WEBVTT - Billy Beer: When American Beer Hit Bottom, Then Bounced Back 0:00:17.560 --> 0:00:19.040 Pushkin too quick. 0:00:19.240 --> 0:00:33.159 No, it was perfect, pushkin stop, you got it. 0:00:34.800 --> 0:00:37.240 Jacob Goldstein, I want to tell you a story about 0:00:37.280 --> 0:00:42.400 two brothers from Georgia. One was a goofy looking peanut farmer. 0:00:42.680 --> 0:00:45.760 The other one also a little goofy looking, also peanut farmer, 0:00:46.200 --> 0:00:49.080 also the President of the United States of America, Jimmy 0:00:49.080 --> 0:00:53.720 Carter and Billy Carter. They looked similar, Billy and Jimmy, 0:00:53.920 --> 0:00:58.600 but their temperaments were different. Jimmy Carter, the President was sober, 0:00:58.960 --> 0:01:01.440 both in the sense that he rarely drank, but also 0:01:01.440 --> 0:01:05.119 in the sense that he had pretty strong religious views. 0:01:05.160 --> 0:01:07.440 He felt that if you looked at a woman who 0:01:07.520 --> 0:01:10.000 was not your wife with lust in your heart, this 0:01:10.160 --> 0:01:14.360 was actually a form of adultery. His brother, Billy, loved drinking, 0:01:14.520 --> 0:01:19.040 loved beers, and he would drink them with this unquenchable thirst. 0:01:19.319 --> 0:01:23.200 And he judged the nineteen seventy seven Miss Piggy's Pizza 0:01:23.280 --> 0:01:26.920 Beauty pageant. I'm going to argue that Billy and his brother, 0:01:27.000 --> 0:01:30.839 the President were essential to an important moment in business history, 0:01:30.880 --> 0:01:34.400 specifically the history of the beer industry in the United 0:01:34.440 --> 0:01:36.959 States of America. Between the two of them, they were 0:01:37.000 --> 0:01:42.080 responsible for possibly the very lowest point in American beer history, 0:01:42.120 --> 0:01:44.959 which we will tell you about, and eventually the birth 0:01:45.319 --> 0:01:50.280 of the fantastic American craft beers we have today. It's 0:01:50.320 --> 0:01:53.480 a fall and rise story, and surprisingly it is the 0:01:53.560 --> 0:01:58.480 teetotaling president, not the drunkard, who saves the great American Bruski. 0:01:58.960 --> 0:01:59.680 I'm Robert Smith. 0:01:59.680 --> 0:02:01.600 Have you ever said Bruski before in your life? 0:02:01.640 --> 0:02:02.960 I have never said brusky before? 0:02:03.760 --> 0:02:06.640 In this business history A show about the history of beerness, 0:02:06.920 --> 0:02:08.840 no show about the history of business. 0:02:08.920 --> 0:02:10.400 No, do it, do it, do it. We're going do 0:02:10.480 --> 0:02:11.240 it all the way. 0:02:11.519 --> 0:02:15.440 This story answers some questions that I have always had 0:02:15.560 --> 0:02:18.360 about beer. How did a nation of immigrants, each of 0:02:18.440 --> 0:02:22.480 which brought delicious beers with them, create an American beer 0:02:22.520 --> 0:02:25.120 industry that, at least in the sixties, seventies, and eighties 0:02:25.480 --> 0:02:31.040 served bland, watery swill. And how did craft beers finally 0:02:31.080 --> 0:02:34.360 break that curse? And the answer this is going to 0:02:34.360 --> 0:02:37.400 delight you is tax policy and regulation. 0:02:37.639 --> 0:02:40.519 It does delight me, the two most powerful forces in 0:02:40.560 --> 0:02:41.120 the universe. 0:02:41.639 --> 0:02:45.120 I was a kid during this era and the news 0:02:45.200 --> 0:02:49.000 just loved stories about Billy Carter. And maybe it was 0:02:49.040 --> 0:02:52.800 because Jimmy was a goodie two shoes. But Billy, Oh. 0:02:53.040 --> 0:02:55.959 People would tell these stories about the president's brother is 0:02:56.000 --> 0:02:58.720 a redneck, he's a good old boy, and Billy Carter 0:02:59.000 --> 0:03:03.800 embraced those terms. Jimmy Carter's route to the presidency was 0:03:03.960 --> 0:03:07.480 a classic one. He left the small town of Plains, 0:03:07.560 --> 0:03:10.640 Georgia as soon as he could to attend the Naval Academy. 