-First

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Amendment in the wake of the repeal of Prohibition. Thus, states can regulate beer and other alcoholic beverages in a way that they are not able to regulate other products. Beer laws are complex and vary substantially between states. Table 1 indicates the major types of state laws that apply to beer. These are divided largely into regulations on shipping, and laws pertaining to taxation and regulation of production, distribution, and consumption of beer in-state. States regulate the production, distribution, sale, and shipment of beer among all agents in the industry (producers, wholesalers, retailers, and consumers). Some states— called Franchise States—give additional privileges to wholesalers/distributors, making it difficult for breweries to change distributors without cost (Strike & Hinman, 2002). These states complicate the termination of contracts between retailers and wholesalers by requiring mediation or arbitration and sometimes govern the conditions under which a retailer can change distributors (Strike & Hinman, 2002). State regulations are changing regularly, with some states becoming more supportive of smaller producers and consumers, while other states becoming increasingly supportive of wholesalers and their own revenue agencies (see Taylor, 2008). Other governments—county, tribal, and municipal—can impose regulations on beer and other alcoholic beverages. Whether alcohol sales are permitted is generally a prerogative of county governments, and a patchwork of wet, dry, and moist countries exists throughout the United States (a situation that is surprising to those from outside the country). Overall, beer (and other alcoholic beverages) is regulated by one federal government, 50 state governments, 3143 county governments, about 37,000 municipal governments, and 310 tribal governments, meaning that about 40,504 governments have the authority to regulate beer and other alcoholic beverages in the United States. Not surprisingly, comprehending this is difficult and complex, so in this chapter, we look briefly at only four areas in which these laws may apply, focusing mainly on state regulations.

Four Vignettes State Beer Taxes The average beer drinker is perhaps most aware of beer excise taxes (a tax levied at the time of purchase), which vary considerably across states, from high tax states to low tax states. Figure 1 shows the range of beer excise taxes by state in the United States, based on the standard use of tax per gallon and shown as relative to the national average. Here, we see a patchwork of tax levels, with Tennessee

132 Table 1 State beer legislation and policies

M. Balentine and M. Pretes Shipping legislation • Direct shipping/sales — Complete restriction on direct shipment to consumers No out-of-state direct shipments from brewery to consumer No in-state direct shipments from brewery to consumer — Three-tier system restrictions Restrictions against out of state retailer to consumer Restrictions against out of state wholesaler/distributor to consumer Restrictions against out of state brewery to consumer Wholesaler/distributor license requirements for state brokers who are not wholesalers/distributors — Reciprocity requirements for direct shipping into the state — Franchising laws — Cap-gallon restrictions — Face-to-face purchasing requirements — Restrictions on shippers (FedEx, UPS) regarding delivery • Direct purchasing — Age restrictions — Restrictions on grocery store sales — Restrictions on Sunday sales On site Off site — Dry, moist, and wet county laws State laws County laws Municipality laws Taxation and Other Restrictions • Taxes on beer — Taxes on producers — Taxes on consumers Alcohol taxes Sales taxes • Corkage/BYOB restrictions • Restaurant restrictions — Serving age — Re-corking laws — Happy hour laws • Open container restrictions • Transportation restrictions on inter-state movement of beer • Advertising requirements — Label requirements — Beer tasting requirements — Restrictions on specifics of advertising and promotion • Producer requirements regarding materials sourcing (anti-terrorism laws)

having the highest taxes followed by Alaska and Hawaii. Apart from the non-conterminous states, the states of the Deep South2 have the highest beer taxes (> 0.50 standard deviations above the national average of 0.28), but with the notable exceptions of Georgia, Louisiana, and Arkansas,

2

No regional definition is completely satisfactory (Hart, 1976), and the South’s definition depends on a complex web of historical conditions and situations (Odum, 1936). However, attempts have been made to distil the region’s limits. Drawing upon the classic regional geographic patterns of core, domain, and sphere, Sloan and Long (2018) identify a county-level southern core. This core is characterized by its history of agriculturally produced wealth and slavery and stretches contiguously from just beyond the Piedmont region of North Carolina to the eastern edges of Arkansas and Louisiana.

which have moderate levels of tax, though still higher than most of the rest of the country. Of the Deep South states, only Arkansas’s beer tax was below the national average. The lowest tax levels are found in a series of states stretching intermittently across the middle of the country from the Pacific to the Atlantic, including Oregon, Wyoming, Colorado, Wisconsin, Missouri, Indiana, Kentucky, Pennsylvania, Maryland, New Jersey, and Massachusetts (with Wyoming being the lowest of all). No clear-cut spatial pattern emerges here, though some Southern states do tend to have higher beer taxes overall. The higher taxes in some Southern states might be attributed to traditional religious views on alcohol, and the historic, though loosening, prohibition of alcoholic beverages by

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Fig. 1 State beer excise taxes as deviation from the national average

Southern churches such as the Southern Baptist Convention and the Church of Christ, as well as various fundamentalist and Pentecostal churches (Johnson, 1976; Morgan & Watson, 1991). Alaska and Hawaii can do as they please, as they have no neighboring states to which customers can drive for a less heavily taxed product. The geographic pattern of the lowest tax states is more difficult to explain, but we suggest that states with substantial beer production, major brewers, microbrewers, and “beer culture,” such as Oregon, Colorado (home of Coors), Wisconsin (home of Miller), and Missouri (home of Anheuser-Busch), have greater clout in terms of lobbying state legislatures for lower taxes.

State Homebrewing Laws Homebrewing is the brewing of beer on a very small scale, usually intended for personal consumption or very limited local distribution. Legally, homebrewing is typically defined as the production of under 200 gallons per year (with lower amounts in some cases, usually 100 gallons if there is only

one person of legal drinking age in the producing household). The practice has become widespread across the country and is now legal in all 50 states (the last two states to legalize homebrewing were Alabama and Mississippi in 2013). State governments and other authorities can still regulate homebrewing; however, and many states have imposed their own specific regulations on homebrewing. Other states do not have their own laws but rely on federal law to govern and control homebrewing in their state (Fig. 2). And most states allow county and municipal governments to restrict or even prohibit homebrewing if they so choose. Homebrewers are exempt from paying excise taxes on their production, providing an additional incentive for some people to brew their own beer. Homebrewers often like to enter their product in exhibitions or competitions such as beer festivals or shows, county or state fairs, or other similar events. Some states permit the transportation of beer for this purpose—moving the product from its production site to another location—but some states do not. Moreover, the states that do permit transportation of homebrewed beer impose restrictions on the amount that

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Fig. 2 State homebrewing laws

may be transported. Figure 3 shows which states permit the transport of beer for events, and which do not. As with homebrewing regulations in general, no clear geographic patterns emerge. Pacific Coast states, where homebrewing is popular, allow for transportation, but so do the traditionally conservative and alcohol-suspicious Southern states. States associated with brewing and with major brewers, such as Colorado, Wisconsin, Missouri, and Pennsylvania, all allow transportation, even though some “liberal” states such as Massachusetts do not. If there is any spatial explanation for the apparently random patterns shown in Figs. 2 and 3, it may be that individuals in states with large brewers and an active ``beer culture” have enough clout to influence state legislatures compared to other states. Figure 3 shows the states that have imposed their own homebrewing laws that take precedence over federal laws. Other states use the federal standard without establishing their own restrictions. Spatially, no clear regional patterns emerge with respect to whether states rely on federal law or impose their own. Southern states have enacted state-specific

provisions, but so have “liberal” states such as Oregon and Connecticut. Three Pacific Northwest states, which incidentally are the source of most of the hops grown in the United States, also impose their own restrictions on homebrewing. In considering whether states impose their own homebrewing laws or rely on federal law, no clear regional patterns emerge.

“Blue Laws” and Sunday Sales Blue laws, or Sunday laws, are laws limiting commercial and entertainment activities on a certain day, usually Sunday. Blue laws often prohibit the sale or purchase of alcohol on Sundays (a day that is widely observed as significant for Christians). Blue laws and their historically religious basis have raised constitutional concerns related to the First Amendment, though they were upheld as constitutional by the United States Supreme Court in McGowan v. Maryland 366 U.S. 420 (1961). The Court’s decision left

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Fig. 3 Homebrewing transportation laws by state

the implementation and enactment of blue laws to each state. As such the pattern of regulation, like homebrewing laws, is variegated see (Fig. 4). The U.S. South maintains an overall restrictive stance toward blue law adoption, but it does not distinguish itself from other major regions of the country.

Grocery Store Sales Depending on which state you live in, you may or may not be able to purchase beer in a grocery store, and if you can purchase beer, it may only be low-alcohol (under 3.2%) beer. State governments have the authority to restrict alcohol sales in grocery stores and other retail outlets, and different laws apply to beer, wine, and spirits. Most states permit grocery stores to sell beer, though there may be restrictions on the hours during which it may be sold (and of course restrictions on the age of the purchaser). Some states prohibit

the sale of beer (and wine and spirits) on Sundays or at other times, even though the grocery store may be open, and customers can buy other products. Figure 5 shows the states where beer can and cannot be purchased in grocery stores. Nearly, all states permit such sales (subject to additional restrictions); Alaska, Delaware, and Rhode Island are the only states that do not permit such sales. A central block of states—Utah, Colorado, Kansas, and Oklahoma—allow the sale of beer in grocery stores, but only low-alcohol (3.2% or under) beer, and Maryland allows counties to make the determination. No clear geographic pattern emerges with respect to beer in grocery stores. Both the largest and smallest states by area prohibit it, but there are no regional patterns. In Alaska, restrictions may be due to state concerns over access to alcohol in rural areas, but this would not apply in the two other states. It is most likely that such restrictions are a legacy of earlier general restrictions on beer sales and have yet to be updated by state legislatures.

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Fig. 4 Blue laws by state

Discussion and Conclusion It is surprising that the regulatory landscape of beer does not express clear regional patterns. One would think the country’s regional religious contours (especially with the South’s distinctively protest posture), and its history with alcohol, would yield observable patterns. These results, however, are potentially explained by two considerations. First, it is important to consider that the state regulatory measures are expressions of multiple interest groups across scales. For the purpose of exploring spatial patterns, the regulations investigated were broadly classified, reducing nuance and complexity of their application. Second, political culture may be influencing the spatial expression of regulatory measures by unifying interest groups often considered antagonistic. This has been found in Stephan Gohmann’s (2016) work investigating the dearth of breweries in the South. Gohmann concluded that the South has fewer

breweries per capita in part because of the synergies between regulatory measures and cultural groups. The results support the “bootleggers and Baptists” regulatory theory coined by Smith and Yandle (2014), which suggests bootleggers would benefit from reduced industry competition by aligning with groups opposed to alcohol consumption on religious grounds. These policy patterns are potentially contextualized through the lens of regional cultural foundations because cultural forces are intertwined with politics. Elazar (1972: 84) argued that the forces of political culture and sectionalism shape state “political structures, electoral behavior, and modes of organization for political action.” Sectionalism is the expression of “social, economic, and especially political differences along geographic lines (Elazar, 1988, xiv),” while political culture refers to “the particular pattern of orientation to political action in which each political system is embedded” (84). Political culture describes the way in which a community views the role of

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Fig. 5 Grocery store sales of beer

government and the citizenry’s relationship to it and is “particularly important as the source of differences in habits, perspectives, and attitudes that influence political life in the various states” (85). Together these concepts capture this connection between culture and regional differences in U.S. politics. Elazar posits three distinct US political cultures and sections: moralistic, individualistic, and traditionalistic. Elazar suggests these political cultures are traceable to the earliest European settlement patterns of the United States– each with its own colonial hearth and corresponding practices. Elazar’s theory contends that the U.S. South is archetypical of the traditionalistic conventions, which is often paternalistic, hierarchical, and uninterested in market-based approaches to governance. The primary objective of this tradition is to maintain the existing social order–having government interfere with policy only when the social order is threatened. The group, and its interest, taking precedence is usually based upon familial ties. Ancillary to the kinship base in-group is religious affiliation, or the church family. The importance of the extended religious family, and the historical dominance of Protestantism

in the South, offers some explanation toward the spatial patterns of regulation and governance. Geographic research on beer law—and on law and legislation on alcoholic beverages in general—in the United States is still in its infancy. Few scholars have explored the geospatial dimensions of the complexity of beer (as well as wine and spirits) regulation at the state level, and these scholars have typically been economics, epidemiologists, or legal analysts (e.g., Martin, 2000, 2001; Sparks, 2010; Staples et al., 2021; Wagenaar et al., 2005). Our conclusion is that no strong regional or sectional patterns have emerged with respect to beer laws at the state level. Instead, we hypothesize that regional and sectional patterns are minimal or non-existent, as beer legislation is based on myriad factors and not on cross-cutting ones such as religion or revenue dependence. Future research will identify and explore these explanatory factors. Acknowledgements We thank John Murphy for data collection and early map drafts, Vagn Hansen and Gerald Webster for advice and background information, and the volume editors and chapter reviewers for helpful comments.

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M. Balentine and M. Pretes Smith, A., & Yandle, B. (2014). Bootleggers and baptists: How economic forces and moral regulation interact to shape regulatory politics. Cato Institute. Sparks, C. (2010). Out-of-state wine retailers corked: How the Illinois general assembly limits direct wine shipments from out-of-state retailers to Illinois oenophiles and why the commerce clause will not protect them. Northern Illinois University Law Review, 30(2), 481–507. Staples, A. J., Chambers, D., & Malone, T. (2021). How many regulations does it take to get a beer? The geography of beer regulations. Regulation and Governance, 16(4), 1197–1210. Strike, B., & Hinman, J. (2002). Franchise states: Dealing with under-performing distributors. Wine Business Monthly. https:// www.winebusiness.com/wbm/?go=getArticleSignIn&dataId= 20737. Last accessed April 9, 2023. Taylor, R. (2008). Indiana reverts to face-to-face wine sales. Wine Spectator. https://www.winespectator.com/articles/indiana-revertsto-face-to-face-wine-sales-4280. Last accessed April 9, 2023. Wagenaar, A. C., Harwood, E. M., Silianoff, C., & Toomey, T. L. (2005). Measuring public policy: The case of beer keg registration laws. Evaluation and Program Planning, 25, 359–367. Williams, A. (2017). Exploring the impact of legislation on the development of craft beer. Beverages, 3(18), 3020018.

Matthew Balentine is an Assistant Professor in the Department of Geoscience at the University of North Alabama. He holds degrees from the University of North Alabama, University of Wyoming, and the University of North Carolina at Greensboro. Though enjoying all beer styles, he is especially fond of classic Czech lagers. His research and teaching specialties include social and political geography and the geography of the American South.

Michael Pretes is Professor and Chair of Geoscience at the University of North Alabama. He holds degrees from the University of California at Berkeley, Northwestern University, and the Australian National University, and has previously taught at universities in Canada, Finland, Australia, Hawaii, New Mexico, Wyoming, Missouri, and California. A fan of Reinheitsgebot-inspired Bavarian lagers, English ales, and experimental brews, he teaches a geography of beer, wine, and spirits course and has additional interests in tourism, economic development, national parks, and geopolitics.

Wet and Dry: The Alabama Beverage Control Act and the Prohibition of the Saloon Richard White

Abstract

In 1937, The Alabama Beverage Control Act allowed for the sale of alcohol (malt, vinous, and spirits), yet only prohibited the sale of draft beer within the State of Alabama. The paradox of creating legal package beer sales versus illegal draft beer sales is tied to the preprohibition historical experience of Alabama. Words like “saloon” and “temperance” invoked powerful images and ideas of morality and immorality for the citizens of Alabama and were used to prevent the sale of draft beer to protect public safety. With the passage of time, it became apparent that draft beer sales might not endanger Alabama public safety. However, by that time, beer distributors with a monopoly power had a vested interest in maintaining the status quo and protecting their profit margins. Since the prohibition on draft beer sales can be removed on a case-by-case basis, it is highly unlikely that Section 23 c of the ABCA “No draft or Keg beer or Malt beverage sold or dispensed within Alabama” will be stricken from the law. Keywords





Saloon Temperance Alabama Beer




Wet and dry counties




“The saloon, as it existed in pre-prohibition days, was a menace to society and must never be allowed to return. Behind its blinds, degradation and crime were fostered, and under its principle of stimulated sales poverty and drunkenness, big profits and political graft found a secure foothold. Public opinion has not forgotten the evils symbolized by this disreputable institution, and it does not intend that it shall worm its way back into our social life.” (Toward R. White (&) College of Business, University of Alabama in Huntsville, Huntsville, AL, USA e-mail: [email protected]

Liquor Control by Fosdick & Scott The Center for Alcohol Policy, 2011a). Toward Liquor Control written by Raymond Fosdick and Albert Scott was commissioned by John D Rockefeller Jr. in 1933 to offer America a regulatory and policy outline for a post-prohibition era to manage the previous evils of alcohol. Interestingly, the authors stated, “American liquor legislation in the past, as we have seen, been guided more by emotion than by reason or experience.” In the stumbling search for a law to cure the evil drink, legislators seldom paused to inquire what drinks should be the main target of attack. To many earnest and sincere temperance workers, alcohol in any form was a vice. Beer containing 3.2% alcohol (ABW—alcohol by weight) was condemned indiscriminately along with whiskey having a content of 30–45% ABW. In most states, under the old regime, a single license permitted the sale of both beer and whiskey. As a result, they were commonly sold over the same counter and often the chief source of profit of the “beer saloon” was its sales of hard liquor.” (Toward Liquor Control by Fosdick & Scott The Center for Alcohol Policy, 2011b). Fosdick and Scott promoted 3.2% ABW beer as a non-intoxicating beverage and considered the availability of this alternative to divert customers from use of higher alcohol content beverages, primarily spirits. However, one can argue the State of Alabama treated the draft beer in the “beer saloon” to be the primary evil. Starting in 1828, the first “temperance” societies were formed in Alabama (Minutes of the South Alabama Presbytery, 1828). By 1835, the first “dry” Alabama municipality was created (LaGrange); however, the “temperance” movement in Alabama was unable to gain any widespread traction. During the 1850s, the national “temperance” movement had tremendous success in Northern and Midwestern states, with thirteen states passing state-wide prohibition laws. But Alabama political leaders and many citizens believed that “temperance” should not be legislated but managed on a personal basis. Governor Winston, after vetoing a couple of special acts to prohibit the sale of liquor

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_11

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near educational institutions, stated that Alabama needed to choose educators who did not “come from a land where prohibitory measures are deemed necessary to keep them sober.” (Seller, 1943). Based on the perceived close relationships between “temperance” and abolitionist movements in the Northern and Midwestern states, Alabamians tended not take an active public stand for legalizing “temperance.”. Alabama experienced significant and meaningful changes after the Civil War—stronger temperance movements and immigration and industrialization. Before the war, Southern temperance societies avoided national societies because they actively supported the abolition of slavery, but afterward local temperance movements were willing to be supported at a national level. The Women’s Christian Temperance Union (WCTU) came into Alabama in 1881. The Alabama WTCU first focused on the teaching of “temperance” within existing Sunday school programs. By the late 1880s, Alabama Baptist, Methodist, and Presbyterian churches had over 65,000 Sunday school students receiving some type of “temperance” training. Beginning in the early 1890s, the WCTU was successful in getting the Alabama Legislature to direct public schools to incorporate “temperance” education into the curriculum. In 1908, almost 400,000 public school students (white and black) were being taught the dangers of intemperance. The Alabama WCTU’s successful education efforts, however, did not translate into successful legislative efforts to mandate the prohibition of alcohol. While the Alabama Legislature was quite willing to create hundreds of special local option acts (prohibiting alcohol), they were not willing to support either a state-wide prohibition or state-wide county level local option law. In Alabama, even though the various “temperance” organizations and societies had hundreds of thousands of followers, their strength was diluted by distance between their rural communities and the lack of a state-wide political structure. In 1893, Rev. Howard Hyde Russell founded the Anti-Saloon League. Rev. Russell stated, “The Anti-Saloon League is formed for the purpose of administering political retribution,” and the League’s stated goal was to abolish alcohol from American life (http://www.smithsonianmag. com/history/wayne-b-wheeler-the-man-who-turned-off-thetaps-14783512/#AU3XmbCFCOkthkIm.99). Unlike other “temperance” groups, the Anti-Saloon League worked with the Democratic and Republican parties and relied heavily on the use of newspaper editorials and public demonstrations to persuade politicians to support the ASL or face defeat come election time. The Alabama Anti-Saloon League was formed in 1904 and quickly joined forces with the WCTU. By September 1906, the Alabama State Democratic Convention, with the guidance of the Anti-Saloon League, adopted a platform plank endorsing state-wide county level local option for alcohol control and had a nominee for Governor who was willing to make it a reality. Alabama “temperance”

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forces had been fighting for 54 years to pass a state-wide local option law. It only took 42 days of the 1907 Legislative session to gain the legal means to achieve state-wide prohibition through local option elections at the county level. By January 1, 1909, Alabama achieved state-wide alcohol prohibition, but Alabama was the 29th state to ratify the 18th Amendment on January 15, 1919, only one day before total ratification. After the American Civil War, Alabama experienced an influx of European immigrants and industrialization primarily iron and steel production in Birmingham. One example of immigration into Alabama was Johann Cullmann, originally from Bavaria, who had a vision of establishing a German community within Alabama. Colonel Cullmann proposed his idea to Governor Robert M. Patton and in 1871 successfully negotiated with the South–North Alabama Railroad (which became the Louisville and Nashville railroad) for a track of land that was almost 350,000 acres (about twice the area of Austin, Texas). Within four years of the first families locating to the new area, Cullman County met the population requirement of 9500 (1877) to achieve county status (https://cullmanal.gov/about/history/). To put that growth into perspective, the population of Alabama from 1860 to 1870 only grew by 32,791 persons. Around the turn of the century in south Alabama (Baldwin County), there was another influx of Europeans. “Italians settled in Daphne, Scandinavians in Silverhill, Germans in Elberta, Poles in Summerdale, Greeks in Malbis Plantation, and Bohemians in Robertsdale, Summerdale, and Silverhill.” (https://www.baldwincountyal.gov/community/about-baldwincounty/history-of-baldwin-county/historic-compilationscomprehensive-history). Driven by iron and steel production, Birmingham Alabama experienced tremendous population growth from 1870 to 1910 (0–132,685). Birmingham was founded June 1, 1871, and earned the name “The Magic City” because of its proximity to coal, limestone, and iron ore deposits to make steel and its rapid population growth. During this time, Birmingham breweries created various saloons that mirrored the tied house concept in Great Britain. These brewers would lease property and even finance license fees for saloon operators that would sell their draft beer. Saloon operators would offer “free” lunches to workers and only charge for the draft sales (https://www.al.com/bhammag/2015/ 09/birmingham_beer_a_heady_histor.html). The 1907 R. L. Polk City Directory for Birmingham listed over 115 “saloons,” and many of these saloons were densely packed in city blocks to meet the needs of the iron and steel workers. “No lady ever walked along the block on 20th Street, North between Third and Fourth Avenues,” wrote Birmingham Age-Herald reporter C. M. Stanley, “because of the drunks and saloons and beer kegs on the sidewalks she would have to pass.” (http://www. jeffcohistory.com/newsletter_July_14_pg1.html). Mobile Alabama, Alabama’s oldest city founded in 1702 was home to

Wet and Dry: The Alabama Beverage Control Act and the Prohibition of the Saloon

Bienville and Mobile Brewing. Mobile, as a port town, was home to over 105 “saloons” with many of these saloons were densely located along the wharves of the city. Montgomery Alabama was the state’s third-largest city and home to Capital Brewing & Ice Company. Montgomery boasted over 60 saloons to service the capital and legislature and its citizens. The cumulative population of these three cities and their counties represented 15% of the total Alabama population. By 1907, the State of Alabama had five state-of-the-art production breweries with ice-making and bottling capability producing over 113,000 barrels of beer (Annual report of the commissioner of internal revenue for the fiscal year ended, 1907). However, all the brewing and saloon operations would come to a complete stop on January 1, 1909, Alabama’s first state-wide prohibition (Fig. 1). During the 13-year experiment with National Prohibition, many previous supporters began to question the effectiveness and even the need for prohibition. Alabama law enforcement officials were spending a large amount of time and resources on the detection and elimination of the manufacturing of alcohol. In Birmingham alone, there were over 113,000 “dry” law convictions from 1917 to 1936 (Birmingham age, 1937). On July 18, 1933, Alabama held a state-wide referendum to approve the 21st Amendment (the repeal of the 18th Amendment) which was approved by 58.6% of the voters (Birmingham News, 1933). With the repeal of the 18th Amendment, the citizens of Alabama were more willing to go back to the previous local option rules regarding alcohol control. Entrepreneurs felt confident that change was coming as evidenced by the formation of Magic City Brewing Company of Birmingham Alabama on December 15, 1933 (http://arc-sos.state.al.us/ cgi/corpdetail.mbr/detail?corp=768395&page=name&file= &type=ALL&status=ALL&place=ALL&city=). During the 1934 Alabama gubernatorial campaign, two of the candidates explicitly stated that the legislature should legalize the sale of light wines and beer as a temporary measure and allow a state-wide referendum on the sale of hard (spirituous) liquor. In January 1935, the Alabama Legislature passed a referendum bill that presented three questions for the voters to determine on February 26, 1935. 1. Shall Alabama’s present laws against the manufacture, sale, and distribution of prohibited liquors be modified? 2. Shall the manufacture, sale, and distribution of beer (malt liquor) and wine (vinous liquors) be legalized in Alabama? 3. Shall the manufacture, sale, and distribution of hard liquors (spirituous) be legalized in Alabama under strict State regulation, but under no condition any saloons? (State of Alabama Acts, 1935)

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The Alabama Anti-Saloon League and the WCTU stepped up to rally against all three questions. With over 50 years of church and public school “temperance” training, the WCTU had children march in Montgomery with place cards asking “What Would Christ Do.” (Montgomery Advertiser, 1935). The outcome of the February 1935 referendum was that Questions One and Two were voted down by only 8000 state-wide votes and Question Three lost by only 12,000 votes. The three largest urban areas Birmingham, Mobile, and Montgomery voted overwhelming for modification with a 72% majority (Alabama Official and Statistical Register, 1935). In the summer of 1936, the Birmingham Restaurant Association proposed that the City of Birmingham repeal its ordinance against the sale of beer within the city limits, even though the sale of alcohol was illegal state-wide. On Election Day (August 18, 1936), the voters of Birmingham voted 11,099 for repeal versus 758 for the current prohibition law. The day after the election beer prices per bottle (once legal) in Birmingham fell from 25 to 20 cents and in some locations as low as 15 cents per bottle (Birmingham News, 1936). Clearly, the citizens of Birmingham had been openly transporting and selling bottled beer illegally from other states before the repeal and alcohol prohibition was merely an empty phrase. Governor Graves called for a special legislative session for November 1936. The special session created the “Alabama Beverage Control Act” (ABCA) which consisted of the creation of the current state-store system (retail outlets) with the Alabama Beverage Control Board (ABCB) and a state-wide local option referendum. The ABCB would be empowered to issue licenses and control all aspects of production and distribution of alcohol within the State of Alabama. Since 1937, the citizens of Alabama have had the ability to determine at a local level if their community would allow alcohol sales “wet” or not allow alcohol sales “dry.” However, the ABCA’s stated goal was “To promote temperance and suppress the evils of intemperance.” Section 10 of the Act stated “In order to protect the welfare, health, peace, temperance, and safety of the people of the State, and to prevent the return of the saloon atmosphere, there shall be no alcoholic beverages as defined herein sold in less than sealed packages and/or consumed by purchasers, except as hereinafter provided. There shall be no open saloons operated within this State.” Section 23 (C) of the Act stated, “No draft or Keg beer or Malt beverage sold or dispensed within Alabama.” From the Alabama legal viewpoint, “saloon” meant that a retail license had been issued to proprietor to sell alcoholic beverages for on-site consumption. For those in the “temperance” (prohibition) movement, the “saloon” was the primary source of individual moral decay and the destruction of civilization. Because of the moral power of

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Fig. 1 Places mentioned in chapter

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Wet and Dry: The Alabama Beverage Control Act and the Prohibition of the Saloon

the word “saloon” and the highly restrictive control of local governments, Alabama only allows for the sale of draft beer after numerous legal requirements have been met. Section 23 (c) of the Alabama Beverage Control Act contains the provision that “{t}here shall be no draft or keg beer or malt beverages sold or dispensed within this State.” However, there was one stated exception “{P}rovided, however, in rural communities with a predominant foreign population, after payment of the tax imposed by this Act, draft or keg beer may be sold or dispensed by special permit from the Board, when in the judgment of the Board, the use and consumption of draft or keg beer are in accordance with the habit and customs of the people of any such rural community.” The rural communities mentioned in the Act were Cullman and Baldwin counties, which had ties to foreign habits and customs. On March 10, 1937, all 67 Alabama counties voted in the referendum. Twenty-four counties consisting of more than half of Alabama’s population repealed the previous status with 43 counties voting to retain the previous laws regarding alcohol. Once again, the total county vote masked the closeness of the popular vote. The state-wide dry majority vote was less than 2500 or 50.6% (Birmingham age, 1937). Even though twenty-four counties had voted themselves the privilege of alcohol sales, only two counties—Baldwin and Cullman—had received the ABCB’s exception for draft consumption based on the habits and customs of the rural community. Those two counties accounted for less than 3.0% of the Alabama total population. Beer drinkers in the other twenty-two counties could only consume from bottles and cans. An additional economic impact of the ABCA and Section 23 (c) was the high entry barriers to potential Alabama beer manufacturers. This law meant that an Alabama start-up production brewery would need to immediately invest in more capital-intensive packaging lines (bottling or canning) to get their product to the local markets. The prohibition of draft sales was a barrier to entry that prevented Magic City Brewing Company of Birmingham from ever starting brewing operations even though they were in a “wet” county (Jefferson) with over 459,000 citizens—16% of Alabama’s total population. The first efforts to ease the draft beer restrictions started in the mid-1960s. In 1950, Wernher von Braun (formerly in charge of Germany's V-2 rocket program during WWII) transferred to Redstone Arsenal (Huntsville—Madison County) along with other members of “Operation Paperclip” (a U.S. intelligence program to transfer former German rocket scientists to the U.S. to continue America’s missile development efforts). Redstone Arsenal encompasses almost 8 square miles of land and has direct access to the Tennessee River, but it was Monte Sano Mountain that reminded von Braun and his team of their former homeland. Former Huntsville Mayor Joe Davis stated that “He (von Braun), being the leader of the German group, made Huntsville

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realize it was going to have to take on a cosmopolitan atmosphere, rather than a complacent Southern town.” (https://www.al.com/huntsville-times-business/2012/03/ wernher_von_braun_a_scientist.html). Marshall Space Flight Center (MSFC) began operations in 1960 with von Braun as Director. The Center was responsible for developing the heavy lift rockets necessary for the Apollo program. By 1965, MSFC was the home to over 7000 government employees along with another 7000 employees working as subcontractors to the Apollo program. Wernher von Braun had the economic and political power to encourage Alabama to relax its draft beer regulations for Madison County, Alabama. Alabama Act No. 136 Regular Session became law on July 9, 1965, and allowed for legal draft beer sales in the third county (out of 67) in Alabama. The next draft beer exception would take place with Alabama Act No. 133 Regular Session became law on July 23, 1971, to allow for legal draft beer sales in Sumter County, Alabama. At the time, Sumter had a population of 16,974 (about the seating capacity of Madison Square Garden) which was less than 0.5% of the total Alabama population. Sumter County is in the “Black Belt” region of Alabama which was known for its rich dark soil that supported cotton plantations before the American Civil War but became as Booker T Washington (President—Tuskegee University) quoted in 1901 “..Later, and especially since the war, the term seems to be used wholly in a political sense— that is, to designate the counties where the black people outnumber the white.” The third draft beer exception was for Marengo County on September 28, 1971. Marengo County is also in the “Black Belt” region but is better known as the location of the Vine and Olive Colony. The Vine and Olive Colony was a failed attempt to use French exiled military aristocrats loyal to Emperor Napoleon to establish a domestic wine-making industry in America. As of the 1970 U.S. Census, Marengo County, Alabama, represented approximately 0.6% of the total Alabama population, and this author has not been unable to determine the motivation for the draft beer waiver for either Sumter or Marengo counties. So, on September 28, 1971, only 8.3% of Alabama’s total population had legal access to draft beer. In 1970, William J Baxley was elected Attorney General for the State of Alabama. Baxley would become famous for reopening the 16th Street Baptist Church bombing case (Birmingham, AL Sunday, September 15, 1963) and achieving a successful prosecution of a Ku Klux Klan (KKK) member (1977). However, one of his very first cases (1972) was Baxley as Attorney General of the State of Alabama (Plaintiff) v. Frank V. Potts, as Chairman of the Alabama Alcoholic Beverage Control Board, George C Wallace, as Governor of the State of Alabama, Defendants.

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Baxley was suing the State to remove the restrictions set on draft beer in Section 23 (c) of the Alabama Beverage Control Act. Since the State of Alabama was suing itself, Attorney General v. ABCB and Governor of Alabama, the case was heard in U.S. Federal Court. At first, neither the ABCB nor the Governor “actively opposed the plaintiff’s complaint nor resisted the granting of his prayer for relief.” At this point, the Alabama Wholesale Beer Distributors approached Attorney General Baxley to drop the case, and once he declined to do so, they joined the case as defendant-intervenor (Phone interview with the Honorable William Baxley, 2016). The Alabama Wholesale Beer Distributors reached out to Champ Lyons Jr. to defend them in this suit. Champ Lyons Jr. would become an Associate Justice on the Alabama Supreme Court. However, in 1971, Baxley and Lyons had two things in common. Both gentlemen had known each other while attending the University of Alabama law school and both appreciated the drinking of draft beer during their law studies (Phone interview with the Honorable Champ Lyons Jr., 2016). The Attorney General made the argument that the Code deprived citizens of “wet” counties their right, privileges, and immunities under the equal protection clause of the fourteenth amendment to the United States Constitution. However, the court ruled “the plaintiff has neither shown his standing to maintain this action, nor has he borne the burden of establishing the unconstitutionality of the pertinent part” of the Alabama Code (Baxley v. Potts Civ., 1972). It seems odd that the Alabama Wholesale Beer Distributors would defend a law that restricts beer access to consumers. To better understand why it was rational behavior, one needs to know how the Three-Tier system for alcohol works. The Three Tiers are the producer (brewer), distributor, and the retailer. In a three-tier market, the brewer cannot move their product directly to the consumer (there are some limited exceptions) and they must use a distributor to access retail markets. Distribution of packaged products (cans and bottles) is easier and provides the distributor with the highest profit margin product to deliver to the retailer. The movement of draft (keg beer) entails some logistical issues which cut into profits—the need to deliver cold kegs and the collection and return of empty kegs to the brewer. By legally maintaining the status quo, the Alabama Wholesale Beer Distributors avoided any market-driven changes to their business operating model by successfully participating in the defense of this case. The historical dilemma for the Alabama Legislature has been the desire to collect alcohol revenue while trying to project a moral prohibitionist image to the general population. To help achieve this goal in 1973, the Legislature passed Alabama Act No. 642 “to authorize the Alabama Alcoholic Beverage Control Board in its discretion to grant to any civic center authority to which a liquor license has

R. White

been issued ‘a revocable permit to sell or dispense draft or keg beer or malt beverages.’” The cities of Birmingham (1970 population 300,000) and Montgomery (1970 population 133,000) were in the process of building large civic centers to attract conventions and host musical tours/events, based on Mobile’s (1970 population 190,000) successful civic center built in 1964. The ability to sell draft instead of packaged beer made more environmental and economic sense for the municipality running the center, and since draft beer sales were still illegal in all three of those counties (32.8% of Alabama’s total population), this Act would provide an exclusive benefit to the civic center. Finally, in 1980, the Alabama Legislature passed the Alabama Beverage Licensing Code (Alabama Act No. 80-529). For the first time, the Legislature attempted to create a unified Code to give the Alabama Alcohol Beverage Control Board clearly defined authority to address the issues of alcohol transactions in “wet” counties, licensing for manufacture, warehousing, import, wholesale, or retail sale of alcohol beverages, and prescribe penalties for violations. The maximum alcohol content for beer was 4% ABW. Unfortunately, this Act allowed the Legislature to maintain its moral prohibitionist image by abdicating their authority to a three-person board appointed by the governor. Instead of directly striking the line “No draft or Keg beer or Malt beverage sold or dispensed within Alabama” from Section 23 (c) of the Alabama Alcohol Control Act, the Legislature allowed for the process of local acts to allow “wet” counties to pursue legal draft sales within their county. The process starts with the representatives of the local government formally requesting their local State representatives to create a special act of the Legislature. This act, once written and approved by both chambers and signed by the Governor, would then allow the local community to hold a referendum vote on draft sales. If the referendum were unsuccessful, the special act would automatically terminate, requiring the process to be restarted. In 1984, local option (Wet/Dry) became available for municipalities with populations over 7000 citizens (State of Alabama Acts, No. 84-408). During these local option elections, six municipalities choose to legalize alcohol sales. These elections created the unique situation of “wet” cities in “dry” counties. However, after the original elections in 1984, there was no significant conversion of “dry” municipalities for another 26 years. As of year-end 2022, there are 69 “wet” municipalities in 24 “dry” counties, and each of those “wet” areas would need to use the process defined in the Keg Beer Law of 1980 to remove the prohibition of draft beer sales (Fig. 2). The original intent for the prohibition of draft beer sales was public safety tied to the image of the “beer saloon” with whiskey as the primary profit generator. By granting draft exceptions to Cullman and Baldwin counties, the legislators

Wet and Dry: The Alabama Beverage Control Act and the Prohibition of the Saloon

Fig. 2 Wet and dry administrative boundaries

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did not trust native Alabamians to consume draft responsibly yet there were no restrictions on packaged beers. By the mid-1960s the public safety aspect of draft prohibition moved to the protection of special interest—Wholesale Beer Distribution. Since beer can be accessed in a packaged format and there is a legal process to legalize draft sales, it is highly unlikely that any politician or group would be willing to invest their political capital for either the additional conversion of “dry” to “wet” counties or the removal of “No draft or Keg beer or Malt beverage sold or dispensed within Alabama” from Section 23 (c) of the Alabama Alcohol Control Act.

References Annual report of the commissioner of internal revenue for the fiscal year ended June 30 1907 Washington Government Printing Office, Washington D.C. Alabama Secretary of State Business Entity Records. http://arc-sos. state.al.us/cgi/corpdetail.mbr/detail?corp=768395&page=name&file =&type=ALL&status=ALL&place=ALL&city= Alabama Official and Statistical Register. (1935), 763–764. Birmingham beer: A heady history of brewing in the Magic City. https://www.al.com/bhammag/2015/09/birmingham_beer_a_heady _histor.html Bars Were Plentiful When Birmingham Was a Rough and Ready Town by Jim Bennett. http://www.jeffcohistory.com/newsletter_July_14_ pg1.html Birmingham age—Herald, February 23, 1937. Birmingham age—Herald, March 13, 1937. Birmingham News, July 19, 1933. Birmingham News, August 19, 1936. Baxley v. Potts Civ. A No 3442-N. 337 F Supp. 7 (1972).

