At the time, many Americans had only a nebulous notion of what craft beer was and how it was made. So when Anheuser-Busch launched a series of negative ads criticizing Boston Beer Company for using contract breweries to produce some of their beer, the ads were strikingly effective. Believing the ads were unfair, Koch appealed to the Better Business Bureau in 1997, who ultimately ruled in his favor. Neither Anheuser Busch-Inbev or MillerCoors would comment for this story, directing requests instead to the Beer Institute in Washington, a trade group that represents the entire $223 billion beer industry. The institute did not comment on the 1997 campaign.
But speaking to U.S. News from his Boston headquarters as he sampled his own beer—part of a daily routine for years—Koch is more than happy to talk about the ads, and the harm he believed they caused him. He says the campaign caused distributors to drop him across the country, and stalled the growth of craft beer for years to come.
"They have shown that they can do a lot of damage to craft brewers," he says, pointing to the flat-lining of craft beer growth in the late 1990s. "But I learned... that we as craft brewers need to, because we are all so small, stay together. If they can divide us, get us to attack each other, we will damage our industry."
Craft brewers are heeding Koch's advice. The Brewers Association, a trade group of some 2000 small and independent brewers, was founded in 2005 to be a "passionate voice for craft brewers" and craft beer, and it has made itself as vocal as the bigger Beer Institute.
The association has even created what appears to be the first definition of a craft brewery: a brewery that is "small, independent and traditional." The brewery must be less than 25 percent controlled by a big beer conglomerates, and must brew less than 6 million barrels a year.
Sam Calagione, who founded the craft beer favorite Dogfish Head and chairs the Brewers Association, says it's about a lot more than the numbers. "The craft brewing renaissance happened because American consumers fell in love with the taste of craft beer and the idea of craft beer: supporting small, family, local, artisanal businesses."
The Beer Institute's spokesman Chris Thorne offers a very different definition. Craft beer "is a marketing term," he says.
The Fight Stays Fresh
Fifteen years after Anheuser released its slew of negative ads about Boston Beer, the fight between craft and big beer is more intense than ever.
Greg Engert, the beer director for the Neighborhood Restaurant Group, a group of nine restaurants and bars in the D.C. area, believe this is because craft brewers have truly taken off. Despite its relatively small market share, the popularity of craft beer has experienced a meteoric rise in recent years, while big beer's sales in the U.S. have seen a continuing decline.
"Now that craft brewers are so successful, there's more riding on it. The investment in your business is huge. Your staff has gotten enormous. It's at that point when you start to be a little more concerned about how this game has been playing out," he says.
When Calagione started Dogfish Head in the back of his Delaware restaurant in 1995, he was brewing just 100 barrels of beer a year. Today, his brewery produces more than 171,000 barrels, and distributes it to some 30 states. Dogfish is among the fastest growing craft breweries in the country. And Calagione himself is known widely for his role on the Discovery Channel TV show Brewmasters.