0:03:11.080 --> 0:03:16.360 He joined America's nuclear submarine fleet, and when his father died, 0:03:16.400 --> 0:03:18.680 he went back to run the family business, the family 0:03:18.720 --> 0:03:24.239 peanut farm. Billy, twelve years younger than Jimmy. Billy flunked 0:03:24.240 --> 0:03:27.880 out of university. He left a four thousand dollars beer 0:03:27.960 --> 0:03:31.400 tab behind. A lot of beer, was a lot of drinking. 0:03:31.760 --> 0:03:34.720 He ended up working and managing the peanut farm. But 0:03:34.880 --> 0:03:36.960 he was smart. Billy Carter was smart. He was a 0:03:37.040 --> 0:03:40.520 voracious reader. He did a great job of running the 0:03:40.520 --> 0:03:44.960 peanut farm. But he did find that the drunken, good 0:03:45.000 --> 0:03:49.400 old boy shtick was effective in the peanut business. He 0:03:49.440 --> 0:03:53.200 once told a reporter, I got a redneck white sox 0:03:53.560 --> 0:03:54.680 and blue ribbon beer. 0:03:54.720 --> 0:03:58.000 Blue ribbon beer like PBR, like Pabst, blue ribbon. 0:03:57.880 --> 0:04:01.520 Paps, blue ribbon. He would roll up to farmers and 0:04:01.600 --> 0:04:05.160 peanut buyers in his pickup truck with an open perhaps 0:04:05.200 --> 0:04:08.800 blue ribbon, driving while drinking between his knees, and the 0:04:08.840 --> 0:04:10.800 customers just loved it. 0:04:11.160 --> 0:04:13.840 So in nineteen it was like a business show. He 0:04:13.960 --> 0:04:17.240 was like a salesman selling this character of Billy Carter 0:04:17.400 --> 0:04:18.080 to some extent. 0:04:18.720 --> 0:04:22.200 Yeah, of this southern farmer you know who loved America, 0:04:22.200 --> 0:04:23.160 loved his beer, and. 0:04:23.159 --> 0:04:25.439 He's a good time. You're happy if you're in business 0:04:25.440 --> 0:04:26.839 with him and he shows up, you know it's going 0:04:26.919 --> 0:04:27.600 to be a good time. 0:04:27.800 --> 0:04:29.760 I think it still works in business to this day. 0:04:30.000 --> 0:04:32.760 Like you were not unhappy when Billy Carter rolled up 0:04:32.800 --> 0:04:35.880 with a six pack of PBR. In nineteen seventy two, 0:04:35.920 --> 0:04:39.600 Jimmy Carter was governor of Georgia and Billy Carter also 0:04:39.680 --> 0:04:43.880 made his big career jump. So he was living at 0:04:43.880 --> 0:04:47.120 this time planes Georgia in a dry county, meaning they 0:04:47.120 --> 0:04:50.320 couldn't sell alcohol. You could find alcohol, but they didn't 0:04:50.360 --> 0:04:55.480 officially sell alcohol in the county. So Billy Carter joins 0:04:55.520 --> 0:04:58.840 the town council for the sole reason of voting to 0:04:58.920 --> 0:05:03.200 allow alcohol sales in the county, and once that vote 0:05:03.240 --> 0:05:07.039 went through, he resigned from the town council. About the 0:05:07.120 --> 0:05:10.599 only gas station in town and Plains, Georgia. And he 0:05:10.680 --> 0:05:14.200 put up a big beer sign and said, we are 0:05:14.240 --> 0:05:17.640 selling beer, which I helped legalize. Here at the only 0:05:17.680 --> 0:05:21.280 gas station in Plains, Georgia, and it became this community 0:05:21.360 --> 0:05:24.000 hub for the city. With Billy holding court, why don't 0:05:24.000 --> 0:05:25.080 you give me his quote? 0:05:25.240 --> 0:05:28.120 We were a beer joint that sold gas as a sideline. 0:05:28.600 --> 0:05:31.680 I probably drank or gave away more beer than I sold. 0:05:32.040 --> 0:05:34.640 That second part is the is the trick right. It's 0:05:34.640 --> 0:05:37.400 great if your business is selling beer. Good classic business, 0:05:37.839 --> 0:05:39.560 giving the beer away that's going to hurts you in 0:05:39.560 --> 0:05:41.159 the end, and drinking it also. 0:05:41.920 --> 0:05:43.679 Now at this point, I want to leave the Carter 0:05:43.960 --> 0:05:48.360 Brothers for a moment, and I want to follow the 0:05:48.360 --> 0:05:53.200 beer itself, the Paps blue ribbon, because, unbeknownst to Billy's belly, 0:05:53.680 --> 0:05:56.640 Paps is a perfect way to tell the story of 0:05:56.680 --> 0:06:01.159 how beer got to America and how it got so bad. 0:06:01.600 --> 0:06:04.760 We're going to flash back now one hundred and thirty 0:06:05.200 --> 0:06:07.880 years to eighteen forty four. 0:06:08.160 --> 0:06:10.440 I'm there, I'm ready. I love the eighteen hundreds in 0:06:10.480 --> 0:06:14.240 business history, as you know, my favorite business history century. 