R. White Comprehensive History. https://www.baldwincountyal.gov/commu nity/about-baldwin-county/history-of-baldwin-county/historic-com pilations-comprehensive-history History of Cullman, Alabama. https://cullmanal.gov/about/history/ Montgomery Advertiser, February 23, 1935. Minutes of the South Alabama Presbytery—April 3, 1828. Phone interview with the Honorable William Baxley, September 27, 2016. Phone interview with the Honorable Champ Lyons Jr., September 27, 2016. State of Alabama Acts 1935, Regular Session 5-6. State of Alabama Acts, No. 84-408. Seller, J. (1943). The prohibition movement in Alabama. 1702 to 1943. University of North Carolina Press. Toward Liquor Control by Fosdick & Scott The Center for Alcohol Policy. (2011a) (p. 10). Toward Liquor Control by Fosdick & Scott The Center for Alcohol Policy. (2011b) (p. 19). von Braun, W. A scientist who wanted a city overflowing with cultural opportunities. https://www.al.com/huntsville-times-business/2012/ 03/wernher_von_braun_a_scientist.html Wheeler, W. B. The man who turned off the taps. Smithsonian Magazine. http://www.smithsonianmag.com/history/wayne-b-whee ler-the-man-who-turned-off-the-taps-14783512/#AU3XmbCFCOk thkIm.99

Richard White is a graduate of the University of Mississippi with an M.B. A. and a B.B.A. in Managerial Finance. He has taught Finance and Economics at the University level since 1988. Since 2012, he has immersed himself in the craft beer industry in the Southeastern United States. Along with writing about the history of beer in the Southeast, Richard has prepared presentations on bottling for Auburn University’s Graduate Certificate program in Brewing Science and Operations and has operated two contract mobile bottling service companies.

Politics, Geography, and the Three-Tier System Jeff Dense

Abstract

Introduction

The primary structural challenge to the success of the beer industry in the United States is the three-tier system. A legacy policy arising out of 1930s Prohibition, the three-tier system, consisting of producers, distributors, and retailers, presents stern spatial impediments to the ability of the craft beer industry to formulate creative sales solutions and hence maximize profits. Despite this, several policy innovations in Oregon have ‘chipped away’ at the rigor of the three-tier system. In particular, state-level policy changes in direct-to-consumer sales, along with self-distribution laws and breweries as points of sales, provide hope for the industry. This chapter analyzes the geographic diversity along with recent legal challenges to the three-tier system. An overview of the political underpinnings of the three-tier system-campaign contributions by industry stakeholders are presented. The chapter concludes with a call for a more interdisciplinary research agenda on the three-tier system, utilizing theories of policy diffusion and political geography to better understand the cross-jurisdictional influences on the beer industry in the United States. Keywords














Three-tier system Craft beer policy Geography and beer Beer regulation Direct-to-consumer Self-distribution Law and beer Policy diffusion

J. Dense (&) Eastern Oregon University, La Grande, OR, USA e-mail: [email protected]

The three-tier system of alcohol regulation is the primary structural characteristic affecting the success of the beer industry in the United States. While there exists a symbiotic relationship between the central and state government’s regulatory role in our federalist system, it can be argued state government controls the reins of the beer industry via the three-tier system. Beer is politics (Saunders & Holland, 2018). Facets of three-tier system’s politics and policies vary widely across state lines, including franchise laws, vertical integration, and levels of taxation (Martinez-Gouhier & Petersen, 2018). Direct-to-consumer (DTC) sales and the ability for breweries to self-distribute their products are subject to significant spatial barriers depending on jurisdiction. The three-tier system has recently been subjected to a series of policy innovations and legal challenges. In order to understand the geographic, political, policy, and legal implications confronting the future of this policy regime, an evaluation of the three-tier system is called for. The three-tier system embraces a state-level regulatory structure governing the relationship between manufacturers, wholesalers, and retailers of alcoholic products. However, this tripartite classificatory scheme is a gross simplification of the nuances of the beer industry, particularly its craft beer element. There are significant and fundamental differences between a microbrewery, brewpub, taproom brewery, regional brewery, and contract brewing company, not only with regard to production limits but also how each brewery category is regulated under the three-tier system. While it would be easy to aggregate the political, policy, and legal implications of the three-tier system under one overarching umbrella, the reality is that there is significant difference in how the three-tier system affects the craft beer industry from one geographic location to another. The Twenty-First Amendment of the United States Constitution directly contributed to the creation of the three-tier system of alcohol regulation in the United States.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_12

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The Twenty-First Amendment, which repealed the prohibition provisions of the Eighteenth Amendment, serves as a historical anomaly with regard to the constitutional amendment process. Introduced by Congressman Henry Rainey (D-IL) as House Joint Resolution (H.J. Res.) 480 during the 71st session of Congress (1931–33), the measure failed to garner the necessary two-thirds vote to pass the House as a constitutional amendment. Two months later, the Senate debated a similar resolution which also failed to garner initial approval. Subsequently, Section Two of the House version, which required the creation of state conventions to consider the amendment, was inserted into the Senate version of the bill, and it passed the next day. On December 5, 1933—exactly one year after H.J. Res. 480 was introduced in the House—Utah became the 36th of 48 states to ratify the Twenty-first Amendment. President Franklin D. Roosevelt immediately proclaimed the Eighteenth Amendment repealed. This incident is particularly noteworthy as this is the first and only instance of the utilization of an alternative amendment ratification process. Previously, all constitutional amendments had been subject to a two-thirds vote of the House of Representative and Senate, and subsequent ratification by three-fourths of state legislatures. Empowering the states to determine the fate of prohibition gave the measure the support it needed to pass in both chambers (United States House of Representatives). Moreover, this procedural deviation served as the impetus for the creation of the three-tier system as states, buttressed by the ‘health, safety, and welfare’ provisions of the Tenth Amendment, serve as the primary regulatory body for the control of the production, distribution, and sale of alcohol. This chapter will examine the myriad of policy consequences of the three-tier system of beer regulation in the United States. Geographic, political, and legal elements of the current three-tier system are highlighted. After an overview of research on the three-tier system, several key structural components which significantly vary by jurisdiction, direct-to-consumer (DTC) sales, and the ability of breweries to self-distribute, are discussed. ‘Best practices’ from Oregon are explored and may be generalizable to other jurisdictions. The chapter examines recent legal challenges and political advocacy efforts which have the potential to significantly impact, or sustain the three-tier system. The chapter concludes with a call for an interdisciplinary research effort on the three-tier system.

Literature Review General overviews of research efforts exploring craft beer policy provide a starting point for the examination of the three-tier system. Miller (2019) provides an effective historical overview of craft beer regulation in the United States

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while providing several insightful policy recommendations related to franchise laws and excise tax rates which sit at the fulcrum of the three-tier system. Gohmann and Smith (2020) examine restrictions on the Sunday sales of alcohol, i.e., ‘Blue Laws,’ and find significant room for improvement in the three-tier system, noting deeper reform remains elusive. Burgdorf (2021) find that beer franchise laws significantly reduced craft brewery entry and growth, leading to lower levels of breweries and craft beer production, with the effects largest in states that place restrictions on brewery/wholesaler integration. Elzinga and McGlothlin (2022) also examine the consolidation issue, finding large negative effects on product variety, and increasing difficulty for craft brewers to gain shelf space in post-acquisition markets. Pellegrin (2019) scrutinizes Texas burgeoning craft beer industry, asserting the state’s legal framework favors beer distributors while limiting growth and investment in the craft beer industry. Pellegrin’s discussion of the territorial rights underlying distribution agreements highlights the spatial aspects of craft beer regulation under the three-tier system. Thornley (2021) argues that the three-tier system and beer franchise laws are anti-competitive and should be repealed. Linking a consideration of the geographic and legal aspects of the three-tier system is a necessity for developing an understanding of the future implications of this widespread public policy. Any research effort examining the three-term system must recognize a myriad of policy consequences, especially its cross-jurisdictional spatial dimensions. A consideration of the geographical implications of the three-tier system holds significant promise in advancing knowledge concerning this alcohol control policy. Jordan and Jaffee (1987) note the presence of a solitary distributor in a geographic region which inhibits high-quality service found in more competitive regions, adversely effecting both retailers and brewers. Staples et al. (2020) examine the economic geography of beer regulations. They find that there are on average over 10,000 state regulations involving beer supply and supply chains, with an additional 115,000 federal regulations simultaneously overlaying this complex state regulatory structure, highlighting the geographic diversity of beer regulations across interstate value chains. Techo (2021) focuses on the spatial connection between neo-localism, tourism, and craft beer clusters in case studies of Birmingham, AL, Asheville, NC, and Denver, CO. Techo asserts a general trend of increased regulations which generally leads to fewer breweries, a finding which may have strident implications on the geographic location of new breweries. The weighty impact of geography on the three-tier system, and beer policy in general, is a subject worth further exploration. The cross-jurisdictional aspects of craft beer regulation are the focus of self-distribution provisions of the three-tier system. A number of these research efforts examine the three-tier system’s political and legalistic underpinnings,

Politics, Geography, and the Three-Tier System

with several authors focused on cross-jurisdictional case studies to demonstrate the fluctuating application of the three-tier system by geographic locale. In a comparative overview of United States and European Union craft beer regulations, Lam (2014) asserts that lobbying-based initiatives by large wholesalers and retailers all but ensure that the three-tier system is here to stay. Codog (2019) raises the specter of antitrust challenges preventing further consolidation in the craft beer industry. Recent mergers within the craft brewery and beer wholesaler industry sectors, two of the primary participants in the three-tier system, have arguably made entry more difficult for new entrants into the craft beer market. Irrespective of the longevity of the three-tier system, its continual evolution has strident implications for the future of the beer industry in the United States. A major thrust of legal-oriented research efforts examining the three-tier system focus on the implications of the Supreme Court’s Granholm v. Heald decision (2005). The Granholm decision struck down Michigan and New York’s prohibition of direct-to-consumer wine sales by out-of-state wineries as a violation of the Commerce Clause of the Constitution. Granholm has had a significant impact on the three-tier system far beyond its apparent wine-only focus. Elias (2016) finds the three-tier system that maintains its widespread legal vitality in the aftermath of Granholm, though noting how e-commerce and internet sales have significantly changed the regulation of interstate alcohol sales. Croxall (2022) examines the ongoing tension between the Dormant Commerce Clause and the 21st Amendment in the aftermath of the Supreme Court’s decision in Granholm. The Dormant Commerce Clause refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce (Legal Information Institute), a policy provision with strident geopolitical implications. The intersection of these two constitutional provisions and a revisiting of the Court’s 5-4 Granholm decision appears to be the fulcrum for future legal challenges to the three-tier system, demonstrating the ongoing tension between wholesalers, beer producers, and consumers attributable to the vagaries of the three-tier system.

Self-distribution One of the most important spatial facets of the three-tier system affecting craft breweries, especially upstarts, is a self-distribution sales strategy. Self-distribution allows breweries to improve profit margins by cutting out the middleman, i.e., beer wholesaler. However, self-distribution requires a significant up-front capital investment in sales force, equipment, and transportation (Encompass). Thirty-six states provide breweries the option to self-distribute within

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their state (Sovos, 2022b). Despite its widespread practice, the scope and implications of self-distribution laws vary widely by jurisdiction. Breweries choosing to self-distribute are often constrained to a maximum production level. In several states, the law allows breweries to self-distribute to retail accounts subject to geographic restrictions linked to state franchise laws (i.e., a distribution agreement with a recognized wholesaler for a particular territory). The decision by a brewery to either self-distribute or sign a distribution agreement with a licensed wholesaler has long-term implications on the ‘bottom line’ of a brewery (Croxall, 2021) (Fig. 1). Despite its widespread practice, the research findings regarding the impact of self-distribution by breweries are mixed. Given the increasing environmental ethos of the beer industry, the ‘footprint’ attributed to self-distribution should not be ignored. Bahl et al. (2021) attempt to place brewery self-distribution within the context of a holistic review of the craft beer supply chain, raising issues of the long-term sustainability of this beer sales strategy. Malone and Lusk (2016) found allowing breweries to sell beers on-premises as well as allowing for breweries to self-distribute have a statistically significant positive relationship with the number of microbreweries, brewpubs, and breweries. However, self-distribution raises the cost of market entry by requiring new breweries to comply with industry standards and pay a series of fees to obtain the necessary licenses. Given these added costs, new breweries may have lower levels of experimentation (Schiller, 2013). Given recent changes to the (craft) beer landscape, and self-distribution’s spatial impact on the three-tier system, a replication of these studies focused on the impact of brewery self-distribution is warranted. Given the significant variation in self-distribution laws from state-to-state, innovative strategies employed by breweries can be perceived as ‘best practices’ worthy of adoption in other jurisdictions. One such self-distribution innovation has been undertaken by Block 15 Brewing, a craft beer producer located in Corvallis, OR. Block 15, an adherent to the self-distribution model since inception, subsequently created its own distribution company, Block 15 Distribution, in 2020. Founder and Co-Owner Nick Arzner stated We landed on a model that is designed to enable the passionate small and medium-sized producer, with aspirations of moderate growth, to share their artistic offerings throughout Oregon and Washington. All aspects of our approach to distribution—from our fixed length contracts to our overarching mission—will focus on equitable relationships with our partners. As our brewery has developed a robust self-distribution program over the years, we have prioritized efficiency, impeccable care for the product, and enthusiastic relationships with our accounts. We will draw on these same values as we champion the artistic visions of our partner producers. (Block 15 Distribution)

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Fig. 1 Self-distribution map

Block 15 Distribution’s current product portfolio includes de Garde Brewing of Tillamook, OR, and Ale Apothecary of Bend, OR, two of the country’s leading wild ale producers (Block 15). This partnership has allowed expanded access to the retail market for these craft beer producers who otherwise would be tethered to one of Oregon’s beer wholesalers. Block 15 Distributing’s footprint runs across Oregon and, moreover, Washington, which allows Oregon breweries to self-distribute within its borders. This spatial policy is a bone of contention for Washington-based breweries who are not afforded the same cross-border self-distribution privileges in Oregon. Breweries transitioning from the self-distribution model to establishing their own distribution company may provide a stern challenge to the existing three-tier system. Another innovative Oregon-based craft beer (self-)distribution strategy has been undertaken by Day One Distributing who has leveraged a loophole in Oregon regulations that allow out-of-state breweries to temporarily access the Oregon market for 30 days at a time as long as they are distributed by a licensed wholesaler. Day One Distributing, while serving as the regular distributor for several Oregon breweries including Great Notion Brewing

of Portland, OR, also serves as the distribution gateway for a number of non-Oregon breweries, including Cloudburst Brewing of Seattle, WA, Maine Beer Company of Freeport, ME, and The Alchemist Brewery of Stowe, VT (Day One Distributing). This distribution initiative has benefited Oregon consumers who would otherwise have to travel long distances to obtain these highly desirable craft beers. Moreover, this spatial distribution strategy has allowed out-of-state craft breweries to avoid linking their long-term financial success to the prevailing beer wholesaler sales model. The Block 15 and Day One distribution ‘experiments’ may have significant long-term repercussions on the three-tier system far beyond their Oregon genesis.

Direct-to-Consumers In comparison with the relatively widespread ability of breweries to self-distribute their products, there is a relative paucity of states that allow direct-to-consumer (DTC) beer sales. Only 11 states (Alaska, Kentucky, Nebraska, New Hampshire, North Dakota, Ohio, Oregon, Pennsylvania,

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Rhode Island, Vermont, and Virginia) currently allow DTC sales of beer. It is important to note that existing data sources focusing on providing information concerning DTC sales of beer are focused on interstate sales, not intrastate sales. There is broad variation on state requirements for DTC sales of beer. The majority of the above states require a direct sales permit or license to engage in DTC sales. Several states have limits on how much beer can be delivered to a consumer ranging from no more than 192 oz of beer per customer per month (Pennsylvania) to 36 gallons per individual per month (Vermont). With the exception of Oregon, sales tax must be paid to the state to which the beer is shipped. All states require the payment of excise taxes on the DTC beer (Sovos, 2022a). The issue of direct-to-consumer sales appears to have significant room for spatial growth with regard to the number of states permitting this beer sales strategy. While a relative paucity of states allows DTC beer sales, 47 states permit DTC wine sales. Beer markets have continued to consolidate, threatening market access and

Fig. 2 Direct-to-consumers map

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squeezing out small brewers. DTC sales are a viable and proven option, critical for brewers, consumers, and the future of the craft beer industry (Sovos, 2023). The wide spatial variation in direct-to-consumer sales regulations highlights the varied, and complex, nature of the three-tier system and its relationship to the beer industry. Irrespective of the spatial impact of DTC, a timely application of direct-to-consumer sales of beer has manifested itself within intrastate commerce. The Covid-19 pandemic required breweries to pivot into new sales channels in order to financially survive. With brewery taprooms, bars, and restaurants being closed to the public, innovative sales strategies were called for. A number of policy initiatives were implemented during the pandemic in Oregon in order to protect the state’s prolific brewing industry. Beer delivered by the brewery to consumers, drive-through sales at the brewery, and heretofore draft-only breweries pivoting to canning product for the retail market were some of the strategies employed by Oregon breweries. While information

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on these direct-to-consumer sales variants is not widely available, it is safe to assume a number of states permitted such practices. In the aftermath of the Covid-19 pandemic, there has been a proliferation of breweries engaged in intrastate direct-to-consumer beer sales, a trend that should be explored in the future by beer researchers (Fig. 2). Given the three-tier system’s overarching reach over all alcohol products, the differences in direct-to-consumer sales of beer versus wine and spirits must be acknowledged. Unlike the paucity of states allowing DTC interstate sales of beer, the majority of states have statutory provisions that allow for out-of-state manufacturers to ship alcoholic beverages directly to consumers. Conversely, the majority of states restrict the direct shipments to wine (Morton, 2020). The variation in direct-to-consumer practice between beverage types highlights the disparate regulatory treatment received by the individual industries in the states (Cole, 2021). There exists a number of rationales for this deviation between beer, wine, and spirits. It is conceivable states are engaging in protectionist practice to shelter alcohol and wine distributors and producers located within their jurisdiction (Ellig, 2019). Another plausible explanation is rooted in the existence of the control state system where government is an active market participant, selling alcoholic beverages at wholesale and/or retail levels within its borders. Control jurisdictions typically sell spirits at the wholesale level; however, in some cases, jurisdictions may also sell wine and beer. In the United States, there are 17 states that operate under the control model, including Oregon (Virginia Alcohol Beverage Control Authority, 2022). Indeed, there are significantly more jurisdictions operating under the ‘government as market participant’ control state model than allowing DTC interstate sales of beer. Given these differential policy structures, it is not surprising that the three-tier system has recently come under legal attack.

Recent Legal Challenges Given the wide range of three-tier related policy differences, future legal changes have the potential to alter the alcohol regulatory structure in a number of states. A recently filed lawsuit by three Washington state located breweries, Garden Path Fermentation LLC v. Oregon (2022), challenged Oregon’s prohibition against out-of-state breweries selfdistributing beer directly to retailers and consumers. Garden Path Fermentation of Burlington, WA, Mirage Beer of Seattle, WA, and Fortside Brewing of Vancouver, WA collectively brought a lawsuit in federal district court seeking to change Oregon’s beer self-distribution laws. Under existing law, Washington breweries needed to utilize a licensed Oregon-based distributor to sell their product to both retailers and direct-to-consumers as they are not

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allowed to self-distribute in Oregon. The Washington breweries alleged this policy amounted to unlawful discrimination. The plaintiff breweries argued ‘Oregon laws, rules, and practices that: (a) allow in-state beer producers to sell, deliver, and ship beer directly to consumers but prohibit out-of-state beer producers in Washington from doing so; and (b) allow in-state beer producers to self-distribute directly to Oregon full on-premises, limited on-premises, and off-premises sales licensees and other OLCC-licensed retail establishments but prohibit out-of-state breweries from doing so’ violate the Commerce Clause of the United States Constitution (Garden Path Fermentation v. Oregon, 2022). The plaintiffs indicated that they were reliant on the precedent elucidated in Granholm v. Heald (2005) to support their argument. In Granholm, the US Supreme Court determined Michigan and New York state laws which permitted in-state wineries to sell wine direct-to-consumers while restricting out-of-state wineries’ ability to do so violated the ‘dormant’ Commerce Clause of the US Constitution. The Supreme Court, in a 5-4 opinion authored by Justice Antonin Kennedy, found that the Michigan and New York laws discriminated against interstate commerce and, moreover, this discrimination was not authorized by the 21st Amendment’s Section Two which states ‘The transportation or importation into any state, territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.’ Justice Kennedy’s majority opinion asserts that ‘the Twenty-first Amendment does not supersede other provisions of the Constitution and, in particular, does not displace the rule that States may not give a discriminatory preference to their own producers (Granholm, 2005).’ The majority opinion in Granholm articulates the standard that state laws that violate other provisions of the Constitution are not trumped by the provisions of the 21st Amendment as per the Court’s previous decision in 44 Liquormart Inc v. Rhode Island (1996). Granholm stands for the proposition that a state cannot discriminate against out-of-state sellers unless it has evidence that the discrimination, and accomplishes a clear public purpose that cannot be accomplished through less restrictive means. The Supreme Court has sent a clear signal that the 21st Amendment does not ‘trump’ the Commerce Clause (Walsh, 2019). In lieu of time-consuming and costly litigation, the Oregon Liquor and Cannabis Commission (OLCC) recently decide to settle this lawsuit. The settlement will allow out-of-state brewers to self-distribute to Oregon retailers. However, the settlement does not allow for direct-to-consumer shipping from breweries in other states that do not allow the same privilege to Oregon breweries. The settlement will expire in 5 years or shorter if the Oregon legislature enacts legislation which makes the settlement moot (Johnson-Greenough, 2023). The settlement came in the aftermath of recent

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disclosures that some OLCC leaders had set aside rare and hard to find liquor bottles, which resulted in a subsequent change of leadership at the agency (Oregon Liquor and Cannabis Commission, 2023). These recent developments highlight the symbiotic relationship between the liquor and beer industries, a central facet of alcohol regulation in control states, an important facet of the three-tier system. Given the result of the legal case brought by the three Washington breweries against Oregon, it is reasonable to expect similar lawsuits may arise in other jurisdictions, with clarity only arising by the Supreme Court revisiting their 5-4 decision in Granholm. Given recent changes in composition toward a ‘state-friendly’ majority, it will be interesting to see how the Court ultimately resolve this controversy. Future changes to the three-tier system and the spatial aspects of the beer industry may center on the ability of stakeholders to influence policy change via the country’s legal system and, moreover, the legislative branch.

Beer, Campaign Finance, and the Three-Tier System The preceding discussion of the primary structural characteristics and recent legal challenges to the three-tier system aptly demonstrates the geographic effects of this pervasive regulatory policy. However, this analytical approach fails to identify the causes for the longevity of this regulatory framework. In order to understand the spatial consequences of the three-tier system, it is imperative to examine its political dynamics. An examination of the fiscal impact of the beer industry on elections is called for. There has been a recent series of modifications to campaign finance regulation that have expanded the beer industry’s influence on federal elections. The Supreme Court’s 5-4 decision in Citizens United v. Federal Election Commission (2010) opened the door for a dramatic increase in campaign expenditures. Citizens United held, due to free speech provisions of the First Amendment, government was restricting from limiting campaign contributions by corporations, trade associations, and labor unions. Citizens United led to the proliferation of unregulated ‘dark money’ and a dramatic rise in the overall cost of American elections. The 2008 election cycle, the last before the Citizens United decision, had a total cost of $5.29 billion. In comparison, the 2020 election cycle’s total cost climbed to $14.4 billion (Center for Responsive Politics-1, 2022). While ‘dark money’ continues to cast a considerable pall over electoral politics, an examination of regulated ‘hard money’ reveals the significant impact of the beer industry on the electoral process and its subsequent impact on the three-tier system. Arising out of the Watergate scandal, federal election law was reformed in the 1970s to allow for the creation of Political Action Committees (PACs).

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PAC contributions to candidates are ‘hard money’ and tightly regulated. The strict reporting requirements for PACs make an assessment of the role of ‘hard money’ contributions by the beer industry, a venue for garnering insights into the political underpinnings of the three-tier system. One of the most influential PACs and leading beer industry advocates as measured by total ‘hard money’ contributions to candidates for federal office is the National Beer Wholesalers Association PAC (NBWAPAC). The largest PAC within the licensed beverage industry under the auspices of the three-tier system, NBWAPAC, is regularly one of the largest contributing PACs to federal candidates. NBWAPAC has been the second-largest contributing PAC every election cycle since 2012, trailing only the National Realtors Association PAC (Center for Responsive Politics-2, 2022). NBWAPAC contributed over $4.28 million in ‘hard money’ to federal candidates during the 2021–2022 election cycle. NBWAPAC contributions were disbursed evenly between Democrat (49%) and Republican (51%) candidates. The vast majority of NBWAPAC campaign contributions (93.8%) were directed at incumbent candidates (Center for Responsive Politics-3, 2022). Given beer wholesalers financial self-interest in maintaining the status quo, campaign contributions by NBWAPA serve to prevent legislative changes to the three-tier system from originating at the federal level. An evaluation of the role of beer industry advocacy groups on state-level elections further illuminates the connection between politics and beer. Similar to NBWAPAC, the Oregon Beverage PAC represents the interests of beer wholesalers in the electoral process. Administered by Romain Freeze, a lobbying firm, Oregon Beverage PAC made reported cash and in-kind contributions of $0.36 million to state-level candidates for office in Oregon during the 2021–2022 election cycle. Oregon Beverage PAC continues to make contributions to candidate committees after the conclusion of the election, either to retire campaign debt or fund future reelection efforts. Governor Tina Kotek recently received a $10,000 contribution from Oregon Beverage PAC (Oregon Secretary of State, 2023). The political advocacy efforts by beer wholesalers within the state electoral process may be one of the primary causes for the continued longevity of the three-tier system and should be the subject of study in other jurisdictions.

Theory, Interdisciplinary Research, and the Future of the Three-Tier System One of the primary shortcomings of previous research efforts exploring the three-tier system has been a lack of theory aiding in explaining the prevalence of this policy phenomenon. A most promising theoretical construct which

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should be explored as an explanation for the who/what/when/where/why of the three-tier system is the theory of policy diffusion. This body of theory holds significant promise in explaining how public policies are spread from one jurisdiction to the next. Building on the seminal research of Walker (1969), policy diffusion theory has proven to be a valid construct in explaining a range of ‘vice’ policies, including state lotteries (Berry & Berry, 1990) and anti-smoking laws (Gilardi et al., 2021). Given the impact of the three-tier system on the beer industry, a research effort exploring the vitality of theories of policy diffusion to this policy regime is called for. Policy diffusion is defined as one government’s policy choices being influenced by the choices of other governments. The theory assumes that governments’ decisions constitute a strategic game in which governments are influenced by their neighbors (Baybeck et al., 2011). Policy diffusion can aid in explaining how government can innovate by adopting policies numerous other jurisdictions that had previously embraced. Diffusion models are inherently intergovernmental, viewing state adoption of policies as emulations of previous adoptions by other states (Berry & Berry, 2018). Theories of policy diffusion are focused on external events, as states learn from one another as they ‘borrow’ policy innovations perceived to be successfully employed by other jurisdictions. Under the policy diffusion model, there is significant policy learning, and borrowing, from other jurisdictions. Given the nuanced spatial differences of the three-tier system, policy diffusion may aid in explaining future changes to this regulatory framework of the beer industry in the United States. Shipan and Volten (2012) have provided a list of seven ‘lessons’ gleaned from previous applications of policy diffusion theory, several of which have overt geographic implications. (1) Policy diffusion is not (merely) the geographic clustering of similar policies. (2) Governments compete with one another. (3) Governments learn from each other. (4) Policy diffusion is not always beneficial. (5) Politics and government capabilities are important to diffusion. (6) Policy diffusion depends on the policies themselves. (7) Decentralization is crucial for policy diffusion. DellaVigna and Kim (2022) found geographic influences in policy diffusion decay over time, and political polarization has risen as a key variable explains the spread of policies across jurisdictions. Given the cross-jurisdictional element of theories of policy diffusion, its application to the study of the three-tier system holds significant promise for a wide range of academic disciplines, including geography, political science, and public policy. A significant facet of the allure of theories of policy diffusion is its explicit recognition of the impact of geography in understanding the political, policy, and legal implications of the three-tier system. Given its demonstrated

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spatial and political implications, an interdisciplinary approach to the study of the three-tier system is called for. There are many geographies of beer, each with its own story to be told (Patterson & Hoalst-Pullen, 2014). Several geographic subfields may logically contribute to the interdisciplinary study of beer. Applied geography can be conceptualized as the deployment of geographic concepts or spatial themes to address real world problems like the three-tier system (Gatrell et al., 2018). Regional geography holds promise in studying the beer industry, though it has been argued the region floats away when one tries to grasp it, and disappears when one looks directly at it and tries to focus (Minshull, 2017). The subdiscipline of political geography combines aspects of both the political and geographic to study how political power is created, maintained, and exerted over geographic space. Political geography is inherently interdisciplinary in its subject matter, theoretical perspectives, and modes of analysis (Webster, 2006). Increased attention is now being given by geographers to the spatiality inherent in the modern state system of competitive state sovereignties, as evidenced by the nuanced differences of the three-tier system (Agnew & Muscara, 2012). Electoral geography examines the spatial patterns associated with ballots for and against candidates or issues as well as the geographic implications of resulting policy (Webster, 2006). Electoral geography could be employed to examine campaign contributions by beer industry interests' intent on perpetuating the current three-tier system. While the primary thrust to date of electoral geography has been the spatial analysis of voting, the utilization of this geographic subfield to the study of the three-tier system could be applied to the geography of campaign contributions. Despite the significant contributions geographers have made to the study of beer, geographic knowledge does not consist of transparent and value-free truths in the way that have been assumed in the past. Like all knowledge, it is the product of particular social and political contexts, and as such it advances certain interests, often at the expense of others (Painter & Jeffrey, 2009). Breweries operating within the confines of the three-tier system can be considered geographical agents that both respond to and enact cultural and environmental change (Myles et al., 2023). Unfortunately, the ‘siloing’ of academic disciplines remains an ever-present impediment to research which cuts across academic disciplines. Contradictory disciplinary conceptualizations of space bedevil cross-disciplinary initiatives (Johnston, 2019). Moreover, institutional tenure and promotion policies which do not adequately value multiple-authored research articles or publishing across disciplinary lines may impede a future interdisciplinary research effort. Despite this ongoing tension, a number of sub-disciplines of geography hold considerable promise in exploring cross-disciplinary theoretical explanations of the three-tier system.

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Despite the longevity of the three-tier system, beer regulation in the United States continues to evolve. There is still much to be learned from studying the three-tier system. In particular, further exploration of the political, policy, and legal aspects of the three-tier system is warranted. In order to best understand the myriad of consequences linked to this policy regime, researchers from a wide array of academic disciplines and beyond should continue to investigate the myriad of real-world consequences of the three-tier system. While there has been a spate of research examining this policy phenomenon, there exist a number of future interdisciplinary research opportunities in need of being explored. Campaign contributions by the beer industry on state-level elections and its subsequent effect (or lack thereof) should be further explored. The impact of legal challenges to the three-tier system such as that currently occurring in Oregon and their potential effect on other jurisdictions must be better understood. Policy diffusion can aid policymakers in better understanding how ‘best practices’ derived from another jurisdiction can be successfully applied to the three-tier system in another state. Despite the longevity of the three-tier system, there is still much to be learned about this policy regime, and its impact on the success of the beer industry in the United States. There is much promise in future research partnering the disciplines of political science and geography to the three-tier system, and moreover, the study of beer.

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155 Center for Responsive Politics-3. (2022). PAC profile. National Beer Wholesalers Association. https://www.opensecrets.org/politicalaction-committees-pacs/national-beer-wholesalers-assn/C00144766/ summary/2022 Codog, A. (2019). The antitrust roadblock: Preventing consolidation of the craft beer market. The University of the Pacific Law Review, 50, 403–426. Cole, G. (2021). States where breweries, distilleries, retailers and wineries can ship DTC. https://www.avalara.com/blog/en/northamerica/2020/08/states-where-breweries-distilleries-retailers-andwineries-can-ship-dtc.html Croxall, D. (2021). Independent craft breweries struggle under distribution laws that create a power imbalance in favor of wholesalers. 12 WM. & Mary Business Law Review, 12, 401–432. Croxall, D. J. (2022). Delirium of disorder: Tension between the dormant commerce clause and the twenty-first amendment stunts independent craft brewery growth. Penn State Law Review, 126, 35–464. Day One Distributing. (n.d.). Brewery profiles. https://dayonedistro. com/brewery-profiles/ DellaVigna, S., & Kim, W. (2022). Policy diffusion and polarization across U.S. states. National Bureau of Economic Research working paper 30142. https://www.nber.org/papers/w30142 Elias, R. (2016). Three cheers for three tiers: Why the three-tier system maintains its Legal validity and social benefits After Granholm. DePaul Business & Commercial Law Journal, 14, 209–231. Ellig, J. (2019). Francisco Franco still dead, naked alcohol protectionism still illegal. https://regulatorystudies.columbian.gwu. edu/francisco-franco-still-dead-naked-alcohol-protectionism-stillunconstitutional Elzinga, K., & McGlothlin, K. (2022). Has Anheuser-Busch let the steam out of craft beer? The economics of acquiring craft brewers. Review of Industrial Organization, 60, 147–173. https://doi.org/10. 1007/s11151-021-09838-7 Encompass. (n.d.). Beer distribution 101: Self-distribution vs. distributor. https://www.encompasstech.com/blog/beer-distribution-101/ Gatrell, J., Reid, N., & Steiger, T. (2018). Branding places: Place, region, sustainability and the American craft industry. Applied Geography, 90, 360–370. Gilardi, F., Shipan, C., & Wuest, B. (2021). Policy diffusion: The issuedefinition stage. American Journal of Political Science, 65, 21–35. Gohmann, S., & Smith, A. (2020). “Blue laws” and other cases of bootlegger/Baptist influence in beer regulation. In A. Hoffer & T. Nesbitt (Eds.), Regulation and economic opportunity: Blueprints for reform (pp. 386–405). Utah State University. Johnson-Greenough, E. (2023). Washington breweries win! Oregon settles lawsuit to self-distribute and ship. The New School. https:// newschoolbeer.com/home/2023/4/washington-breweries-claimvictory Johnston, R. (2019). Political geographers and geographical political scientists—Crisis, what crisis? Political Geography, 70, 148–151. Jordan, W., & Jaffee, B. (1987). Use of exclusive territories in the distribution of beer: Theoretical and empirical observations. Antitrust Bulletin, 32, 137–164. Lam, T. (2014). Brew free or die: Comparative analysis of U.S. and E. U. craft beer regulations. Cardozo Journal of International & Comparative Law Review, 23, 197–xviii. Legal Information Institute. (n.d.). Commerce clause. Malone, T., & Lusk, J. (2016). Brewing up entrepreneurship: Government intervention in beer. Journal of Entrepreneurship and Public Policy, 5, 325–342. Martinez-Gouhier, C., & Petersen, R. (2018). Regulation of the alcohol beverage industry: A sunset report on the Texas alcohol beverage commission. https://www.texaspolicy.com/wp-content/uploads/ 2018/12/TABC-Sunset-Report.pdf

156 Miller, A. (2019). Crafting better industry: Addressing problems of regulation in the craft beer industry. University of Illinois Law Review, 2019, 1353–1384. Minshull, R. (2017). Regional geography: Theory and practice. Routledge. Morton, H. (2020). Direct shipment of alcohol state statutes. https:// www.ncsl.org/research/financial-services-and-commerce/directshipment-of-alcohol-state-statutes.aspx Myles, C., Wiley, D., Furness, W., & Sturdivant, K. (2023). “Brewing change”: Advocacy in craft beer in the United States. Annals of the American Association of Geographers, 0, 1–24. Oregon Liquor and Cannabis Commission. (2023). New chair charts commission course change. https://www.oregon.gov/olcc/Docs/ news/news_releases/2023/nr031723-Commission-Meeting-March2023.pdf Oregon Secretary of State. (2023). Transaction search results: Oregon beverage PAC. https://secure.sos.state.or.us/orestar/cneSearch.do? cneSearchButtonName=search&cneSearchFilerCommitteeId=126 &OWASP_CSRFTOKEN=1QC2-XT97-M1EB-1USU-JBVE-28 SJ-XQ4T-7QCM Oregon State Legislature. (2023). Senate Bill 616: Relating to shipment of alcoholic beverage. https://olis.oregonlegislature.gov/liz/2023R1/ Downloads/MeasureDocument/SB616/Introduced Painter, J., & Jeffrey, A. (2009). Political geography. Sage. Patterson, M., & Hoalst-Pullen, N. (2014). The geographies of beer. In M. Patterson & N. Hoalst-Pullen (Eds.), The geography of beer: Regions, environment, societies. Springer. Pellegrin, D. (2019). Micro-brew, macro-fees: Texas law favors beer distributors while curbing growth and investment in the nation’s third largest craft beer market. Baylor Law Review, 71, 190–212. Saunders, R., & Holland, J. (2018). The ritual of beer consumption as discursive intervention: Effigy, sensory politics and resistance in everyday IR. Millennium: Journal of International Studies, 46, 119–141. Schiller, S. (2013). Self-distribution licensing requirements and craft brews across states. https://papers.ssrn.com/sol3/papers.cfm? abstract_id=2395293 Shipan, C., & Volten, C. (2012). Policy diffusion: Seven lessons for scholars and practitioners. Public Administration Review, 72, 88– 796. Sovos Ship Compliant. (2022a). 2022a direct to consumer beer shipping report. https://www.sovos.com/shipcompliant/contentlibrary/dtc-beer-report/ Sovos Ship Compliant. (2022b). Beer distribution rules: State-by-state beer distribution rules within the three-tier system. https://www. sovos.com/shipcompliant/resources/beer-distribution-rules-by-state/

J. Dense Sovos Ship Compliant. (2023). 2023 direct to consumer beer shipping report. https://sovos.com/shipcompliant/content-library/dtc-beerreport/ Staples, A., et al. (2020). How many regulations does it take to get a beer? The economic geography of beer regulations. Working paper 2020.017. https://www.thecgo.org/wp-content/uploads/2020/09/ The-Economic-Geography-of-Beer-Regulations-1.pdf Techo, E. (2021). Examining the trends of craft beer regulation in the US. University of Alabama at Birmingham. Thornley, D. (2021). Opening the taps of freedom to distribute alcohol: An overview of state alcohol regulation in the United States and recommendations for reform. University of the Pacific Law Review, 52(4), 821–862. United States House of Representatives. (n.d.). The ratification of the twenty-first amendment. https://history.house.gov/Historical-Highlights/1901-1950/1932_12_05_Twenty-first_Amendment/ Virginia Alcohol Beverage Control Authority. (2022). Understanding the control state system. https://www.abc.virginia.gov/library/ education/pdfs/white-papers/control-states.pdf Walker, J. (1969). The diffusion of innovations among the American states. The American Political Science Review, 63, 880–899. Walsh, M. (2019). Liquor store war. ABA Journal, 105(1), 20–21. Webster, C. (2006). Political geography. In B. Warf (Ed.), Encyclopedia of human geography (pp. 362–366). Sage.

List of Cases Liquormart Inc. v. Rhode Island 517 U.S. 484 (1996). Citizens United v. Federal Election Commission 558 U.S. 310 (2010). Garden Path Fermentation LLC et al v. Oregon Case 3:22-cv-01086-SI (2022). Granholm v. Heald 540 U.S. 300 (2005).

