Twenty years ago, the era of craft brewing suffered its first serious setback. The early years, from the late 70s to the mid-80s, birthed the nascent industry but produced precious little beer. It was during the next decade that the most successful breweries grew into serious businesses. By the mid-1990s, speculators were attracted by the dollars companies like Boston Beer and Pete's Wicked were earning, and they rushed to get into the market. They mostly were not beer people, and the products they offered were opportunistic knock-offs of popular beer (or worse, cynical concoctions that were more likely to challenge Zima and other flavored malt beverages than Budweiser). That moment of speculation turned into a froth, and by about 1997 the froth had collapsed, leading to the failure of a number of high-profile breweries.

Fifteen years later, from about 2012-2015) a similar pattern seemed to be repeating the earlier one: growth figures for the industry were in double digits, and some breweries were posting triple-digit year-over-year growth; the number of breweries soared. To respond to spiking demand, larger breweries bought huge, expensive breweries, usually on credit. For a few years, breweries looked like money-printing presses.

I revisited this era when I recently returned to Pete Dunlop's excellent history, Portland Beer. The book covers the whole sweep of Portland's brewing history, but it was a later section on the craft era that caught my attention. As Pete was walking through that mid-90s stretch, I was reminded of another lesson from that era. It's not the small breweries that fail during a market correction, it's the big, seemingly successful ones. The case in point is Portland Brewing, which became an unexpected focal point for how quickly breweries can collapse. The brewery still exists, but is a living tar pit containing the bones of two deceased breweries, and the struggling, trapped bodies of a couple more. There seems to be something in the story worth repeating here in 2017.

Let's begin with Saxer Brewing, one of the break-out critical success of the 1990s in Oregon. Helmed by German-trained brewmaster Tony Gomes, they made stellar lagers that won a case full of medals. This was not an opportunistic brewery by any stretch: Gomes used decoction mashing, aged his lagers for weeks or months, and refused to tart them up with hops, as was becoming the fashion among other local breweries. Unfortunately, Oregon was not ready for a brewery with a low-hop bock as its flagship, and so despite the critical raves, the brewery had a hard time turning a profit.

Next we have the experiment of one of those speculators, Jim Bernau, a winemaker who was trying to build a national network of breweries. His idea was to invent a brewery, Nor'Wester, built for large volume, to effectively flood the market and grab a large share. He promptly hired Karl Ockert from BridgePort to head the brewhouse, and his vision for the beer line was pure dilettantism. Here's Karl describing those his approach, which was emblematic of the entire project. (To fully understand this, it's important to know that Widmer's Hefeweizen was by far the biggest-selling beer in the Northwest, so much so that it attracted many imitators. Together that style dominated the overall market.)

"I was working for Nor’Wester Brewery, and Jim Bernau was looking and going, ‘What’s the most popular style of beer? Wheat beer. That’s what we’re going to make.’ So we made our own Hefeweizen, and we did quite well with it. And then, because Berry Weizen was big, we made a Raspberry Weizen. (It was awful beer, but it did quite well.)"

Bernau approached Nor'Wester like it was a standard widget-maker, applying the kind of business strategy that would sell shoes or soda. He wrapped his bottles of wheat beer up in glossy branding and invested a mint to inject as much beer into the market as he could. The flagship Hefeweizen--stolen wholesale from Widmer--was at one time the best-selling bottled beer in the state. (And that was the factor that convinced Widmer it was time to start bottling themselves.)