0:06:14.640 --> 0:06:16.240 So since this is a beer store, you know it's 0:06:16.240 --> 0:06:19.159 going to feature Germans. Eighteen forty four, a lot of 0:06:19.160 --> 0:06:23.760 Germans are coming to America, including Jacob Best, who starts 0:06:23.760 --> 0:06:27.640 the Empire Brewery in Milwaukee, Wisconsin. Now, in this era 0:06:27.720 --> 0:06:32.280 of German migration, they brought a new style of beer. 0:06:33.000 --> 0:06:35.480 They brew a beer it's all cloudy, has all this 0:06:35.520 --> 0:06:37.840 stuff in it, and they would store it somewhere cold, 0:06:37.960 --> 0:06:41.880 like in a cool cellar, and the stuff inside the 0:06:41.880 --> 0:06:45.240 beer would sort of drop down to the bottom. And Jacob, 0:06:45.279 --> 0:06:51.200 do you know what store away is in German? No, no, no, 0:06:51.640 --> 0:06:56.200 it's Lagern, where we get the term lagger. So this 0:06:56.279 --> 0:06:58.440 is the beer that the Germans have brought to America 0:06:58.440 --> 0:07:01.479 and this new process. And after the lagurn process, you 0:07:01.560 --> 0:07:05.400 had a clear, mellow beer that stayed fresh longer than 0:07:05.440 --> 0:07:10.720 other ales. And the timing of Jacob Best was impeccable 0:07:10.760 --> 0:07:15.760 because soon after the reopened came the Great Lagger Drought 0:07:16.000 --> 0:07:19.240 of eighteen fifty four. No put it on the calendar. 0:07:19.400 --> 0:07:21.960 It's like a bank panic, But for beer, I knew 0:07:21.960 --> 0:07:25.760 all the bank panics. I did not know about the 0:07:25.800 --> 0:07:28.960 Great Lagger Drought of eighteen fifty four. It had apparently 0:07:29.040 --> 0:07:32.720 been a hot summer. There's all this newly arrived German 0:07:32.760 --> 0:07:36.760 population in Saint Louis and Chicago, and they drank the 0:07:36.840 --> 0:07:40.520 city's dry. The Chicago Journal wrote about. 0:07:40.280 --> 0:07:43.520 This here give it to us, Jacob, Germans disconsolate and 0:07:43.600 --> 0:07:47.600 haggard wander from hall to hall, and as yet there. 0:07:47.560 --> 0:07:48.400 Is no beer. 0:07:48.960 --> 0:07:52.280 Something must be done. A newspaper loves nothing more than 0:07:52.320 --> 0:07:54.360 to say something must be done. 0:07:54.640 --> 0:07:57.360 The problem was that most lagger at this point was 0:07:57.440 --> 0:08:00.080 sold within a mile or two of where it was brewed. 0:08:00.240 --> 0:08:02.600 Number one, it's heavy, so it's expensive to move. But 0:08:03.120 --> 0:08:05.760 number two, it's because once the beer gets warm, it 0:08:05.840 --> 0:08:09.360 starts to go bad. But luckily for Jacob Best, this 0:08:09.440 --> 0:08:11.960 is the beginning of the age of the cold shp 0:08:13.280 --> 0:08:16.360 So you had ice, you had railroads, you had shipping, 0:08:16.400 --> 0:08:18.720 you had a way to transport beer. 0:08:18.920 --> 0:08:21.200 So call back to our ice king show. Of course, 0:08:21.280 --> 0:08:23.480 right around this time mid eighteen hundred's kind of early 0:08:23.520 --> 0:08:27.400 to mid eighteen hundreds, they're they're industrializing ice before they 0:08:27.400 --> 0:08:29.720 have refrigeration. They're cutting it out of frozen lakes and 0:08:29.800 --> 0:08:31.440 using it to keep beer coll It was actually one 0:08:31.480 --> 0:08:34.439 of the first places that spread from Boston was Milwaukee 0:08:34.440 --> 0:08:35.400 for the beer business. 