Jeff Dense is Professor of Political Science and Craft Beer Studies at Eastern Oregon University in La Grande, OR. His research focuses on economic development, regulatory policies, and budgetary politics attributable to this dynamic industry. He has conducted numerous economic impact studies examining the effect of the Oregon Beer Festival, Great American Beer Festival, and World Beer Cup on host communities. Dr. Dense’ current research examines the impact of Brexit on craft beer tourism in the European Union and United Kingdom.

Perceptions

Local Legends, Local Flavor: Leveraging Folklore in Craft Beer Marketing Jeffrey S. Debies-Carl

Abstract

The rapid expansion of craft breweries has been fueled partly by neolocalism: demand for products made by real people, with local materials, from real places. Brewers signal these qualities on product packaging and brand websites. This chapter contends that invoking local legends—a form of folklore—comprises one potentially powerful signifier of neolocalism. Previous research identifies the neolocal potential of legends but does little beyond noting their presence on products as local tales. It has barely engaged with legend scholarship to investigate how this peculiar and distinctive form of discourse functions. More than mere stories, legends are living discourse that, when properly deployed, capture people’s attention, engage with remarkable claims, and influence behaviors. Through a qualitative content analysis of legend-branded beers, this chapter analyzes the ways breweries deploy this discourse, as well as the advantages, challenges, and shortcomings of using it to produce a sense of place for product promotion. Keywords








Legends Folklore Craft beer marketing Beer branding




Neolocalism




Beer

Many of these are drawn from ‘legends’: a form of folklore with distinctive properties that make it ideal for motivating consumer behavior (Dégh, 1994). This chapter analyzes ‘legend branding,’ the process by which breweries use marketing techniques like product packaging and webpages as media for legend transmission and product promotion. By applying findings from legend research, it outlines how properly deployed legends can provide a deep connection between customers, brands, and localities. Through content analyzing an array of legend branding cases, it explores the advantages and challenges of using legends to link product to place. This chapter is organized into several parts. It begins by reviewing the concept of neolocalism, its relationship to beer branding, and the possible role of folklore in this process. Next, it introduces the discursive form called a ‘legend’ and explains why these can be a particularly potent form of folklore that, more than merely serving as theming for a brand, engages audiences and promotes behavioral responses. The third part outlines the study’s methodology, which is then followed by a report of its findings. The latter section analyzes a range of methods that breweries have used to leverage legends on their packaging materials to promote their brands. It identifies both particular strengths and drawbacks to some of these approaches in providing connections to place. The final portion of this chapter offers a brief conclusion, along with suggestions for beer marketers and future researchers.

Introduction Ghosts and vampires, sea serpents, and hairy monsters— today, craft breweries present potential customers with a wide array of strange images in their marketing materials in the hopes of attracting their attention and their dollars. J. S. Debies-Carl (&) Department of Psychology and Sociology, University of New Haven, West Haven, CT, USA e-mail: [email protected]

Neolocalism Numerous studies have investigated the causes for the dramatic rise of microbreweries around the world. Carroll and Swaminathan (2000) observed that large brewing companies, with familiar brand names like Budweiser or Miller, can technically create products with taste and other characteristics comparable to those of microbreweries, even though they usually produce more standardized lagers with cheap

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_13

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ingredients. However, even when these large companies brew more exacting beverages, specialist consumers still tend to find the brands unsatisfactory. This suggests that there is something about large brewing companies, themselves, that these consumers find unsavory, rather than just their products per se. They lack a more subjective quality that microbreweries have in abundance and which no amount of technical proficiency can compensate for in its absence. That elusive quality consists of characteristics that satisfy consumer demand for ‘neolocalism’ (Shortridge, 1996). Neolocalism is “a delayed reaction to the destruction in modern America of traditional bonds to community and family” (1996, p. 10): a “self-conscious reassertion of the distinctly local” (Flack, 1997, p. 38). According to Flack (1997), the characteristics of neolocalism promote the success of microbreweries. They provide consumers with a means by which to feel a connection to local places through terroir (i.e., consuming products made from locally sourced ingredients) and ‘social terroir’ (experiencing local people, their relationships, and community) (Sjölander-Lindqvist et al., 2020). A ‘place’ is, a specific, physical location imbued with subjective meanings (Debies-Carl, 2014). Since major brewing companies are sprawling affairs, often with locations of operation scattered around diverse regions, it is difficult to associate them with a single place. Likewise, their products are typically uniformly produced, underdifferentiated, and widely distributed across a similarly vast, often global, territory (Debies-Carl, 2019). This is useful for reaching the largest number of consumers possible, but it simultaneously divorces these firms from association with a particular locale. On the other hand, microbreweries are small-scale operations that are easily linked to specific places, specific communities, and identifiable individuals (Hede & Watne, 2013), as are their products. They produce beverages that they present as “authentic” in that they “seem real, unique, or high quality, instead of plastic or fake” (Koontz, 2010, p. 978). They offer the local “as a deliberate counter to ‘the global,’ as a sign of transparency (…), as non-corporate, as rooted in community, and, perhaps more than anything else, ‘authentic’” (Schnell, 2011, p. 283). Visiting microbreweries or consuming their products can give people a strong sense of place, a method to support a local business, and a feeling of belonging to a local community. Brands “intentionally signal certain values to consumers via advertising” (Shepherd et al., 2015, p. 85), and microbrewery brands are no exception. They convey these neolocal values and characteristics through the ways they communicate to potential customers. One important method to present neolocalism to customers is through product

J. S. Debies-Carl

packaging. For example, many breweries in Montana draw on the state’s reputation as an outdoor paradise with “[f] ishing-, mountain-, and wildlife-themed beers” (Fletchall, 2016, p. 551). Montana-based breweries are certainly not unique in this regard. Microbeer labels and cartons around the world commonly feature textual and visual references to local places, historical events, area personalities, traditional production methods, and many similar elements (Eberts, 2014; Flack, 1997; Ikäheimo, 2021; Schnell & Reese, 2003). In this way, microbreweries frame their firms and products as neolocal in character to potential customers in an effort to appeal to a craving for the values and experiences this entails. In utilizing this sort of messaging, breweries associate themselves with places that they frame as identifiable and specific, rather than the vague and homogenous landscapes that sometimes appear on the packaging of larger brewers (Debies-Carl, 2019; Holtkamp et al., 2016). In comparing these divergent practices, it is clear that “microbreweries are marketing ‘place’ as much as they are marketing beer” (Schnell, 2013, p. 57). In a now classic paper exploring these strategies, Schnell and Reese (2003) briefly observed that invoking local folklore—urban legends, ghost stories, and the like—on product packaging can also serve as a powerful method for cultivating neolocal characteristics. They argued that it enhances a sense of place and place attachment by transforming “[w]hat once seemed an unexceptional backdrop to our daily lives” into a landscape with “multiple layers of history and meaning” (2003, p. 57). Since that time, other researchers have also observed the presence of folklore in beer promotion. Hede and Watne (2013) could provide a sense of place and humanize brands. LeBlanc (LeBlanc, 2019) investigated Unibroue Brewing, which has consistently featured folklore drawn from Quebecois traditions to imbue the brand with a sense of cultural identity. Cipollaro et al. (2021) found that folklore features in the Italian beer market. Meanwhile, in a broad survey of brands in Wales and Brittany, Bowen and Miller (2022) identified folklore as a common means of establishing terroir for beer, a concept more commonly associated with wine. Studies like these continue to illustrate the persuasive power of folklore and highlight the need for further investigations of its potential. However, research like this has not generally distinguished between different forms of folklore nor engaged with their complexities. Characters from legends, for instance, are treated as little more than local stories that quaintly appear on marketing materials to distinguish them from other brands. As the next section demonstrates, legends are much more than that. Their peculiar characteristics can establish a distinctive sense of place, and encourage customers to explore it, in a deeper and more engaging fashion than mere stories alone can account for.

Local Legends, Local Flavor …

Legend Research and Theory Legends, also called urban legends or contemporary legends, are a type of vernacular or folk discourse pertaining to alleged bizarre or even supernatural occurrences. They are “accounts of past happenings” (Ellis, 2003, p. 167) that are told as though the events they relate might be true (Dégh, 2001). In this way, they are distinct from other forms of discourse that claim to be true (e.g., history, sacred myths) and from those forms that make no pretensions relating to true events at all (e.g., literary fiction, fairy tales) (Bascom, 1965). Visitors to San Jose, California, can marvel at the sprawling and labyrinthine “Winchester Mystery House.” According to legend, the bizarre mansion was built by a crazed Sarah Winchester. Heiress to the Winchester firearms fortune, she allegedly designed the house to appease the vengeful spirits of those killed by the guns (Dickey, 2016). A somewhat similar possibility awaits visitors to Lake Champaign, a freshwater lake sandwiched between Vermont and New York. A ripple in the water might just be a fish, or it could be the telltale sign of the monster said to lurk beneath its otherwise placid surface. Legends like these provide a sense of local tradition, identity, and history that distinguishes a place from others, but they are more than mere stories. They also possess specific characteristics that make them particularly engaging, difficult to ignore, and compelling to take action in response to. The fact that they might be true, for instance, requires that audiences examine their content and make a determination for themselves (Dégh, 2001). Next, legends contain bizarre and often supernatural elements, which spark interest and are themselves difficult to ignore (Brunvand, 1981). Moreover, these elements are not presented in a neutral way. Instead, legends warn of urgent dangers—either to physical safety or to a community’s values—or promise possible rewards (Ellis, 2003). Besides these elements, legends are far too incomplete or fragmentary to constitute actual stories (Dégh, 2001). They may lack beginnings or endings, omit important details, or fail to explain character motivations and other key elements. This causes listeners to actively interpret them to interpolate their missing pieces and to debate their meaning, rather than to more passively listen to them as they might be a completed tale (Tucker, 2007). In fact, many folklorists do not consider legends to be narratives at all. Thus, a “legend is not self-contained but is part of an ongoing conversation (…). [T]he text cannot be separated from the legend-telling event, since the performance arises from the group’s concerns and in turn provokes further discussion and performance” (Ellis, 2003, p. 11). Indeed, discussion and debate is a defining characteristic of the genre since, “a legend is a legend once it entertains debate about belief” (Dégh, 2001, p. 97).

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For these reasons, legends cause people to stop and take notice. They give their settings a sense of significance, depth, and mystery. More than that, because they claim the possibility of experiencing their claims directly, legends also have the potential to influence the actions of people who hear them (Dégh & Vázsonyi, 1983). When people become sufficiently enthralled by a legend, they may engage in various behaviors in response to its claims. They might pass the story on to others, take action against rumored dangers, or seek to investigate its claims further, often visiting the place associated with the legend to do so. These behavioral responses to legends are called ‘ostension’ (1983). Participants behave as though the legend could be true. In doing so, they provide apparent evidence that it really is true to onlookers, which likewise perpetuates the legend. Countless people over many generations have reacted in a dramatic fashion to legends about sadistic adults doctoring children’s Halloween candy. These fears have persisted for decades even though there are very few substantiated cases of this actually happening (Best & Horiuchi, 1985). Moreover, the few documented accounts of tampering were not the source of the legends, but were actually inspired by them—another form of ostension. Nonetheless, X-raying candy, public awareness campaigns, parents keeping their children home on Halloween night, and similar ostensive behaviors in response to tampering legends have become something of a tradition themselves. Legends can also inspire efforts to test the veracity of their claims. One common form of this is a ‘legend trip’ (Debies-Carl, 2023; Hall, 1973), which involves traveling to the setting of a legend to investigate its claims firsthand. This reflects an effort to resolve some of the ambiguity of a legend, an attempt to determine whether it is true, and a hope of experiencing its remarkable claims in person. Does a ghost really haunt the cemetery down the street? Does a monster really lurk in the woods outside of town? To legend trippers, there is only one way to really know. Whatever they find, they report back to the community discussing the legend, which serves to perpetuate and transform it at the same time. This strong desire to test legend claims appeals to potential believers, but it appeals equally strongly to skeptics who might become engaged with legends in the interest of falsifying them. Nonetheless, their willingness to do so still highlights the engaging nature of legends and their influence on our behaviors. Debunking them, likewise, thrusts the skeptic firmly into the cycle of debate that serves to disseminate the legend even further. This eagerness to travel and visit a place illustrates, again, the power of legends to enrich their settings with meaning and motivate behavioral responses. As this brief summary illustrates, legends are not just quirky stories. They are a form of social behavior that encourages participation and widespread dissemination.

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Tapping into this process, which comes so naturally to people, presents clear opportunities for marketers and others with a message to share, especially when that message is intended to provide a sense of local identity and distinctiveness so compelling that it encourages specific behaviors, like word-of-mouth marketing, traveling to visit a brewery, or product purchases. In this endeavor, beer packaging can serve as a medium for legend branding, but is not without its challenges. Despite being associated with tradition, folklore has a knack for keeping up with the times and updating itself to reflect emergent concerns (Goldstein et al., 2007). Likewise, despite a similarly erroneous association with oral transmission, folklore can adapt to new methods of transmission (Dégh, 1994). Different media, however, can nonetheless have transformative effects on the character and influence of folklore (Blank, 2018; Debies-Carl, 2021). Participating in the legend process requires more than simply featuring images or words from a folktale on a product. Marketing elements must invoke the significant characteristics of legends to actively engage audiences and effectively produce a sense of local identity that draws them in for deeper participation.

Methodology To explore how breweries use legends to establish a geographic link between themselves and local identity, this paper deployed a qualitative content analysis of brewery marketing materials. These included two well-established sources of data: product packaging (e.g., Bowen & Miller, 2022; Patton & Mathews, 2013; Schnell & Reese, 2003) and website materials (e.g., Hede & Watne, 2013; Holtkamp et al., 2016; Mathews & Patton, 2016). A nonprobability, purposive sampling method was deployed to select breweries for inclusion. This method is appropriate when a study’s goals are to explore content and identify patterns for future inquiry, and do not require quantification or external generalization of results (Singleton & Straits, 1999). Particularly common in qualitative research, it is especially useful in ensuring that individual cases “displaying certain attributes are included in the study” (Lune & Berg, 2017). In this case, selection was therefore determined with an eye toward including a range of geographies and legend variants rather than to statistically represent a specific population (Table 1). First, a list of breweries operating in the United States, provided by the Brewers Association (2023), served as a guide to identify potential cases. Links to individual breweries’ websites were followed and scrutinized to find individual products across the country featuring folklore. This process continued until a range of geographic regions were represented in the data from across the nation (Map 1). Interpreting legends (Ellis, 2003) and even recognizing them

J. S. Debies-Carl

on product packaging (Schnell & Reese, 2003) can be challenging. Limiting this initial selection procedure to American breweries increased the likelihood that the author’s experience in studying American legends would minimize these potential obstacles by increasing the likelihood that these legends would invoke familiar themes and cultural assumption—in a language known to the researcher —and minimize the occurrence of unfamiliar ones. However, it was also deemed important to consider how different breweries represented the same legend source material. The second sampling procedure thus systematically searched for beers that featured legends already represented in the sample. As discussed below, sometimes this led to surprising situations where a local legend was invoked by different breweries across wide geographic and even international ranges. While this sort of pattern in the data might present concerns for quantitative research, it provides fascinating material for a qualitative exploration. Analysis of both packaging and website data consisted of a grounded theory approach (Miles & Huberman, 1994). This proceeded iteratively and simultaneously with additional data collection and data focusing (Lofland & Lofland, 1995). Doing so allowed patterns to emerge from the data without being imposed by a priori expectations and provided flexibility as new themes were encountered. While traditional text-based information was an important component of the data, so were visual elements, which occur prominently on packaging and websites and have occupied a more central place is social scientific research since the visual turn (Rose, 2001). These are especially important in an analysis of legends given the many ways these are communicated ostensively. The analysis, thus, required carefully examining these elements and interpreting them in light of folkloristic theory to understand their functions. Examples are provided throughout the findings, below. Thematic coding served to reduce both textual and visual data to manageable and meaningful segments. Consistent with grounded theory, codes were largely determined through induction (Miles & Huberman, 1994). Nonetheless, code identification and interpretation were also aided by maintaining sensitivity to prior research and theory in both folkloristics and cultural geography. This process begins with ‘open coding’ for the initial identification of themes, and proceeds with ‘axial coding,’ through which patterns and relationships across themes are compared (Strauss, 1990). Validity for the resultant themes and their interrelationships was achieved through two modes of triangulation: (1) “source” triangulation, in which more than one observation must verify a given statement or theme, and (2) “method” triangulation, in which patterns must occur across both data types for consistency (Lincoln & Guba, 1985). Triangulation enhances the validity of results by ensuring that themes and patterns are not merely idiosyncratic.

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Table 1 Selection of legend-branded beers and breweries Brand

Beer

Location

Legend

3rd Turn Brewing

Pope Lick Monster Blend

Louisville, KY

Pope Lick Monster

10k Brewing

Wendigo

Anoka, MN

Wendigo

903 Brewers

Sasquatch

Sherman, TX

Bigfoot

Allagash

Haunted House Hoppy Dark Ale

Portland, ME

Haunted houses

Anchorage Brewing Company

Wendigo

Anchorage, AK

Wendigo

Back Bay Brewing Company

Witch of Pungo

Virginia Beach, VA

Witch

Barrel Brothers

The Windsor Wendigo

Windsor, CA

Wendigo

Beer Tree Brew

Finding Bigfoot

Port Crane, NY

Bigfoot

Black Dog Brewing Company

Gravity Hill

Mooresville, IN

Gravity hill

Boneyard Beer Pub

Skunkape IPA

Bend, OR

Skunkape

Brotherton Brewing Company

Jersey Devil DIPA

Atco, NJ

Jersey Devil

Bunnyman Brewing

Various

Fairfax, VA

Maniac

Burlington Beer Company

Creatures of Magic New England Style India Pale Ale

Burlington, VT

Various

Cerveceria de Baja California

Chupacabra Pale Ale

Mexicali, MX

Chupacabra

Chronicle Brewing Company

Loveland Frogman

Bowmanville, Canada

Loveland Frogman

Clown Shoes (Mass Bay Brewing Company)

Ride the Wendigo

Boston, MA

Wendigo

Conshohocken Brewing

Wendigo

Conshohocken, PA

Wendigo

Cricket Hill Brewing Company

Jersey Devil Red Ale

Fairfield, NJ

Jersey Devil

Dixie Brewing Company

Blackened Voodoo Lager

New Orleans, LA

Voodoo

Down the Road Beer Company

Pukwudgie

Everett, MA

Pukwudgie

El Paso Brewing Company

Thunderbird

El Paso, TX

Thunderbird

Epic Brewing

Chasing Ghosts

Salt Lake City, UT

Ghost

Freedom’s Edge Brewing Company

Jackalope Juice IPA

Cheyenne, WY

Jackalope

Gipsy Brewing Company

Bigfoot

London, UK

Bigfoot

Great Divide Brewing Company

Pumpkin Ale

Denver, CO

Headless Horsemen

Great Lakes Brewing Company

Lake Erie Monster Imperial IPA

Cleveland, OH

Lake monster

Greenbrier Valley Brewing Company

Mothman Black IPA

Maxwelton, WV

Mothman

Hanging Hills Brewing

Various

Hartford, CT

Black dog

Lake of the Woods Brewing

Sasquatch Black Lager

Kenora, ON

Bigfoot

Main St. Brewing

Screaming Sasquatch

Vancouver, BC

Bigfoot

Melvin Brewing

Tuttle Bottom

Alpine, WY

Tuttle Bottoms Monster

Montgomery Brewing

Wendigo

Montgomery, MN

Wendigo

Moon River Brewing Company

Various

Savannah, GA

Haunted brewery

Miskatonic Brewing Company

Bell Witch

Darien, IL

Bell witch

New England Brewing

Sea Hag IPA

Woodbridge, CT

Ghost/Ghost Ship

Noon Whistle Brewing

Tuttle Bottom

Lombard, IL

Tuttle Bottoms Monster

Ogopogo Brewing

Wendigo

San Gabriel, CA

Wendigo

Old Town Pizza and Brewing

Various

Portland, OR

Haunted brewery

Old Yale Brewing

Sasquatch Stout

Chilliwack, BC

Bigfoot (continued)

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J. S. Debies-Carl

Table 1 (continued) Brand

Beer

Location

Legend

Olympia Brewing

Bigfoot

Tumwater, WA

Bigfoot

Public House Brewing Company

Ozark Howler

St. James, MO

Ozark Howler

Revival Brewing Company

Mercy Brown Imperial Ale

Providence, RI

Vampire

Rock Art Brewery

Ridge Runner Barley Wine Ale

Morrisville, VT

Kokopelli

Sasquatch Brewing Company

Various

Portland, OR

Bigfoot

Shipyard Brewing Company

Pumpkinhead Ale

Portland, ME

Headless Horsemen

Sierra Nevada Brewing Company

Bigfoot Barleywine–Style Ale

Chico, CA

Bigfoot

Six Rivers Brewery

Sasquatch Double IPA

McKinleyville, CA

Bigfoot

Skyroc Brewery

Ghost

Attleboro, MA

Ghosts

Smuttnose Brewing Company

Star Island Single

Portsmouth, NH

Mermaids

Spice Trade Brewing

Various

Denver, CO

Haunted brewery

Tall Tales Brewing

Sasquatch

Parsonsburg, MD

Bigfoot

Thimble Island Brewing Company

Ghost Island Double IPA

Branford, CT

Haunted island

Thorn Brewing Company

Various

San Diego, CA

Haunted brewery

Three Heads Brewing

Wendigo Winter Ale

Rochester, NY

Wendigo

Timberyard Brewing Company

Spider Gates Pumpkin Ale

Brookfield, MA

Haunted cemetery

Unibroue Brewery

Various

Quebec, Canada

Various

Veracious Brewing Company

Owld Boreas

Monroe, CT

Witch’s familiar

Wolfden Brewing Company

Various

Bloomingdale, IL

Haunted brewery

Wynkoop Brewing Company

Various

Denver, CO

Haunted brewery

Findings: Telling Legends Through Beer Marketing There is no shortage of breweries hoping to make a connection with local folklore. Skyroc Brewery (Attleboro, Massachusetts) celebrates the supernatural with its ‘Ghost’ pale ale. Brotherton Brewing Company (Atco, New Jersey) recalls a local favorite with its ‘Jersey Devil DIPA,’ while the mighty ‘Thunderbird’ graces the surface of El Paso Brewing Company’s (Texas) same-named, dark lager. This section reports patterns and themes that emerged from the content analysis regarding how breweries sought to leverage legends to link brands, place, and folklore.

Beers with Tales to Tell There are many ways to associate beers with legends and their settings. A fairly typical example, and therefore a good place to begin, concerns the legend of Mercy Brown. According to tradition, toward the end of the nineteenth century, several members of the Brown family of Exeter, Rhode Island, became sick and passed away from ‘consumption’ (Holly & Cordy, 2007). Among them was Mercy herself, only 16 years old at the time. When young Edwin

Brown fell ill, some people began to suspect a vampire feeding on the life force of the family was to blame. At their urging, Mercy was exhumed from her resting place in Chestnut Hill Baptist Church Cemetery. Much to their horror, they found that she did not show the usual signs of decay. To put an end to her supernatural predations, they removed her heart and liver and burned them (Bell, 2001). The tale looms large in the minds of people living in the region even to this day for many reasons: the fact that it occurred locally, the nature of its bizarre claims, its heartrending sense of loss, and its warning that the danger has not entirely passed. Indeed, although the events so described occurred long ago, today many people still drive out to Mercy Brown’s grave hoping (fearing?) for an encounter with her still restless spirit. Of course, the legend is also a source of local curiosity, identity, and pride. It is perhaps for these reasons that it is retold on one of the beers produced at the Revival Brewing Company in nearby Providence, Rhode Island: Mercy Brown Imperial Ale. By just picking up a can, customers learn about the young woman it is named after, her sad fate, and the allegations of vampirism surrounding her. Importantly, it is a local tale: it happened here. Text on the can, which also appears on the brewery’s website, reads: “To appease the spirit of 16-year-old Mercy Brown, who died of consumption in 1892 and was suspected of becoming a

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Map 1 Geographic distribution of breweries represented in the analysis (Map by Mark Patterson, ©2023)

vampire, the Mercy Brown Imperial Ale offers rich warm malt notes to awaken the senses (though perhaps not the dead). Dried plum, toasted malts, and dark caramel tones finish with a spicy herbal hop flavor” (Revival Brewing Company, n.d.). A drawing of a teenage vampire accompanies this description and draws attention to the can. Although brief, these elements serve to communicate principal elements of the legend. Certainly, there are many more details available, but the few presented here sketch a workable outline of the story, presented as though it might be true, that contains compelling components (e.g., supernatural claims, tragedy, etc.). Like most legends (Dégh, 1971), it is not a complete narrative. Its fragmentary form, along with its questionable veracity, raises questions that allow people exposed to it to engage with its claims and missing pieces. Is any of it true? What happened after the organs were burned? Does something still lurk in the cemetery? These questions moreover present ready opportunities to participate in the legend, to investigate its claims,

perhaps by looking up more information or even by visiting Mercy Brown’s grave. These elements also attempt to provide a sort of connection between the local legend and the beer, associating it with local traditions and identity in the process. The grave is not even a half hour drive down the road from the brewery and elements from the text seem to imply a sort of thematic proximity as well. The beer was made to ‘appease’ her spirit, and its notes will awaken your senses but ‘probably’ not the dead, and even the ‘dark’ tone of the caramel finish contributes to the theme. The implication here is that drinking the beer likewise offers a form of social terroir (Sjölander-Lindqvist et al., 2020) and a means of experiencing the legend in some form: That is, experiencing an important element of local culture and local tradition. Despite the overall successful application of folklore in cases like these, Mercy Brown Imperial also demonstrates some of the challenges and difficulties legend branding to signify neolocalism entails. For instance, while it establishes

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a connection between brand and legend, the connection remains somewhat tenuous, largely focusing on flavor profile. The most direct connection, spatial proximity, is actually not mentioned at all. This might be assuming that most customers are aware of its location or that interested customers have enough information to go on that they can simply look this up with no difficulty. Another potential concern is in the beer’s overall treatment of the legend, which is rather flippant in tone considering its grim content: illness, premature death, and grave desecration. The potential for commercialization to trivialize folklore has long been of concern to many scholars (Sullenberger, 1974). The cartoonish image of Mercy Brown as a vampire likewise implies a less than serious stance toward the matter. Then again, presenting a supernatural story in earnest might present its own difficulties in terms of, for example, brand reputation. Likewise, an overly morbid message might be even more problematic. As this brief sketch illustrates, there are many issues to consider when leveraging a legend for product branding. Nonetheless, the overall outcome is a method that both disseminates folklore and borrows from it to enrich itself. Revival Brewing is far from unique in this regard. Many other breweries employ similar techniques that demonstrate both the potential power and possible pitfalls of legendbased neolocalism. However, there are many different ways to establish a geographic link between breweries and legends. The most direct method is provided when the brewery itself actually serves as the setting for that legend. In considering these cases, it is important to remember, again, that legends can influence behaviors. In theory, this characteristic could present excellent opportunities for breweries seeking to inspire consumer behavior like word-of-mouth advertising, traveling to visit a brewery, or buying a product. According to its website, the Moon River Brewing Company in Savannah, Georgia, is haunted by numerous spirits (Moon River Brewing, 2021). Housed in the historic ‘City Hotel,’ the website ponders over the “many theories and stories” attached to the location. The haunting has been featured in the brewery’s ‘Apparition Ale’ and is alluded to in its t-shirts, one of which reads “Drinking with your friends, past and present” (Moon River Brewing, 2022). The legend presents a tempting invitation for the curious to visit the brewery to test its claims and, while there, sample its beers. At Thorn Brewing Company, on the other side of the country in San Diego, California, visitors might experience flickering lights and mysteriously moving objects in addition to tasting a range of local beers (Brigham, 2016). Interestingly, as of this writing, the company does not seem to present the haunting in any of its beers. This could be a missed opportunity, or perhaps a tactical decision, which I will consider shortly. The company’s website juxtaposes this claim alongside the tales of other local haunts, such as the

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Whaley House and the Hotel del Coronado, thereby linking itself to a strong tradition of local legends. This also presents the opportunity for “serial legend tripping” (Debies-Carl, 2023). Somewhat like a bar crawl, this is a form of activity where participants visit one legendary location to examine its claims, but then use the experience as a jumping off point to visit other legendary locations nearby. The outcome is a rich ecology of legend-driven neolocalism. Brewing companies like these can convincingly establish a geographic connection to their local legends without having to go to any great lengths in their marketing materials. These in-house legends also present the opportunity to offer goods and services beyond the usual product line one might expect at a brewery and to market to an additional demographic specifically interested in the paranormal. Moon River, for example, has appeared on numerous paranormal television shows and serves as a stop for a number of Savannah’s ghost tours. Of course, marketing a brewery as ‘haunted’ is not without its own potential problems. While some potential customers might find the possibility of a spectral encounter exciting, others might be put off by it, finding the claim too frightening, too silly, or otherwise unappealing. Fortunately, there are methods for dealing with these pitfalls. Many operators of allegedly haunted locations emphasize that they only have ‘friendly’ ghosts that pose no risk to clients (Hanks, 2015). Others employ a sort of ‘fragmentation’ (Goldstein, 2007), wherein they limit the extent of the supernatural claims by suggesting they only apply to certain parts of a building or at certain times. Patrons avoiding those places will be just fine. Fragmentation can also be accomplished through targeted marketing: varying the message of advertising or other promotional materials depending on the interests of the demographic these will reach. Thorn Brewing, for instance, seems to have accomplished the latter approach through an absence of any overt references to their haunting on the majority of their website or in any of their products. The sole exception on the website is a blog entry (Brigham, 2016) posted just before Halloween, when viewers are most likely to be amenable to ghosts. Most references to the haunting appear in other sources, also typically dated near Halloween or catering specifically to paranormal enthusiasts (e.g., San Diego Haunted Locations, 2022).

Black Dogs, Spider Gates, and Synecdoche One of the challenges of using beer packaging as a medium for legend-transmission is the limited amount of available space. The small surface area is not conducive to the inclusion of lengthy narratives and filling the space at hand with too much text would likely not serve to make the product visually appealing in any case. Consequently, their

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Fig. 1 Lake Erie Monster Imperial IPA (courtesy of Great Lakes Brewing Co., © 2023)

legend narratives tend to be quite short, especially since space needs to be used for other messaging elements too. Great Lakes Brewing Company in Cleveland, Ohio, produces an ale called ‘Lake Erie Monster Imperial IPA.’ Text on the packaging describes the legend of the mysterious creature and the character of the beer in a mere 21 words (Fig. 1). Interestingly, while websites theoretically do not suffer from the same space limitations, in practice they provide no more legend information than packaging. In fact, they usually provide even less, showing merely the front of a can with perhaps a sentence or two description. Fortunately, legends can be communicated in a wide variety of ways. Of particular note here is the capacity to relate them ostensively, i.e., to ‘show’ a legend rather than narrate it verbally or textually: to provide a “presentation (as opposed to the representation) of a legend text” (Koven, 2007, p. 184). This can take the form of ‘ostensive action’ (Dégh & Vázsonyi, 1983), wherein some portion of a legend is actually acted out. For example, ostensive action can be used to communicate the famous legend cycle that folklorists call the ‘hatchet man’ (Grider, 1980) or the ‘roommate’s death’ (Brunvand, 1981). Many variants of this tale exist. However, the basic theme is that a young woman is alone in her dorm room one evening, waiting for her roommate to return. At one point, she hears scratching on the door, but is too afraid to open it.

She hides in the closet instead while the scratching persists. Come morning, the sound has stopped, and she works up the nerve to investigate. Upon opening the door, to her horror, she finds her dead roommate. She had been attacked during the night and could only feebly scratch at the door until she bled to death. In some versions of the story, the murderer leaves a hatchet near his victim. A legend like this would likely resonate particularly well among college students. Indeed, Grider (1980) found that they frequently reenacted parts of it in their dormitories by scratching on each other’s doors and slipping notes under them signed ‘H.M’ (i.e., ‘hatchet man’). It is important to underscore the fact that this sort of ostension does not require acting out the whole legend, but only some significant part of it that calls the rest of the episode to mind (Dégh, 1994) in a sort of ‘ostensive synecdoche.’1 Of course, this assumes shared cultural knowledge on the part of the audience, without which the

The term ‘synecdoche’ refers to the linguistic practice of referring to the whole of some concept by referencing only part of it (Burke, 1945). For example, the entirety of the United States Government might be referred to simply as ‘Washington.’ The term seems appropriate for describing this comparable mode of legend-telling: referencing a specific part of it verbally, behaviorally, visually, and so forth instead of relating an entire tale. 1

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reference would make little sense. This example requires some sort of physical behavior, but ostension can also be visual in character and operate in a similar way. Earlier considerations of ostensive communication focus more on this visual dimension than behaviors alone (Eco, 1979). Here, some significant portion of a legend is presented for others to see as a sort of shorthand to designate the legend in its entirety. A subtle example of this sort of ostension appears in the logo of Hanging Hills Brewery of Hartford, Connecticut, which appears on all its products and promotional materials (Fig. 2). Although there are several versions of this logo in use, each one incorporates the silhouette of a dog. In older versions, the dog is a small figure perched on the brink of a steep escarpment. In more recent ones, it is larger and takes up the majority of the logo without any landscape features present. To the uninitiated, the dog appears to be fairly innocuous and might not attract much unwarranted attention. Its small stature juxtaposed against the steep cliff, for instance, might merely be intended to provide a sense of scale. However, to those familiar with local folklore, this is clearly a reference to the strange, black dog that is said to haunt a series of ridges in the central part of the state: the Hanging Hills. According to this legend, hikers may encounter the friendly dog, which seems perfectly normal at first. However, they will soon notice, as it follows them on their trek, that it leaves no tracks and has a silent bark. Encountering the dog once will bring you good luck, but the second sighting will bring sorrow, and, worse yet, a third meeting will precede your death (Philips, 1992).

Fig. 2 Hanging Hills Brewing Co. Logo (courtesy of Hanging Hills Brewing Co., 2023)

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Of course, all this can be difficult to fit on a can, even in this summary form. Likewise, their website offers no elaboration either. However, the juxtaposition of the dog on the cliffside in the logo, along with the name of the brewing company itself, serves as a shorthand reference to the broader legend cycle. These minimal elements can tidily call the entire tale to mind and brand the product line with that local association. Again, not everyone, especially people from out of town, will be familiar with the reference. Such people viewing a can from Hanging Hills might wonder about the significance of the dog, but there might not even be enough hints of a legend to arouse suspicion in this case since cliffs and dogs are prosaic enough. The image underlines and reinforces the local nature of the legend but may not disseminate it very effectively beyond the community already ‘in the know.’ Not all visual references to legends are so subtle, even among those that likewise require insider knowledge to understand fully. Analyzing cases like these reveals very clearly how the legend process can work in beer marketing. Timberyard Brewing Company produces a seasonally available pumpkin ale called ‘Spider Gates.’ Packaged in cans, which are also portrayed on the company website, its label presents an almost sepia-toned drawing of the grim reaper, scythe in hand, crouching between two barren, gnarled trees (Fig. 3). These elements dominate the viewer’s attention. However, across the bottom of this image one might notice what appears to be a wrought-iron gate, as if to a cemetery although no tombstones are visible. It will not obvious to someone unfamiliar with the local legend what this image is referencing, but this is the distinctive entryway to a well-known cemetery in the Northeast.2 These are called the ‘spider gates’ vernacularly, and they consist of a pair of stone posts, between which hang a metal gate, fashioned in a sort of wavy starburst design, which generations of locals creatively reinterpret as spider webs. Many outrageous tales and claims circle about the cemetery they lead to. To name just a few, it is said that beyond these gates, ghosts prowl, a strange ooze flows from the earth, Satanists hold rituals, mysterious runes cover buried stones, an unknown creature roars in the woods, and there might even be a gate or two to Hell! At least two variations of the same label exist. On each, the artwork is the same, but one features a brief description of the legend on the back of the can and the other does not. Regarding the former, the narrative cannot express the legend in its entirety, because there is too great a variety of claims and stories to ever fit on a can. Instead, it merely states that this variety exists, and contents itself with only offering one particular example, noting there may be a gate

2

The location of this cemetery is withheld to protect it.

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Fig. 3 Spider Gates Pumpkin Ale (art created by Dean McKeever and courtesy of Timberyard Brewing Co., © 2023)

to Hell here. It does not include specific details like where to find it, how it got there, or what might happen if you visit although these are standard legend components (Ellis, 2003). The brief mention certainly alerts the reader to the presence of a legend, but little more. Then again, even this much text might not be necessary. As noted above, a single image referencing an entire body of legend lore can be very economical and effective, especially in situations where there is no coherent story to tell. Instead, customers must rely on their imaginations and cultural expectations. In situations like these, when no single claim is made, but people are aware that a place has a strange reputation, their minds wander and come up with a wide variety of possible interpretations (Debies-Carl, 2023). However, they must be alerted to the possibility of an uncanny presence. Text on a can, informing viewers of a legend, will do the trick, but odd visual elements can do the same thing. Even people unfamiliar with them will find them eye-catching and wonder if there is a story behind the images. In fact, this is how many legends are born: a strange feature of the landscape attracts attention and speculation— often at least as bizarre as the object itself—as to its origin or significance (Dégh, 1971). Why was that old house abandoned? What is in that old tunnel? Why do the cemetery

gates look so strange? Thus, the very characteristics that give rise to some legends in the first place (i.e., uncanny appearance), and which warrant the references to these places on product packaging, can have the same effect on perception once they are ostensively displayed on that packaging. They catch the eye, raise questions, and inspire speculative answers to those questions. All of this serves as the basis for emergent legends and the fuel for their perpetuation through discussion.

