It’s Saturday night. I’m watching 21 Jump Street and thinking about mead.
This chart shows the number of breweries in America. I have always assumed that prohibition destroyed a local and flourishing brewing scene.
If I had to draw a chart of the number of breweries in operation from 1887-today I would have drawn something like this:
Except that’s completely wrong.
Here’s what it actually looks like:
Two things to note here. The number of breweries today is at an all-time-high, much higher than prior to prohibition. Additionally, the trend-line prior to prohibition was pretty obviously down and to the right.
Why? My guess is that three major factors contributed to this trend from 1887-1950:
- Logistics increased efficiency dramatically: Railroads grew dramatically, the truck came on the scene. For the first time, companies could ship beyond their local region.
- American consumers didn’t have much disposable income. As a result, consumers prioritized product affordability over quality, specialty, and their personal taste.
- Larger institutions could become, for the first time, dramatically more efficient than smaller to medium sized organizations. Bottling machines, lower cost purchases of bulk raw materials, and other stuff that big companies could do helped them lower the price of their products compared to their smaller competitors.
The way up:
- Personal disposable income increased dramatically at the exact moment that the number of breweries increased. As shown below, consumers certainly didn’t funnel this into personal savings. Instead, they prioritized their personal tastes (or, you know, drinking local products) over cost.
- A lot of the efficiencies that were obtained by large businesses were suddenly available to small breweries. Golden Coast Mead built our bottling machine from plans we found on the internet for under $1,000. This availability of information is worth millions of dollars in inflation-adjusted 1930 machinery.
I’m probably missing something and I’ll review this when I’m not watching 21 Jump Street.