0:08:35.640 --> 0:08:39.239 So you have a new way to transport beer. You 0:08:39.280 --> 0:08:41.920 have a beer panic in the big cities. And so 0:08:42.040 --> 0:08:45.800 Jacob Best starts to ship barrels of their logger on 0:08:45.880 --> 0:08:48.680 the Lake Michigan ferry to Chicago and then down a 0:08:48.720 --> 0:08:54.160 canal to Saint Louis. Lagger drought over Jacob Best, and 0:08:54.160 --> 0:08:58.280 eventually his son Philip started to build their brand. The 0:08:58.280 --> 0:09:00.840 other thing happening in eighteen hundreds is the launch of brands. 0:09:01.160 --> 0:09:07.199 They put their last names. They put worst Beer first, No, 0:09:07.480 --> 0:09:09.440 it was best select, and they put it on the bottle. 0:09:10.400 --> 0:09:16.320 And they came up with a drinking song specifically for 0:09:16.400 --> 0:09:19.640 their beer. Here are the lyrics printed in Maureen Ogle's 0:09:19.640 --> 0:09:24.599 great book Ambitious Brew. Jacob sing Us sing Us a 0:09:24.679 --> 0:09:26.120 drinking song of the bests. 0:09:26.760 --> 0:09:30.559 When the glasses loudly ring, all the waiters quickly spring, 0:09:30.720 --> 0:09:34.880 serving promptly all the guests with the bestest of the bests, with. 0:09:35.080 --> 0:09:40.840 The bestest of the best. I want a tuba for 0:09:40.920 --> 0:09:44.199 that the best. We're soon making enough profit to expand. 0:09:44.320 --> 0:09:46.720 They built a new brewery in Milwaukee look like a 0:09:46.720 --> 0:09:51.160 Gothic castle, and the Lagger vaults extended for several city 0:09:51.200 --> 0:09:52.200 blocks under the city. 0:09:52.240 --> 0:09:54.079 It's all beer below the water. 0:09:54.160 --> 0:09:56.080 We need a comic book. We need a beer comic 0:09:56.080 --> 0:09:56.760 book down there. 0:09:56.880 --> 0:09:59.480 Eventually a steamboat captain married into the family and he 0:09:59.520 --> 0:10:02.480 took over the business and renamed it. His name was 0:10:02.559 --> 0:10:06.319 Frederick Papst. He tied a little blue ribbon around the 0:10:06.360 --> 0:10:09.120 next of the bottles, like an actual blue ribbon. Yeah, 0:10:09.160 --> 0:10:11.000 as part of the marketing they could stand out. 0:10:11.200 --> 0:10:12.719 I always thought it was it's like they won a 0:10:12.760 --> 0:10:14.640 blue ribbon at a contest or something. 0:10:14.400 --> 0:10:15.120 They later did. 0:10:15.200 --> 0:10:18.680 Also, Yeah, the actual blue ribbon seems impressive. 0:10:18.760 --> 0:10:19.480 It's nice. 0:10:19.720 --> 0:10:21.559 Now you needed a gimmick like this to stand out. 0:10:21.640 --> 0:10:23.839 Because everyone was getting into the brewing business in the 0:10:23.920 --> 0:10:27.880 late eighteen hundreds, we start to see companies like Schlitz, Miller, 0:10:28.080 --> 0:10:32.840 Anheuser Busch, and Papst. Now, maybe because it was a 0:10:32.880 --> 0:10:37.120 product of the German immigrants, beer did not enjoy the 0:10:37.160 --> 0:10:40.400 best reputation in the late eighteen hundreds. This is when 0:10:40.400 --> 0:10:43.600 the temperance movement was rising in America. People who said 0:10:43.679 --> 0:10:46.920 we should outlaw alcohol. It's terrible, and these German and 0:10:47.000 --> 0:10:50.320 Irish immigrants, they were painted as being drunks invading and 0:10:50.320 --> 0:10:56.080 destroying America. The beer industry fought back with science. They said, listen, 0:10:56.559 --> 0:11:00.200 beer is a low alcohol alternative to the devil that 0:11:00.320 --> 0:11:03.440 is whiskey. They said in court, you could drink twenty 0:11:03.480 --> 0:11:05.800 pints of lager before you could get drunk. 0:11:05.840 --> 0:11:06.800 It's a lot of pints. 0:11:06.840 --> 0:11:09.000 The brewers might have won this argument, but just as 0:11:09.000 --> 0:11:12.760 the prohibition movement was growing, the US declared war on 0:11:12.840 --> 0:11:17.720 Germany in nineteen seventeen, and beer became an easy target 0:11:17.880 --> 0:11:21.079 for the propaganda of the war. Here's what one pro 0:11:21.120 --> 0:11:22.920 prohibition politician had to say. 0:11:23.080 --> 0:11:26.280 No, Germans in the war are conspiring against the peace 0:11:26.320 --> 0:11:30.400 and happiness of the United States more than Papst, schlitz 0:11:30.880 --> 0:11:34.640 Miller and others of their kind. We don't like that 0:11:34.640 --> 0:11:35.600 phrase their kind. 0:11:36.520 --> 0:11:40.080 It's never good. No, we should do a prohibition show 0:11:40.120 --> 0:11:40.760 in the future. 