It's not just that there was a three-tier system, but I would argue that in this particular case, it was the legalization of homebrewing that was the gateway into the innovation.
Early 80's and 90's homebrewers were essentially hackers [1], doing things at very small scales, and branching far out into experimental recipes and techniques. I'm sure there was innovation in distribution and retail over the last 40 years, but definitely nowhere near the scale of the actual brewers.
Without homebrewing, you don't get the wave of 80's self/indie hackers interested in the first place. So yeah, I could believe the author was right, without the three-tier system the little amount of innovation in brewing couldn't overthrow the total amount needed to also take over distribution and retail.
Maybe the analogy would be the first touch phones, or what Tesla is doing now with EVs.
And the rules didn't just change... people that wanted to make changes had to lobby for years to make it happen... and then it took the right years to make it happen.
I've been a part of this activism in New York State for wine, cideries, and to some extent homebrewing my entire life and belong to a number of organizations to help make it happen.
There's also never a coincidence on timing and the economy. Governments love an excise tax and "sin" products are heavily taxed and a lot stays at the state level to where when the economy is in the dumps... they are much more willing to listen to lobbyists on ways to boost income for the state.
It works every time. In the wake of the "Great Recession," we were able to pass the most amount of pro-winery laws in a generation in New York State, unfortunately, we still came up short for our biggest initiative: WIGS aka Wine in Grocery Stores do to illegal campaign financing from overseas and domestic liquor groups. Albany is still a very dirty space. But prior to the recession, it would cost you $20K to get a license to start a distillery... we got that down to about $600. Wineries can now have 5 outlets or mini-wineries to sell their wine. The list goes on and on and it's had a real impact on jobs in Upstate New York.
You'll notice the big rule change for homebrewing happened in 1978... you had the oil crisis... Carter... inflation... and a Congress that was willing to literally let people start making beer in a super unregulated fashion to eventually boost income for the government... and of course create jobs and all that jazz along the way.
When the economy tanks again, I expect there will be marijuana legalization at the federal level.
> it was the legalization of homebrewing that was the gateway into the innovation.
I'm with you on this part. It's hard to imagine the boom happening while tinkering was outright illegal! Also, surely the 58 year gap (1920-1978) caused some generational loss of knowledge. The homebrewers of the 80s and 90s must have started from scratch in many ways.
> without the three-tier system the little amount of innovation in brewing couldn't overthrow the total amount needed to also take over distribution and retail.
Watch "Beer Wars" and you'll see craft brewers with promising products struggling to get shelf space. The problems started for them even before the shelves: they needed to get into existing distributor's trucks, and by this stage of the three-tier game, tier 3 (breweries) had captured tier 2 (distributors). Why exactly would you let an upstart competitor onto "your" truck?
What's surprising to me is that craft brewers found a way! They succeeded not because of the three-tier system, as this article posits, but in spite of it. I'd love to hear how.
PS. You cite an article by the Dogfish Head founder Sam Calagione. In "Beer Wars" he recounts the story of how he started an illegal brewery in Rhode Island, then (because the state was small enough and he knew someone who knew someone) managed to get a law passed to legalize brewing.
I would like to know too, if it really is some odd phenomena that everyone so far is missing.
If I had to pin it to any one guess, I would maybe go with imports. Beer imports were always around to some extent, but it was also the way that consumers got the other tastes they couldn't find at the football game.
In fact, if I had to think back to when I was a kid, there was always that one uncle who enjoyed drinking imports over typical 'domestic', and maybe that 90's uncle is basically the same person today as a craft-IPA drinking millennial. Distributors accommodate more imports as brands get acquired, and maybe that's the gateway. I suppose you could look at the data of brands changing over the years.
> I'm with you on this part. It's hard to imagine the boom happening while tinkering was outright illegal! Also, surely the 58 year gap (1920-1978) caused some generational loss of knowledge. The homebrewers of the 80s and 90s must have started from scratch in many ways.
This is absolutely true. Find older homebrewing guides from the 80's, and you'll see practices that would seem amateurish to even complete newbie homebrewers today - using baker's yeast instead of specialized strains, limited hop availability and poor packaging, and protections against contamination during fermentation being limited to a towel over a bucket.
reading this makes me realize that the business school mantra of 'create barriers to entry' is ultimately limiting for both the industry and its dominant players
Early 80's and 90's homebrewers were essentially hackers [1], doing things at very small scales, and branching far out into experimental recipes and techniques. I'm sure there was innovation in distribution and retail over the last 40 years, but definitely nowhere near the scale of the actual brewers.
Without homebrewing, you don't get the wave of 80's self/indie hackers interested in the first place. So yeah, I could believe the author was right, without the three-tier system the little amount of innovation in brewing couldn't overthrow the total amount needed to also take over distribution and retail.
Maybe the analogy would be the first touch phones, or what Tesla is doing now with EVs.
1. https://hbr.org/2016/05/the-founder-of-dogfish-head-on-flout...