Looking for a Legend Most breweries are not fortunate enough to be located in a haunted location or to have other clear connections to comparable legend settings. Instead, they must try means that are more indirect to associate their brands with folklore, and these strategies present their own challenges. One common practice is to simply select some subject material that is reasonably proximate to the brewery, incorporate elements of its imagery into marketing materials, and use terms that reflect its theme in the product name and description. The Dixie Brewing Company of New Orleans, Louisiana, takes advantage of its location’s association with the religion

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and traditions of Voodoo in its ‘Blackened Voodoo Lager.’ The product’s carton presents a dark, blue bayou landscape with overhanging trees and a dimly moonlit sky. According to text on the side of the package, the word Voodoo “means to search deeply into the mysteries of the universe: in practice, it has come to have many different meanings, all mysteries [sic], exotic, and beguiling.” The remainder of the narrative attempts to link the brewery to this vague definition in a similarly indeterminate way noting, for example, how they “have imported a touch of magical Louisiana spirit” to the product. All of these elements are loosely evocative of the theme, but display no real connection to a particular location, legend, or, indeed, to information about Voodoo. In a very different part of the country—Portsmouth, New Hampshire—Smuttynose Brewing Company uses a nearly identical approach albeit with different source material. A carton of its ‘Star Island Single’ features a photograph of a woman dressed as a mermaid, reclining against a rocky shoal, and holding aloft a shell-encrusted chalice of, presumably, beer. Text claims that visitors to the area “are sometimes startled to see mysterious, alluring creatures” in the waters. This experience is then likened to drinking the beer, which is “brewed to celebrate life’s surprising pleasures.” It possesses a “beguiling mix” of flavors and is meant to be savored alongside good company and “tall tales.” Although there are legends about mermaids throughout the region from time to time, it is unclear if this is citing any particular one or just the idea of mermaids. It includes no information about people’s experiences, specific settings, or other elements that might provide a rich sense of local lore and its relationship with the brand. Cases like these may provide a sense of general folklore, but they lack the details needed to engage in the legend process. Other breweries do not try to assert this minimal level of association with specific places and local lore but, simultaneously, do not give up entirely on trying to leverage legends in general. An illustrative example is a beer by Allagash Brewing Company of Portland, Maine, called simply ‘Haunted House.’ Like the beers discussed above, this name does not refer to a particular place with a specific legend associated with it. In this case, however, it is not vaguely referring to a general region like Louisiana or New England with characteristic lore and identity either. Instead, it is referring to the concept of haunted houses in general. Generic references to folk motifs present no obstacle to perpetuating legends per se. The idea of a ‘haunted house’ is firmly ensconced in cultural expectations; generic references simply tap into this broad body of folklore and simultaneously reinforce it. For instance, literature, cinema, and other sources have taught us how to recognize one instantly, based on its stereotypical characteristics, and inform our expectations for what is supposed to happen within its walls (Grider, 2007). The Allagash can portrays a dense neighborhood

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populated by the outlines of houses stretching across the bottom of the dark, purple can.3 Although there are no ghosts, witches, or other incriminating entities present to reveal the fact, it is immediately evident which one of these edifices is supposed to be the haunted house in question. It is the large mansion with the distinctive mansard roof and corner turret. It is certainly helpful, although unnecessary, that all of the windows are aglow as well, but these architectural features are sufficiently indicative of the haunted house motif in everyday culture (2007) and bring that general legendry to mind regardless of whether they appear in a movie or on a beer can. However, again, none of this associates the brand with a particular place or specific legend: the house can be from anywhere. This presentation could conceivably allow someone viewing it to call to mind some specific haunted house that they are familiar with. Also, while the can reflect a stereotypical haunted house drawn from gothic horror, houses believed to be haunted in real life can look like nearly anything, ranging from Cape Cods to mobile homes, and are not nearly so predictable (2007). In short, this approach does not seem to suggest place-based neolocalism, but it does effectively invoke and perpetuate folklore. Many breweries use similar, indirect references to legends either in the regionalized form, like Dixie Blackened Voodoo Lager, or the more generalized form, like Allagash Haunted House. One popular theme involves references to the cryptic known as bigfoot or sasquatch. Probably the most famous is Sierra Nevada’s ‘Bigfoot Ale,’ but there are numerous others. Some of these are west coast breweries, which seems to emphasize the creature’s traditional association with that broad region. These include offerings from Olympia Brewing (Tumwater, Washington), Six Rivers Brewing (McKinleyville, California), Main St. Brewing (Vancouver, Canada), and Old Yale Brewing (Chilliwack, Canada). However, others come from a wide variety of locales, such as Texas (903 Brewers), Ontario, Canada (Six Rivers Brewery), New York (Beer Tree Brewing), Maryland (Tall Tales Brewing), and even the United Kingdom (Gipsy Brewing). This wide sampling seems to indicate that the bigfoot legend has become as generic a legend theme as haunted houses. Patterns like this suggest that beer marketing might provide useful data for determining broader social patterns, like when a particular legend has transcended a single locality and become a more generic theme. Another surprising example is the mainstream popularity of the creature known as ‘wendigo.’ Based loosely on the beliefs of Algonquian3

The choice of an urban setting is itself unusual since craft breweries typically prefer rural imagery (Debies-Carl, 2019) and haunted houses are often portrayed within more naturalistic, albeit run-down, settings as well (Grider, 2007).

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speaking peoples from North America (Brightman, 1988), it shows up with startling frequency on beer labels including examples from places as wide ranging as Alaska (Anchorage Brewing), California (Barrel Brothers Brewing, Ogopogo Brewing), Massachusetts (Clown Shoes), Minnesota (10k Brewing, Montgomery Brewing), New York (Three Heads Brewing), and Pennsylvania (Conshohocken Brewing). These come in a wide variety of styles with no particular type of beer associated with the wendigo. It seems to be a general North American identity that is now represented by this legend. Further evidence of this development is the fact that breweries from other parts of the world also have wendigo-themed beers now. However, these seem to typically be recipes for American style beverages. Mythica Brewing of New Zealand offers a ‘Wendigo’ American Pale Ale while Unorthodox Brewing in Slovakia, in turn, produces an American, west coast-style IPA. Again, the wendigo image provides theming but, at least in these cases, does not provide a connection to a specific place or local legend and likely falls short of the level of engagement it otherwise might achieve. A wide range of other potential challenges await brewers when they try to associate legends with brands where little real connection exists. The Burlington Beer Company brews ‘Creatures of Magic,’ a New England IPA with numerous creatures on the label including two pegasi, two sphinxes, two basilisks or cockatrices, Cthulhu,4 and a garden gnome. Whatever connection these entities might have to each other or to the brewery’s location in Vermont is left to the imagination. Another common attempt to solve the problem of finding a legend to connect to is to draw on very specific, local traditions, but drawn from other places. Boneyard Beer in Bend, Oregon, celebrates a Floridian legend with its ‘Skunkape’ IPA rather than featuring something a little closer to home (or at least on the same coast). Whatever connection it might provide consumers, it seems unrelated to the neolocal. Rock Art Brewery, in Vermont, features images of Kokopelli—a Hopi fertility god from the southwest—on its line of products. Back in Florida, J. Wakefield Brewing features the ‘Nightmarchers’ on one of its beers, although this is a reference to the ghosts of warriors in Hawaii. Meanwhile Montgomery Brewery, located in Minnesota, honors the Grootslang on its Russian imperial stout, although this is a serpentine monster from South Africa. In all of these examples, it is unlikely that the legend references provide meaningful connections to their brands. They suggest that finding a local legend to associate

4

Cthulhu is the tentacle, literary creation of American horror author, Lovecraft (1999), in a short story originally published in 1928.

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meaningfully with a brand can be difficult. Generic legend themes are too vague to provide a sense of local connection when they are not linked to specific cases or sightings from local tradition. When breweries are linked to specific legends from other places, this could raise other problems, like authenticity concerns. Without local connections, companies might nonetheless still provide an appealing product presentation and a distinctive brand identity. For many brewers, provided they are not attempting to leverage the legend process that might be enough as long as the outcome successfully differentiates the product from competitors. Then again, if numerous brewers are referencing the same legend in a generic, non-localized way, this approach can hardly be said to differentiate a brand from its competitors. With the connection of these themes to actual folklore so superficial, engagement with the potential of legends as marketing tools is limited as well. The wendigo image loses its potency when it is cut adrift from its cultural and geographic context. Generic theming may be more appropriate for larger firms, with intended customer base that extends beyond a limited geographic area (Debies-Carl, 2019). One further, questionable strategy for linking a brand to a local legend remains to be considered: make one up. This is precisely what New England Brewing of Woodbridge, Connecticut, did to promote its ‘Sea Hag’ IPA. The can features a disquieting image of a woman, with long white hair draped partially over her face, reaching outward toward the viewer. An older version of the can claimed, “The Sea Hag continues to haunt New Haven to this day.” It then referred customers to the company website to learn more, one of the few breweries to avail itself of this option. Even without this text, which newer cans lack, the suggestive name and image invite quests for further information. An internet search will lead to both the company website and a WordPress website with more information, claiming that the Sea Hag is a ghost who haunts nearby New Haven Harbor. However, there is no such legend. Drawing on traditional folklore elements, the story was completely fabricated to promote the launch of the beer (Shkolnik, 2016). The company gave promotional statements claiming the story was told by the brewer’s grandfather (e.g., Hoppy Boston, 2015) and even created a hoax Wordpress website dedicated to the legend (Susan, 2006). The latter claims to be the creation of a Yale University student interested in local folklore. It contains more details about the ‘legend,’ tips for avoiding the spirit, historic images, and even summaries of legitimate local legends to give the hoax an air of authenticity. While a strategy like this is potentially risky, it does not seem to have harmed New England Brewing at all, even after its origin as a hoax was revealed. Today, Sea Hag remains one of its best-selling products and, according to recent reports, among the best-selling IPAs in the state

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(Zahn, 2021). New England Brewing is by no means the first company to tap into the legend process by presenting a made-up story as real,5 but this approach seems unusual among breweries. There is no shortage of legitimate local legends the company could have selected for its product. In fact, even the harbor that serves as the setting for their invention has a very old story about a phantom ship associated with it they could have used (Philips, 1992). Despite not connecting with a ‘real’ legend, this approach does seem to have succeeded in connecting to the legend process: it invoked a compelling story about a local place, made claims to its authenticity, and incited debate and discussion. In terms of the latter, for instance, the brewery’s faux Wordpress site contains posts discussing the Sea Hag legend, although it is certainly possible that these are fake too. New England Brewing is no stranger to controversy, having had two previous products come under fire: one for its use of Disney intellectual property on its ‘Imperial Stout Trooper’(Siss, 2015) and another for using Mahatma Gandhi’s image (Dowling, 2015). Both issues resulted in the company changing its theme. However, the brand remains extremely popular despite—or perhaps partly because of—the discussion it generates.

Conclusion: Learning from Legends Neolocalism is popular in part not just because it provides messages about places and local culture, but also because it promises that those places can be experienced firsthand. Legends provide further incentive and means to experience these localities. Their narrative structure and bizarre content engage the listener, describe the unique traditions of an area, and invite them to participate in the legend process through exploration and debate. This chapter illustrates the popularity and potential of legend branding to that end, while simultaneously demonstrating some of its challenges and shortcomings. It highlights the fact that while legends can be a potent source of local identity, presenting them through beer marketing is not always a simple matter. Consequently, this chapter contributes to our understanding of neolocalism —and the challenges of pursuing it in a global age—by extending this body of scholarship into considering the applications of the legend process. Beyond its importance to future researchers who seek to continuously refine and extend our understanding of these and related processes, this chapter also provides insights for beer industry professionals who might deploy these methods.

Most famously, the 1999 film Blair Witch Project used similar techniques (Dobele et al., 2005).

5

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Leveraging folklore to establish neolocalism can be a powerful means of engaging customers, but it can also be a very confusing approach. The difference lies in which legend is selected, how it is presented, and how well these choices actually correspond with the message a brewing company intends to convey. These are all issues that should be considered carefully. For instance, the intent might be to actually tap into, and perpetuate, regional traditions. If that is the case, companies should first make sure the legend actually is reasonably local. This is of course not a matter of objectively measuring distance, but one that considers what counts as local or regional identity in a given context. Referring to a broad area, like New England, might be sufficient. Referring to a legend from another coast or even continent is more problematic. Conversely, was a particular legend chosen just because it is something that interests the brewer personally? If so, that connection could be clearly portrayed on the can to humanize it (Hede & Watne, 2013). Personal detail serves to localize the brand to a specific individual, even if the legend has no local connection in terms of geography, but only if this association is presented clearly. Whatever the case, the fact that a legend is being presented should be established fairly conspicuously. This does not mean that the legend needs to be presented clearly or in full of course. Practical limitations often mean this is impossible, but even in situations where it is possible, a sense of ambiguity or mystery is preferable since it benefits the legend process more than spelling everything out in full detail. Instead, elements that merely suggest the presence of the legend may be sufficient. For instance, clearly visible images of strange places, unusual architecture, or similar elements that tend to give rise to legends in the first place can suffice if they are odd enough to attract attention and speculation. Here, even consumers who are not familiar with the tale can be organically drawn into the legend process. Often companies choose legends as themes not because of any particular local connection, but in an effort to establish their brand and products as distinctive and quirky. Given the need to stand out in a market flooded with competing firms, this is quite understandable. However, it is necessary to consider whether a specific attempt to localize a product in this way is actually achieving its goal, or merely watering down brand image. In other words, excessive generic imaging, no matter how zany or offbeat, can actually make a product less distinctive when it muddles the message, makes no meaningful connections to places or people, and merely repeats similar practices from other firms. Again, whatever the specific goal might be in leveraging folklore, careful consideration should be put into planning its communication and considering how consumers will receive it. When resources are available, some companies might consider conducting interviews or focus groups to test how well messaging actually corresponds with audience reception.

Local Legends, Local Flavor …

Vague legend themes, rather than localized legends, can be problematic for craft brewers. In a sense, the message these produce is the opposite of approaches that effectively leverage local connections and extend these to customers. They are generic legends rather than specific ones, they are placeless instead of emplaced, and they are vague instead of detailed. They rely on common knowledge—most people have heard of their content in general—rather than appealing to local lore and tradition. It is possible these generic references cause people to think about their themes in general, or even to think of some specific sample they are familiar with. However, this is hardly the same as some of the other, more directed linkages to place examined above, and less likely to produce the deep, neolocal engagement required to effect a behavioral response. Folklore typically is transmitted through communities with shared background, history, and concerns. This makes it somewhat tricky to use in marketing if the goal is to expand beyond a given demographic. However, it can work particularly well if the idea is to appeal to locals or entice non-locals into learning more about a given area because they want to experience it. The characteristics of legend can even present challenges and obstacles to small-scale brewers if they do not study its nature and requirements: including opportunities for debate, providing opportunities for legend participation even if these are merely going to the brewery’s website, and so on. Although decades of research have demonstrated the power of legend, there has been less research to date on its use in beer marketing. Much of the existing research treats legends as superficial themes instead of engaging, social discourse. Consequently, there are many opportunities for future research on the use of folklore in beer promotion in general, and on the use of legends to that end in particular. There is further need to empirically study how individuals perceive, interpret, and respond to specific legend messages. Of particular interest would be questions regarding just how ‘local’ a legend has to be to be perceived as local and how consumers respond to generic, as opposed to specific and highly localized, legends. Likewise, while the content of beer packaging is important to explore, examining the intentions of the people who designed it and determining whether these are consistent with the message actually displayed also presents ample opportunities for research. Further possibilities remain regarding the content of packaging and other messaging materials too. For instance, if legends shift over time to keep up with changing concerns, similar patterns should be present in this written record. Whatever the answers to these or similar questions might reveal, it can be assured that the legend process will continue, whether as intended or as something else entirely.

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J. S. Debies-Carl Moon River Brewing. (2022). Moon river spooky shirt. https:// moonriverbrewingcompany.myshopify.com/collections/apparel/ products/mens-spooky-t-shirt Patton, M. T., & Mathews, A. J. (2013). Marketing American microbrews: Promoting neolocalism one map at a time. Papers in Applied Geography, 36, 17–26. Philips, D. E. (1992). Legendary Connecticut: Traditional tales from the nutmeg state. Curbstone Press. Revival Brewing Company. (n.d.). Our beers. https://www. revivalbrewing.com/ Rose, G. (2001). Visual methodologies. Sage. San Diego Haunted Locations. (2022). Thorn street brewery good spirits and a ghost. https://www.sandiegohaunted.com/thorn-streetbrewery-good-spirits-and-a-ghost/ Schnell, S. M. (2011). The local traveler: Farming, food, and place in state and provincial tourism guides, 1993–2008. Journal of Cultural Geography, 28(2), 281–309. Schnell, S. M. (2013). Deliberate identities: Becoming local in America in a global age. Journal of Cultural Geography, 30(1), 55–89. Schnell, S. M., & Reese, J. F. (2003). Microbreweries as tools of local identity. Journal of Cultural Geography, 21(1), 45–69. Shepherd, S., Chartrand, T. L., & Fitzsimons, G. J. (2015). When brands reflect our ideal world: The values and brand preferences of consumers who support versus reject society’s dominant ideology. Journal of Consumer Research, 42(1), 76–92. Shkolnik, D. (2016). Crafty. Daily Nutmeg. https://dailynutmeg.com/ 2016/09/08/new-england-brewing-company-crafty/ Shortridge, J. R. (1996). Keeping tabs on Kansas: Reflections on regionally based field study. Journal of Cultural Geography, 16(1), 5–16. Singleton, R. A., & Straits, B. C. (1999). Approaches to social research. Oxford University Press. Siss, W. (2015). Connecticut beer: A history of nutmeg state brewing. American Palate. Sjölander-Lindqvist, A., Skoglund, W., & Laven, D. (2020). Craft beer —Building social terroir through connecting people, place and business. Journal of Place Management and Development, 13(2), 149–162. Strauss, A. L. (1990). Qualitative analysis for social scientists. Cambridge. Sullenberger, T. E. (1974). Ajax meets the Jolly Green Giant: Some observations on the use of folklore and myth in American mass marketing. Journal of American Folklore, 87(343), 53–65. Susan. (2006). The legend of the Sea Hag. https://seahag.wordpress. com/ Tucker, E. (2007). Haunted halls: Ghostlore of American college campuses. University Press of Mississippi. Zahn, B. (2021). Why NEBCO, that brewer of Sea Hag fame, wants West Haven as its new home. New Haven Register. https://www. nhregister.com/news/article/Why-NEBCO-that-brewer-of-Sea-Hagfame-wants-16654259.php

Jeffrey S. Debies-Carl Ph.D., is Professor of Sociology in the Department of Psychology and Sociology at the University of New Haven. His research examines the social significance of physical, digital, and hybrid environments. His work has appeared in a number of scholarly journals, such as the Journal of Cultural Geography and the Journal of Folklore Research. He is the author of Punk Rock and the Politics of Place (Routledge, 2014) and If You Should Go at Midnight: Legends and Legend Tripping in America (University Press of Mississippi, 2023).

Southern Cultural Tropes in Craft Beer Naming and Image Conventions Joshua Z. Merced

Abstract

Names and product labels adopted into craft brewery operations are avenues to understand both marketing trends of the industry and how they navigate the complex contours of the politics and economics of place-making. Naming and labels, as pathways of consumption, are two of many ways in which the material world is organized. Drawing from spatial frameworks of consumption, place-making and neolocalism of the craft beer industry, this chapter examines naming and image conventions to excavate submerged ideologies of Southerness and regional identity through a case of Brewers Associationregistered microbreweries across five states in the Southeast United States. This chapter situates craft beer as an actor in the cultural economy, and is critical of how culture, identity, and experiences are commodified in a growing industry. Keywords

Place-making Southerness




Place-branding




Marketing




Labels




Introduction In the craft beer industry, branding as a competitive strategy is paramount to driving multi-scalar economic function and appealing to the ethos of neolocalism within the industry (Flack, 1997; Gatrell et al., 2018). While the strategy of branding spaces and materials is economic in nature, the underexamined impact of selecting imagery and names has spatial and cultural implications which contribute to the J. Z. Merced (&) Department of Geography, Planning, and Recreation, Northern Arizona University, Flagstaff, AZ, USA e-mail: [email protected]

broader effect of a craft beer producer. Naming and imagery of the craft beer industry are opportunities to identify patterns of consumption and examine how the material world is organized. In the urban craft beer scene, producers utilize a range of naming and image conventions to produce a narrative of both their relationship with the consumers and cultural trends in the industry. This chapter examines these conventions to excavate submerged ideologies of southern identity through place-branding tactics. Through a case study of five states in the Southeast United States—Alabama, Georgia, North Carolina, South Carolina, and Tennessee—we will explore the role of naming and imagery of craft breweries that contribute to the construction of a cultural narrative and establish a sense of place that both promotes and inhibits industry participation.

Craft Beer Landscapes in the Southeast United States While the 21st Amendment was instrumental in changing society’s relationship with alcohol consumption, legal restrictions and demanding policies of beer production and consumption continue to present challenges to the industry’s growth and integration into the wider network of craft brewing. Brewing reformers have confronted issues such as repressive taxation, distribution limitations, and homebrewing regulations (Ray, 2013). One of the most recent legal victories in the Southeast United States region permits qualified Louisiana microbreweries to sell their products directly to bars and restaurants (Price, 2022). Navigating the state’s policies around brewing is one of many avenues that contribute to network building and resource sharing in the industry. The COVID-19 pandemic presented additional challenges for the broader brewing industry, both in their economic and social functions that inherently work in tandem. Distribution limitations regulated by local and state ordinances and availability and rising costs of materials

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_14

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determined the survival of breweries, with the newest companies of the industry being the most vulnerable (Fallows, 2020). Brewing in the region works against cultural friction as well, navigating the contours of the domineering toponym, “Bible Belt” (Baginski & Bell, 2011). The South’s widely adopted ties to religious doctrines, primarily of evangelical Protestantism, is illustrated by membership, plenitude of places of worship, and replication of symbols and motifs (Hill, 2006). The fundamental doctrines of the Bible Belt not only have impeded the legal progress of the industry, but also dictated patterns of individual and collective responsible consumption. For example, at the individual level, religious leaders consciously limit alcohol consumption entirely or in private, secluded settings, to protect their moral reputation in the community (Jackson, 2017). Craft beer is inherently an economic device driven by its creative and social properties. Coupling craft beer with tourism is a sensible and deliberate practice, and is proven successful in parts of the Southeast United States (e.g., Alonso, 2011; Murray & Kline, 2015; Slocum, 2016). As an extension of culinary tourism, beer as a tourist destination involves the “visitation to breweries, beer festivals and beer shows, for which beer tasting and experiencing the attributes of a beer region are the prime motivating factors for visitors” (Plummer et al., 2005, p. 450). Beer tourism contributes not only to local economic growth, but the development and affirmation of local identity (Schnell & Reese, 2003). However, “local” identity has developed into an elastic concept, scaling geographic localism to the wider extent, as far as a state’s borders (Eades et al., 2017).

Expressions of Southern Identity The proliferation of identities is grounded in the experience, replication, and mobility across time and space. Collective identities reflect continuities and ruptures in relationships to reconstruct and imagine cultural expressions and their cohesiveness and tensions with one another (Hall, 1997). Barbara Bender’s transdisciplinary discourse on landscape, place, and heritage puts in perspective the fluidity and transformation of identity and its relationship with space (Bender, 1993, 2002, 2006). Regional identity, as outlined by historians, is constructed through three highly critiqued components: geography, culture, and history (Catsam, 2008). For the American South, geography often reflects the fixed and narrow scope of space and is deemed an unreliable indication of the breadth and depth of the region’s identity. Culture embodies recurring themes and practices across Southern communities that forge non-representative, or even misrepresentative, collective regional identity. While history is ubiquitous, individual truths and experiences are often

J. Z. Merced

absorbed into a homogenous narrative. Southerness operates at the crossroads of overlapping identities, which those sub-experiences have defining factors themselves based on social and physical surroundings, and in turn inform policy opinions and behaviors (Cooper & Knotts, 2013).

Place-Making Through Names and Imagery of Craft and Creative Industries Place-making discourse has evolved from the groundwork set by spatial critics that investigated how and why humans develop complex relationships with space, paving the way for emerging frameworks that adapt and accommodate to sociopolitical shifts (Buttimer & Seamon, 1980; Cresswell, 2004; Ellery et al., 2021; Massey, 1994; Relph, 1976; Tuan, 1977). Ellery et al. (2021) present a contemporary placemaking framework that synthesizes place-making factors previously interrogated, including the role of individual senses and responses to the physical environment. They elevate these factors by emphasizing the community component, suggesting that the degree to which the community is invested in individual or collective place-making is correlated to the magnitude of the impact of the place-making efforts. The proposed framework also suggests that placemaking occurs on a continuum. On one end of this placemaking continuum lies changes to the community environment that are a result of external forces (e.g. government planning policies, private development projects, etc.), and that are imposed upon the community members. At the other end of the placemaking continuum are those changes that result from individuals in the community initiating and taking responsibility for the environmental change themselves. (Ellery et al., 2021, p. 70).

Place-making can be conveyed through toponyms, or placenames, which are intentionally constructed, primarily to “impart a certain meaning” and establish identity (Radding & Western, 2010, p. 395). While toponyms can be arbitrary at face-value, space and time present challenges such as a redefinition, reattribution, disconnection, and misinterpretation. The shift away from an original meaning not only disrupts linguistic and grammatical function, but societal patterns and associations, resulting in opaqueness in placenames (Radding & Western, 2010). Placenames develop at the crossroads of geography, language, and culture, shaping both individual and collective identities and cultural conventions, and indicate spatial distribution and temporal movement (Berg & Kearns, 1996; DeAza, 2020; West, 1954). Names and other markers of identity have a regulatory factor, providing a space for human recipients to index and organize the material world. This process of materializing, contextualizing, and visualizing names is grounded in

Southern Cultural Tropes in Craft Beer Naming and Image …

“geosemiotics” framework (Scollon & Scollon, 2003). Geosemiotics references the complex social meanings behind names, signage, and expressive behaviors of the material world. Drawing from the intersection of anthropological, psychological, geographic, and linguistic theories, geosemiotics is an apparatus adopted into everyday societal infrastructure that dictates human behavior. Language, at the roots of geosemiotics, plays an important role in transforming space into place (Lou, 2017). Names and images strategically adopted into the communication or promotion of the material world serve as links between intent of an action and their sub-meanings: …there are three ways in which language can be located in the material world: the interaction order (including speech, movement, gesture), visual semiotics (including text and images), and place semiotics (all of the other non-linguistic symbols that directly or indirectly represent language). (Scollon & Scollon, 2003, p. 13).

While these three ways of identifying language are bound to one another, human geographers may have a vested interest in visual semiotics and place semiotics in particular to supplement place-making discourse. Visual semiotics are represented by markers in the form of text and images that convey meanings and values through different variables such as illustration, placement, design, and word choice. The meaning and value are determined by the recipient and their relationship with the material that is presented, informed by emotions and experiences external to the subject matter. Place semiotics represent the spatial component in which humans interact with a presented form of visual semiotics (Scollon & Scollon, 2003). Employing a visual component to place-making embraces place-branding and place-marketing tactics that are set of tools and strategies to construct identity, and in turn provide a sort of economic advantage, in a market. Strategies used to develop place brands may not necessarily reflect the culture and heritage links embedded in a particular place (Skinner, 2008). Place-marketing and place-branding can be adopted at any point in a place-making process, whether that being a place has an established sense of identity, a place in need of refashioning, or a place has an underdeveloped identity. Depending on the scale of place-making through these tactics, often the process occurs with governments and industries collaborating at the helm, dictating the adoption of terminology, imagery, and distribution to appropriately “target, correct, improve and evaluate the brand” (Skinner, 2008, p. 919). Craft and creative industries adhere to the practices and subjectivities of Mansvelt’s (2005) “geography of consumption.” The places and spaces of consumption are transformative in the sense that identities are (re)produced through materials and symbols that cycle through the political-economic functions of consumer behavior

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(Mansvelt, 2005). Consumption, as an economic function, occurs through a range of commodity outputs: goods or services, people, and ideas. Craft commodities present unique consumption behavior, as they have evolved over time to reflect culture and societal trends. Craft commodities range from conventional handwork such as jewelry, printing, and furniture making, to more contemporary expressions of material and trade culture such as bartending, barbering, and butchering (Campbell, 2005; Ocejo, 2017). This particular exchange of craft commodities, referenced as “craft consumption,” marries “activities in which individuals both design and make the products that they themselves consume” and “transforms ‘commodities’ into personalized objects” (Campbell, 2005, p. 27–28). Place-making in the craft beer industry leans heavily into “local” discourse, both in the production of the beer itself and its marketing tactics (Eberts, 2014; Fletchall, 2016; Schnell & Reese, 2014). In beer’s sister industry of wine, the measurement of locality has become synonymous with the concept of “terroir,” or geographic indications that preserve and enhance the taste of a place through the material (Trubek, 2008; Trubek & Bowen, 2008). Similarly, place-making for moonshine producers, specifically in East Tennessee, occurs through place-based naming and referencing the heritage and history of the industry, identifying moonshine producers as place-makers (Rosko, 2017). For beer, this identification of place-identity is conceptualized as “neolocalism,” reflected through the “self-conscious reassertion of the distinctively local” (Flack, 1997, p. 38). Neolocalism in the industry has been geographically interrogated through the analysis of brewery and beer names, accompanying imagery, and maps (Flack, 1997; Fletchall, 2016; Patton & Mathews, 2013; Schnell & Reese, 2003). Regional studies continue to reinforce place-making frameworks in the craft beer industry, identifying contemporary practices and phenomena that promote locality and innovation, which are two main drivers of industry participation for both consumers and producers (Debies-Carl, 2019; Jolly, 2020; Nelson, 2021; Reid & Gatrell, 2017; Smith & Asirvatham, 2022).

Branding Southerness in a Regional Craft Beer Industry Visual and textual references in place-based marketing are devices to inform, imagine, organize, and sometimes distort geographic concepts (Fleming & Roth, 1991). Place-based marketing in the food and beverage industry is approached in a variety of ways, depending on the product. The placebased marketing tactic employed influences “consumer perception of product quality and eventual purchase behavior” (Mathews & Patton, 2016, p. 277). This study draws

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from similar place-marketing assessments, specifically Mathews and Patton’s (2016) analysis of brewery website text and graphics and Fletchall’s (2016) categorization of imagery and naming trends. The study area of interest for this analysis encompassed the states of Alabama, Georgia, North Carolina, South Carolina, and Tennessee. Data for the study is an aggregate of web resources (Brewers Association registration database and individual brewery websites). In March 2023, 166 classified microbreweries (Fig. 1) and 291 taprooms (Fig. 2) were registered with the Brewers Association across study area of interest (n = 457), with the distribution across the states represented in Table 1. Brewery names, locations, and website URLs gathered from the Brewers Association database and catalogued into a spreadsheet. Microbreweries listed in the catalog were selected at random to analyze website content, with particular interest in product names and associated imagery. Drawing from Bender’s construction of regional identity, text and visuals associated with microbreweries in the study area were divided into three categories: landscape, place, and heritage (Appendix A). Landscape included texts and visuals that referenced physical geography such as rivers, lakes, and mountains, and any associated toponyms. Place included city and town monikers. Heritage included historic, cultural, or personal references, regardless of association to Southerness or the American South.

J. Z. Merced

Place-Making and Conveying Southern Themes Through Brewery and Product Names The study area presents a unique case of detaching urban and rural adoptions of social implications and politics of Southerness. Selecting region-based language is inherently an economic strategy to promote individual brewery’s commitment to neolocal motifs. Brewery names establish the tone and identity for the rest of the brewery’s operations, permeating into strategies behind product names, associated imagery, and programs and events hosted through the establishment. Building on the place-making framework of Ellery et al. (2021), adoption of particular references through brewery names reflects the continuum in which placemaking can occur. One end of the continuum considers external forces that institutionalize physical and social variables of Southern identity. Whether that be political hallmarks that withstand changing sociopolitical landscapes or the acknowledgment of industrial and agricultural histories that lay the groundwork for contemporary economies, scaling the South as a homogenous institution disregards the array of narratives that co-exist among the region. On the other end of the continuum is place-making strategies prompted at the individual level, drawing from personal experiences and interpretations of the environment, broadly. Replicating a dominant Southern theme and expressing it through a vanguard of consumption, in this case brewery

Fig. 1 Distribution of Brewers Association-registered microbreweries across Southeast US < original to the author >

Southern Cultural Tropes in Craft Beer Naming and Image …

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Fig. 2 Distribution of Brewers Association-registered taprooms across Southeast US < original to the author > Table 1 Number of Brewers Association microbreweries and taprooms by state

State

Number of Brewers Association-registered microbreweries

State

Number of Brewers Association-registered taprooms

Alabama

12

Alabama

16

Georgia

31

Georgia

62

North Carolina

75

North Carolina

146

South Carolina

23

South Carolina

25

Tennessee

25

Tennessee

42

Total

166

Total

291

names, restricts the scope of participants to those who resonate positively with said themes. Brewery names are arguably the first point-of-contact with consumers, where allegiance and perception develop. While not all brewery names have explicit sociopolitical implications regardless of paying homage to regional identity, several breweries identified having a “heritage” based name remains consistent with expressing Southerness that is often approached with a critical lens. South Carolina’s breweries provide a wide range of references under those classified as a “heritage.” One non-regional reference is that of Frothy Beard Brewing Company in Charleston, South Carolina, whose name draws inspiration from a popular culture reference. Michael Biondi, one of the three-bearded owners of the company, pays tribute to the “grizzly-bearded Lord of the Rings character at a bar, sluggin’ back a beer that covers his entire face” (New Brew, 2013). Charleston, a riverside city with a

coastal-urban vibe with a network of breweries referenced as the “Brewery District” at its core relieves the stress of appealing to masses through their marketing strategies. Local and regional tourism of Charleston is driven by many channels, with the brewing scene being a leading industry. In Columbia, River Rat brewery establishes ties to both the physique and culture of a Southern experience. Columbia is situated at the confluence of the Saluda and Broad Rivers that merge into the Congaree River, and home to Fort Jackson, a U.S. Army training camp. The term “river rat” can resonate with a variety of experiences to those living or visiting the area. River rat has been used colloquially to describe frequent participants of water recreational activities, a historical reference for impoverished people who resided along rivers, and “a collection of American veterans…who formed the backbone of the River Patrol Force of the Vietnam War” (Stark, 2016). The narrative the brewery subscribes to reflects the “three rivers that run through our city

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and the working-class men who labored on the canal here more than a century ago” (Our History, 2022). These two examples exhibit place-making efforts from the two ends of the continuum framework through their names, with the latter expressing distinct neolocal themes. Product names are merely an extension of place-making efforts that breweries deploy and provide a more creative yet provisional platform to connect with consumers. Names can evidently be seen as something overlooked, giving more attention to factors such as beer style (e.g., taste, flavor profile, brewing method). However, names work at the intersection of reflecting both the beer style and the tone and theme of the brewery established in their history and brewery name. Highland Brewing of Asheville, North Carolina embraces sensory language that mirrors primarily physical experiences of the state and region, broadly. The focus on physical elements of North Carolina and Southern landscapes validates neolocalism not only through their product names, but the provided descriptions that accompany them. For example, the High Pines Imperial IPA illustrates a common topographical feature found across the region, but is deeply incorporated into the creation of the product itself, described as “citrus and blueberry hop flavors with a touch of fresh mountain pine” (Our Beers, 2022). Appalachian Grail Brewing Company of Hayesville, North Carolina takes a contrasting approach to place-making through referencing a regional toponym in their product names. The names of the majority of their current products are iterative of the toponym “Appalachian,” a term laden with regional cultural significance. The product names marry “Appalachian” with names of ingredients incorporated into the beer or the style of beer itself. For example, Azacca hops are incorporated into a New England Style India Pale Ale, resulting in the product name of “Azaccalachian.” (Our Beers, 2022).

Place-Making and Visualizing Southerness Through Product Labels Images used to promote products and identity through craft beer labels are opportunities to critique, construct, and reimagine place-identity. Product labels are merely a single, yet important component, to building not only the brand of a product or brewery, but a geographic brand. In contrast to names, images used in product labels provide a visual context and intent behind specific marketing strategies. In the case of a regional craft beer industry, names establish definition while labels reflect individual and community narrative and identity, developing labels in a collaborative and multi-faceted process. Artists are responsible for the skill and creativity in conveying the identity promoted through the products. Not only are they promoting a cultural identity

J. Z. Merced

in this strategy, but an identity of the beer itself, including its flavor profile and style of brewing. Product labels “should not only draw attention to itself, but also ‘tell the story of the beer’” (Lisle, 2022). Given the range of references and themes breweries subscribe to through, the study area presents a case where breweries work within their means to continue developing neolocal themes through their labels. A trend in the region’s industry involves the descriptor term “haze” that provides a consistent interpretation through adopted imagery and presentation. Haze, as a broad term used in the brewing industry, “generally covers all forms of instability in beer in which insoluble material appears” (Oliver, 2011). Essentially, the beer itself presents to be cloudy and opaque to the brewing process. Haze is a shared reference to 1960s counterculture, coded by eccentric behavior and material at the introduction of the term “Purple Haze” by Jimi Hendrix (Whiteley, 1990). Back Forty Beer Company of Birmingham, Alabama, joins a regional colloquial idiom with the counterculture reference in a product named “Rollin’ in the Haze.” The vibrant color scheme and eclectic design of the label places the counterculture reference at the forefront, with iterations among comparable brews across the regional industry. While this tactic to promote hazy beers does not convey banal Southern motifs, the commitment to cultural references submits to broader place-making themes within the industry. The replication of visualizing counterculture themes situates the region as a critical component to identity development within the industry.

Rivers as Southern Symbolism in Product Names and Labels Rivers evidently have ecological and socioeconomic mechanisms that can drive the interest of craft breweries establishing a relationship with them. The river generally functions as an element of the physical landscape, heavily formed by natural and human impact, and can provide both physical and cultural resources to a craft brewery (Wohl & Merritts, 2007). The foundation of beer is water, whose quality is carried from start to finish in the brewing process. Regional water quality has served as both an advantage and a barrier for framing a craft brewery’s branding and competitiveness in the market (Gatrell et al., 2014). Water is instrumental in constructing neolocal themes and the “taste” of a particular area. The adoption of references to regional rivers and river systems in branding and marketing contributes to the relationship building between the built and natural environment. The reference to a river in a brand or product name serves as a means of place association, recognizing that the river plays a significant part in the community’s identity. River references can also provoke a sense

Southern Cultural Tropes in Craft Beer Naming and Image …

of individual nostalgia solely through its name, allowing consumers to draw their own connections to how the river constructs their geographic memory. River references are placed into the “landscape” category of Bender’s regional identity framework, whether it is the explicit use of a river’s name or a colloquial term. Rivers in the Southeast United States maintain a particular culture and experience through their histories and functions. The toponymic and colloquial river names can tell the story of who has lived along the river or offer insight into the sensory experience of the river. Craft breweries incorporate these into their branding and marketing works in promotion of a unique regional natural element and experience.

Conclusion Overall, very few microbreweries in the region affirm banal sociopolitical themes of Southern identity through their brewery name, product names, and product labels. For those who subscribe to Southerness through these avenues, the material they present confirms the adoption of neolocalism not only through the flavor profiles of their products, but through the terminology and imagery they associate with their operations. The breweries in analysis for this study seemingly have a broader interest in promoting the creativity and collaboration that the industry relies on. With the Southeast United States being a growing region for the industry, the lack of homogeny in Southern culture is reflected in the marketing decisions made by individual breweries. Promoting “the South” through names and imagery does not seem to be a priority. However, this study assessed open-source content of breweries and perceptions from a range of survey participants with no geographic limitations and does not account for the expressed intentions from brewery owners and operators as to why these marketing tactics are being adopted. Place-making in the beer industry is not limited to expressions through name and imagery. While names and images provide a distinct point-of-contact that is not dependent on the geography of the consumer, place-making is arguably equally dependent on the physical embodiment of culture and identity. This often occurs on-site at breweries through décor and infrastructure, as well as other contact points such as festivals and conventions. The multi-angle place-making framework suggested by Ellery et al. (2021) relies on individuals establishing a sense of place that ultimately helps construct a collective place-identity. The Southeast United States’ craft beer industry is at early stages of establishing a collective place-identity. As breweries make strategic decisions around marketing, often informed by neighboring activities and trends, they are establishing an individual sense of place. In order to promote a positive

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trajectory for equitable and diverse industry participation, it begins with monitoring and critiquing what is happening at the individual scale.