0:11:41.440 --> 0:11:44.880 Yeah, there's a lot of sort of tax and regulation. 0:11:45.000 --> 0:11:46.720 I mean, even just al Capone. I think there's a 0:11:46.720 --> 0:11:50.120 business case study about al Capone that I've been meaning 0:11:50.160 --> 0:11:50.880 to dig into. 0:11:51.120 --> 0:11:52.240 Oh, we should definitely do it. 0:11:52.600 --> 0:11:55.640 Just after the war, the Eighteenth Amendment passed, which meant 0:11:55.720 --> 0:11:58.120 that prohibition was in effect in the United States of America. 0:11:58.240 --> 0:12:01.679 Production of alcohol is now banned, and the big beer 0:12:01.720 --> 0:12:06.880 companies converted their giant factories to make near beers like 0:12:07.000 --> 0:12:10.120 low alcoholics, soft drinks. Essentially, it would have been very 0:12:10.160 --> 0:12:10.880 popular today. 0:12:10.920 --> 0:12:11.600 That is the trend. 0:12:12.480 --> 0:12:16.720 And because they had ice houses and refrigeration plants, some 0:12:16.760 --> 0:12:23.079 started to produce ice cream. Paps made spreadable cheese delicious. 0:12:23.160 --> 0:12:26.160 In fact, got sued by Craft. Perhaps also had a 0:12:26.160 --> 0:12:28.600 big real estate portfolio from all the beer gardens and 0:12:28.640 --> 0:12:33.600 hotels and taverns, and it acquired it developed these properties, rented, 0:12:33.679 --> 0:12:38.320 sold them off. It did anything to survive prohibition. And 0:12:38.360 --> 0:12:39.760 because all of this, you know, a lot of the 0:12:39.760 --> 0:12:42.640 small breweries went out of business, but paps they made 0:12:42.679 --> 0:12:46.120 it through. When prohibition was repealed in nineteen thirty three, 0:12:46.280 --> 0:12:48.439 they could reopen the factory and start to sell beer 0:12:48.800 --> 0:12:53.040 again in America. But the paps that they were about 0:12:53.080 --> 0:12:55.000 to brew, the one that Billy Carter was to come 0:12:55.000 --> 0:12:58.360 to love, would not be the same beer. It would 0:12:58.400 --> 0:13:02.040 taste different than the one that carried that first blue ribbon. 0:13:02.600 --> 0:13:27.559 It would be much worse after the break. I think 0:13:27.559 --> 0:13:30.840 we've all heard about the celebrations when prohibition was repealed 0:13:30.840 --> 0:13:32.360 and people are drinking in the streets. It feels like 0:13:32.440 --> 0:13:36.960 it was this anomaly in America. But prohibition really changed 0:13:37.000 --> 0:13:41.480 the industry. Obviously, people drank less, they just did after prohibition, 0:13:42.120 --> 0:13:46.440 and the industry structure was altered. In the old days, 0:13:46.480 --> 0:13:49.320 if you were perhaps blue ribbon, you would have a 0:13:49.360 --> 0:13:49.920 beer guarding. 0:13:50.040 --> 0:13:54.400 A lot of bars were owned or financed directly by brewers, right, 0:13:54.440 --> 0:13:56.280 it was like a it was a vertical integration. 0:13:56.360 --> 0:13:59.880 Basically, when prohibition was repealed, the US government was like, well, 0:13:59.880 --> 0:14:01.520 wait a minute, let's not go back to the way 0:14:01.559 --> 0:14:06.520 things were. Let's create something new called a beer distributor. 0:14:06.840 --> 0:14:08.720 It was ended up being a what is a three 0:14:08.760 --> 0:14:09.360 tier systems? 0:14:09.480 --> 0:14:11.480 Three tier system? This is the phrase everybody is. 0:14:11.760 --> 0:14:14.720 Yeah, so rather than sell the beer you made to 0:14:14.760 --> 0:14:16.840 someone who wants to drink the beer you made. 0:14:16.880 --> 0:14:18.920 Or even rather than sell it to a store that's 0:14:18.960 --> 0:14:19.680 going to sell it. 0:14:19.800 --> 0:14:22.560 The brewer would sell it to a distributor. The distributor 0:14:22.600 --> 0:14:24.520 would sell it to a store, and the store would 0:14:24.560 --> 0:14:25.720 sell it to the customer. 