Theo Nash
When the Prohibition came into effect in 1920, alcohol manufacturers, distilleries, and breweries were forced to adapt or die. Many iconic brewers, such as Anheuser-Busch, Coors, Pabst, Miller, and Yuengling, survived by diversifying their product lines. Some brewers, like Anheuser-Busch, pivoted to producing non-alcoholic near beer, which was legal under Prohibition as long as it had less than 0.5% alcohol content. Others, like Pabst, ventured into new products such as processed cheese, while Coors became the world's largest supplier of malted milk. Some companies, such as Yuengling, opened dairies and began producing ice cream. While some companies managed to stay afloat, many others did not survive the Prohibition era, and thousands of workers lost their jobs. The Prohibition also gave rise to bootlegging and speakeasies, with some former alcohol companies turning to illegal alcohol production and distribution.
| Characteristics | Values |
|---|---|
| Companies that sold alcohol during Prohibition | Bootleggers, pharmacists, doctors, grape farmers, grocery and hardware stores |
| Alcohol sold | "Medical wine", "bathtub gin", "moonshine", "wine bricks", "wine blocks", whiskey, beer, gin, liquor |
| Impact on companies | Alcohol manufacturers, distilleries, breweries, theaters, clubs, and restaurants suffered |
| Impact on jobs | Unemployment rose, but the number of registered pharmacists tripled |
| Impact on crime | Crime syndicates spread their influence, and bootlegging became a lucrative business for criminals |
| Impact on public health | 1000 Americans died annually from tainted liquor |
| Government response | Increased toxicity of industrial alcohol, leading to thousands of deaths |
| Effectiveness of Prohibition | The liquor market was nearly destroyed, but alcohol consumption continued |
| Unintended consequences | Decline in the amusement and entertainment industries, negative impact on law enforcement, corruption |
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What You'll Learn
Companies pivoted to selling alcohol-making equipment and ingredients
The Prohibition era in the United States, lasting from 1920 to 1933, prohibited the production, importation, transportation, and sale of alcoholic beverages. This period forced many companies in the alcohol industry to adapt or face closure. Some companies pivoted to selling alcohol-making equipment and ingredients, taking advantage of loopholes and quirks in the Volstead Act that allowed for home alcohol production and medicinal alcohol use.
One notable example was Anheuser-Busch, the St. Louis-based maker of Budweiser beer. They developed Bevo, a non-alcoholic beverage that tasted similar to beer and became an immediate success, selling over 2.2 million cases in six months. However, as the popularity of bootleg alcohol grew, Bevo sales declined, and the company had to adjust its strategy again. They sold non-alcoholic products such as soft drinks, corn syrup, frozen egg products, and even truck bodies.
Pabst Brewing Company, based in Milwaukee, Wisconsin, also diversified its product offerings during Prohibition. They created a processed cheese called Pabst-ette, selling over eight million pounds. Additionally, they entered the dairy business and began producing ice cream, which remained in operation until 1985. The Yuengling family, America's oldest brewery, also opened a dairy and started producing ice cream, leveraging their massive refrigeration facilities.
Coors, based in Golden, Colorado, became the world's largest supplier of malted milk, selling to soda fountains and candy companies. They also invested in the pottery business, and the Coors Porcelain Company still manufactures ceramics and industrial products today.
Breweries played a significant role in providing the equipment and ingredients necessary for homebrewing. They produced malt syrups and yeast, which, when combined with water and properly aged, resulted in a passable beer. Vineyards also contributed by producing raisin cakes, dried grape bricks that came with labels cautioning they would "ferment and turn into wine." These products allowed individuals to make wine and beer for personal consumption, exploiting a loophole in the legislation that permitted "non-intoxicating" home wine production.
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Some companies exploited loopholes to sell alcohol indirectly
During the Prohibition era, companies exploited loopholes in the law to sell alcohol indirectly. The Eighteenth Amendment prohibited the manufacture, sale, and transportation of intoxicating beverages, but it did not outlaw the possession or consumption of alcohol. This, along with other loopholes and quirks in the Volstead Act, the federal law that enforced Prohibition, allowed for the evasion of the ban.
One such loophole was that pharmacists were permitted to dispense whiskey by prescription for various ailments, ranging from anxiety to influenza. This led to widespread abuse, with people writing and filling counterfeit prescriptions at pharmacies. Bootleggers bought prescription forms from unscrupulous doctors, and in 1931, a scam involving 400 pharmacists and 1,000 doctors was uncovered, resulting in only a small number of indictments and minor fines. Drugstores became fronts for bootlegging operations, and the sale of medicinal alcohol was so lucrative that it was referenced in works such as The Great Gatsby.
Another loophole was that individual farmers were allowed to make certain types of wines for home consumption, as long as they were non-intoxicating fruit juices. Grape farmers took advantage of this by producing liquid and semi-solid grape concentrates, often called "wine bricks" or "wine blocks," which could be turned into wine by adding water and leaving it to ferment. These products were sold with tongue-in-cheek warnings, such as "do not place the liquid in a jug away in the cupboard for twenty days, because then it will turn into wine." The demand for these concentrates led to a significant increase in land cultivation by California grape growers during the early years of Prohibition.
In addition to these loopholes, the law was unclear regarding the production of wine at home, and many Americans purchased kits to make their own wine, taking advantage of the ambiguity. Home stills were technically illegal, but they could be easily purchased at hardware stores, and instructions for distilling were available in public libraries. The law inadvertently encouraged Americans to become experts in making their own wine and liquor.