Appendix Registered microbreweries and taprooms with the Brewers Association categorized by name associated with landscape, place, or heritage (Member Directories: Breweries, 2023). Landscape

Place

Heritage

Avondale Brewing Company Brock's Gap Brewing Company Druid City Brewing Oyster City Brewing Company

Back Forty Beer Company Black Warrior Brewing Company Bowler Hat Brewing Company Common Bond Brewers Cross-Eyed Owl Brewing Company Folklore Brewing & Meadery Ghost Train Brewing Company Mad Malts Brewery Old Black Bear Brewing Old Majestic Brewing Company Oversoul Brewing Rocket Republic Brewing Salty Nut Brewery Tallulah Brewing Company Trim Tab Brewing Twisted Barley Brewing Company Uproot Brewing Yellowhammer Brewery

Athentic Brewing Company Atlantucky Brewing Cochran Mill Brewing Company Dalton Brewing Company Gate City Brewing Company Georgia Beer Company

Abide Brewing Company Akademia Brewing Company Angry Hops Brewing Arches Brewing Awkward Brewing Blackbird Farms Brewery BlueTarp Brewing Company Brackish Beer Company Bucking Goat Brewing Company (continued)

Alabama Big Beach Brewing Company Braided River Brewing Company Cahaba Brewing Company Old 31 Brewing Singin’ River Brewing Company

Georgia 52 West Brewing 6S Brewing Company Camp Brewing Company Cartecay River Brewing Company Chattabrewchee Southern Brewhouse Coastal Empire Beer Company Currahee Brewing Company

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J. Z. Merced

Landscape

Place

Heritage

Drowned Valley Brewing Company Pendley Creek Brewing Company Savannah River Brewing Company Silver Bluff Brewing Company Six Bridges Brewing The Woodlands at Sweetwater Two Tides Brewing Company

Glover Park Brewery Macon Beer Company Normaltown Brewing Company Oconee Brewing Company Omaha Brewing Company Senoia Beer Company Talking Rock Brewery

Burnt Hickory Brewery Contrast Artisan Ales Debellation Brewing Company Dr. Scofflaw's at the Works ATL Dry County Brewing Company Eventide Brewing Company Fannin Brewing Fire Maker Brewing Company Freedom Brew & Shine Grumpy Old Men Brewing Halfway Crooks Beer Hippin’ Hops Brewery Hixtown Brewing Company Indio Brewing Company Inner Voice Brewing Ironmonger Brewing Ironshield Brewing Jekyll Brewing Kettlerock Brewing Liquid Nation Brewing Little Cottage Brewery Mandatory Fun Beer Works Monday Night Brewing Monkey Wrench Brewing Company Orpheus Brewing Outrun Brewing Company Pontoon Brewing Company Pretoria Fields Collective Printer's Ale Manufacturing Company Red Hare Brewing Company Reformation Brewery Rightside Brewing Riverwatch Brewery Round Trip Brewing Company Sabbath Brewing Schoolhouse Brewing Second Self Beer Company (continued)

Landscape

Place

Heritage Skint Chestnut Brewing Company Slow Pour Brewing Company Southbound Brewing Company Southern Brewing Company Southern Brewing Company StillFire Brewing Strange Duck Brewing Tantrum Brewing Company The Lodge Three Taverns Craft Brewery Three Taverns Imaginarium Towerhouse Farm Brewery Twain's Brewpub Variant Brewing Company Whistle Top Brew Company Wild Heaven Beer

North Carolina Black Creek Brewery Black Mountain Brewing Crystal Coast Brewing Company Currahee Brewing Company Deep River Brewing Company Ecusta Brewing Company Eleven Lakes Brewing Company French Broad River Brewing Company Ghost Harbor Brewing Company Gypsy Road Brewing Company Haw River Farmhouse Ales Hell on Horsecreek Brewing Hickory Nut Gorge Brewery Mountain Layers Brewing Company New River Brewing Northern Outer Banks Brewing Company

Bear Creek Brews Belmont Brewing Company Carolina Brewery Carolina Brewing Company Catawba Brewing Company Edge City Brewery Fishtowne Brew House Kernersville Brewing Company Little City Brewing Company Lookout Brewing Company Lost Colony Brewery Lost Province Brewing Company Lucky City Brewing Company Lynnwood Brewing Concern

12 Bones Brewing Altered State Brewing Company Americana Beer Company Archetype Brewing Ass Clown Brewing Company Aviator Brewing Company BearWaters Brewing Company Beer Lab By Ghostface Brewing Belleau Wood Brewing Company Big Game Brewing Big Pillow Brewing Company Billy Beer Birdsong Brewing Co Blue Blaze Brewing BMC Brewing Bombshell Beer Company Bond Brothers Beer Company Boojum Brewing Company Brew and Feed Brewing Brewery 99 (continued)

Southern Cultural Tropes in Craft Beer Naming and Image … Landscape

Place

Heritage

Oaklyn Springs Brewery Outer Dunes Brewing Company Pharr Mill Brewing Company Pisgah Brewing Company Pitt Street Brewing Company Satulah Mountain Brewing Company Snowbird Mountains Brewery Southern Appalachian Brewery Southern Peak Brewery Sugar Creek Brewing Company Sweeten Creek Brewing Two Rivers Alehouse Uwharrie Brewing White Street Brewing Company

Mica Town Brewing Mill Hill Taproom New Village Brewery and Taproom NoDa Brewing Company Oak City Brewing Company Olde Hickory Brewery Raleigh Brewing Company Southern Pines Brewing Company Tarboro Brewing Company Triangle Beer Company Twoboros Brewery Wilmington Brewing Company

Brewery Bhavana BrickTree Brewing Company Bright Light Brewing Company Broomtail Craft Brewery Brown Truck Brewery Brueprint Brewing Company Brutopia Brewing Company Buck Bald Brewing Burial Beer Company Burning Blush Brewery Casita Brewing Company Cavendish Brewing Company Cellarest Beer Project Clouds Brewing Compass Rose Brewery Cotton House Craft Brewers Craftboro Brewing Depot D9 Brewing Company Dingo Dog Brewing Company Divine Barrel Brewing Double Barley Brewing Double-E Brewing DrumTrout Brewing Company DSSOLVR Duck Rabbit Craft Brewery Durty Bull Brewing Company Edit Beer Company Edward Teach Brewing Eluvium Brewing Company Eurisko Beer Company Fainting Goat Brewing Company Fiddin’ Fish Brewing Company Flying Machine Brewing Company Flytrap Brewing Fonta Flora Brewery Forgotten Road Ales (continued)

183 Landscape

Place

Heritage Fortnight Brewing Company Four Saints Brewing Free Range Brewing Freshwater Beer Company Fullsteam Brewery Funguys Brewery Ginger's Revenge Gizmo Brew Works Good Hops Brewing Goofy Foot Taproom and Brewery Green Man Brewing Company Grove Cartel Brewing Company Guidon Brewing Company Hatchet Brewing Company Heist Brewery & Barrel Arts High Branch Brewing Company Hi-Wire Brewing Hi-Wire Brewing Homeplace Beer Company HOOTS Beer Company HopFly Brewing Company Hoptown Brewing Company Hugger Mugger Brewing Company Innovation Brewing Iron Key Brewing Company Ironclad Brewery Jolly Roger Brew Joymongers Brewing Company Kettell Beerworks Koi Pond Brewing Company KoMANA Brewing Company Laconia Ale Works Lazy Hiker Brewing Company Lenny Boy Brewing Company Lesser Known Beer Company Leveller Brewing Company Liquid Roots Brewing Project Little Oblivion Brewing Company (continued)

184 Landscape

J. Z. Merced Place

Heritage Local Oak Brewing Company Lonerider Brewing Company Lost Worlds Brewing Lower Left Brewing Company Mason Jar Lager Company Midsummer Brewing Mill Whistle Brewing Mother Earth Brewing Mythic Brewing Nauti Dog Brewing Company New Anthem Beer Project New Sarum Brewing Newgrass Brewing Company Nickelpoint Brewing Company Norse Brewing Company Oden Brewing Company Old Armor Beer Company One World Brewing Owls Roost Brewery Percent Tap House Petty Thieves Brewing Company Pig Pounder Brewery Primal Brewery R&D Brewing R&R Brewing Radar Brewing Company Red Buffalo Brewing Company Resident Culture Brewing Riverside Rhapsody Beer Company RMM Brewery Incubator Salty Turtle Beer Company Seaboard Brewing Seven Sounds Brewing Company Shortway Brewing Company Sidetracked Brewery Sideways Farm and Brewery Skull Camp Brewing Skull Camp Brewing Sneaky Penguin Brewing Company (continued)

Landscape

Place

Heritage Starpoint Brewing Starpoint Brewing Steel Hands Brewing Steel String Craft Brewery Sweet Union Brewing Swellsa Brewing Sycamore Brewing Taproom & Beer Garden Tar Banks Brewing Company The Dreamchaser's Brewery The Garage Thirsty Skull Brewing Toasty Kettlyst Beer Company Tobacco Wood Brewing Company Triple C Brewing Company Trophy Brewing Company Unknown Brewing Company UpCountry Brewing Company Uptown Brewing Company Vaulted Oak Brewing Vicious Fishes Brewery Waterline Brewing Company Wedge Brewing Company Whaley Farm Brewery White Elephant Beer Company Wise Man Brewing Zebulon Artisan Ales Zillicoah Beer Company

South Carolina Brewery 85 COAST Brewing Company Cooper River Brewing Company Estuary Brewing Company Low Tide Brewing Thomas Creek Brewery

Carolina Bauernhaus Ales Columbia Craft Holy City Brewing Lake Wylie Brewing Company Pendleton Brewing Company Rock Hill Brewing Company

13 Stripes Brewery 1873 Brewing Benford Brewing Company Bevi Bene Brewing Company Commonhouse Aleworks Dust Off Brewing Company Fatty's Beer Works Freehouse Brewery Frothy Beard Brewing Company (continued)

Southern Cultural Tropes in Craft Beer Naming and Image … Landscape

Place

Heritage

Sumter Original Brewery

Ghost Monkey Brewery Hazelwood Brewing Company Hobcaw Brewing Company Holliday Brewing Hunter-Gatherer Brewery Lincoln and South Brewing Company Lot 9 Brewing Company Magnetic South Brewery Munkle Brewing Company New South Brewing Company Peak Drift Brewing Company Revelry Brewing Company River Dog Brewing Company RJ Rockers Brewing Company Savage Craft Ale Works Seminar Brewing Shoeless Brewing Company Side Hustle Beer Company Southern Barrel Brewing Company Steel Hands Brewing Tetrad Brewing Company Think Tank Brew Lab Twisted Spur Brewing Two Blokes Brewing Company Wild Heart Brewing

Cedar City Brewing Company Chattanooga Brewing Company East Nashville Beer Works Evil Nash Brewing Company Grind City Brewing Company

1907 Brewing Company Bearden Beer Market Big Trouble Brewing Black Abbey Brewing Company Blackhorse Pub and Brewery Blackstone Brewing Company Bold Patriot Brewing Company Calfkiller Brewing Company (continued)

Tennessee Albright Grove Brewing Company Appalachian Sun Brewery Bays Mountain Brewing Company Blackberry Farm Brewery Depot Street Brewing Company Ghost River Brewing Happy Trails Brewing Company

185 Landscape

Place

Heritage

Harding House Brewing Company Johnson City Brewing Company Memphis Made Brewing Company MoCo Brewing Project Tennessee Brew Works TennFold Brewing

Common Law Brewing Company Corsair Artisan Crafty Bastard Brewery Crosstown Brewing Company Curio Brewing Company Ebony & Ivory Brewing Company Elderbrew Elst Brewing Company Five Wits Brewing Company Greak Oak Brewing Company Hampline Brewing Company Hexagon Brewing Company High Cotton Brewing Honky Tonk Brewing Company Hook Point Brewing Company Jig Head Brewing Company Lilly Pad Hopyard Brewery Little Animals Brewery Living Waters Brewing Company Mad Knight Brewing Company Mayday Brewery Next Level Brewing Company Oddstory Brewing Company Ole Shed Brewing Company Pretentious Beer Company Printshop Beer Company Red Silo Brewing Company Sawbriar Brewing Schulz Brau Brewing Company Swing On Brewing Company TailGate Brewery The Fallen Brewery Turtle Anarchy Brewing Company Twisted Copper Brewing Company (continued)

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J. Z. Merced

Landscape

Place

Heritage VonSeitz TheoreticAles WanderLinger Brewing Company Wiseacre Brewing Company Xul Beer Company Yee-Haw Brewing

< original to author >

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Joshua Z. Merced, Ph.D. is an assistant teaching professor in the Department of Geography, Planning, and Recreation at Northern Arizona University. He is an urban-cultural geographer with research interests around place-making and the cultural economy of craft beer, with a regional focus in the Southeast United States.

What About the Locals? Laying Out a Third Place Branding Strategy for Local Craft Breweries in the Neolocalism Literature Matthew M. Mars and Craig A. Talmage

Abstract

Introduction

Craft breweries commonly appeal to tourists and other “non-local” consumers by showcasing iconic cultural, geographic, and historical features in their branding schemes. Such place-based branding neglects locally based consumers who seek intimate connections to community via their consumption choices and routines. In this chapter, we present a case study of The Shop Beer Company, a local craft brewery located in Tempe, Arizona. Data originate from a catalog of 137 label designs and nearly 30 h of unstructured interviews with the brewery founder. Using a grounded theory approach, we organically identify four elements—play, provocation, participation, and proximity—that synergistically represent a novel third place branding model. The model directly integrates the notion of third place with established narratives pertaining to local beer branding and neolocalism more generally. Likewise, the model stands to inform how craft brewers and community developers strategically approach place-making in ways that foreground local consumer connectedness. Keywords












Local development Food and beverage tourism Craft beer Place-making Place-based branding Third places

M. M. Mars (&) College of Agriculture and Life and Environmental Sciences, University of Arizona, Tucson, AZ, USA e-mail: [email protected] C. A. Talmage Entrepreneurial Studies, Hobart and William Smith Colleges, Geneva, NY, USA e-mail: [email protected]

The massive resurgence of craft beer over the past several decades is directly linked to the broader movement to relocalize economies and (re)create shared senses of local, placebased identities (Eberts, 2014; Flack, 1997; Schnell & Reese, 2003). Often referenced as “neolocalism” within the academic literatures, such relocalization is heavily motivated by a craving for more intimate connections to others within surrounding locales and an overall sense of the places we find ourselves in (Holtkamp et al., 2016; Shortridge, 1996). Succinctly, Cavaliere and Ingram (2020) summarize that “the mother of neolocalism” (p. 2) is rooted in “revisiting sense of place” (p. 2); neolocalism “was born from the study of place” (p. 2). In concept, the neolocalism movement counters the community homogeneity that has resulted from mass-scale corporatization and the de-localization of enterprise, consumption, and, more generally, experience (Schnell & Reese, 2014). The intellectual trajectory of neolocalism has been focused more on place-based branding than on place development. By definition, branding is a marketing process that through identity framing and broadcasting aims to persuade others to include products or services in their consumption choices and routines (Marzano & Scott, 2009; Zarantonello et al., 2013). The strategies associated with such branding typically leverage cultural, geographic, and historical elements of locales to enhance or what Honkaniemi and colleagues (2021) refer to as “sexy up” (p. 327) the images and reputations of places—especially in the eyes and minds of tourists (Ingram et al., 2020). In other words, the prominent cultural, geographic, and historical elements and icons of locales and regions are commonly used as branding devices intended to persuade outsiders to frequent and/or relocate to surrounding communities. The promotion of locally produced craft beer is often associated with such place-based branding strategies and marketing campaigns that target demographics living outside of destination

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_15

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communities (Gatrell et al., 2018; Schnell & Reese, 2014; Taylor & DiPietro, 2020). The association between neolocalism and the creation of endearing and enduring connections between tourists and place neglects the most fundamental of populations—those who permanently live, work, and play within the communities (Nelson, 2021). As of this writing, neolocalism research is starting to gain momentum around exploring place- based branding and place-making. Place-based branding is a well-known concept in studies of craft breweries, where brands and product identities are connected to senses of place with a primary aim being to persuade outside visitors (i.e., tourists) to come and continue to return to destination locales (Nelson, 2021; Taylor & DiPietro, 2020). Congruently, place-based branding also links to the phenomenon of place-making in tourism research, including the intersection of craft beverages and neolocalism (Fletchall, 2016; Kingsbury, 2021). Here again, emphasis is more on promoting place to those living outside of destination locales with the “making” being more memorable connections to be carried away than on building the place itself (i.e., the community). In this chapter, we posit that craft beers, breweries, and their branding showcase unique expressions of neolocalism that have not yet been explored robustly in the neolocalism literature. Specifically, we assert an alternative “third place” view of local craft beer branding that is focused less on conveying the identity of place to those outside of a community and more on nurturing intimate, highly connective spaces for those living, working, and playing within a community. We ground our assertion in the notion of third places, which are social spaces “outside the workplace and the home… [that provide] people with a larger measure of their sense of wholeness and distinctiveness” (Oldenburg & Brissett, 1982, p. 267). We support our overall thesis using insights generated as part of a much larger case study of the craft beer movement in Central and Southern Arizona. In this chapter, we rely on two specific sources of data from the larger study, the first of which is a catalog of 137 label designs created by The Shop Beer Company (hereafter referred to simply as The Shop). The Shop is an especially progressive local craft brewery that intentionally works to create a sense of intimacy and connectedness between local patrons and their consumption experiences. Our analysis of the labels as printed brand artifacts unveils an alternative, more community-centric strategy of neolocal branding, which we term third place branding. Second, we complicate and strengthen our analysis using a series of unstructured interviews with The Shop founder and lead designer to confirm, refine, and overall strengthen the trustworthiness of our analysis. The interviews were conducted over nearly 30 h of onsite fieldwork and follow-up phone calls. In the next section, we review the literature on third places and

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community development. We then briefly describe our methods, which is followed by a rich articulation of four intersecting elements—play, provocation, participation, and proximity—that frame a novel approach to third place branding. Thereafter, we close with a discussion of how third place branding can re-center community in both the geography of beer and neolocalism grand narrative—moving community building further out of the shadows of place-based branding strategies and the persuasion of place to outside markets. Specific to the current volume, our contribution rests at the intersection of persuasion as a fundamental element of conventional branding and print as a powerful place-making device.

Third Places The term “third place” was first used over four decades ago to describe local establishments that help bring uniqueness and intimacy to the lived experiences of people within their home communities (Oldenburg & Brissett, 1982). Third places are widely diverse in terms of type to include, as examples, barber shops and beauty salons, libraries, fairs and festivals, pop-up retail activities (e.g., farmers’ markets), and hospitality establishments such as cafes, coffee shops, and of course, local pubs and taverns (Oldenburg, 2001). Regardless of place-type, attachment occurs when individuals can identify and comfortably express themselves within a particular setting (e.g., “I see and can be myself here”), feel a sense of distinctiveness (e.g., “nowhere else has this”), and make and sustain social connections (e.g., “this is my/our place”) (Joo, 2020; Oldenburg, 2001; Rosenbaum, 2006). Third places become deeply entangled in the routine activities and pace of life of individuals, becoming very much part of their everyday lived experience. Citing Seamon (1979), Rosenbaum et al. (2007) underscore this entanglement when stating, “the merging of place into a person’s daily routine a place ballet, which suggests that a person’s movement into a place, such as a third place, becomes habitual and to some extent choreographed in his or her daily life” (pp. 48–49). In short, third places, such as craft breweries and local taprooms, are powerful inputs to the everyday lived experiences and community connectedness of individuals. Third places have long been a thread in the social fabric of communities. Consider, for example, the cultural significance of the local pub to the English way of life—a communal centerpiece dating back as far as the Roman occupation some 2000 years ago (Maye et al., 2005). In current times, the importance of third places to communities have been (re)amplified relative to the not-so-village-like

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globalization of economies and de-personalization of work life via the massification of industries and collapse of small-scale, locally owned business sectors. It this de-personalization of work-life-community connections that in part led Putnam (2000) to declare people are now more than ever civically disengaged and left to “bowl alone” (p. 356). Third places offer some antidote for community disconnectedness and the de-personalization of social life as indicated through alignment with concepts such as Lefebvre’s (1991) and Soja’s (1998) thirdspaces and having qualities of in-between work and domestic designs that are expressive of what Nautiyal (2016) calls the “new public realm” (p. 147). Surprisingly, however, third places have not been rigorously considered relative to the neolocalism movement. This oversight is largely due to neolocalism evolving into (1) a place-based branding strategy and (2) an economic development model. The resurgence of local craft beer provides a powerful backdrop for re-invigorating neolocalism as a community space-making model more so than a place-based branding strategy. Craft breweries have been described as third places based on common characteristics such as neighborhood positioning and walkability, the fostering of social interactions between patrons, and reflection of place (Apardian & Reid, 2020; Apardian et al., 2022; Mathews, 2022; Reid et al., 2020b). Regarding the latter, reflection of place is most widely recognized through references to the iconic images and features of a locale or region to include prominent heritage symbols, notable geographic land and water formations, historical artifacts, and so on (Talmage et al., 2020). Such symbolism of place is widely thought to be effective in conveying identity of place to those outside of a community (e.g., tourists) (Taylor & DiPietro, 2020). The understanding of the history and cultural nuances of iconic symbols can allow local consumers to interpret local beer brands differently than those visiting a locale from elsewhere. For example, Hede and Watne (2013) state, How much various consumers take away from this story may also vary; beer tourists foreign to Norway may simply perceive a Viking-theme, while local consumers are more likely to know the story about Ægir. Consumers are then free to connect with the brand and the place in ways that are meaningful to them. (p. 216)

While we do not disagree with this observation, we contend place-based branding overall neglects the importance of branding strategies that foster community connectedness via local residents and their consumption choices and routines. This contention motivates our current exploration and initial framing of a third place branding strategy aimed at making connective space for community residents within their local craft breweries and taprooms.

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The Neolocalism and the Third Place Literature Gap As of this writing, a Google Scholar search containing “Third Place,” “Oldenburg,” and “Neolocalism” yielded twenty-one results. Only seven pieces (five articles and a book chapter) discuss third places and neolocalism in tandem. Of the others, six are theses or dissertations, one is a blog that does not tie neolocalism to third places, and the rest are articles or book chapters that only reference the terms in their reference lists or briefly cite them in-text, but never in tandem. Reid et al. (2020a) write about the adaptive reuse of heritage buildings, using three breweries as case studies. They mention neolocalism and third places, but do not specifically explore third place branding. Talmage and colleagues (2020) create a rubric for identifying neolocalism on brewery websites, but only give cursory mention to third places at the conclusion of their article. Mars (2023) connected localized firm-centric brand and iconological storytelling to feelings of intimacy and belonging in places, showcasing potential linkages to how third places are characterized. Rojak and Cole (2016) conclude that brewpubs may be important third places in communities that leverage neolocalism, but they do not specify localized scale as a third place branding element. Similarly, their article specifically examines the physical environment of breweries and how they connect to place attachment, which provides insights for future research on third place branding expressed in the physical environment of breweries. In a similar light, Apardian and Reid (2020) connect third places and neolocalism to the walkability of local breweries, focusing much more on breweries as third places than neolocalism (see also Apardian et al., 2022). Concerning the darker sides of breweries as third places, Mathews (2022) undertook an examination of neolocal practices around third places, specifically Saskatoon and Regina breweries. The findings suggest that strong neolocal practices focused on third places have a high propensity to promote gentrification compared to other co-occurring factors. Jolly and colleagues’ (2021) qualitative exploration of local stakeholders’ perspectives regarding Oklahoma craft breweries is more aligned with our chapter-at-hand as compared to the preceding studies. These authors note the breweries in their sample function as “third spaces” and discuss branding, neolocalism, and third spaces as separate concepts that meet to foster interactions between locals. While they do not specifically note branding using neolocalism and third space elements as a causal factor, they do depict how breweries encourage (and perhaps effectually persuade) locals to slow down, enjoy life, enhance local culture, be sociable, and act in more socially conscious ways. Regarding third spaces, they find breweries to be

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welcoming and family friendly places for stopping by or hosting events. Yet, these authors do not advance the strategy of third place development and promotion across the local craft beer sector. In the coming sub-section, we introduce the local craft brewery branding as a promising approach to fostering and integrating third place development with the neolocalism movement.

Making Space Within Place: An Alternative View of Neolocal Branding Branding is a fundamental element of marketing that in the simplest of terms involves an entity curating and conveying an identity that differentiates it from competing alternatives. The underlying form and function of branding is far more complex. Branding involves the development of storylines that engross others to the point of seeing themselves, via their consumption choices, as characters in a plot (Woodside, 2010). Branding also requires balancing a sense of individualism with that of being part of something special— i.e., self-expression and community belonging (Muñiz & Schau, 2005). As such, the persuasive power of a compelling brand relies on signs and symbols that express both uniqueness—standing out from others—and belonging— enabling cohesion among targeted consumers (Hirschman, 2010). In the case of place-based branding, storylines use one or more distinctions of place, such as historical or geographic icons, to shape a brand and the experiences others have with it (Taylor et al., 2020). The targets of place-based branding are audiences that reside outside of the focus destination— especially tourists—with the underlying strategy being to create emotional attachment to the place/destination (Orth et al., 2012). Such place attachment enhances senses of fondness and loyalty, increasing the likelihood of return visits and in the aggregate further generation of local economic gains and overall growth (Cardinale et al., 2016). Place-based branding is a powerful approach to marketing places as appealing destinations and consistent with the neolocalism agenda via the expected financial returns on investment to local businesses and economies (Cleave et al., 2016). For locals and non-locals, neolocalism can be described as an emotional and experiential branding strategy to allow customers to be insiders that are “in on the joke” or “know the code to the secret menu.” Talmage and colleagues (2020) explored numerous ways neolocalism is expressed in the Finger Lakes Region of New York. They noticed many breweries were named after local legends or lore and many beers were named after locals (and their dogs) or had funny or weird names. Such strategies are designed to prompt customers to ask, “why are you named this” or “who is this

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beer named after.” The resulting stories, while not always authentic, are meant to emphasize uniqueness and forge connections between the consumer and the establishment. While seen as a way of engaging consumer participation and interaction, this common neolocal branding strategy risks excluding those without insider knowledge who may feel intimated by the unknown and/or left out by their ignorance of the intended plot. We note this threat applies to both those visiting from outside of a locale or community and local residents who lack insider knowledge. Place-based branding becomes more problematic from a community development perspective when it dominates the identity development and storylines of local businesses and especially those such as local craft breweries that otherwise serve as third places. Why? Local residents are likely underwhelmed by branding schemes that all, but exclusively showcase the most iconic elements of their surrounding communities and geographies—e.g., the saguaro cactus of the Arizona desert or the famous gun fights of the Old West. In this regard, over-promotion can dilute the effectual meaning of such iconic elements with their presence fading into mundanity for those living and working in a locale or region (see Knox, 2005 for a discussion on the social construction of place through everyday practices and routines). The everyday lifestyles of local residents can also become key inputs to place-based branding schemes with their everyday activities serving as backdrops to the external projections of community and place (Johnson et al., 2014). Yet, they themselves are mostly neglected as local brand consumers (Braun et al., 2013). As opposed to imagery that conveys straightforward storylines that leave little room for self-interpretation (e.g., featuring iconic images), we argue third place branding should center on schemes that foster intimate and interpretive spaces that empower local residents to connect themselves and their lived experiences with their local consumption choices and routines. As illustrated in Fig. 1, we draw on our forthcoming findings to propose a novel third place branding strategy that is composed of four elements: play, provocation, participation, and proximity.

Methods: Exploring Third Place Branding Through a Neolocal Lens To advance our argument, we leverage a single, embedded case design (Gerring, 2007) using within- and crossunit/micro-case analysis (Swanborn, 2010). The case focused on The Shop in Tempe, Arizona (Maricopa County/Phoenix Metropolitan Area), specifically using 137 label designs in the brewery’s catalog as the bounds for the examination. At the time of the study, The Shop was one of four breweries in Tempe, Arizona. The Shop offers a strong purposive case with its artistic designs on their labels (shown

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Fig. 1 Third place branding model and constructs

Third Place Environment/CommunityCentered Local Consumption Space Development

Place

Proximity

Provocation

Participation

and discussed in the section that follows) and neolocal branding strategies. To help guide and strength our claims, we drew upon insights generated through nearly 30 h of unstructured interviews with the brewery founder, who is also the principal label designer. The interviews took place both onsite at the brewery and through a series of scheduled phone conversations. Descriptions of the rationale and strategies for each label design were recorded using an unstructured field note format, a known strategy for bolstering rigor and trustworthiness in qualitative inquiry (Lietz & Zayas, 2010). We analyzed the data using an inductive method to organically identify across the 137 labels the primary elements that visually convey the sense of place created through the overall The Shop branding scheme. Four elements were identified through this process: play, provocation, participation, and proximity. These elements were elucidated using a grounded analytical approach looking at the intertextuality present with each label, that is, how co-existing texts and images coalesce meaning to a single image or collection (Rose, 2007). More specifically, each image was first individually analyzed as a micro-case (within-unit analysis) with the resulting micro-case patterns and themes being collectively compared, narrowed, and refined (cross-unit analysis) until researcher consensus on final set of findings was reached (Leech & Onwuegbuzie, 2007; Swanborn, 2010). Analysis entailed open and axial coding (Corbin & Strauss, 2015), which included triangulating the meanings extracted from the images and the insights generated from the interviews to further maintain rigor in the analysis (Lietz & Zayas, 2010). Trustworthiness was enhanced by the brewery founder and principal label designer participating in continual member checking of the findings and promoting reflexivity regarding our otherwise

unconscious biases as researchers (Candela, 2019; Lietz & Zayas, 2010; Thornberg, 2012; Warren, 2005). Next, we present the four elements of third place branding that emerged from our study.

Elucidating Third Place Branding Elements Play The literature on craft beer and place points to consumer incentives that range from tourists gaining a sense of locality to environmentalists expressing their values through their consumption choices (Graefe et al., 2018; Nelson, 2021). Surprisingly, this literature overlooks a fundamental experience of being human—play! As social beings, we often gather to play and enjoy one another’s company—simply put, play is part of being human (Hamayon, 2016). As indicated by Rosenbaum (2006), the third place, such as the local craft brewery, “transforms from a place of consumption to a place where they [consumers] engage in fun, joy, and play” (p. 64). The core value of the third place is not access to products or services. And, unlike the dominant thread in the neolocalism and place-based branding literatures, third places are not where tourists go to experience place. Rather, they are where local residents go to build and live community. The driving appeal is the opportunity to gather and feel a sense of belonging and social attachment to those who live and work around you. Play, and the joy of having fun, matter. How then can play be integrated with third place branding strategies? The Shop catalog includes an array of examples of how label designs can foster an interpretative space in which patrons can create customized meanings and

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Fig. 2 Visual promotion of play

connection through playful consumption. The first illustration of play space development is the most explicit of the examples with the beer being named “Fun” (see Fig. 2). The design is especially vibrant with splashy waves of color that hint at the free-spirited times of the 1960s and 1970s. The beer name, Fun, is positioned at the center of the label in bubbly font that is more cartoon-like than refined. Also, note the peace sign in the lower left corner of the label — an icon of love and community. The subtle inclusion of icons that signal the intended theme of a beer rather than those that convey more defined place-based identities, such as cacti, road runners, or other desert icons, is an esthetic element that is consistently woven throughout The Shop catalog. A less explicit, but equally compelling example is the label shown in Fig. 3. Consistent with beer being an Oktoberfest release, the label features a whimsical bratwurst cartoon character surrounded by playful photographs of The Shop team. The seemingly idiosyncratic inclusion of pink flamingos on both sides of the label are the mascot for the line of beers the issue is associated with, which is the Neonic series. In the top left corner of the label sits, a bratwurst character joyfully playing the Alphorn, which is an instrument used to communicate across the peaks of Alps. While the Alphorn is no way symbolic of The Shop’s location in Arizona, it serves as a playful call to The Shop customers to collect in a local celebration of Oktoberfest. A third example of the many playful images included in The Shop catalog is the label for a beer named Tickle Fight (see Fig. 4). The very notion of a tickle fight harkens back to a laugh inducing game and, more generally, childhood play. The design of the label returns to the bubbly font used on the Fun label (recall Fig. 2), but with a dripping outline that

points to the use of melting marshmallows as a flavorful ingredient. Consistent with the tickle fight theme, melting marshmallow is for many a reminder of childhood treats and more free and playful times. The faded background images of cartoon marshmallows, hotdogs, and skateboards create a nostalgic collage of playfulness and fun.

Provocation Scholars have largely limited the role of provocation in marketing to triggering shock through controversial and edgy images and messaging. Consider, for instance, the following definition of provocation in the context of advertising offered by Vézina and Paul (1997): A deliberate appeal, within the content of an advertisement, to stimuli that are expected to shock at a portion of the audience, both because they are associated with values, norms or taboos that are habitually not challenged or transgressed in advertising, and because of their distinctiveness and ambiguity. (p. 179)

We uncovered a different, more general stance on provocation relative to the nurturing of the third place via branding strategies. We see provocation not as foremost a source of shock (and consequentially negative and contentious responses), but instead as one of deeper thought, contemplation, and ultimately connectedness to others and community. This more intimate view is consistent with Heidegger’s (1968) philosophical assertion that thought provocation involves “everything that gives us to think. And the most thought-provoking gift is that of thought for we incline toward it” (p. 4). When it comes to third place branding strategy, provocation is the prompting of internal

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Fig. 3 Idiosyncratic promotion of play

Fig. 4 Nostalgic collage of playfulness and fun

thought and contemplation and ideally external conversation and connectedness between those who share the place itself. The Shop labels are intentionally designed to provoke a range of emotions and responses within and between customers including, but far from limited to the just described sense of fun and playfulness. The labels are often designed to provoke internal contemplation within patrons and prompt discussions among patrons. Conversely, the labels are never designed to convey a direct message—e.g., serve as propaganda for a specific political position. The designs are

instead aimed at provoking thought, exploration, and conversation. Figure 5, the label for a beer named Joy Juice, illustrates this approach. The design includes several playful features including a cartoon thumbs up tethered by a triad of colorful balloons, a plane flying a “It’s yummy” banner, and a witty quote from Ronald Reagan dismissing the need for hard work. There are also seemingly misplaced images of dragonflies, lobsters, and a foot with blue nail polish. The meaning of these random images is left to the patrons’ imaginations and the conversations they kindle.

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Fig. 5 Provocation and connectedness through imaginative cues

Figure 6 is the label for a beer named Desert Dolphin. The tone of the design is darker than most other labels in the catalog with a demonic-like dolphin riding what appears to be a polluted wave. In the background sits a factory spewing toxic gases into the air. The evilness of the factory is further conveyed through the sinister face formed by its windows. While the tone is clear, the intended message is intentionally left vague. While the label clearly provides environmental commentary, one is left to wonder if it relates to air pollution, water pollution, or both? Further, the notion of a desert dolphin is disconnected from the geographic terrain and Fig. 6 Connectedness through visual provocation

aquatic life of Central Arizona—thus suggesting a potential riff on water scarcity. What matters more than the determination of meaning is the contemplation within and conversation between patrons that the label provokes. Such provocation and connectedness are hallmarks of a third place. The water meets desert image is not an intentional pushback against place-based branding. Though, it is nonetheless an indication of alternative strategies for creating an entrepreneurial identity for the brewery and its third place environment that are not confined to immediate geographic scenes and icons.

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Fig. 7 Connectedness through nostalgia

The Shop labels are frequently designed to provoke a sense of nostalgia and a connection between product, place, and one’s pastime. Nostalgia is a powerful branding and marketing tool—transporting consumer to an enchanted place in their past that in doing so “rendering the ordinary [product or service] into emotionally-charged, exciting, magical, and special market resources” (Hartmann & Brunk, 2019, p. 669). Consider the label shown in Fig. 7 that is for a beer named Critical Hits. The design strikes a 1980s video game motif with marbles colliding below two hovering robot-like images. The characteristics are retro, while the emotions experienced are nostalgic (Oh & Kim, 2022). The label is likely to remind middle-aged patrons of their younger years playing video games in the arcades that used to anchor the corners of shopping malls or provide younger demographics with a connection to a seemingly more blissful time prior to their own coming of age. Nostalgia does not require consumers to have lived or directly experienced a particular time period. Nostalgia can be communal where consumers can gain enjoy pleasure from retro products (Han & Newman, 2022). Han and Newman (2022) use the example of consumers who grew up listening to music on MP3 players may also consume vinyl records later in life. With Critical Hits, the sense of nostalgia provoked by this, and similar labels, provide a portal to the past and a connective space in which patrons can imbibe, connect, and reminisce.

Participation A core attribute of third places is the open and congenial participation in communal activities and dialogs (Oldenburg & Brissett, 1982). The identity of third place establishments helps invite such community participation and connectedness among patrons. Recall that a principle aim of branding is to create a balance between the expression of self and

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connection to community (Muñiz & Schau, 2005). Such balance is vital to the identity of a third place as a welcoming space for community participation and connectedness. Soukup’s (2006) article on virtual spaces in summarizing Oldenburg’s (2001) work provides important words attached to welcoming that provide more imagery for conceptualizing third place branding, such as “atmosphere” (p. 428), “open…to everyone” (p. 431), and “home away from home” (p. 434). Carroll et al. (2015) also uses the “home away from home” concept to include spurring the feeling through participatory play. Thus, third place branding strategy should signal participation as a key identity marker with labels providing visual cues and invitations for patron engagement in both self-expression and community connectedness. Equally important, participation enables other third place elements—i.e., the freedom and comfort to play and engage in provocative conversation and community dialog. Figure 8 is illustrative of the use of label design to invite patron participation in both product consumption and sense of community. To begin with, the name of the beer, Reflections, suggests patron contemplation occurs while drinking the beer. Reflection can involve a range of emotions depending on the topic with some instances being more personal than others. The lighthearted cartoon diffuses the intensity that may otherwise be associated with the act of reflecting, thereby opening the door for meaningful dialog between patrons—e.g., sharing memories and stories, whether joyous or sorrowful in nature. To the right of cartoon is a lyric written by a locally known hip-hop artist that encourages reflections that lead to affection and joy in living one’s life. To the left of the cartoon is the following quote from the character Bubba in the classic film Forrest Gump: I’m gonna lean up against you, you just lean right back against me. This way, we don’t have to sleep with our heads in the mud. You know why we a good partnership, Forrest? ‘Cause we be watchin’ out for one another. (Zemeckis, 1994)

This quote underscores the importance of creating strong connections with others, which ideally is spurred and nurtured through meaningful and enjoyable conversations over beer at the brewery. (The Shop labels often include quotes from classic movies, as also pointed out above in reference to Fig. 8, as a means of further conveying the message of a label and providing additional connection points between products and patrons.) The nurturing and development of third places is serious work and vital to the sense of community available within neighborhoods and locales. Yet, the resulting tone can, and we argue should allow for playfulness, fun, and lightheartedness. Figure 9 exemplifies this dynamic. The child-like image of the stick figure and lemonade stand, along with the inclusion of the grainy computer-aided design frame,

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Fig. 8 Visual invitation to consumption and community connectedness

(2018) describes as the “embourgeoisement” of craft beer. A subtle nod to the separation from elitism is hinted at in the following quote from the classic movie Smokey and the Bandit: “What we’re dealing with here is a complete lack of respect for the law” (Needham, 1977). In this case, the “law” is the elitist culture of the craft beer field, and the “lack of respect” is the not-too-serious identity The Shop has worked to create. The visual and emotional accessibility of product created through the Strawberry Bandit is consistent with the welcoming environment and open sense of community that characterize third places.