0:14:25.840 --> 0:14:29.360 Yes, and so the three tiers, to be clear are brewer, wholesaler, 0:14:29.400 --> 0:14:33.440 slash distributor, and store. And like, just like, why did 0:14:33.480 --> 0:14:35.120 they do that? What is the rationale? 0:14:35.560 --> 0:14:41.040 I think the government was worried that the brewers had 0:14:41.280 --> 0:14:44.800 incentive to, first of all, to take over markets because 0:14:45.280 --> 0:14:48.280 they owned the bars and the beer halls, and also 0:14:48.360 --> 0:14:50.760 an incentive to encourage people to drink more than they 0:14:50.840 --> 0:14:54.200 probably should because because it is their product. So they 0:14:54.200 --> 0:14:59.280 were concerned about alcoholism. But also they were concerned about 0:14:59.320 --> 0:15:01.800 taxing the industry, and they felt like if they reduced 0:15:01.800 --> 0:15:04.480 the power of all parts of the brewing industry, it 0:15:04.520 --> 0:15:07.160 would be easier to track the beer and to tax 0:15:07.240 --> 0:15:07.680 the beer. 0:15:07.960 --> 0:15:10.440 And maybe you know, I'm kind of making this up, 0:15:10.480 --> 0:15:13.760 but antitrust was pticularly aggressive around this time, and there 0:15:13.840 --> 0:15:17.240 was that famous case. You know, movie studios used to 0:15:17.240 --> 0:15:19.960 own movie theaters, yes, and there's the famous case that 0:15:20.000 --> 0:15:22.640 went to the Supreme Court where the government didn't want 0:15:22.680 --> 0:15:24.880 that to happen anymore. They didn't want that vertical integration, 0:15:25.160 --> 0:15:29.080 and they won and movie studios were no longer allowed 0:15:29.120 --> 0:15:31.480 to own theaters anymore. This is the analog of that, right, 0:15:32.000 --> 0:15:36.200 beer brewers can't own bars anymore. And it seems like 0:15:36.320 --> 0:15:38.800 there are some I don't know whether they're intended or not, 0:15:38.840 --> 0:15:41.920 but there are some interesting structural consequences of this shift. 0:15:42.200 --> 0:15:44.760 One of them of this three tiered system is it 0:15:44.800 --> 0:15:47.400 seems to be quite bad for small brewers, right, They 0:15:47.440 --> 0:15:50.120 already were having a hard time. A lot of them 0:15:50.160 --> 0:15:52.359 had gone out of business in prohibition. 0:15:52.560 --> 0:15:55.880 They don't have a lot of leverage with the distributors, right. 0:15:55.960 --> 0:15:59.800 Distributors have a limited storage space, limited truck space, and 0:15:59.840 --> 0:16:02.560 limited shelf space. These are the things that distributors care about, 0:16:03.040 --> 0:16:07.120 and so in theory they could negotiate with every small brewery. 0:16:07.840 --> 0:16:10.200 But if you're a distributor, it's easy to just talk 0:16:10.200 --> 0:16:12.480 to Paps Blue Ribbon and to like fill up your 0:16:12.480 --> 0:16:14.120 truck with Paps we Ribbon and to put it on 0:16:14.160 --> 0:16:14.880 the shelf. 0:16:14.600 --> 0:16:16.920 And I bet Paps we Ribbon will give you a deal. 0:16:17.160 --> 0:16:18.920 I mean, it kind of reminds me of the Amp 0:16:19.120 --> 0:16:23.320 story as well, where the big player it just has 0:16:23.440 --> 0:16:27.000 economies of scale and efficiencies, and the distributor just wants 0:16:27.040 --> 0:16:29.760 to do the easiest, cheapest thing, the most efficient thing, 0:16:29.760 --> 0:16:31.960 and why wouldn't they And that's good for the big 0:16:32.000 --> 0:16:34.240 brewers and bad for the small brewers. So now we 0:16:34.280 --> 0:16:38.320 have beer distributors and the big breweries seem to get bigger. 