The Prohibition era also saw the rise of bootlegging and organised crime syndicates, which coordinated the complex chain of operations involved in the manufacture and distribution of alcohol. Bootleggers sourced alcohol through various means, including smuggling from Canada, Great Britain, and Mexico, as well as diverting denatured alcohol intended for industrial use and "washing" it to make it potable. They also manufactured their own liquor, with stills capable of producing five gallons of alcohol in just eight minutes. Commercial stills in New York could produce 50 to 100 gallons a day, selling each gallon for $3 to $12.
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Many alcohol companies went underground, becoming bootleggers
The Eighteenth Amendment, which prohibited the manufacture, sale and transportation of intoxicating beverages, was ratified in 1919 and went into effect in 1920. However, it did not outlaw the possession or consumption of alcohol. This loophole, along with others, allowed people to continue drinking and led to the emergence of a black market for alcohol, comprising bootleggers, speakeasies and distilling operations.
The Volstead Act, which enforced Prohibition, allowed individual farmers to make certain wines "on the legal fiction that it was a non-intoxicating fruit juice for home consumption". Grape farmers and companies took advantage of this, selling grape concentrate with a "warning" that if dissolved in water, it should not be stored away as it would "turn into wine". Home-distilled liquor, known as "bathtub gin" in northern cities and "moonshine" in rural areas, was also common.
The law's failure to stop people from drinking, along with the rise of organised crime and the economic impact of the Great Depression, led to the disbandment of Prohibition at the federal level by the Twenty-first Amendment in 1933.
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Some alcohol companies went out of business
The Eighteenth Amendment, which prohibited the manufacture, sale and transportation of intoxicating beverages, was ratified in 1919 and went into effect on 19 January 1920. While the Amendment did not outlaw the possession or consumption of alcohol, it had a devastating impact on the alcohol industry.
The nationwide moratorium on alcohol sales led to the closure of saloons and breweries, causing significant economic disruption and job losses. The beer industry, centred around German-Americans, attempted to resist the prohibition laws, but their efforts were ultimately unsuccessful. As a result, many alcohol companies were forced to shut down or transition to producing non-alcoholic beverages.
The prohibition era also saw the rise of organised crime syndicates, which coordinated the complex chain of operations involved in the illegal manufacture and distribution of alcohol. Bootleggers, speakeasies, and distilling operations emerged to meet the demand for alcohol, often with ties to criminal gangs. Some brewers and distillers collaborated with these gangs, providing them with alcohol in exchange for cash.
While some alcohol companies managed to adapt and survive by exploiting loopholes in the law or transitioning to new products, others were not able to weather the prohibition storm. The exact number of businesses that went under during this time is unclear, but it is safe to assume that the prohibition era dealt a significant blow to the alcohol industry, leading to the closure of many companies that were unable to adapt to the new legal landscape.
In addition to the economic impact, the prohibition era also had social and cultural consequences. The closure of saloons and public drinking establishments led to a shift in social norms, with women becoming a new target demographic for alcohol marketers as social attitudes towards women's drinking evolved.
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A few companies switched to selling non-alcoholic products
During the Prohibition era, some companies that previously sold alcohol switched to selling non-alcoholic products. For example, some brewers began producing soft drinks, "cereal" drinks, and other legal beverages.
The Volstead Act, which enforced Prohibition, allowed individual farmers to make certain wines under the legal fiction that it was "non-intoxicating fruit juice for home consumption". This led to a surge in demand for grape concentrate, which could be easily turned into wine at home. Companies sold this concentrate with a warning that instructed buyers not to leave the liquid "in a jug away in the cupboard for twenty days, because then it would turn to wine".
Some companies that sold alcohol before Prohibition became bootleggers, manufacturing or smuggling alcohol illegally. For example, Roy Olmstead, a former Seattle Police lieutenant, became known as the "King of the Puget Sound Bootleggers". He smuggled liquor from Canada with the help of his Canadian wife, Elise, who read coded children's bedtime stories on their radio station to communicate with rumrunners.
However, not all companies that sold alcohol chose to break the law. Some switched to selling non-alcoholic products, such as soft drinks or cereal beverages. For example, Charles R. Walgreen, the founder of Walgreens, is speculated to have expanded his business from 20 stores to 525 stores during the 1920s due to the sale of medicinal alcohol.
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Frequently asked questions
The Eighteenth Amendment prohibited the manufacture, sale, and transportation of intoxicating beverages, causing a massive drop in the economy and leading to the unemployment of thousands of workers. Alcohol manufacturers, distilleries, and breweries were the first to be impacted. The liquor market was almost completely destroyed, and the government lost out on tax revenue from alcohol sales.
Many companies pivoted to selling products that could be used for making alcohol at home, such as gallon stills, bottles, malt syrup, and corn sugar. Some companies sold grape concentrate with warning labels that listed the steps to avoid to prevent the juice from fermenting into wine. Bootlegging and the black market for alcohol also became more lucrative, with some companies manufacturing alcohol and smuggling foreign-made liquor into the country.
Prohibition had both positive and negative social impacts. On the positive side, it reduced per capita alcohol use and alcohol-related harm. It also increased social acceptance of women drinking in semi-public environments, such as speakeasies. However, it also led to a decline in amusement and entertainment industries, with restaurants, theaters, and clubs losing business as they could no longer sell alcohol. Additionally, the trade in unregulated alcohol had serious consequences for public health, with thousands of Americans dying each year from tainted liquor.