Proximity: Physical Environment and Community Scale

Fig. 9 Connectedness through visual and emotional accessibility

purposefully creates an amateur and somewhat sloppy esthetic. The design (and others like it) signals that the brewery does not take itself too seriously and as such pushes back against the elitism that comes with what Thurnell-Read

Our empirical focus is on the development of a local craft brewery as a third place via label esthetics and messaging. Up to this point, we have shown how label designs contribute to the identity of a brewery and create connective spaces between local community and consumption. Consistent with the understanding of brands being largely metaphorical (Hirschman, 2010), these spaces are abstract and fluid with impact being dependent on patron

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engagement and interpretation. The physical environment of the brewery itself and the community scale it creates through collaboration is more tangible. Located on the periphery of Arizona State University, a large public research university in the city of Tempe, Arizona, The Shop is in an unassuming building that retains the mid-century architectural look of the surrounding neighborhood. The wording tied to the pin that locates The Shop on the standard geographic positioning map of Tempe emphasizes a relaxed setting consistent with a third place environment. Specifically, the pin identifies The Shop as a “relaxed brewery and beer garden.” Passers-by will not notice any large signs in front of the brewery/taproom nor any flashy neon lights in its windows. Rather, the presence of a third place brewery is signaled by a wraparound patio with people gathered around wooden picnic tables drinking beer and engaging in conversation and laughter. Framed images of the labels and artifacts of product releases adorn the otherwise minimalist design of the interior taproom. The taproom and brewhouse are separated by a courtyard that houses at its center a wooden table that has been graffitied and carved up by patrons over The Shop’s 10-year history (see Fig. 10). The table serves as a community art piece and a clear symbol of patron connectedness. Overall, the third place identity that is conveyed through The Shop label catalog is reinforced and fostered by the physical environment created within its one and only taproom. The consistency between the abstract and fluid space created through the label designs and the physical environment of the taproom further develops proximity between a conceptual local consumption space and a “live” community place. The notion of scale is a quandary for localized entrepreneurs (Mars, 2020). On one hand, they are pressured to confine production and consumption to locally defined boundaries. On the other hand, they are confronted with financial incentives and the economic need to scale production and the geographic reach of their marketspace. The Shop has confronted this dilemma through community-wide collaborations that involve co-production and co-branding arrangements with partners that share similar missions and values. At the time of our data collection, The Shop had co-produced and co-branded 40 collaborative beers with over a dozen partners, most of which are in the Phoenix Metropolitan Area and six of which have participated in multiple partnerships. The co-branded labels all follow the The Shop label design strategy and thus retain a recognizable esthetic look. The partners range from bottle shops to— other craft breweries to pubs and restaurants to a skate shop to a beer enthusiast club. When it comes to the dilemma of localized scale, collaborations allow The Shop to grow the scope of its product-types and geographic accessibility of its “live” third place environment without compromising its localized identity and values. Figure 11 illustrates how co-production and co-branding collaborations have stretched

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Fig. 10 Connectedness through consumption community art

the geographic proximity of The Shop brand access to its third place identity with the orange dots indicating the location of partners.

Conclusion Novel Insights and Future Directions The general aim in this chapter is to promulgate the connections between third places, neolocalism, and the surprisingly overlooked context of “locals” as target brand consumers and primary stakeholders. Figure 1 illustrates the synergistic dynamic of the four elements of third place branding of that we have just laid out with the convergent point being the co-development of third place environments and community-centered local consumption spaces. We assert this preliminary model provides scholars from community development to applied geography to applied anthropology to planning and applied fields beyond, as well as those more narrowly focused on the local craft brewery movement, with an approach to integrate the wellestablished notion of third place more intentionally and rigorously with the grand narrative of neolocalism.

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Fig. 11 Geographically stretched proximity of the shop local consumption space

Again, recalling Fig. 1, most local consumption occurs where the third place branding model constructs overlap in the consumer experience, which third places (e.g., breweries) can facilitate. We posit that third place branding promotes particular effect and behaviors by local consumers that epitomize place-making. As such, it stands as an alternative to neolocalism branding strategies when it comes to intentionally engaging local consumers in relocalization campaigns and strategies (as opposed to destination branding and marketing strategies that target consumer markets located outside of communities and locales—i.e., economic development). Yet, perhaps the most promise rests with holistic place-making strategies that balance the place-based branding campaigns designed to persuade outside audiences to visit (and ideally revisit) locales with the creation and enhancement local consumption spaces that serve those living and working within the immediate community and locale (for more, see Mars, 2023). Future studies can further explore our claims by comparing the intentions (place-making versus place

promotion) and efficacies of third place branding to neolocal branding. No studies to date have undertaken this comparison approach; however, it has been well-established that breweries are (or can be) critical venues for place-making (Fletchall, 2016; Jolly et al., 2021).

Limitations and Future Research In this piece, we tightly focused on the neglect of the local consumer in neolocal branding strategies. We underscore individual connection and experience as a necessary input to community building and transformation—a core value proposition of the movement to relocalize production and consumption (Mars & Schau, 2017). Future scholarship can focus on how third place branding can restore a sense of place and help communities reconnect in meaningful and transformative ways and restore histories and collective identities that have been damaged, fragmented, or lost.

What About the Locals? Laying Out …

Perhaps, neolocalism expressed through third place branding can help activate and mobilize communities toward change. More specifically, we did not explore connections between third place branding and cultural festivals or events, which can be the focus of future work (Cavaliere & Ingram, 2020; Derrett, 2020). Additionally, future research should further examine how the elements of third place branding may be faked or bastardized, which Eberts (2014) noted as a concern regarding neolocalism in the brewery industry. We also did not discuss the role third place branding plays in adaptive reuse and revitalization of buildings, specifically heritage buildings, which others have noted as important topics in craft brewery research (Reid et al., 2020a). Lastly, the darker side of third place branding warrants direct and ongoing attention. We did not explore the gentrifying effects of third place branding, which are potential unintended consequences much like those associated with the development practices of neolocalism and the local craft beer movement (Mathews, 2020). More specific to the overarching theme of the current Geography of Beer volume, the likelihood of propaganda via third place branding warrants attention. We note the esthetic designs and branding strategies deployed by The Shop are intentionally agnostic with the aim being to foster intimate and meaningful connectedness between people, place, and local consumption. There is undoubtedly potential for the purposeful inclusion of more persuasive elements in visual schemes with the intent of promoting specific agendas, ideologies, and so on. In such a scenario, divisiveness threatens to displace connectedness and place-making. We thus call for further research designed to reveal and theorize such grayer or darker side elements of third place branding. The contributions of our piece and the future research it aims to generate can contribute to practice in two ways. First, the notion of third place branding can inform how local craft brewers intentionally work to create meaningful and sustainable connections between their brands and products and local patrons. Third place branding schemes that intentionally balance consumer appeal and individuality with elements of place stand to engender greater access and connection to community and provoke constructive discussion of challenging topics and pressing issues. As such, this combination is a promising strategy for both increasing and sustaining locally based revenue streams and positioning breweries as community forums and sites of collective dialog and identity development. Second, third place branding, whether within craft breweries or other local enterprises (e.g., bookstores, cafes, restaurants), can serve as a generative link between economic development agendas and community development initiatives. This is to say third place branding represents a local and community development strategy as much as it does one that targets economic growth.

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Closing Remarks We have contributed a new perspective on the geography of beer—one that foregrounds the conceptuality of space over the physicality of place. Our exploration led us to propose four synergistic elements of third place branding that when intentionally converged can serve as a conceptual entry point through which local consumers can more intimately connect with community via through consumption choices and routines. The community connectedness and associated complexities of local craft breweries have been illustrated through the analyses of the physical environments and social arrangements that characterize the nature and functions of third places as first conceptualized by Oldenberg (1982) (see Apardian & Reid, 2020; Mathews, 2022). To our knowledge, we are the first to consider how third place branding strategies project and reinforce more fluid and intimate parameters of place that empower consumers with the agency and platform needed to associate for themselves their lived experiences with their local consumption choices and routines. We identify such parameters not through the physical locations and environments of local craft breweries (though not irrelevant), but rather through the imagery, stories, and values conveyed through printed label designs and underlying messaging. In doing so, we extend the conceptualization of craft breweries as third spaces to include transcendent spaces that invite local consumers to create for themselves meaningful connections between community and consumption.

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M. M. Mars and C. A. Talmage Jolly, C., Settle, Q., Greenhaw, L., Inman, R., & Cartmell, D. (2021). Community stakeholders’ perspectives of craft breweries in their communities in Oklahoma. Journal of Applied Communications, 105(4), Cov1+. https://doi.org/10.4148/10510834.2383 Joo, J. (2020). Customers’ psychological ownership toward the third place. Service Business, 14, 333–360. https://doi.org/10.1007/ s11628-020-00418-5 Kingsbury, A. (2021). The reinterpretation of locality and place in the wine industry of Yamanashi Prefecture. In Rethinking locality in Japan (pp. 187–205). Routledge. Knox, P. L. (2005). Creating ordinary places: Slow cities in a fast world. Journal of Urban Design, 10(1), 1–11. https://doi.org/10. 1080/13574800500062221 Leech, N. L., & Onwuegbuzie, A. J. (2007). An array of qualitative data analysis tools: A call for data analysis triangulation. School Psychology Quarterly, 22(4), 557–584. https://doi.org/10.1037/ 10453830.22.4.557 Lefebvre, H. (1991). The production of space. Trans. Donald Nicholson-Smith. Blackwell. Lietz, C. A., & Zayas, L. E. (2010). Evaluating qualitative research for social work practitioners. Advances in Social Work, 11(2), 188–202. https://doi.org/10.18060/589 Mars, M. M. (2020). From within the shadows of the everyday: Localized entrepreneurship and the dilemma of scale. Community Development, 51(5), 628–645. https://doi.org/10.1080/15575330. 2020.1825504 Mars, M. M. (2023). Looking behind the label: Firm-centric brand storytelling and the development of local consumption spaces. Local Development & Society. Advance Online Publications.https:// doi.org/10.1080/26883597.2023.2175713 Mars, M. M., & Schau, H. J. (2017). Institutional entrepreneurship and the negotiation and blending of the Southern Arizona local food system. Agriculture and Human Values, 34(2), 407–422. https://doi. org/10.1007/s10460-016-9722-3 Marzano, G., & Scott, N. (2009). Power in destination branding. Annals of Tourism Research, 36(2), 247–267. https://doi.org/10.1016/j. annals.2009.01.004 Mathews,V. (2022). Planning for craft breweries: neolocalism, third places and gentrification. Urban Geography. Advance online publication. https://doi.org/10.1080/02723638.2022.2126143 Maye, D., Ilbery, B., & Kneafsey, M. (2005). Changing places: Investigating the cultural terrain of village pubs in south Northamptonshire. Social & Cultural Geography, 6(6), 831–847. https://doi. org/10.1080/14649360500353079 Muñiz, A. M., & Schau, H. J. (2005). Religiosity and the abandoned apple newton community. Journal of Consumer, 31(4), 737–747. https://doi.org/10.1086/426607 Nautiyal, J. (2016). Aesthetic and affective experiences in coffee shops: A Deweyan engagement with ordinary affects in ordinary spaces. Education and Culture, 32(2), 99–118. https://doi.org/10.5703/ educationculture.32.2.0099 Needham, H. (Director). (1977). Smokey and the Bandit [Film]. Universal Pictures. Nelson, V. (2021). Consuming local: Product, place, and experience in visitor reviews of urban Texas craft breweries. Leisure Studies, 40 (4), 480–494. https://doi.org/10.1080/02614367.2020.1831044 Oh, M., & Kim, H. (2022). The effects of fashion brands’ retro marketing types on retro characteristics perception and nostalgia emotions. Journal of Fashion Business, 26(1), 140–157. Oldenburg, R. (2001). Celebrating the third place. Marlow. Oldenburg, R., & Brissett, D. (1982). The third place. Qualitative Sociology, 5, 265–284. https://doi.org/10.1007/BF00986754 Orth, R., et al. (2012). Using attribution theory to explain tourists’ attachment to place-based brands. Journal of Business Research, 65 (9), 1321–1327. https://doi.org/10.1016/j.jbusres.2011.10.027

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Matthew (Matt) M. Mars, Ph.D. is Professor of Leadership and Innovation at The University of Arizona. His research focuses on how entrepreneurial logics and strategies become embedded in and influence academic cultures, community development initiatives, and social movements. In addition to being a widely published interdisciplinary scholar, Matt is currently the Co-Editor of Advances in the Study of Entrepreneurship, Innovation and Economic Growth series, Associate Editor of Community Development, and a member of the editorial board of Local Development & Society.

Craig A. Talmage is an Associate Professor of Management and Entrepreneurship at Hobart and William Smith (HWS) Colleges, Editor-in-Chief of Community Development, and a Ph.D. graduate of the School of Community Resources and Development at Arizona State University. Talmage has twenty years of combined not-for-profit, nonprofit, and public sector research and leadership experience, and serves as the faculty liaison for the Center for Community Engagement and Service Learning at HWS. In the beautiful Finger Lakes, he also studies the intersections of food security, agritourism, and neolocalism.

Sense of Place Expressions in Welsh Craft Beer Branding: Identity, Neolocalism and Social Terroir Maggie Miller and Robert Bowen

Abstract

This research explores how place associations create a sense of place as an effective way in branding craft beers. While previous research has explored connections between a sense of place and craft beer brands, the focus here is on the label as the most significant representation of the brand, and the most persuasive cue in the branding of the craft beer. Data are gathered from the labels of 717 craft beers from 118 craft breweries in Wales, UK, as a place with a strong tradition for brewing. Findings point to the persuasiveness of craft beer labels in communicating the brand. This includes local, regional, national or even no expressions of place. Such expressions afford new understandings around the ways in which practitioners can use their branding and how it could be optimized for their intended market, depending on the focus of the brewery on local, domestic or international markets. Keywords









Craft beer Sense of place Provenance branding Neolocalism Wales




Place

Introduction The aim of this chapter is to explore how a sense of place is expressed in the branding of craft beers. There has been a surge in the growth of craft brewing in the recent decade, with many countries seeing the emergence of local craft breweries as consumers become increasingly interested in M. Miller Swansea University, Swansea, Wales e-mail: [email protected] R. Bowen (&) Cardiff University, Cardiff, Wales e-mail: [email protected]

quality, authenticity and sustainability. This is true in the UK, where the number of microbreweries has doubled since 2012 (Brewers of Europe, 2020). Strong associations are recognized between foods and their places of origin (Tregear, 2001), notably expressed in terroir, a notion often linked to French wine. Terroir emphasises that the unique characteristics of foods are derived from the distinctiveness of the soil, climate, topography and cultural traditions of their place of origin (Charters et al., 2017). For craft beer, terroir relates to the characteristics of the ingredients in the brewing process, which are notably evident in the cultural representations of different types of beers, such as British traditions for ale or German wheat beer (Bowen & Miller, 2022). Additionally, originality and authenticity can be evoked in craft beer through ‘social terroir’, the social ties of the beer to the place and community (Sjölander-Lindqvist et al., 2020). Through the lens of resource-based view theory, these associations between food and place represent a potential competitive advantage through the valuable, rare, inimitable and non-substitutable characteristics (Barney, 1991) of place possessed by craft beers. Thus, food products can be marketed uniquely according to the product’s sense of place (Hede & Watne, 2013). Consequently, this research aims to explore how craft breweries in Wales express a sense of place in the branding of their beers. Under the Geography of Beer theme, this research focusses on the importance of place, propaganda and print to craft beer, through the location of the brewery and its sense of place expressions in its branding. Here, the focus on print resides with the craft beer labels, as the main representation of the craft beer brand, with the imagery and text expressions shown on the labelling providing the propaganda aspect, as a visual form of persuasion used to influence attitudes and beliefs towards the brand. Wales was chosen as a place with established cultural expressions, as well as strong traditions for beer production and consumption, such as the landmark use of selling beer in cans by the Felinfoel Brewing Company in the 1930s

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_16

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(Felinfoel Brewery, 2022), or the iconic view of the Brains brewery, historically located in the centre of Cardiff, the capital of Wales (see Fig. 2). The research is based on an analysis of the labels of 717 craft beers from 118 craft breweries in Wales. The use of the label is important, as this is the most identifiable expression in the branding of the beer, as it contains text and imagery that relate to the beer brand (Bowen & Miller, 2022). Data were obtained from the text and images of the craft beer labels and analysed through thematic analysis (Braun & Clarke, 2006). Hereafter, we discuss literature relating to craft beer branding, as well as sense of place expressions in food, as the theoretical background for this research. This section introduces discussions of social terroir and neolocalism in relation to craft breweries. The third section outlines the qualitative design of this research, based on the thematic analysis of craft beer labels from Wales. Fourth section presents the findings, and fifth section discusses the conclusions. Ten themes are outlined from the data including representations of nature, place, culture, Welsh symbols, design, company, name, product, language and general. These are discussed and analysed in “Findings” and “Conclusion” sections.

Theoretical Background This section discusses the theoretical background to this research. Considering the aims of the chapter outlined in the previous section, we now consider how this research is underpinned by existing research on craft beer promotion, as well as understanding the theoretical background of a sense of place.

Craft Beer Research There is an emerging body of research on the geographies of beer (Hoalst-Pullen & Patterson, 2020; Patterson & Hoalst-Pullen, 2014). This is largely seen in relation to place representations in the branding of craft breweries (Bowen & Miller, 2022; Gatrell et al., 2018; Hede & Watne, 2013; Melewar & Skinner, 2020). This emerging interest in craft beer research aligns with increasing trends in craft beer consumption, drawn from consumers’ interests in better quality beers, and beers with strong ethical and environmental associations (SIBA, 2020). Indeed, research shows that consumers seek authenticity, associated with craft beer, and are often prepared to pay premium prices for authentic products (Melewar & Skinner, 2020). Hede and Watne (2013) outlined the value of place significations, including myths and folklore, as a means of humanising the craft beer brand. Gatrell et al. (2018, p. 368) note that geography can

M. Miller and R. Bowen

be applied on various scales in the promotion of craft beers, emphasising the need for brands to leverage the ‘spatial triple helix’ of place, practice and region, as the place name alone may not be enough. Furthermore, Bowen and Miller (2022) point to the possible influence of the craft beer brand on local, regional, national and international markets. Discussions of place connections of craft breweries also relate to neolocalism (Eberts, 2014; Flack, 1997; Holtkamp et al., 2016; Schnell, 2013; Taylor & DiPietro, 2020), defined as ‘a deliberate seeking out of regional lore and local attachment by residents (new and old) as a delayed reaction to the destruction […] of traditional bonds to community and family’ (Shortridge, 1996, p. 10). Geography and place are thus used in the branding and marketing of craft breweries to emphasise their connection to their locations (Eberts, 2014). There is a wider body of research that investigates the economic associations of craft beer, such as the impact of craft breweries on the local economy (Argent, 2018; Cabras & Mount, 2016), craft beer influences on tourism (Cabras et al., 2020; Eades et al., 2017), rural entrepreneurship in craft brewing (Ellis & Bosworth, 2015; Sjölander-Lindqvist et al., 2020), and the emergence of BrewDog as an international brand through effective marketing (Smith et al., 2010). Argent (2018) discussed the importance of craft beer in a rural context, notably the influence of rural craft beers on the local communities in Australia, with links to tourism opportunities. Tourism benefits associated with craft beer include unique experiences through ‘beer tourist pilgrimage destinations’ (Bujdosó & Szûcs, 2012, p. 107), as places become known for beer. Beer festivals can play a role in this by attracting tourists and promoting local craft beers as consumers create association with local breweries (Cabras et al., 2020). The ‘social terroir’ discussed by Sjölander-Lindqvist et al. (2020) is an important aspect in the way that craft beer can impact on local economic development, as it links people, places and craft beer businesses. Indeed, this social terroir is evident in the increasing entrepreneurial activity of microbreweries, which have been increasing in the UK in recent years, despite coinciding with a declining number of pubs (Ellis & Bosworth, 2015).

A Sense of Place Place, defined as ‘a meaningful location’ (Cresswell, 2004, p. 7), is a widely researched subject, especially as places are unique and often possess special qualities. A sense of place is associated with feelings and identification to a place and evokes different meanings, since places are ways of seeing, knowing and understanding the world, in which people give meaning and experience to the world (Cresswell, 2004). The notion of a sense of place relates to place identity, place dependence and place attachment (Jorgensen & Stedman,

Sense of Place Expressions in Welsh Craft Beer Branding: Identity …

2001) and is interpreted by people’s experiences and feelings towards a place (Rantanen, 2003). Through globalisation, there has been a homogenisation of place, as places worldwide resemble each other through similarities in fast food outlets, airports or shopping malls. These are places that are disconnected from the locality; therefore, place attachments are not as strong (Cresswell, 2004). He pointed to the ‘Disneyfication’ of places, derived from mass culture, notably mass mobility and tourism, creating homogenised places that lack a sense of place. Similarly, Ritzer (1992) discussed the ‘McDonaldization’ of society through the visibility of large multinational chains around the world. Indeed, the concept of ‘placelessness’, the inability to develop authentic relationships to place due to the sameness of places, was discussed by Relph (1976) in the 1970s. While Cresswell (2004) is critical of the impact of mobility on the authenticity of place, he supports discussions by Massey (1991) on a global sense of place, in which she sees place as a process; place as defined by the outside; place as a site of multiple identities and histories; and a uniqueness of place defined by its interactions. Neolocalism is seen as a response to globalisation and the homogenisation of the urban landscape, as a conscious attempt to create a new sense of place (Eberts, 2014; Holtkamp et al., 2016; Schnell & Reese, 2014). This can be seen through the growth of farmers’ markets, local festivals, local food movements and increased popularity of craft breweries (Schnell, 2013). More recent discussions underline the value of place branding to places, drawing feelings of attachment to place by internal and external audiences, and enabling competitive advantage (Colomb & Kalandides, 2010).

A Sense of Place in Craft Beer Existing research has considered a sense of place in relation to craft beer, notably Hede and Watne (2013) who lauded a sense of place as a suitable concept, more so than country of origin, for the brand narratives of craft breweries due to its local appeal. This relates to findings from Bowen and Miller (2022) who identified the potential for place branding in craft beers to be effective in different ways, depending on the reach of the brand across local, regional, national or international markets. Additionally, they point to the resources of place as a source of competitive advantage, associated with the concepts of terroir (Charters et al., 2017), and social terroir (Sjölander-Lindqvist et al., 2020). Furthermore, Taylor and DiPietro (2020) consider neolocalism to state that knowledge of place-based brands should be extended to consider the social aspects related to a place, since perceptions of neolocalism positively influence relationship quality, and relationship quality positively influences place attachment and brand attachment. These discussions align with

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tendencies across the food and drink sector in which consumers increasingly seek authenticity and local food products (Bowen & Bennett, 2019). In terms of craft beer, Eades et al. (2017) describe this as a manifestation of consumers reconnecting with places, history and culture, while Melewar and Skinner (2020) note that consumers are prepared to pay premium process for authentic craft beers.

Methods This exploratory research evaluates sense of place expressions in craft beer branding, by paying particular attention to the use of provenance in the text and images on craft beers’ labels from Wales, UK. Wales has a rich history in beer production and is located within the UK, the country with the highest number of active breweries in Europe (Brewers of Europe, 2020). Wales has also been recognised as a place that evokes a strong sense of place in its food products (Bowen & Bennett, 2019). Thus, Wales was chosen as an ideal location for this research with aims to build on existing research on craft brewing, notably that of Melewar and Skinner (2020) who emphasised the value of terroir and authenticity in their case study of Corfu Beer in Greece. Data for this research were gathered from the text and imagery included on the labelling of craft beers from Wales, in either the form of a bottle or can. Indeed, food labelling is an important source of ‘press’—information for consumers —about the production process and identity of the product, such as beer, as the type of beer depends on the production process. However, the label is recognised as an underused data source within craft beer research. Further, while text is an integral part of qualitative research, images are increasingly prominent as persuasive and pervasive sources of data representing human experience (Pink, 2013). For instance, the use of photography has become more popular in Tourism research in recent years (Balomenou & Garrod, 2019), a field which relates closely to place branding and regional provenance. Thus, differing from previous research on place representations of beer, focusing on brand name (Gatrell et al., 2018; Melewar & Skinner, 2020) or data from the websites of craft beer brands (Hede & Watne, 2013), this qualitative research uses multimodal analysis of both text and imagery to better understand how craft beer can be seen as an asset for places, supporting local development and enhancing place identity. To begin our analysis, we compiled a database of active Welsh craft breweries and their beers based on official documents relating to food and drink producers, confirmed by the Welsh Government. To be included, breweries had to meet eligibility criteria used to define craft breweries by the Brewers Association (2022): notably, annual production of beer had to be less than 6 million barrels a year, and less than

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25% of the brewery is owned or controlled by an alcohol industry member that is not itself a craft brewer. This led to a database of 118 eligible craft breweries and 717 craft beers with labels to be analysed. Rigorous qualitative processes were conducted through first and second cycle codings (Miles et al., 2014) of both text and image data from all beer labels, which were documented using NVivo 12. Following the coding of data, a reflexive thematic analysis process (Braun & Clarke, 2006) was implemented to further evaluate representations on the labelling, a method consistent with other food place branding studies (Bowen & Bennett, 2019). Text and image data were analysed independently before all data were gathered for further interpretation. The findings are presented in the following section.

Findings This section presents the findings of the analysis of the 717 craft beer labels from 118 craft breweries in Wales, UK. Initial analysis on the data sought to evaluate the location of the craft beers. Figure 1 presents a map of the craft breweries in Wales that made up the database for this research. The map highlights a concentration of craft breweries around the main urban areas of Cardiff, the capital city; Swansea, the second largest city; and Wrexham, the largest city in North Wales.

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majority of the breweries are located in areas in which Welsh identity is strongest. Considering the Three Wales Model of Welsh identity discussed by Balsom (1985), most Welsh craft breweries are located in ‘Welsh Wales’, an area across Southeast Wales in which people identify as Welsh, but do not speak Welsh. A large number of craft breweries are located in the ‘Fro Gymraeg’, the Welsh-identifying and Welsh-speaking heartland of Wales. A small number of breweries are located in the area defined as ‘British Wales’, areas including the southwestern tip of Wales and eastern border areas, where the population is more likely to define their identity as British. These location-identity associations are important for this study in considering how the branding of the craft beers represents and expression of the identity of the place. The significance of this is further evident in observing the number of craft breweries that use provenance indicators in their branding. Of the 118 craft breweries in this study, 51 (43.2%) included provenance indicators in their brand name, and 52 of the 118 brands (44.1%) included provenance indicators in their logo. These provenance indicators included representations of regional symbols and national symbols for Wales, including dragons or daffodils. Observations across the 717 beers included in this study showed that all (100%) of the beer labels analysed included images and text representing the provenance of the beer.

Thematic Analysis Findings Location Initial analysis of the craft beers in this study looks at their location. Observations from the map underline a clustering of craft breweries in the Southeastern corner of Wales, where the majority of the population lives, and across North Wales, with areas of West Wales seeing a lower concentration of craft breweries, and very few craft breweries across midWales. Accounting for the location of the craft brewery, Fig. 1 outlines that 71 of the 118 craft breweries in this study are located in rural areas, with 47 in urban locations. Location can be an important factor in the visibility of the craft beer brand, as evidenced by the most well-known brewery in Wales being historically located in the city centre in Cardiff (see Fig. 2). Although the brewery relocated away from the city centre in 2019, Fig. 2 shows that the original tower of the brewery, which displays the Brains name, remains visible and is one of the first sights people see when arriving at Cardiff Central train station. While the location of craft breweries aligns with population patterns in Wales, more interesting observations of this study can be seen by exploring the location of the craft breweries according to identity patterns. Based on the locations of craft breweries in Wales seen in Fig. 1, the

The thematic analysis process of data obtained from the text and imagery of the 717 craft beer labels in this study led to ten themes, which are defined and explained in this section. Initially, 1375 codes were produced from text data, which equated to 16 unique codes. These were related to place names, place descriptions and references to industrial heritage. Image data yielded 1168 codes, leading to 30 unique codes, once duplicates were removed. These were related to place imagery, location outlines and mythological images. Following the thematic process, these codes were grouped into ten themes, which are presented in Table 1. Many of the themes outlined in Table 1 represent provenance indicators, notably the themes of nature, place, culture, Welsh symbols, company, name and language. Conversely, others relate to generic representations, such as the design, product or general themes. Within the themes relating to generic representations, the design theme can be sub-categorised to include imagery that is focussed on patterned designs or cartoons that do not have place associations. Examples of this from Top Rope Brewing include images associated with the beers named Papa Mango, Vanilla Monsoon and American Dream. The product theme relates to text that provides descriptive information about the

Sense of Place Expressions in Welsh Craft Beer Branding: Identity …

Fig. 1 Craft breweries in Wales

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Fig. 2 Image of the Brains brewery, historically located in Cardiff city centre. Source Photo taken by author Table 1 Themes from the thematic analysis

Theme

Description

Examples

Nature

Imagery relating to nature

Snowdonia landscapes, Welsh coastline

Place

Text or imagery relating to the place of the brewery

Conwy, Tenby harbour

Culture

Text or imagery relating to Welsh culture

Rugby, industrial heritage

Welsh symbols

Imagery depicting symbols relating to Wales

Daffodil, red dragon, sheep

Design

Imagery depicting a design

Patterned design, cartoon

Company

Imagery relating to the brewery company

Cat images (9 Lives Brewery), Heavy Industry brewery

Name

Imagery relating to the name of the craft beer

Amlwch port, Parys Mountain

Product

Text relating to the craft beer product

‘Light in colour, with a sharp, hoppy, grapefruit finish’

Language

Text relating to the Welsh language

Bragdy Twt Lol, Cwrw Llŷn

General

General text and imagery

Company logos, colours

beers, such as ‘Light in colour, with a sharp, hoppy, grapefruit finish’ for the Tudor IPA of the Tudor Brewery. Finally, the general theme relates to text and imagery that does not fit into a specific category. Here, sub-themes include craft beers that possess the company logo, which does not contain any place indications, such as the Mabby Brewing Co, whose beer names and labels are named after colours, including Silver, Rainbow and Blue. Within the themes that relate to place associations, the nature theme includes examples of beer labels that include imagery of local natural landmarks, such as the Snowdonia mountains (Snowdon Craft Lager), the Gower Peninsula (Gower Gold) or the Rhondda Valley (Cwrw Fforch, Cwm Rhondda Ales). This was particularly common for craft beers located in rural areas, where the natural landscape

could be considered a distinctive feature of the local area. The place theme refers to text or imagery relating to specific places, including images of Conwy Castle (Conwy Brewery), Tenby harbour (Tenby Harbwr Brewery) or various images of the Mumbles, including the company logo containing Mumbles Pier (Mumbles Brewery). These place representations were common across many examples of the craft beer labels. The culture theme represents various depictions of culture relating to place. Sub-themes relate to imagery of the industrial heritage of the former coal mining areas of the South Wales valleys (Grey Trees Brewery) or images of local rugby heroes (Cwrw Grav, Tinworks Brewing Co.). The Welsh symbols’ theme relates to a number of beers that contain symbols of Wales, such as the dragon (Felinfoel Brewery, Big Hand Brewing Co.), daffodil

Sense of Place Expressions in Welsh Craft Beer Branding: Identity …

(Cwrw Braf, Tomos Watkin Brewery) or the flag of St David (Magic Lagyr, Tomos Watkin Brewery). The use of Welsh symbols was particularly evident in craft beer labelling, whether this was expressed prominently on the label through the main image, or smaller images of Welsh identity, such as a dragon also visible on the label. The company theme captures text and images that refer to the name of the craft beer company. While some examples relate to generic names, such as the 9 Lives Brewery, whose beers and labels relate to cats, many examples within this theme relate to places. This includes the Heavy Industry Brewery, which relates to the industrial heritage of the local area, or the Great Orme Brewery, whose beers and branding relate to local places, such as the Great Orme, or the Snowdonia mountains. The name theme underlines that many breweries and their beers are branded to reflect their place of origin. This includes names and images of places on Anglesey for the Anglesey Brewing Co., such as Amlwch port (Amlwch), or Parys Mountain Golden Ale (Parys Mountain). Furthermore, all beers of Crafty Devil Brewing contain images of landmarks of Cardiff, where the brewery is located. The final place-related theme is language, which relates to text on the labelling in the Welsh language. The use of the Welsh language on labelling is common among the majority of beers in this study, with many breweries using Welsh names for their beers, and using Welsh text on their labels. This was particularly common in areas of Wales with higher levels of Welsh-speaking populations and Welsh identity. Examples of this include Cwrw Lleu, whose beers are named after characters from Welsh mythology (Blodeuwedd, Lleu, Gwydion, Bendigeidfran), or Cwrw Ogwen, whose beers are named after local landmarks (Caradog, Chwalfa, Tryfan). Some beers contained text in both English and Welsh, such as Cader Ales, Bragdy Mona and Purple Moose Brewery.

Discussion Findings from this research outline that place associations are widely used in the branding of craft beers in Wales, indeed all of the 717 beers observed in this research contained a provenance indication. This underlines the value that craft beer producers place on place associations. While less than half of the craft beer brands contained provenance indicators in their brand name or logo, the inclusion of some form of place association on the beer label is noteworthy. The thematic analysis process identified ten themes from the text and image data, of which seven related to place associations, with three themes that represented generic associations. The use of place associations can reinforce the terroir of the product and enhance the perception of authenticity of the craft beer (Melewar & Skinner, 2020). As

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the label is the most visible representation of the craft beer (Bowen & Miller, 2022), the inclusion of place associations on the beer label is the most important way for the beer brand to express its place identity. Here, the findings support the notion that geography can be applied on various scales in the promotion of craft beer (Gatrell et al., 2018), as various geographical representations are evident among the data. This includes expressions of identity that relate specifically to the location of the brewery, place representations across a region or expressions of national identity. A hyper-local association is common within the food and drink industry, as many foods take on the identity of their specific place of origin, as is common with cheese, which are often named after the specific village, town or place from which they derive. This can be observed within this research, as many craft breweries take on the name of their location (e.g. Mumbles Brewery, Rhymney Brewery). However, this may be based on a wider and less-defined area, such as the Heart of Wales Brewery, or Bluestone Brewery, which refers to the blue stones which are synonymous with the Preseli hills. The use of place associations observed in the text and imagery on the craft beer labels also underlines the varying levels of place distinctions that can be expressed. While some beers made reference to local landmarks or heroes (such as famous local rugby players), others placed more emphasis on regional aspects, such as their location in the Snowdonia National Park, or images of the Cardiff skyline. On a national scale, many beers contained imagery and references to Welsh place associations, such as dragons, daffodils or Welsh mythology. The use of folkloric images like this resonates with findings of Hede and Watne (2013) who expressed the value of these representations in humanising the brand. However, the branding across some craft beers was less place-specific and took a more general identity, using patterned designs or generic images. These distinctions point to differing levels of focus for the craft beers, as some would place more attention on the local or regional market, while others would target national or international markets (Bowen & Miller, 2022). Following discussions of identity, observations were made on the location of craft beers that possess place associations and the nature of identity in Wales based on the Three Wales Model (Balsom, 1985). The Three Wales Model characterises three expressions of identity across different parts of Wales, and these are ‘Welsh Wales’, across the South Wales valleys where people identify as Welsh but do not speak the Welsh language; ‘Y Fro Gymraeg’, the Welsh-speaking heartlands across West and Northwest Wales where people strongly identify as Welsh; and ‘British Wales’, areas of East Wales along the English border, and the far Southwest corner of Wales, where people identify more as British rather than Welsh. Considering these identities, craft beer brands located in areas of ‘Welsh Wales’

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tend to possess hyper-local or national expressions of place. These can be seen through some breweries taking the name of the village or valley where they are located (e.g. Cwm Rhondda Ales, Rhymney Brewery) but include images of rugby, landscapes or industrial heritage. Similarly, craft beers located in ‘Y Fro Gymraeg’ were more likely to possess hyper-local, regional or national place expressions and would be more likely to use the Welsh language in their branding. Hyper-local expressions are related to specific places, such as the use of images and place names on Anglesey for the Anglesey Brewing Co. However, many beers located in this area took on a more regionalised identity, particularly in relation to notable landmarks, particularly the Snowdonia National Park (Snowdonia Brewery, Snowdon Craft Beer) or the Preseli mountains (Bluestone Brewing). Craft beers located in ‘British Wales’ are more likely to possess a hyper-local or a generic design, although there are some beers that include Welsh symbols. A notable example in this area is Geipel Brewery, whose beers are German in style and in name, producing beers named Pilsner, Hefeweizen and Dunkelweizen. However, the Wrexham Larger Company retains a Welsh identity, with its beers having close associations with the Wrexham football club. Considering the observations from the research regarding place associations and patterns of identity, findings of the research point to craft beers having a sense of place, aligning with findings of Hede and Watne (2013). While Hede and Watne (2013) point to the brand narratives of craft breweries along the lines of their local appeal, this research shows that varying levels of place associations exist, as outlined by Bowen and Miller (2022); thus, expressions of a sense of place can vary (Cresswell, 2004). The sense of place can be felt on a hyper-local, regional or national level, and this sense of place could be leveraged according to the focus of the brewery on local, regional, national or international markets. The differing levels of a sense of place expressed by the beers in this research underline the importance of terroir (Charters et al., 2017) and social terroir (Sjölander-Lindqvist et al., 2020) to craft beers. Through leveraging place resources, the craft beer could derive a competitive advantage (Barney, 1991) based on the place characteristics that influence the character and identity of the beer, whether due to the climatic, topographical or soil characteristics that influence the ingredients of the craft beer, or the social aspects of the place. Indeed, branding along the lines of place attachments can enable competitive advantage (Colomb & Kalandides, 2010) and could enable consumers to (re)connect with places, history or culture (Eades et al., 2017). Research findings underline that the use of place branding on craft beer labelling aligns with discussions of neolocalism (Eberts, 2014; Flack, 1997; Holtkamp et al., 2016; Schnell, 2013; Taylor & DiPietro, 2020). Indeed, place connections

M. Miller and R. Bowen

are used in the craft beer branding to create a sense of place as a response to globalisation and the homogenization of place (Eberts, 2014; Holtkamp et al., 2016; Schnell & Reese, 2014). Craft beers are notable expressions of this neolocal sense of place due to their local identity and connections to the local place (Schnell, 2013). Here, findings from Wales support observations of neolocalism in existing research; however, findings point to the use of place expressions on varying scales, from hyper-local to regional or national. This focus depends on the intended target market for the craft beer, whether local, regional, national or international in scope (Bowen & Miller, 2022). A notable observation from the findings in Wales is the relationship to identity in different parts of Wales, which reinforces the neolocal sense of place and social terroir associated with craft beers due to specific relations to place-specific craft beers.

Conclusion Findings from this research add weight to discussions of place associations in the branding of craft beers. Expanding on research from Hede and Watne (2013), this research supports the notions of a sense of place and neolocalism in the branding of craft beers. The widespread usage of place associations observed in this research highlight how craft breweries place value in providing some form of place expression; however, this varies according to the focus of the brewery on local, regional, national or international markets (Bowen & Miller, 2022). Here, observations point to feelings of identity as having a bearing on how the craft beer may choose to express its sense of place. This research underlines that craft breweries could take a hyper-local sense of place regardless of the type of identity that might influence the brand, however brands located in areas of stronger Welsh identity tended to place more emphasis on a Welsh sense of place, while breweries influenced by a more British identity were more likely to adopt more generic branding. These findings support the value of terroir (Charters et al., 2017) and social terroir (Sjölander-Lindqvist et al., 2020) as a possible source of competitive advantage for craft beer brands, as the place associations represent unique resources for the brand that cannot be replicated. Thus, place associations can have an impact on the perceived authenticity of the craft beer from the consumer perspective. Revisiting the connections between place, propaganda and print, the findings of this research highlight how place can be an important characteristic in the promotion of craft beers, expanding on existing discussions of neolocalism to emphasise the importance of identity and social terroir to the way in which a sense of place is expressed in the branding of craft beers. In terms of marketing, the label is the most significant visual representation for the craft beer, as it

Sense of Place Expressions in Welsh Craft Beer Branding: Identity …

contains both brand and product information to distinguish the brand from others that are presented in similar-looking cans or bottles. The beer label, therefore, becomes the most significant representation of the brand, and the most persuasive form of promotion for the craft beer. As such, effective promotion of the brand relies on the label effectively communicating the brand to consumers. The focus on the beer label is an important contribution of this research, as previous research has largely overlooked with value of the label. While this research has advanced knowledge on the branding of craft beers, this topic remains under-researched, and future research should continue to explore place association expressions on craft beer labels. Limitations are acknowledged in the scope of this research on one setting, and more research would be necessary in expanding the geographical scope of observations. There is value which is further exploring how these place associations could link with expressions of identity, particularly exploring this across a variety of settings. Future research could also explore how place associations on the craft beer label are interpreted by consumers. Findings of this research could enable craft beer producers to evaluate the effectiveness of their branding activities and help them to better understand how the place expressions that they integrate into their brand could be more effective in reaching their target market.