0:16:38.400 --> 0:16:41.360 The smaller ones seem to be hurt after this. And 0:16:42.040 --> 0:16:44.880 it's interesting when you have a market like this and 0:16:44.920 --> 0:16:47.960 there's a few big players, there's a couple of ways 0:16:48.000 --> 0:16:54.200 the market can divide differentiate. One way would be that, 0:16:54.280 --> 0:16:57.480 you know, some people could start making beers for a 0:16:57.480 --> 0:17:01.320 more sophisticated palette. You could have basically a rich person's 0:17:01.360 --> 0:17:04.080 beer costs a lot, has great flavor, and then a 0:17:04.159 --> 0:17:07.760 cheaper swell you could sell to the masses. What actually 0:17:07.800 --> 0:17:11.320 happened was that all the big breweries decided they were 0:17:11.320 --> 0:17:15.840 going to cut costs and compete to be the cheapest, blandest, 0:17:16.240 --> 0:17:20.000 most generic beer out there. This feels very mid century 0:17:20.040 --> 0:17:22.080 to me. I feel like in the we're in the 0:17:22.119 --> 0:17:23.800 kind of post war period here, right, We're in the 0:17:23.880 --> 0:17:29.080 nineteen fifties, sixties. It feels like this very mass market era. 0:17:29.760 --> 0:17:32.440 And you can imagine the three tiered system being highly 0:17:32.480 --> 0:17:35.960 relevant here, right. We just we want to fill the 0:17:35.960 --> 0:17:38.919 distributor's trucks with our couple beers, with our one or 0:17:38.960 --> 0:17:41.840 two basic beers that everybody's going to want, and send 0:17:41.880 --> 0:17:43.680 them out by the case. 0:17:44.560 --> 0:17:47.840 So, with this philosophy, perhaps and the other brewers decide 0:17:47.880 --> 0:17:50.720 they need to cut costs become more efficient. They add 0:17:50.800 --> 0:17:54.080 corn and rice to make the beer cheaper and blander 0:17:54.600 --> 0:17:57.720 and at this point they decide they're going to compete 0:17:58.160 --> 0:18:02.480 through advertising, not the flavor space. Flavor space, flavor space. 0:18:03.000 --> 0:18:06.040 So by the nineteen seventies, basically every beer is weak. 0:18:06.440 --> 0:18:09.680 It's very light, very pale, very dry, and the only 0:18:09.720 --> 0:18:13.040 thing to differentiate is the name on the label and 0:18:13.320 --> 0:18:16.720 the tagline. The tagline became so important here. Why do 0:18:16.760 --> 0:18:20.320 you read me some of these taglines? Miller makes it right. 0:18:21.920 --> 0:18:27.399 Where there's life, there's bud. If you'll like beer, you'll 0:18:27.480 --> 0:18:30.719 love Schlitz. You know what things made me think of? 0:18:31.040 --> 0:18:33.840 You remember the Homer Simpson line beer. 0:18:35.040 --> 0:18:39.200 The cause of and solution to all of life's problems, 0:18:40.000 --> 0:18:40.800 something like that. 0:18:41.359 --> 0:18:44.640 Well, he's making fun of this era of beer. And 0:18:45.520 --> 0:18:48.280 because it is the mad Men era and they are 0:18:48.320 --> 0:18:52.240 starting to advertise on television and sponsor big league sports, 0:18:52.680 --> 0:18:57.840 these beer names are everywhere, and everyone's looking for their 0:18:57.880 --> 0:19:01.040 competitive advantage in terms of how can I get the 0:19:01.119 --> 0:19:04.879 name of my beer to stand out? Who can I 0:19:04.920 --> 0:19:08.520 get to hold up my beer and say this beer 0:19:08.640 --> 0:19:13.120 is the best. And their eyes turned towards planes Georgia. 0:19:13.640 --> 0:19:14.800 It's nineteen seventy six. 0:19:14.880 --> 0:19:18.600 Governor Jimmy Carter runs for president and the world's press 0:19:18.800 --> 0:19:21.600 descends on planes Georgia. You know, I've been there myself. 0:19:21.640 --> 0:19:24.480 You have to do the puff piece about the people 0:19:24.560 --> 0:19:27.879 running for president where you interview all their neighbors and 0:19:27.920 --> 0:19:30.560 their relatives and who should be there at the gas 0:19:30.600 --> 0:19:33.640 station when you drive into planes Georgia. But the President's brother, 0:19:34.200 --> 0:19:40.000 Billy Carter, and they loved him. Jimmy Carter, the President 0:19:40.200 --> 0:19:42.520 later said, why don't you give me this quote? 0:19:42.560 --> 0:19:45.240 He could play the country bumpkin as well as anyone. 0:19:45.480 --> 0:19:48.320 His beer drinking helped promote that image. He had a 0:19:48.320 --> 0:19:51.399 can of beer in his hand in every photo I 0:19:51.440 --> 0:19:54.840 ever saw. And I just want to point out that phrase, 0:19:55.000 --> 0:19:58.879 play the country bumpkin, right, because what President Carter is 0:19:58.880 --> 0:20:04.000 saying here is Billy knew what he was doing. He 0:20:04.160 --> 0:20:06.760 was conscious that he was putting on an act, creating 0:20:06.800 --> 0:20:08.320 a persona, and he was good at it. 0:20:08.440 --> 0:20:11.159 And what Jimmy Carter didn't say is that this act, 0:20:11.320 --> 0:20:15.840 this image, the country bumpkin, actually helped his run for president. 0:20:16.240 --> 0:20:19.880 This is just after Vietnam and Watergate, and Americans were 0:20:20.240 --> 0:20:24.439 suspicious of the same old politicians in Washington, DC. And 0:20:25.160 --> 0:20:28.760 Billy Yeah, he was embarrassing. He used some unfortunate language, 0:20:29.400 --> 0:20:32.000 but he humanized Jimmy Carter. He made it seem like 0:20:32.080 --> 0:20:35.080 this is an authentic politician from an authentic small town, 0:20:35.320 --> 0:20:38.120 and who amongst us doesn't have a brother that says 0:20:38.160 --> 0:20:41.800 the wrong thing occasionally. So Billy took advantage of this. 0:20:42.000 --> 0:20:46.760 He went on TV game shows, he judged belly flop competitions, 0:20:47.280 --> 0:20:50.040 and eventually he hired an agent to handle all the 0:20:50.080 --> 0:20:54.000 media requests and business propositions that flooded in. Definitely taking 0:20:54.040 --> 0:20:57.320 advantage of his brother's run for president. And you could 0:20:57.320 --> 0:21:00.360 imagine the beer companies taking a look at this guy 0:21:00.400 --> 0:21:03.640 who is never without a beer in his hand, and 0:21:03.680 --> 0:21:08.119 they think, this guy, we can make money off of 0:21:08.160 --> 0:21:11.840 this guy. One company in particular, this was a small 0:21:12.400 --> 0:21:15.159 trying to compete against the paps and the Budweisers of 0:21:15.200 --> 0:21:19.040 the time. It was called Fall City Brewing Company. They 0:21:19.080 --> 0:21:21.280 were a little desperate. They had started in nineteen oh 0:21:21.320 --> 0:21:25.120 five in Louisville, Kentucky. Just a little side note, Fall 0:21:25.160 --> 0:21:27.200 City were the first people at the time to start 0:21:27.280 --> 0:21:30.520 using the state tab opener for their beer cans, which 0:21:30.560 --> 0:21:31.960 we talked about in our can show. 0:21:32.200 --> 0:21:34.000 The state tad is the way you open a can now, 0:21:34.080 --> 0:21:36.440 the misticulous three lever thing. 0:21:36.640 --> 0:21:39.440 Instead of instead of the ring poll. 0:21:39.480 --> 0:21:41.120 Which was a deadly device. 0:21:41.280 --> 0:21:42.760 People can swallow them. It's terrible. 0:21:42.920 --> 0:21:48.520 So False City looks at Billy Carter and they think, yes, yes, 0:21:49.320 --> 0:21:53.800 what if we craft an entire beer around this beer 0:21:53.880 --> 0:21:58.439 god's image. What if we make Billy beer? And they 0:21:58.440 --> 0:21:59.720 were going to take it up a nuts. They weren't 0:21:59.760 --> 0:22:01.280 just going to put his name on it. They were 0:22:01.280 --> 0:22:05.400 going to have Billy pick the beer. Okay, So they 0:22:05.440 --> 0:22:08.119 send a private jet to Georgia to pick up Billy Carter. 0:22:08.520 --> 0:22:12.240 They bring in Billy Carter. His quote is, perhaps I'll 0:22:12.240 --> 0:22:14.080 become the Colonel Sanders of beer. 0:22:14.400 --> 0:22:17.840 It's interesting that he should say Colonel Sanders because today 0:22:18.960 --> 0:22:22.399 a celebrity not just endorsing a beer, but you know, 0:22:22.600 --> 0:22:26.200 starting a brand that has become a thing. If you're 0:22:26.320 --> 0:22:29.560 famous and you want to not just be really rich, 0:22:29.640 --> 0:22:32.680