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213 Cabras, I., Lorusso, M., & Waehning, N. (2020). Measuring the economic contribution of beer festivals on local economies: The case of York, United Kingdom. International Journal of Tourism Research, 22(6), 739–750. https://doi.org/10.1002/jtr.2369 Cabras, I., & Mount, M. (2016). Economic development, entrepreneurial embeddedness and resilience: The case of pubs in rural Ireland. European Planning Studies, 24(2), 254–276. https://doi.org/10. 1080/09654313.2015.1074163 Charters, S., Spielmann, N., & Babin, B. J. (2017). The nature and value of terroir products. European Journal of Marketing, 51(4), 748–771. https://doi.org/10.1108/EJM-06-2015-0330 Colomb, C., & Kalandides, A. (2010). The ‘Be Berlin’ campaign: Old wine in new bottles or innovative form of participatory place branding? Edward Elgar. Cresswell, T. (2004). Place: A short introduction. Wiley. Eades, D., Arbogast, D., & Kozlowski, J. (2017). Life on the “beer frontier”: a case study of craft beer and tourism in West Virginia. In Craft beverages and tourism (Vo. 1, pp. 57–74). Springer. Eberts, D. (2014). Neolocalism and the branding and marketing of place by Canadian microbreweries. In M. Patterson & N. Hoalst-Pullen (Eds.), The geography of beer: Regions, environment, and societies (pp. 189–199). Springer Verlag. Ellis, V., & Bosworth, G. (2015). Supporting rural entrepreneurship in the UK microbrewery sector. British Food Journal, 117(11), 2724– 2738. https://doi.org/10.1108/BFJ-12-2014-0412 Felinfoel Brewery. (2022). A little bit of history. Retrieved December 11, 2022, from https://www.felinfoel.com/little-bit-history/ Flack, W. (1997). American microbreweries and neolocalism: “Ale-ing” for a sense of place. Journal of Cultural Geography, 16(2), 37–53. Gatrell, J., Reid, N., & Steiger, T. L. (2018). Branding spaces: Place, region, sustainability and the American craft beer industry. Applied Geography, 90, 360–370. Hede, A.-M., & Watne, T. (2013). Leveraging the human side of the brand using a sense of place: Case studies of craft breweries. Journal of Marketing Management, 29(1–2), 207–224. Hoalst-Pullen, N., & Patterson, M. W. (2020). The geography of beer: Culture and economics. Springer. https://doi.org/10.1007/978-3030-41654-6 Holtkamp, C., Shelton, T., Daly, G., Hiner, C. C., & Hagelman, R. R. (2016). Assessing neolocalism in microbreweries. Papers in Applied Geography, 2(1), 66–78. Jorgensen, B. S., & Stedman, R. C. (2001). Sense of place as an attitude: Lakeshore owners attitudes toward their properties. Journal of Environmental Psychology, 21(3), 233–248. https://doi.org/10. 1006/jevp.2001.0226 Massey, D. B. (1991). A global sense of place. Marxism Today, 38, 24–29. Melewar, T. C., & Skinner, H. (2020). Territorial brand management: Beer, authenticity, and sense of place. Journal of Business Research, 116, 680–689. https://doi.org/10.1016/j.jbusres.2018.03. 038 Miles, M. B., Huberman, A. M., & Saldaña, J. (2014). Qualitative data analysis. SAGE Publications. Patterson, M., Hoalst-Pullen, N. (2014). Geographies of beer. In: M. Patterson & N. Hoalst-Pullen (Eds.), The geography of beer. Springer. https://doi.org/10.1007/978-94-007-7787-3_1 Pink, S. (2013). Doing visual ethnography. Sage. Rantanen, T. (2003). The new sense of place in 19th-century news. Media Culture and Society, 25(4), 435–449. https://doi.org/10. 1177/01634437030254001 Relph, E. C. (1976). Place and placelessness. Pion. Ritzer, G. (1992). The McDonaldization of society. Pine Forge. Schnell, S. M. (2013). Deliberate identities: Becoming local in America in a global age. Journal of Cultural Geography, 30(1), 55–89.

214 Schnell, S. M., & Reese, J. E. (2014). Microbreweries, place, and identity in the United States. In M. Patterson & N. Hoalst-Pullen (Eds.), The geography of beer: Regions, environment, and societies (pp. 167–187). Springer Verlag. Shortridge, J. R. (1996). Keeping Tabs on Kansas: Reflections on Regionally Based Field Study. Journal of Cultural Geography, 16 (1), 5–16. SIBA. (2020). The SIBA British craft beer report 2020. https://www. siba.co.uk/SIBA-British-Craft-Beer-Report-2020.pdf Sjölander-Lindqvist, A., Wilhelm, S., & Daniel, L. (2020). Craft beer— Building social terroir through connecting people, place and business. Journal of Place Management and Development, 13(2), 149–162. https://doi.org/10.1108/JPMD-01-2019-0001 Smith, R., Moult, S., Burge, P., & Turnbull, A. (2010). BrewDog: Business growth for punks! The International Journal of Entrepreneurship and Innovation, 11(2), 161–168. https://doi.org/ 10.5367/000000010791291785 Taylor, S., Jr., & DiPietro, R. B. (2020). Assessing consumer perceptions of neolocalism: Making a case for microbreweries as place-based brands. Cornell Hospitality Quarterly, 61(2), 183–198. Tregear, A. (2001). What is a ‘typical local food’? An examination of territorial identity in foods based on development initiatives in the agrifood and rural sectors. University of Newcastle upon Tyne.

M. Miller and R. Bowen Maggie Miller is a Senior Lecturer in Tourism at Swansea University, Wales, who holds a PhD from the University of Waterloo, Canada. Her work focuses on the sociocultural dimensions of sustainability, to understand, enhance and advocate for social justice and equity in tourism and recreation contexts. A critical qualitative scholar, Maggie’s work is informed by relational ways of knowing and draws on diverse methodologies (e.g. narrative, visual and sensorial) and community-based research practices.

Robert Bowen is an International Entrepreneurship Lecturer at Cardiff University, Wales, who undertakes research into rural enterprise, regional development and place marketing, with an interest in food and drink SMEs. He has published in various international journals and presented research at the Welsh Parliament, House of Lords and European Commission. He is currently co-chair of the Rural Enterprise track at the annual Institute of Small Business and Entrepreneurship conference and Editor of Regions eZine.

Regional Identity as a Marketing Strategy for Breweries in Czechia Martin Lepič, Michal Semian, David Hána, and Kryštof Materna

Abstract

Introduction

The intensification of globalization over the last few decades has generated a growing interest among inhabitants and businesses in regional environments and imageries. This includes the interest in regional food, such as the labelling and promotion of food tied to a specific place. The beer industry, in particular, offers comprehensive insights into the dynamics of producers’ usage of regional identity marketing strategies. In this chapter, we aim to evaluate the significance, conditions, and spatial distribution of regional identity marketing of breweries in Czechia, a traditional brewing country that has experienced several waves of upheaval in brewery structure and dynamics following globalization. To achieve this goal, we examined the websites and other modes of promotion of all active industrial and craft breweries to determine the exploitation of regional identity marketing in breweries’ narratives, names, slogans, logos, and labels. The findings indicate significant differences in the usage of regional identity among breweries across regions, confirming that both landscape value and historical regionalism influence the potential for regional marketing in the beer industry. Keywords












Breweries Czechia Landscape value Marketing Nationalism Regionalism Regional identity

M. Lepič (&)
M. Semian
D. Hána
K. Materna Faculty of Science, Charles University, Prague, Czech Republic e-mail: [email protected] M. Semian e-mail: [email protected] D. Hána e-mail: [email protected] K. Materna e-mail: [email protected]




The intensification of globalization processes over the last several decades, emerging since 1970s and 1980s, brought about a growing interest of inhabitants and businesses in topics connected to regions, regional environment, specificity, and place-based imageries. It included an interest in regional foodstuff products on the demand-side, that is, among customers, and in accentuation of regional origin and connection of these products on the supply-side (Williams, 2009). To a large extent, such a regional turn came as a reaction to the processes directly unfolded by economic globalization and its manifestations, namely the centralization and concentration of production via large plants producing a wide range of placeless products (e.g. Relph, 1976), unification of this production in favour of the economies of scale (see e.g. Dicken, 2015), and standardization of taste and look of centralized and unified products (see Hasman et al., 2022). As a geographical consequence of globalization grew the socio-spatial polarization in economic prospects of regions and places. A variety of regionally specific reactions unfolded across the globe. These can be summarized by the two interrelated, though functionally and qualitatively distinct notions—that of glocalization and neolocalism. Glocalization describes the region’s ability to engage in the globalization process by bringing originality and competitive advantage of region in the global economy. Swyngedouw (2000) even considers the revival of regions as intrinsically linked to globalization in positive regard, not as a process of resistance to globalization. Regional initiatives responding to globalization are essentially seen as part of the globalization itself. On the contrary, neolocalism usually refers to antiglobalization stances. Through its perspective, products of large global enterprises are understood as rootless (Schnell, 2013), while the place-based regional products gain prominence among both the brewers and customers. Irrespective of whether the motivation for this regional turn lied in the process of glocalization or neolocalism,

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many customers mainly from highly developed countries and regions (Hána et al., 2022) tended to reject standardized and concentrated “global” products by supporting regionally specific production. At the same time, producers actively exploited and even shaped regional identity by systematically employing place-based regional marketing strategies into their branding. This was documented among others by Hasman et al. (2021) for the case of recently closed breweries whose production became centralized to a multi-national, “placeless” plants. The described process is effectively bi-directional as producers (in this case breweries) intentionally accentuate regional ties and promote regional social networking to establish themselves within the regional imageries, an image they expect is closer to the customers’ preferences (Holtkamp et al., 2016; Wojtyra, 2020). Yet this is not to say that the owners’ decision to adopt regional identity and marketing is merely an unauthentic, economic calculation. Effectively, the decision behind the adoption may be both the active regional identity on the owner’s side and the assumed preferences of customers. We argue that of the foodstuff industries among which the return to the regional level has been studied, the beer industry is especially beneficial for the local–global analysis of strategies and preferences. It is one of the economy sectors in which the globalization-related processes led to a particularly strong transformation (Hasman et al., 2022). Since 1980s, this sector experienced profound changes in the production side (Materna et al., 2022), which is an obvious indication of globalization (e.g. Harvey, 2010). Moreover, the current emergence of new breweries within the craft brewery boom is understood as a reaction to homogenizing globalization processes. It aims at preventing the connection loss between product itself and places of production and consumption (Robertson, 1995; Flack, 1997; Maye, 2011; Taylor and DiPietro, 2020; Hasman et al., 2022). As Hasman et al. (2022) also note, the beer industry is a sector where consumers play a particularly strong role, so their attitudes and behaviour can significantly affect the beer industry in general (Materna et al., 2019). In countries with a long brewing tradition, we can also assume that the bond between the beer brand and the region of its origin will be stronger than other consumer goods. This makes beer industry a particularly interesting example on how regional identity is exploited as a marketing strategy, as well as a response to globalization. Nevertheless, the supply-side’s regional identity and marketing is not only the outcome of interactions between the active business strategy of producers and the assumed attitudes and preferences of potential customers within the region’s territorial and social shape. The character and image of region’s environment, or in Paasi’s (1986, 1991) perspective the symbolic shape of a region, is likewise an

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important variable affecting the possibility and effectiveness of using regional identity as a marketing tool. We can assume that attractive places and landscapes are more prone for being sources of identification. In this chapter, the main aim is to evaluate the significance of regional identity as a place-based marketing strategy of all industrial and craft breweries in Czechia. This includes examining the interactions between producers’ marketing decisions and the characteristics of regional environment within which the producers operate. More specifically, we ask to what extent have breweries exploited regional identity in their official websites. Furthermore, we ask how these marketing strategies are affected by the region, which includes its landscape value, historical specificity (such as brewing tradition, regionalism), and position in a broader geopolitical system (see also Baker, 2019; Eberts, 2014; Fletchall, 2016; Holtkamp et al., 2016; Schnell, 2013; Schnell and Reese, 2014). The emphasis is placed on examining (a) the significance and frequency of regional identity usage in brewery’s promotion strategies (breweries are differentiated by their location, size, and length of operation), (b) the spatial distribution of breweries in the country in terms of their regional marketing accentuation, and (c) the effect of landscape value scale and region’s historical specificity and regionalist ideology in developing of the regional enabling environment. Subsequently, we hypothesize the impact of this enabling environment on the intensification of regional rooting, branding, and promoting of regional products. Based on the aforementioned analytical design and methodology, we formulated three research hypotheses. The first hypothesis (H1) postulates that breweries localized in places with strong landscape value and attractiveness employs regional identity marketing more frequently than those in regions with landscape of less (perceived) symbolic value. As detailed in the following section, the landscape considered attractive in terms of identity-building consists mainly of mountainous, forested, biodiverse, and environmentally conserved areas as well as of areas with a rich cultural-historical heritage and place-based production (e.g. Solecka, 2019). The second hypothesis (H2) postulates that breweries localized in regions with strong historical regionalism and regional identity consciousness employ regional identity marketing in their websites more frequently than those breweries in regions without such spatial particularity. In Czechia, this concerns mainly the large historical regions of Moravia and Silesia in eastern part of the country. Finally, the third hypothesis (H3) postulates that given the strong position of beer as a symbol in the conception of Czech nationalism and national identity in general, the breweries that emphasize Czech nationalism as their prime marketing strategy should also employ place-based regional or local identity content. For context, conversely to the common

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understanding of regionalism as oriented against the state, none of the contemporary regional identities in Czechia are conflicting with national identity. Instead, regional identities in the form of regionalism are unproblematically compatible with state nationalism and its identity. Consequently, there should be either no clear spatial pattern of strong regional accentuation or a pattern corresponding to the hierarchy of national landscape value (see also Agnew, 1998) for this hypothesis to be corroborated. For this analysis, we systematically examined websites and other modes of promotion of all active breweries in Czechia, regardless of their size and foundation. The list included both industrial and craft breweries. The aim was firstly to determine the strength and frequency of the regional symbols’ usage in the narrative, names, slogans, logos, and labels. Based on these findings, we classified breweries into categories and suggested a regionalization of the territory of Czechia according to the prevailing accentuation of regional identity marketing. Finally, we examined the effects of landscape value, regionalism, and nationalism on the probability of breweries to adopt the regional identity marketing. As controls in the analysis, we included the effects of several other factors—both breweries’ characteristics and other marketing strategies they commonly use in their websites.

Landscape, Regionalism, and Nationalism as Environments for Brewery’s Regional Identity The notion of regional identity is usually conceptualized in academic literature as a multi-scalar spatial-structural phenomenon. Indeed, regional identity as a concept contains feelings of attachment to and identification with a meaningful space, the everyday surroundings, and likewise with people and institutions in that space. It is facilitated by the awareness of a (real or imagined) distinct time–space alignments in contrast to the outside world (Kaplan, 1994; Hogenstijn and van Middelkoop, 2005; Vainikka, 2012; Terlouw and van Gorp, 2014). Frequently, it is a result of institutional intentions (Paasi, 1986; Veemaa, 2012). In this chapter, we built on Paasi’s (1991) original concept of regional identity as a thought category and a socio-political instrument which refers to both the symbolic value of regional landscape and the historical institutionalization of region’s existence. This creates a region’s sense of peculiarity, which links region to an individual. It is precisely this feeling of uniqueness (either real or perceived, see Harvey, 2010; Reid and Gatrell, 2015) that can be behind the popularity of some local products in the sense of neolocalism. The first two hypotheses directly relate to the assumption of Paasi’s stages of region’s institutionalization.

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The identity-related landmarks are both of natural (terrain, vegetation) and cultural-historical origin. Any landscape features available and their combinations can become a basis of a place-based identity. Most frequently, however, it is represented by mountains, highlands, hills, rivers, coast, soil, lowlands, forests, trees, meadows (Herb, 1999; Huysseune, 2010; Vainikka, 2012), and the field of local production (Terlouw and van Gorp, 2014) on the one hand, and by the old churches, monasteries, historical heritage, monuments, architecture, settlement structure, urban surroundings, folklore, land use (Herb, 1999), and the territorial and linguistic shape of a unit or group (Savić, 2014) on the other. As a consequence, the landscape gets a meaning and is transformed from a mere natural material occurrence into a natural-cultural project that becomes a basis of identification. This is what Häkli (2001) terms the “discursive landscape”, the interaction between a social group and a space. Similar approach is exemplified by Solecka (2019) who summarizes a range of individual concepts of landscape value assessment. She likewise proposes that landscape value can be measured using natural-environmental and cultural-historical metrics and adds a group of aesthetic-perceptual factors. These factors can be interpreted within the concept of the funnel of causality (Chernyha and Burg, 2012) as a superstructure to more structural and contextual categories of nature and society-culture. However, even here, aesthetic landscape value correlates with mountainous, forested, environmentally protected, biodiverse, rocky, and steep environments (Solecka, 2019) or meaningful fields and meadows (Terlouw and van Gorp, 2014). As noted, we hypothesize that attractive landscapes are more useful and thus more exploited and enabling for regional branding strategies than other types of landscape, even if controlled for a broader set of “classic” marketing strategies. From a geographical perspective, this also means the expectation of a strong variation by the location because the landmarks which strengthen the landscape value are not evenly distributed across the territory (see Buratti and Hagelman, 2021). Nevertheless, landscape value though intrinsic to region, is not the only aspect of regional identity-building. As spatial identities are not only able to take place but also to (re)make place (Vainikka, 2012), the process of identity formation often becomes a field of interventionist strategy made by institutions and interest groups to create a desired, selective image of a region (Veemaa, 2012). This institutionally led top-down official presentation or image of a socio-political entity may or may not be shared by the inhabitants of the entity. Thereby, Paasi (1996) distinguishes regional identity of citizens and identity of the region, that is, regional image. Both cases, however, although different, should not be understood independently of one another. As Agnew (1987) suggested, spatial identity, or a sense of place, is not a mere outcome of unrestricted individual attachments, nor is it fully

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determined by the structural forces. The notion of enabling environment must thus be understood in this complex perspective of the structuration theory (see Giddens, 1984). Further, as Agnew (2001) stated, inhabitants in many regions across the globe are increasingly aware of their region’s history narrative, identity, symbols, myths, and legends. These aspects together create a form of regional ideology which is inevitably backed by a movement of people aware of region’s specificity, and who behave with this in mind (see also Mansvelt Beck, 2005). A large body of literature on regions and regionalism considers only those cases that are ethnically and/or culturally different to the state’s majority and display at least some degree of political grievance against the state, either in the form of autonomism or secessionism. This concept better corresponds to what Lepič (2017) describes as regional nationalism. On the other hand, regionalism per se is not necessarily ethnic nor is it incompatible with the state-national identity. This is likewise the case of Moravia and Silesia regions in eastern half of Czechia. These regions display high degree of regional awareness and identification, while having weak or non-existent autonomist and secessionist movement and a sense of ethno-cultural distinction. The interconnectedness of the Czech historical lands is based on the common official language and the long common history of Bohemia (western half of Czechia), Moravia, and Silesia since the establishment of the powerful Great Moravian Empire governing Bohemia as well (833– 907). The Bohemian conquest of Moravia in 1018, and the declaration of Moravia and Silesia as a fief of the Czech king in 1348 added to this interconnectedness. On the contrary, a relatively strong regional identification comes mainly from a different local culture that can be supported mainly by the long autonomous or self-governing tradition of Moravia and Silesia until 1949 and to a certain extent even by the imperial history. Breweries in these historical-cultural regions should employ the regional identity and marketing more frequently than those in areas without strong feelings of historical regionalism. Finally, since the link between people and the land they inhabit, which is the basis of spatial identity, is also the basis of nationalism, it is no surprise that spatial identity often gets a nation-wide extent and national identity is predominantly experienced in spatial terms (Häkli, 2001). It draws from the iconography of landscape and territory and the historiography of events with a national significance. In this regard, what matters is the discursive narrative of the landmarks, that is, ideas and strategies for treating the material basis of a territory (Elden, 2010). Building on the specific context of Czechia where beer symbolics plays a certain role in the formation and preservation of national identity construct, we

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analyze, among others, a national-traditional vis-à-vis experimental and other marketing strategies for marketing beer, with the aim to extract the effect of state nationalism. The potential interactions between regional and national identity and marketing can also answer the question of compatibility of these two spatial identities within the context of developed regionalism and nationalism.

Data and Methods The question of accentuation and frequency of regional identity usage as a marketing strategy of breweries in Czechia was analyzed using the breweries’ websites, and occasionally, also other modes of brewery promotion. Overall, we analyzed the sample of all 529 breweries which operated in Czechia as of 1 January 2020, that is, shortly before the beginning of COVID-19 pandemic, whose effect on the further proliferation of breweries was particularly profound. Of these enterprises, there were 43 industrial and 486 craft breweries (we use the threshold of 10.000 hl). For each brewery we systematically searched and examined online websites and/or other available sources to assess the intensity of regional place-based references in the brewery’s promotion portfolio vis-à-vis the national identity references and other (i.e. placeless) marketing strategies. These included the brewery’s emphasis on product historization narrative, family size and craftsmanship of the production, connection to a brewing tradition in a locality, experimentation of product design and market, and classic style of brewery’s portfolio. These factors are frequently discussed in the regional marketing literature beyond the place-based accounts. In terms of both regional branding and competing strategies, we searched the references in brewery’s name, names of produced beers, slogans, logos, labels, narratives, and general self-description on the web, including the intensity of the emphasis to region in the description and narrative. Occasionally, in several cases, there was no independent brewery’s websites available, so we searched their Facebook instead. Other sites of online promotion were much less widespread among breweries in Czechia (e.g. Instagram) and thus we limited the analysis to independent web or Facebook pages. As for the research strategy, two researchers searched and examined the online presentations independently from one another, using the same methodological procedure and testing for the potential individual bias. Operationally we identified and subsequently synthesized two methodologically distinct though partially interconnected response variables, which were utilized as proxies for

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the strength of brewery’s regional identity marketing. First, we constructed a qualitative, categorical indicator of the accentuation of regional identity. There were three ordinal categories (i.e. weak, medium, strong) of identity accentuation into which each researcher subjectively ascribed individual breweries after their website analysis. In some cases, we discussed possible disagreements and decided a final ascribed category. Second, to minimize the potential bias emanating from this subjective (though partially objectified) ascription of breweries into categories, we quantified the regional identity accents in respective investigated items (particularly in the names, slogans, logos) and constructed an aggregate quantitative indicator using frequency scale of regional accents across respective items. We constructed a four-point scale in this second variable, stretching from zero to three references. The qualitative and quantitative aggregate variables were subsequently compared and the differences between them are discussed among other methodological limitations of our analysis. As a result, we combined the two categorizations to build an aggregate indicator of dependent variable measuring both accentuation and frequency. The final four categories were strong, moderate, weak, and no brewery’s regional identity marketing (Table 2). Building on this analysis, we classified and categorized individual breweries according to the intensity and representation of regional branding utilization. Comparing this categorization with a set of control marketing strategies and other brewery characteristics (i.e. location, production volume, length of operation) as well as with regional structure of Czechia enabled us to estimate the associations between place-based marketing on the supply-side and the environment within which the supply-side operates. Finally, we mapped and regionalized the territory of Czechia into several spatial blocs based on the differences in accentuation of regional branding strategy vis-à-vis other strategies, including the discussion on the non-stationarity of associations.

Results In this section, we firstly describe and classify breweries according to their accentuation and frequency of using regional identity in their marketing strategy. We then compare Table 1 Brewery categories by accentuation and frequency of regional identity marketing

breweries in terms of their intensity of references to region vis-à-vis other marketing strategies and evaluate spatial distribution of breweries in respective categories across regions of Czechia. The section finally examines in which regions the breweries tend to develop the regional identity marketing strategy most profoundly, using the assumptions from the literature on landscape attractiveness, regionalism, and state nationalism.

Accentuation and Frequency of Regional Identity Marketing In terms of the strength of regional identity accentuation in breweries’ website narratives, we found that only 10% of breweries (51 enterprises) promoted regional ties strongly and foremostly (Table 1). Additionally, we identified 132 breweries, constituting 25% of the total, which accentuated place-based marketing and their connection to region moderately, often in concurrence with other developed marketing strategies. As can be seen in Table 1, a vast majority of breweries (346; 65%), however, applied other strategy (or none of them) for marketing beer. As for the second analyzed variable, that is, a frequency of regional references in breweries’ visual materials (i.e. name of the brewery and/or beers, slogan, logo, and labels), the distribution of frequencies across categories recalls that of the accentuation variable. Slightly over 50% of breweries (268) employed regional identity references in neither brewery and beer names, slogan, logos, and labels, and further 30% (156) referenced to place and region only sporadically. Of the remaining 20%, we identified 24 breweries (4.5%) as very frequently referencing ties to the region in all three aspects and 81 breweries (15%) as having regional references in two of these categories (Table 1). In our analysis, we used these two variables to reduce the risk of selection and evaluation bias. To further objectivize the variable expression, a cross-tabulation of the categories was made, a result of which was a single aggregate dependent variable. The detailed discussion of this cross-tabulation is provided in the following section. Nevertheless, as regional identity strategy is not the only tool for marketing beer, we had to analyze a more comprehensive set of strategies. Figure 1 therefore displays the

Accentuation N Strong

Frequency %

51

9.6

Moderate

132

25.0

Weak

346

65.4

N Three times

%

24

4.5

Twice

81

15.3

Once

156

29.5

Never

268

50.7

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respective numbers of breweries which employed one (or more) of six different marketing strategies vis-à-vis the accentuation of (aggregate) regional identity. Indeed, many breweries in the dataset chose to focus on other types of marketing than exploitation of regional ties. As the evidence indicates, the strategies most utilized among breweries in Czechia were family size craftsmanship (35.2%) and emphasis on classic style of production (such as lagers) and brewery’s interior design (34.6%). Both strategies share with the regional identity a resistance to large-scale centralization, economies of scale, standardization, and placelessness of globalized product, though we are far from suggesting that their motivations were strictly neolocal (see Hasman et al., 2022). Furthermore, connection to brewing tradition in a place was emphasized in websites and narratives of 25.1% of breweries. On the other hand, more glocalization-related experimental style of production and design was identified in 17.2% of breweries. Only rarely did the breweries in Czechia apply regional identity together with experimentation strategy as these are often seen contradictory to one another. Interestingly, a nationalist strategy emphasizing the position of beer in Czech national identity was actively employed only by 9.6% of breweries (51). This is approximately the same number as the breweries strongly focused on the regional identity marketing. There are, however, almost no overlaps in breweries’ accentuation of both regionalism and nationalism. We identified only seven breweries, mostly in the historical region of Moravia, which complemented regionalist strategy with nationalism. These were Zámecký, Heřmanický, Horácký, and Holba breweries in Moravia and Pecký, U Šenkýřů, and Měšťanský Klatovy in Bohemia. Finally, a phenomenon of a complete lack of marketing strategy was identified in the case of 75 breweries (14.2%). Of 75 enterprises in this category, 74 were smaller craft breweries and 64 were established during the last decade. This supports the idea that breweries without a marketing emphasis are mainly those who are new to the field and usually have little information and possibilities to create a comprehensive approach to market their brand online. Indirectly, this can also be seen as an indication of regional entrenchment since a lack of online marketing tools

effectively limits the set of customers to locals and occasional tourists.

Interactions of Accentuation and Frequency of Regional Identity Usage For regionalization, we cross-tabulated the two regional identity variables to get a comprehensive aggregate response variable which measures accentuation and frequency of regional identity marketing. The final variable has four categories of regional ties—strong, moderate, weak, and none. However, in the first step, given the full interaction of categories (see Table 2), we identified 12 sub-categories which were subsequently summarized into four larger blocs. In this section, we introduce both the individual sub-categories and the four general categories of regional identity marketing. The breweries belonging to the three sub-categories coloured red in Table 2 are described below and can be identified as red dots in the map (Fig. 2). They all belong to strong regional identifiers. First, we identified 17 enterprises (five industrial and twelve craft breweries) with both strong and frequent usage of regional identity in their web marketing. Of these, five were in Southern Moravia (namely Tišnov, Vildenberg, Slovácký, Starobrno, and Znojemský breweries), four in the Pilsen region in country’s western part (Chodovar, Klatovy, U Švelchů, and U Šenkýřů breweries), and two in the region of South Bohemia (Písecký hradební and Strakonice breweries). The remaining six strong and frequent regional identifiers (that is Holba, Horácký, Karásek a Stülpner, Radas, Uhříněves, and Skalák breweries) are to be found in six different regions throughout Czechia. Five of the strong and frequent regional identifiers were established by the end of nineteenth century, while the rest twelve breweries were established after 2013. A large majority of them focused on a classic beer style offer and brewery’s design (13 breweries), while glocalization-related experimental production was marginal throughout this category. Occasionally, regional identity strategy was complemented with other marketing strategies—family

Table 2 Classification of breweries by accentuation and frequency of regional identity

Frequency of regional identity Never Once Twice Three times

Weak 243 90 12 1

Accentuation of regional identity Medium Strong 23 2 60 6 43 26 6 17

Note The respective cells are coloured according to the colours of a four-scale classification in the legend of the map in Fig. 2

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Fig. 1 Breweries according to the accentuation of various types of marketing strategies. Note “Regional identity” column includes breweries utilizing this strategy both strongly and moderately

craftsmanship in the case of five breweries, product historicization likewise in five cases, Czech nationalism and an emphasis on the position of beer in Czech national identity (four breweries) and connection to the brewing tradition in the locality (three breweries). In the following sub-category, we identified 26 breweries with strong accentuation and above-average frequency of regional identity use. Of these breweries, four were in the Hradec Králové region in north-eastern Bohemia (Pecký, Nová Paka, Rampušák, and Tambor breweries) and in the Moravian-Silesian region in north-eastern part of the country (namely Beskydský, Karvinský Larische, Trubač, and Valašský breweries). Furthermore, three enterprises were found in South Moravia (Velický bombarďák, Moravia, and Břeclav breweries) as well as in the Olomouc and Pilsen regions, respectively, (Jadrníček, Kosíř, and Melichárek breweries and Kalikovar, Lyer, and U Přeška breweries). Two breweries in this category were in the Zlín region in eastern Moravia (Karlovský Pod Pra and Hrádek breweries), in the Czech-Moravian highlands area, that is, the Vysočina region (Jelínkova vila and Rebel breweries), and in South Bohemia (namely Nová Bystřice and Blatná breweries). The remaining three breweries (Hostomice pod Brdy, Kujebák, and Rudohor) were located in three different regions (Fig. 2). We can clearly observe a strong dominance of Moravian regions in terms of the localization of breweries using

regional identity marketing. In the historical region of Bohemia, the breweries accentuating regional identity are clustered mainly in the Pilsen and South Bohemian regions, particularly in the mountainous and forested areas, places under the natural protection and conservation, and those with a salience of the place-based identity. A tourism potential of these areas may likewise play a part in the explanation (see Hasman et al., 2022). Of 26 enterprises in this sub-category, 23 were craft breweries and 19 established after 2013. Interestingly, 24 out of those 26 breweries did not establish any nationalismrelated marketing strategy. They did not even try to sell beer by exploiting the accent on the construct of Czech national identity as an imagery linked to the beer history and consumption. On the contrary, the spatial identity strategy these breweries applied was strictly regional. Only Pecký and Břeclav breweries complemented nationalistic rhetoric with the emphasis on regionalism. A relatively large share of breweries in this category employed marketing connecting the brewery to the brewing tradition in the locality (50%) and family size craftsmanship (38.5%) together with the regional identity ties. The third sub-category that was defined as generally profound regional identifiers consisted of breweries with moderate but very frequent accentuation of regional identity marketed in both names, slogans, and logos, and labels. Six

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Fig. 2 Spatial distribution of breweries in Czechia by the strength of regional accentuation

breweries belonged here (namely Heřmanický, Pernštejn, Kamenice nad Lipou, Lobeč, Trautenberk, and Soběšický breweries) and were found in six respective regions in both Moravia and Bohemia. Three breweries in this sub-category focused on classic beer style and design, while none applied the experimental modernist look. Two of the breweries were established until the end of nineteenth century, one of them being industrial in size, while four (craft) breweries are new establishments. Secondarily, we identified a generally moderate category of breweries in terms of the accentuation and frequency of their regional identity marketing (see the cells in Table 2 and the dots in Fig. 2 coloured blue). In the first instance, there were 43 breweries containing a moderate accentuation and moderate frequency of regional identity utilization in their web promotion. Most of them were found in the MoravianSilesian region (seven breweries), followed by the Central Bohemia and Ústí nad Labem regions (six breweries), the city of Prague (five breweries), and the Southern Moravia and Czech-Moravian highlands regions (four breweries). Importantly, 32 out of 43 breweries in this category were established after 2013, and 39 were craft breweries. Further 20 breweries also emphasized a family size craftsmanship. The remaining sub-categories within the moderate category of regional identifiers consisted of several of breweries

that have highly unequal visual representation of regional ties in a brewery narrative compared with the actual usage of regional references in their names, slogans, and logos/labels. Firstly, only one brewery was identified as having weak accentuation of regional identity while referring to the region in all three groups of branding marks. This was the case of Český Rudolec brewery in South Bohemia. Established in 2015, this craft brewery had otherwise no complementary marketing strategy. Assumingly, while the beer names, slogan, logos, and labels were already made to emphasize the brewery’s regional ties, the owner so far had not the possibility to target their web narrative. Secondly, there were eight breweries in whose cases the strong identification with region in the website narrative was not complemented with the actual references in names, slogan, logos, and labels. This concerned two breweries in the South Moravian, South Bohemian, and Ústí nad Labem regions. These breweries frequently combined more marketing strategies, thus having the regional identity marketing as complementary to the connection to brewing tradition in the locality and classic beer and design style. After the basic classification of breweries into respective categories, we proceeded to the discussion on spatial distribution and its relation to the formation of enabling environment, the topics discussed in the following section.

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Spatial Distribution of Breweries by Regional Accentuation and Enabling Environment An insight into the map of breweries in Czechia, differentiated by the degree of regional identity usage in their marketing strategy, suggests that these ‘focused-on-region’ enterprises are distributed across the whole country’s territory. A more detailed examination will, nevertheless, reveal that there are several clusters of a higher density in application of regional identity marketing (Fig. 2). First, in terms of the effects of regionalism, there are several clusters of strong regional identifiers in the historical and identity-salient regions of Moravia and Silesia. While there were only 9.3% of breweries strongly accentuating region in their marketing strategy in Czechia in average, the share reached 12% in the case of Moravian-Silesian region and 14.3% in South Moravia. Likewise, in the remaining two Moravian regions—Olomouc and Zlín—as well as in the Czech-Moravian highlands (Vysočina), the share of strong regional identifiers was above the country’s average (see Table 3). This outcome may be surprising given the generally weaker brewing tradition in Moravia compared with the historical region of Bohemia in western part of the country. However, as postulated in the second hypothesis, regions with the existence of stronger sense of regional identity and regionalism should function as an enabling environment for the usage of regional identity marketing in brewery’s decision-making process. Given the generally higher share of breweries using this regional strategy in Moravia and Silesia, we corroborate the regionalist hypothesis. Yet the

Table 3 Exploitation of regional identity marketing by regions in Czechia

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results must be interpreted with caution given the difference of no more than 5% points, the internal heterogeneity of Moravia since there are several distinct microregions within it (some of these recorded no breweries accentuating regional identity), and the unavailability of data for a comprehensive cross-regional, cross-country comparison. The map in Fig. 2 further shows the area of a strong regional identity usage in between Pilsen and South Bohemian regions in south-western part of the country. Especially the Pilsen region has a high percentage of breweries with strong regional identity (16.3%), which makes it highest among all regions in Czechia. Another cluster can be found across the eastern Bohemia, particularly in the Hradec Králové region (15.6%) and its hilly and mountainous areas. Taking this evidence into account, it indeed is probable that not only the ideology and sense of regionalism but also the landscape value and attractiveness function as an enabling environment for breweries’ decision to adopt regional identity marketing. This suggestion is further confirmed if we look at the Central Bohemian region. In general, there are only two breweries strongly accentuating regional identity in their strategy, a share much lower (2.9%) compared with that of, for instance, South Moravia. Both strong regional identifiers (namely Hostomice pod Brdy and Lobeč breweries) are located in places with attractive hilly and rocky landscape, in forested areas with high biodiversity and environmental protection. Similarly, the only brewery in Ústí nad Labem region with strong regional ties (Karásek a Stülpner brewery) builds its place-based identity using local legends connected to mountains and idealized mountain life in the past.

Regional identity marketing Strong

Moderate

Number of breweries Weak

None

Praha

1 (1.9)

5 (9.6)

16 (30.8)

30 (57.7)

52

Středočeský

2 (2.9)

6 (8.8)

19 (27.9)

41 (60.3)

68

Jihočeský

4 (8.9)

3 (6.7)

16 (35.6)

22 (48.9)

45

Plzeňský

7 (16.3)

4 (9.3)

13 (30.2)

19 (44.2)

43

Karlovarský

1 (9.1)

1 (9.1)

7 (63.6)

2 (18.2)

11

Ústecký

1 (2.9)

8 (23.5)

14 (41.2)

11 (32.4)

34

Liberecký

1 (5.3)

0 (0.0)

10 (52.6)

8 (42.1)

19

Královéhradecký

5 (15.6)

4 (12.5)

11 (34.4)

12 (37.5)

32

Pardubický

2 (10.0)

1 (5.0)

7 (35.0)

10 (50.0)

20

Vysočina

4 (11.4)

4 (11.4)

12 (34.3)

15 (42.9)

35

Jihomoravský

9 (14.3)

6 (9.5)

21 (33.3)

27 (42.9)

63

Olomoucký

4 (11.1)

3 (8.3)

11 (30.6)

18 (50.0)

36

Zlínský

2 (9.5)

0 (0.0)

12 (57.1)

7 (33.3)

21

Moravskoslezský

6 (12.0)

7 (14.0)

16 (32.0)

21 (42.0)

50

49 (9.3%)

52 (9.8%)

185 (35.0%)

243 (45.9)

529

Czechia

Note Percentages (for rows) are in the parentheses.

224

The evidence described above is in accordance with the landscape hypothesis which too can be corroborated. It indicates that attractive landscape indeed functions as an enabling environment for breweries to adopt regional identity in their marketing strategy. In the sample of all currently active Czech breweries, those located in historically salient regions and regions with attractive landscape recorded the usage of regional ties more frequently than breweries in other types of environments. There is, however, one exception of the conception of landscape value proposed by Solecka (2019) or Buratti and Hagelman (2021) who took into account not only the natural-environmental but also the cultural-historical value of landscape. As can be seen in the case of Prague, a region with the cultural-historical landscape of primary importance in Czechia, only one of 51 breweries residing in Prague (1.9%) used the narrative of regional identity as a marketing strategy, the lowest number of all regions in Czechia. Nevertheless, even if the outcomes of this analysis confirm the postulates that the environmental landscape value matters in the formation of enabling environment for regional identity marketing appropriation, it should be considered with caution given the subjective nature of landscape value assessment by producers, inhabitants, and regional and national institutions. Finally, in terms of Czech nationalism, on the one hand, there is a cluster of breweries strongly accentuating regional identity in the rural areas of eastern Bohemia, an area of historical and symbolic importance for the Czech national identity construction and narrative (see e.g. Hroch, 1985). A closer insight will reveal, however, that this spatial correlation includes little causation since out of 49 strong regional identifiers, only seven emphasized the identity values connected to Czech nationalism, and only one of them is in the Hradec Králové region in eastern Bohemia. Most of these breweries are actually found in Moravia, which again confirms that Moravian regionalism, in itself important for regional identity narrative, is not constructed in conflict but in accordance with the Czech national identity. For most people, these are rather compatible phenomena. In sum, the nationalism-related hypothesis had to be rejected.

M. Lepič et al.

marketing promotion, usually complemented with other strategies, while the rest of breweries used references to the place and region they are located in and its natural-cultural environment only occasionally or not at all. The pattern is, however, highly unequal in space, stretching from more that 16% in the Pilsen region to less than 2% in Prague and less than 3% in Central Bohemia. In absolute numbers, the highest occurrence of strong regional identifiers was found in South Moravia. On the contrary, three regions in Czechia’s northwest contain only one such brewery each. Based on a mezo-regional level of variation, we identified more frequent usage of regional identity marketing among breweries in Moravia and Silesia compared with Czechia in average. Assumingly a result of the long-term existence of a strong sense and ideology of regionalism, overall environment in these regions somewhat favours the implementation and acceptance of regional identity in breweries’ marketing strategies to sell their products. On the other hand, taking a micro-level variation into account, there is indeed a high diversity within Moravia and Silesia which is not explained by the proposed model of regionalism. Furthermore, other microregional-level clusters which we identified in this analysis were in accordance with the postulate that it is attractive landscape that plays a role in the formation of enabling environment for the adoption of regional identity marketing by a brewery. Nevertheless, this held true only for the natural aspects of landscape value since landscapes of cultural-historical prominence returned weak or no regional identity exploitation. Further research is also needed to explore in detail the nuances of the concept itself, its structural basis and perceptual superstructure, and the possibility of a large-scale cross-regional, cross-country comparison. Overall, the focus of this chapter on the description of extent, enabling environment, and spatial variation of regional identity appropriation by breweries also poses limits to the research and its interpretation. The explorative and mapping character of analysis does not allow to infer causal conclusions. Using the geo-nested logic of research design, the analysis identified several places and microregions upon which it is beneficial to target qualitative research consisting of interviews with brewery’s representatives who decide on the selection and implementation of marketing strategy.

Conclusion In this chapter, we analyzed the significance, conditions, and spatial variation in usage of the regional identity marketing among the comprehensive set of all active breweries in Czechia vis-à-vis their other marketing strategies. The main findings may be summarized as follows. Approximately 10% of breweries employed strong regional ties as their main marketing tool to attract customers. Another 10% applied moderately accentuated place-based online

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225 Lepič, M. (2017). Limits to territorial nationalization in election support for an independence-aimed regional nationalism in Catalonia. Political Geography, 60, 190–202. Mansvelt Beck, J. (2005). Territory and terror: Conflicting nationalisms in the Basque Country. Routledge. Materna, K., Bernhäuserová, V., Hasman, J., & Hána, D. (2022). How microbreweries flooded Europe: Mapping a new phenomenon in the beer industry. Journal of Maps (online first). Materna, K., Hasman, J., & Hána, D. (2019). Acquisition of industrial enterprises and the role of regional identity: The case of beer industry in Central Europe. Norsk Geografisk Tidsskrift-Norwegian Journal of Geography, 73(4), 197–214. Maye, D. (2011). Real ale microbrewing and relations of trust—A commodity chain perspective. Tijdschrift Voor Economische En Sociale Geografie, 103(4), 473–486. Paasi, A. (1986). The institutionalization of regions: A theoretical framework for understanding the emergence of regions and the constitution of regional identity. Fennia, 164(1), 105–146. Paasi, A. (1991). Deconstructing regions: Notes on the scales of spatial life. Environment and Planning A, 23(2), 239–256. Paasi, A. (1996). Territories, boundaries, and consciousness: The changing geographies of the Finnish-Russian border. Wiley. Reid, N., & Gatrell, J. (2015). Brewing growth: Regional craft breweries and emerging economic development opportunities. Economic Development Journal, 14, 4–12. Relph, E. (1976). Place and placelessness. Pion. Robertson, R. (1995). Glocalization: Time-space and homogeneity– heterogeneity. In M. Featherstone, S. Lash, & R. Robertson (Eds.), Global modernities (pp. 25–44). Sage. Savić, B. (2014). Where is Serbia? Traditions of spatial identity and state positioning in Serbian geopolitical culture. Geopolitics, 19(3), 684–718. Schnell, S. (2013). Deliberate identities: Becoming local in America in a global age. Journal of Cultural Geography, 30(1), 55–89. Schnell, S., & Reese, J. (2014). Microbreweries, place, and identity in the United States. In: M. Patterson & N. Hoalst-Pullen (Eds.), The geography of beer: Regions, environment and societies (pp. 167– 187). Springer. Solecka, I. (2019). The use of landscape value assessment in spatial planning and sustainable land management—A review. Landscape Research, 44(8), 966–981. Swyngedouw, E. (2000). Authoritarian governance, power, and the politics of rescaling. Environment and Planning D: Society & Space, 18(1), 63–76. Taylor, S., & DiPietro, R. (2020). Assessing consumer perceptions of neolocalism: Making a case for microbreweries as place-based brands. Cornell Hospitality Quarterly, 61(2), 183–198. Terlouw, K., & van Gorp, B. (2014). Layering spatial identities: The identity discourses of new regions. Environment and Planning A, 46 (4), 852–866. Vainikka, J. (2012). Narrative claims on regions: Prospecting for spatial identities among social movements in Finland. Social and Cultural Geography, 13(6), 587–605. Veemaa, J. (2012). Internationalizing the spatial identity of cross-border cooperation. European Planning Studies, 20(10), 1647–1666. Williams, S. (2009). Tourism geography: A new synthesis. Routledge. Wojtyra, B. (2020). How and why did craft breweries ‘revolutionise’ the beer market? The case of Poland. Moravian Geographical Reports, 28(2), 81–97.

226 Martin Lepič is a research assistant and lecturer in political geography and spatial statistics at the Department of Social Geography and Regional Development, Charles University in Prague. In research, he focuses on state (dis)integration, regional responses to external/internal pressures, secessionist nationalism, multi-scalar geographically nested analysis, and inter-ethnic relations in contemporary Europe.

Michal Semian research interest is framed by regional and historical geography and focuses mainly on ways of regionalization, regional identities, ideas of place and space, and place names. Currently, Michal is working in the field of international education as a director of the International Degree Programs Office at the Faculty of Social Sciences, Charles University.

M. Lepič et al. David Hána is an assistant professor at the Faculty of Science, Charles University in Prague. He has a longstanding interest in local politics, local identity, and political symbolism. Additionally, he also focuses on topics such as political graffiti, political economy, political-geographical education, European integration, and art. As a native of Czechia, specifically from Moravia, the geography of beer holds a special place among his research interests.

Kryštof Materna focuses on the geography of breweries with an emphasis on the trends of globalization and neolocalism in the brewing industry, its connection to the regional identity and the phenomenon of microbreweries. He has published several articles in scientific journals on this topic and in October 2022 published the dissertation on the topic “Globalization, glocalization and neolocalism as driving forces of change of European brewing industry”.

The Bulgarianization of Craft Beers Elitsa Stoilova

Abstract

In recent years, Bulgarian craft beer producers gradually started to introduce new beers that not only incorporated Bulgarian plants and herbs, but also were inspired by local territories, customs, and traditions as well as more resent cultural symbols. This is an adoption of global trends in craft beer production on a local scale. The Bulgarianization of craft beers can be seen as an emancipation of Bulgarian beer producers and as a quest for more authentic local beer taste that simultaneously follows the global trends in craft brewing. The Bulgarianization of craft beers is an example of neolocal strategies used by Bulgarian craft brewers to rethink and re-use local culture and traditions and to create a local beer taste. The research questions how geography, traditions, and local tastes are incorporated in Bulgarian beers, and, how they are promoted. The analysis focuses on the visualization, popularization, and communication of the Bulgarianess. Keywords








Bulgaria Craft beers Locality Bulgarianization Localization




Neolocalism



Place

technologies. If during the twentieth century the main processes were those of food industrialization, devaluation of traditional tacit knowledge, and processes of gastro-nationalism, then the popularization of craft beer in the twenty-first century explicitly questions those established directions in food production and consumption. The craft beer movement offers new economic and consumption models based on innovative interpretations of traditional technologies and problematizing mass production and consumption. It results in rethinking and re-shaping of production, distribution, and consumption models. By questioning the increasing global popularity of craft beer production and consumption, this analysis examines how consumers and producers in the twenty-first century have developed a new food culture and food technologies based on anti-industrial, anti-global, and primarily healthy and ecological discourses. The craft beer movement cherishes the importance of individual taste, craftsmanship, close relations with locality, and local traditions, as well as an increasing interconnection among producers, technology, products, consumers, and taste.1 I follow this shift against industrial technologies for food production by tracing the development of craft beer production and paying a particular attention to the local specifics of Bulgarian craft beer culture. The Bulgarian cases of craft beer production illustrate the dynamics of neolocal practices and the spread of diversified production and consumption patterns.

Introduction In the last two decades, craft brewing has increased in popularity worldwide. The transformations in beer production, distribution, and consumption reviles social and ideological dynamics related to the processes of the re-valuation of craft food technologies and knowledge, as well as to the raising importance of locality and artisanal food E. Stoilova (&) Ethnology Department, University of Plovdiv, Plovdiv, Bulgaria e-mail: [email protected]

Craft Beer Revolution, Globalization, and Localization Today, the increasing popularity of craft beer production and consumption worldwide is often referred to as a “craft beer revolution.“ This movement can be traced back to the late

1

Those processes are well presented in the collection of work published in Alkon and Agyeman (2011).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 M. W. Patterson and N. Hoalst-Pullen (eds.), The Geography of Beer, https://doi.org/10.1007/978-3-031-39008-1_18

227

228

1970s with the establishment of the first microbrewery in California, USA. (Pokrivčák et al., 2019: 65). The craft beer revolution was initiated by microbreweries, which were characterized by small-scale production and independence from mass producers. The focus of this new vision for beer production was on taste, quality, and the application of both traditional and innovative brewing technologies (Pokrivčák et al., 2019: 65). The revolution led by craft beer producers was driven by rising consumer dissatisfaction with the uniformity of beer (ibid.). In the twenty-first century, emerging small breweries patiently redefined beer production and embraced the idea of the “Revolution of the taste.“ Scotlandbased brewery BrewDog, founded in 2007, is a good example of the efforts made by craft beer producers to not only establish innovative beer products in the market but also pack them with meaning and ideology. As the Craft Beer Revolution Manifesto published by BrewDog shows, craft brewing is not just a production but is a statement as well as propaganda. Revealing their philosophy of craft beer, in their Manifesto from the 2017, BrewDog states the following: We bleed craft beer. This is our true north. We are uncompromising. If we don’t love it, we don’t do it. Ever. We blow shit up. We are ambitious. We are relentless. We take risks. We are geeks. Learn obsessively. Share evangelically. Without us, we are nothing. We. Are. BrewDog. We are on a mission to make other people as passionate about craft beer as we are. BrewDog is not a standard business. It’s a revolution against commercial mediocrity. Everyone is in the frontline, so raise your glass and be ready to fight. (BrewDog, 2017)

As a “weapon” in what these craft beer enthusiasts call “a revolution against commercial mediocrity,” they started the edition of a magazine with the provocative name Hop Propaganda both on paper and as digital edition. BrewDog brewery is only one of the spokespersons and activists of the craft beer movement that stand against industrial produced beer. These small breweries established models for beer production that cherish the creativity, shared knowledge, unique taste, and the height quality of the ingredients. The increasing popularity of craft beer worldwide, as a technological and cultural phenomenon of the twenty-first century, represents a reconnection between consumers and the consumed product through its production, and an example of the shifting paradigms in food technologies. Besides the anti-industrial and revolutionary statements, geographer Wes Flack saw the growing worldwide popularity of locally produced craft beer as a manifestation of local movements. He suggested that craft breweries represent a “rejection of

E. Stoilova

national, or even regional culture, in favor of something more local” (Flack, 1997: 49). In a similar vein, American cultural geographers Schnell and Reese (2003: 46) argue that craft breweries are partly a response to the “smothering homogeneity of popular, national culture” and the desire on the part of increasing numbers of people to “reestablish connections with local communities, settings, and economies.” Geographer Derrek Eberts, within the Canadian context, describes craft breweries “as agents of local identity [that] are part of a larger cultural countercurrent that has emerged in resistance to the homogenizing forces of globalization and universal consumer culture” (2014: 193). That larger community of craft beer producers and consumers forms a craft beer culture as a particular understanding of beer making and consumption. This community shares a common passion for quality, creativity, authenticity, and taste. These shared values unite people from different countries and cultures into an informal society that pays respect to production technologies and consumer behavior and creates its customs such as beer festivals, beer tasting events, and similar forms of coexistence and co-creation. The rising interest in craft beer questions the industrialization and the globalization in food production and consumption established in the twentieth century. It offers new economic and consumption models based on innovative interpretations of traditional technologies and problematizing mass production and consumption. The paper addresses that phenomenon as a process of re-valuation of traditional technologies and craft food products and as an example of the valorization of direct distribution and communication between producers and consumers that was affected by the industrialization. The oppositions on production, distribution, and consumption leveled toward the developed in the twentieth-century industrial and multi-national food industries is also a subject of analyzes. The rising popularity of non-industrial, artisanal food as an alternative to what is labeled as unhealthy, mistrusted industrial products started from the late twentieth century and is still active nowadays. The Bulgarian case shows not only the broader diffusion of those new production and consumption models but also reveals how different localities react differently to new trends in food production and consumption. In order to grasp the embodied meanings that local actors attribute to craft beer, the definition created by the Association of Home Breweries in Bulgaria is used. According to the association “craft beer is produced in small, usually family breweries which produce original, special beers with high quality, traditions and are interesting for consumers.” (quoted and translated by Ivanov, 2016: 65) As has happened in other countries, Bulgarians slowly developed a taste for beer produced by small-scale breweries.

The Bulgarianization of Craft Beers

The Craft Beer Culture While beer is popular in Bulgaria, only recently has craft beer become a focus of producer and consumer interest. Considered as conservative and preferring industrial lagers, the Bulgarian beer consumer has gradually developed a taste for different beers. The first commercial Bulgarian microbreweries, craft beer bars, and brewpubs emerged in the 2008. According to Bulgarian economist Ivanov, “at the onset of the second decade of twenty-first century, there started a wave of developing new ‘micro’ and ‘small’ enterprises. Despite the competitive pressure from [industrial] leaders … they adapt successfully and establish themselves on the market by managing to attract more real clients” (2016: 80) (Fig. 1). The popularity of craft beer identified by Ivanov is reflected in its continued growth. The intensification of the Bulgarian craft beer sector sped up after the 2016, a result of the success of existing craft producers and the development of a craft beer culture that saw a raise in the number of craft beer shops (both physical and online), festivals, and thematic bars. The number of small-scale breweries increased from 7 in 2017 to 20 in 2020, and more than 40 in 2023(Stoilova, 2020: 598). The motivation for trying unconventional beer is

Fig. 1. Brewery distribution by Bulgarian Province

229

described as an “increasing demand for novelty flavors and higher-quality beer” (Ivanov, 2016: 80). Furthermore, as noted by Ivanov, the rising producers’ and consumers’ interests toward craft beers followed the same understanding shared by the admirers of artisanal beers internationally as an alternative to the homogeneity of mass-produced beers (as craft breweries offer an expanded variety of styles and flavors) (ibid.). In addition to the rising number of commercial craft brewing and the re-valuation of the small-scale craft like production, there are approximately 1,500 Bulgarians who are homebrewers (Kirilovski, 2017) (Fig. 2). An important characteristic of the craft beer community and culture is that it is not limited to a specific cultural or national context or technological knowledge, but rather based on a shared understanding of good quality and willingness to experiment. Most commercial craft brewers in Bulgaria started as home brewers and engaged in self-education by reading books, following blogs and home brewers’ forums on the Internet, watching online do-ityourself videos, and exchanging practical knowledge with other enthusiasts locally as well as worldwide. They shared their beer with friends and families and thus developed a small circle of followers and craft beer lovers. That forms another characteristic of craft beer related to the duality of

230

E. Stoilova

Fig. 2. Number of breweries per cities

the brewers, as they are simultaneously producers and consumers of craft beer. Indeed, sociologist Colin Campbell suggests the specifics of the craft beer product-consumption interactions are characterized by product’s co-constructing. Campbell defines the term ‘craft’ as referring to “consumption activity in which the ‘product’ concerned is essentially both made and designed by the same person and to which the consumer typically brings skill, knowledge, judgement, and passion while being motivated by a desire for self-expression. In contrast to mass consumption, craft consumption is associated with ‘personalization’ and ‘customization’” (Campbell, 2005: 23). In the co-construction of craft beer, the relationship between brewer and consumer is of great importance, but it also shows that producers also become consumers of their own products, or of products that represent similar ideologies and technological approaches. Geographers Neil Reid and Jay Gatrell point out that “craft brewers are not only intimately connected to the product they make but also to the customers who drink their beer” (Reid & Gatrell, 2017a: 37).

In 2015, Georgi Hristov from Ayliak brewery recalled his first steps in home brewing. According to him, personal experiments with the technology of brewing are crucial for the development of a beer culture. He defines the basic knowledge and practical experience a homebrewer should achieve as key elements of the beer culture: the knowledge of the technological specifics in brewing as well as the ability to distinguish the ingredients and the diverse beer styles. In an interview with the Bulgarian newspaper, Economic Hristov shares his initiation in home brewing as an important step in the development of a personal craft beer culture based on the shared knowledge of a broader international community: Surely, the road to the successful development of craft beer culture goes through home brewers, that is why, even today, I experiment with different brewings at our place. I think we have to help home brewers by any means. I knew nothing about beer except that it was a straw-yellow carbonated drink, and although, as a child, I didn’t make a difference between a beer house and a brewery, I succeeded by reading proven international books on brewing and by trying to make a beer at home

The Bulgarianization of Craft Beers that both our friends and I liked. I learned the hard way that no matter how well you manage to push things on sheer enthusiasm and heart, sometimes there are obstacles that require resources (Tsaneva, 2019).

Hristov’s personal story shows the craft brewers’ search for authentic taste that comes through experiments with ingredients and techniques. Those experiments are grounded in practical and technological know-how, learned through self-education and active communication with other home brewers that are learning by sharing experiences. That way of transmitting the knowledge is close to the way traditional tacit expertise is transferred and in opposition to the codified technological knowledge of industrial production. The knowledge of craft brewing represents an innovative way of transferring practical technological knowledge, where a particular community utilizes direct and indirect social networking through workshops, trainings, blogs, vlogs, forums, books, and social media to transmit ideas, knowledge, and skills. As most distinguishing characteristics, Kodzhaivanova points out the spirit of sharing knowledge and know-how among craft brewers. They are a community based on mutual support “often working together in a creative business environment” (Kodzhaivanova, 2018). Bulgarian craft beer producers fit perfectly in that context. A good example of the cooperative spirit is an initiative generated during the COVID 19 crisis. In March 2021, ten Bulgarian craft breweries brewed unique beers under the same name, I Am Amazing. The initiative joined Divo Pivo, Rhombus, Black Pine, Metalhead, Meltum, Trima i Dvama, CoHoNes, Sofia Electric, Rocket Science, and Fabric. The goal of the initiative was to support craft beer shops, clubs, and bars as part of the craft beer community and as the main places where craft beer was distributed and consumed. Limited edition beers under the label “I Am Amazing” were only sold at these locations to bring consumers back to the bars and shops that were instrumental in popularizing craft beer culture. A special Web page, www.iamamazing.bg, highlighted the places where the beers could be tasted, as well as the ten different craft beers themselves. This was a way for producers to support small businesses that were most affected by COVID measures and were also crucial in the development of the craft beer culture in Bulgaria. In 2022, the same ten breweries launched “I Am Amazing2” as a further demonstration that Bulgarian craft breweries and consumers could be united in protecting the local craft beer culture. That common initiative shows the case of the collaborative energy that the craft beer producers shares. Promoting the idea behind the I Am Amazing initiative, the owner of CoHoNes brewery Mihail Durchev reviles further details:

231 “I am amazing” is one of the lines with which the Bulgarian professional boxer Kubrat Pulev challenged Anthony Joshua last December. That line provoked both positive and negative comments in Bulgaria. We have chosen it because we realized that even a person like Pulev and his undeniable success can divide our society. We want to give a new meaning to this phrase, because we are amazing not only when we win, but especially when we unite in difficult times. (Georgieva, 2021)

In addition to the democratic character of the craft brewing community, educating consumers about taste and fostering curiosity is crucial for the development of the craft beer culture (Ivanov, 2016: 80). Being distinct from the industrial mass-produced and standardized taste is something that Bulgarian craft brewers claim as characteristics of their products. In a passionate confession revealing their motivation to run a brewery, the pioneers from one of the first Bulgarian craft breweries, Glarus asserted that: “Once we saw and tried the plethora of tastes, colors, and aromas that go with the different styles of beer, we knew there was no way back to the ordinary, bland pale lager which is swamping the market and thus robbing people of the right to taste something different.” (Glarus, 2018). This quote reveals an opposition to the mass-produced beers, questioning their quality and technology and criticizing their lack of diversity and bland taste. Thus, the brewery declares its willingness to be part of the international revolution in the way beer is produced and how it tastes. On their website, they have published a manifesto for “a revolution in all aspects of beer making” that might also be considered a declaration of what the craft beer culture is and why it must be promoted. The criticism toward mass-produced beer is very strong, as is the respect toward traditions in brewing and the honoring of authentic taste. The manifesto is based on three basic statements: 1. No more mass produced, bland lager which tastes the same regardless of the brand. Yes to ale—a different type of beer that allows so much more variety in taste. 2. No more beer pasteurization. Yes to the full spectrum of filtered and unfiltered beers. We are gentle on our beers, and they repay us with wonderful character. 3. No more cheap adjuncts like rice and corn. Yes to the best ingredients sourced from the top malt and hops producers around the world including some from Bulgaria.(Glarus, 2018). That manifesto is an interesting argument of the craft beer movement and stands in opposition to the large-scale producers and their products. According to the human resources specialist Hayagreeva Rao, the craft beer movement is a “revolution” and a social movement against industrially

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produced, low-quality, homogeneous beers. The sharing of those common ideas and values unites both consumers and producers. The manifesto of Glarus is a demonstration that Bulgarian beer producers are part of an international identity movement to reshape production and consumption of beer. As stated by Rao, “identity movements, informed by a ‘we’ feeling, arise to challenge dominant organizations or categories and seek to realize new collective identities by building new organizations that emphasize democracy, participation, and empowerment” (Rao, 2008: 43). That new way of identity building is not related to a particular local or national culture, it is rather powered by shared values, production, and consumption practices. The enthusiasts from Glarus, similar to the owners of BrewDog, act as spokespersons representing the broader international craft beer community. As such they are following the same construct that Rao has identified. According to Rao, “beer enthusiasts were able to construct a ‘hot cause’ (the undesirable taste of mass-produced lager) and relied on ‘cool mobilization’ (small brewpubs using traditional methods to brew distinctive beers) in order to spur the revolution” (quoted in Withers, 2017: 16). The message is clear —craft beer culture is co-constructed by both producers and consumers, as an opposition to the bland, pasteurized, low-quality beer produced by large breweries. In contrast, craft beers are defined as high-quality products made with “best ingredients,” and which honor a diversity of unique, tasteful beers produced by innovative brewers. Analyzing the consumers’ motivation for craft beer consumption, the sociologist Michael Borer suggests that consumption of craft beer is “acts of resistance” against the pop-culture and mass market—a revolution against the globalized taste and production practices (Borer, 2015: 297). In order to spread the ideology underpinning the craft beer culture, Bulgarian craft brewers engage in consumer education. One of the main points they stress is the differences between craft and industrial beer. The claims for artisanal accuracy are also used as a key argument in the validation of the higher quality but also and prices of craft beers (two to three times higher than the industrially produced). Analyzing consumers’ motivation to purchase craft beer, Ivanov concludes that a key motivation is “the opportunity for an informed choice of a product or service that satisfies specific needs of consumers that shift the focus from the low price to the product of high value for which it must be paid” (Ivanov, 2016: 78). In other words, a major motivation for craft beer consumption is based on the valorization of product uniqueness. Those values attributed to the purchase are part of the informed choice as well as a

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sign of a craft beer culture that producers and consumers share. The embodied value of craft beer production and the claim for quality over quantity influence not only consumers’ choices but reflect the values of craft beer consumers. Ivanov identifies some of their characteristics and motivations but does not pay attention to the symbolic negotiations that, according to the sociologist Erik Withers, are part of the consumers’ involvement in local craft beer cultures and artisanal brewing. He bases that assumption on Flack’s suggestion that the consumers’ choice of beer is a “sociological marker or symbol of self-definition” (Flack, 1997: 48). Geographers Baginski and Bell (2011:165) suggest that the purchase of craft beer represents elite consumption due to its character as a “high order prestige good” motivated by a “highbrow” consumer’s choice. Douglas Murray and Martin O’Neill define the craft beer consumer as “sophisticated” and “discerning” in order to reveal the culture and informed choices behind craft beer consumption (Murray & O’Neill, 2012: 900). Those authors stress the importance of not only product quality and taste, but also suggest that craft beer is a product with higher social prestige and value due to the specific cultural craftsmanship embedded within the product. Withers further develops the understanding of craft beer consumption as an act of revolution against the mass market. He draws the conclusion that “craft beer consumption is a means by which to explore taste, identity, and popular culture, and a way for consumers to combat product boredom due to market homogeneity.” (Withers, 2017: 16–17). The role that breweries, craft shops, and craft beer bars play in the development of the local Bulgarian craft beer culture and in the education of the consumers is crucial. The aforementioned breweries Ayliak (based in Sofia) and Glarus (based in Varna) are key plays, but they are not the sole influencers and promoters of craft beer in Bulgaria. Divo Pivo and White Stork (both based in Sofia) are breweries that started at the very beginning of the development of a craft beer market in Bulgaria. Both realized the need to identify and develop their customer base—beer drinkers who share their passion for good quality beer. Nowadays, these breweries are well recognized and might be classified as market leaders. Over the years, they have used their websites and social media channels not only as channels for promoting their craft beers, but also as a platform for propaganda of the craft beer culture. In order to reach their messages to a broader audience, most of the breweries are quite active in different local and national media that are other channels for popularization of the craft beer culture.

The Bulgarianization of Craft Beers

Bulgarianization of Craft Beer The most popular styles of craft beer in Bulgaria are following the international tendencies of the dominance on the craft beer market of India Pale Ale (IPA), American Pale Ale (APA), New England India Pale Ale (NEIPA), Porter, and Stout styles. Furthermore, most craft breweries are introducing diverse beer styles to their portfolio and do not hesitate to experiment. In recent years, Bulgarian microbreweries have begun investing in the development of beers that are more locally oriented. These breweries are using flowers, roots, seeds, fruits, and vegetables that are considered typically Bulgarian, demonstrating that technological and ideological innovations as well as international trends can be subject to local interpretations and appropriation. This has led to the development of localized tastes and technologies. The increasing number of breweries offering beers with a distinct “Bulgarian” character shows that Bulgarian consumers are more willing to experiment and that a local beer culture has been established. Craft beer production in Bulgaria is undergoing a process of “Bulgarianization,” which involves attributing local Bulgarian characteristics to the taste, name, or visual representation of the beer. This process is seen as a form of “emancipation,” as some Bulgarian craft beer producers seek to establish a local identity and a unique beer taste that is connected to local traditions and biocultural resources. Those breweries willing to shape the Bulgarian character of craft beer, rather than simply reflect the tendencies in craft brewing, are appropriating these trends to create distinctive products that are unique to the region. The Bulgarianization of craft beer is also associated with the use of meanings and images that are intended to signify an authentic local product. The goal is to construct typically Bulgarian craft beers with unique characteristics that set them apart from other craft beers. Pioneers in researching the importance of food and drinks in the formation of collective identity, anthropologist Arjun Appadurai and sociologist Erik Cohen demonstrated in the 1980s that authenticity is connected to the understanding of uniqueness and individualism (Appadurai, 1986; Cohen, 1988). Furthermore, many researchers have defined food authentication mostly as a result of diverse economic and technological efforts and have identified specific characteristics of authentic food, i.e., it must be original, genuine, real, and true (Parasecoli, 2008; Pratt, 2007). These characteristics suggest a relation between the concept of authenticity and the perception of locality or place. The idea of locality as a place of authenticity is especially tangible in relation to foods and drinks taste. The concept of locality refers to a specific place as a physical structure and symbolic

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construction. The analysis focuses on the authentication of Bulgarian craft beers as a process of construction of local identity of the Bulgarian craft beers. Renowned beer scholar Christian Garavaglia in his research on the development of the local identity of the Italian craft beers shows the use of “names and images that reflect the places where they are produced to create local identities and attachment to places has been employed by many craft breweries in various countries” (Garavaglia, 2020). Garavaglia based these conclusions on his own research and on the analyses of Schnell and Reese (2003) and Schnell (2013) who argue the authentication is the creation of connection to the place of origin. Those authors stressed the interconnection between localization processes and those of neolocalism.Neolocalism is a “place-based concept” that has been developed “as a response to globalization” and “the emergence of stable, familiar, and predictable landscapes, products, and quality that has been driven by homogenized economic processes and economies of scale” (Reid & Gatrell, 2017a: 92). Cultural tourism researcher Micheal Parnwell (2007: 996) approaches the neolocalism as a “grassroots activism” that is “framed and driven by local communities.” The authentication of craft beer involves breweries’ strategies aiming to establish a connection between particular places (locality) and their products. The use of local ingredients and products in beer brewing should establish liaisons with local culinary, agricultural, and cultural traditions. According to Garavaglia, these attributes not only differentiate local products but are a way for craft breweries to establish a strong identity based on the locality (2020: 139). Craft brewers proved to be very innovative in the way they named their beers as well as in the design and the artwork of the labels. In the pursuit for a closer relationship to a particular place, they are using historical figures, events, and lifeways in addition to cultural symbols (Schnell, 2013; Schnell & Reese, 2003). These strategies of connecting a product to a particular place and specific cultural context are crucial in establishing the national and local characteristics of craft beers as unique features that set them apart from the countless varieties of craft beers available worldwide. Flack (1997) notes the growth of these strategies as a critical part of the neolocalism movement. By emphasizing the local and cultural aspects of their products, craft beer producers can differentiate themselves in a crowded market and appeal to consumers seeking unique and authentic experiences. This trend toward neolocalism is seen to counteract the homogenization of global culture and celebrate local diversity. Bulgarian craft breweries show that they are not exception as they developed diverse strategies to create a Bulgarinized identity and taste of their beers.

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Place-Related Neolocal Strategies Some Bulgarian craft beer producers consciously established a neolocal connection right from the very beginning of their endeavors as the way they named their business was aiming to make visible the connection to a particular localness. Such examples are Rhombus, Chiprovsko pivo, Dunav Craft Brewery, and Hills. Rhombus is a family business located in the city of Pazrdzhik. The brewery fostered the company’s name with mythology, historical and cultural traditions. According to the information published on the brewery’s Web page, the name was inspired by a legend “according to this legend, Rhombus was the oldest name of the Maritza River, which flows close to the Rhombus Brewery.”2 In order to make their name even more mystical, additional symbolic constructions are presented as connections to the name and the brewery logo. The information on their website makes it clear that diverse cultural and interpretive influences have inspired both the naming of the brewery and its visual representation. The meanings embodied to the logo are a mixture of symbolic constructions from ancient Greece and the Bulgarian traditional crafts and folklore (Fig. 3). The very name Rhombus (Latin) is borrowed from the Greek ῥόlbo1 that means a rotating body, associated with the spinning of the spindle. The spindle shaped logo is created as a stylized Rhombus created by grains with a hop in the middle. The symbolic interpretation of the logo is further explained by the brewery. The ornamentation of the Chiprovtsi carpets, as well as the traditional embroidery (shevitza) from some areas of Bulgaria are highly geometric. Furthermore, the figures have a particular meaning embodied them…. And the Rhombus is the basis of most of the symbols associated with family and kinship. And since Rhombus is a family brewery, that figure proved to be very fitting. And so, the name Rhombus was born - embodying the family lineage of the brewery, the magic of the craft, and the tradition with which we approach beer production. (Rhombus. 2022. Legend about Rhombus, http:// rhombusbrewery.com/kraft-bira/)

According to Jane Ikäheimo the story of the brand is a crucial strategy in neolocal businesses. According to him, storytelling forms “the core marketing strategy, localness, and the sense of place can be produced, reproduced, appropriated, and maintained” (2021: 375). Rhombus brewery is a perfect example how additional symbolic values are attributed to the brand’s name, and how a sense of inheritance of a long-lasting traditions and connections to the geography of the place and Bulgarian cultural history and folklore are interlinked as a mythology of the brand.

Fig. 3. Logo of Rhombus brewery

Holtkamp et al. (2016) analyzed those strategies of the breweries to make connections between their brand and particular locality as a basic characteristic of the neolocalism. According to them, those are “a conscious effort by businesses to foster a sense of place” that one can detect in Rhombus brewery those “efforts” made to present how their name and brand identity are representative of particular place, traditions, and Bulgarian identity (2016: 66). The Chiprovsko pivo brewery fostered that sense of place even further. If the connection between the Rhombus and the ancient name of the Maritza River needs some reflections, Chiprovsko makes direct connection to the brewery locality and local traditions. The brand name translation is “a native to Chiprovtsi.” Chiprovtsi is the place of origin of the brewery, a small town in northwestern Bulgaria. That connection to the locality, as in the previse example, is not limited to the brand’s name but is further stressed in the symbols of the logo. The visual identity of Chiprovsko pivo uses geometrical elements from the traditional carpentry of Chiprovtsi. That interconnection between the brand and local traditions is not as abstract as in Rhombus’ case. Since in 2014, UNESCO recognized the tradition of carpet making in Chiprovtsi as Intangible Cultural Heritage and included it in the Representative List of the Intangible Cultural Heritage of Humanity.3 Both the brand’s name and its visual representation work toward stress further the interconnection between the brand and local traditions (Fig. 4).

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Rhombus. 2022. Legend about Rhombus, http://rhombusbrewery. com/kraft-bira/.

See the official presentation of the tradition of carpet making in Chiprovtsi on the UNESCO’s webpage: https://ich.unesco.org/en/RL/ the-tradition-of-carpet-making-in-chiprovtsi-00965 (visited 18.03.2023).

The Bulgarianization of Craft Beers

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Fig. 4. Logo of Chiprovsko brewery

The Hills brewery makes a not so direct connection with the city of Plovdiv. Plovdiv is popular in Bulgaria as the city of the seven hills similarly to Rome. Dunav Craft Brewery also embodied its geographical location to their name. They are based in the city of Russe on the big Bulgarian cities situated on the right bank of the Danube River. The Bulgarian name of the river is Dunav (Дyнaв). Through their brands’ names other Bulgarian breweries also represents their connection to the places where they are established by using symbols representative those localities. Thus, Glarus, a brewery from the biggest city of the Bulgarian Black Sea Coast –Varna, is named after one of the most popular sea birds: the seagull (in Bulgarian glarus (глapyc)). Similarly, Vitoshko Lale (literally translated as Vitosha’s Tulip) is another Bulgarian brewery that through its name makes distinctive its place of origin. The brand is based in Sofia and is named after a flower typical of the Vitosha Mountain. Vitosha’s tulip is the Bulgarian name for the flower known as the globeflower that can be found in the Vitosha mountain range. Vitosha is the mountain on the outskirts of the Bulgarian capital Sofia, as well as one of the symbols of the city. Analyzing similar strategies of other breweries in making connections to particular places, Schnell concludes that they “are marketing ‘place’ as much as they are marketing beer.” According to him, breweries are actively seeking out distinct “local imagery, local landscapes, and local stories to position themselves as intrinsically rooted in place” (Schnell, 2013, p. 57). The Bulgarian examples represent how craft beer brands are incorporating culture, history, and symbol of particular localities in order to buster their brand identity as part of a particular biocultural place.

Bulgarian Nature in a Beer Bottle

brands but also are developing strategies toward the Bulgarianization of their beers. That Bulgarian character of the craft beers is created by the implementation of things considered as typical, authentic, or native flowers, spaces, herbs, fruits, and vegetables. What is innovative in their choice of ingredients is the way they embodied a particular aura of authenticity in their products. Based on the research of Schnell and Reese (2003), Fletchall (2016), and Sjölander-Lindqvist et al. (2019), Ikäheimo concluded that “local ingredients can also be sourced in craft brewing to establish the image of a business strongly integrated with the local community” (2021: 375). I will stress on other process of how breweries use local ingredients as source for building an image of strong connection with national territory and cultural traditions. In that sense, the focus is not on how craft producers validate their businesses as connected with the local community but rather how biological and cultural resources are powering the image of an authentic, original, and related to local traditions craft beers. What is interesting in the Bulgarian cases is that what is forced is not the connection to local identity and culture, but rather the national one. In an interview for the Bulgarian gastro magazine DiVino, the proprietor of the With Stork Brewery Karel Roel reviled his motivation to embody a Bulgarian character to the beers. He stated that in 2016, the brewery launched seven new types of craft beers “most of them with Bulgarian influence or Bulgarian ingredients” (Kostadinova, 2017). One of the beers inspired by the Bulgarians’ love of chili peppers was the new beer Dark Side. A stout with chili peppers in collaboration with Bulgarian farm and hot sauces factory Chilli Hills Farm. Another seasonal beer with a Bulgarian character was Pop my Vishna4 which was promoted as the first Balkan cherry style kriek. Other experiment with fruits that are typical for the spring season in

Besides the use of local culture, geography, and symbols to “root” in place, some Bulgarian craft beer producers are working not only toward the localized character of their

4 As Vishna is a cherry in Bulgarian, the literal translation of the name is Pop my Cherry.

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Bulgaria brought to the market another seasonal craft beer by With Stork Brewery, the Strawberry Cheesecake IPA. That seasonal beer was not only with considers by Bulgarians as with a spring taste of strawberries but had other symbolic meaning that was establishing a connection to a cultural tradition celebrating the rebirth of the nature after the wintertime. The brewery paid tribute to a very popular Bulgarian tradition, and the symbolism was due to the red color of the beer, a connection only distinguished by Bulgarians. According to a With Stork Brewery representative, such liaisons were intentional and that is why Strawberry Cheesecake was introduced to the market in the very beginning of March (Kostadinova, 2017). On the first day of the March, Bulgarians are celebrat