The craft beer
industry grew at a euphoric rate of
50 percent in both 1994 and 1995,
spurring some regional brewers --
 heady as prom queens with their
local popularity -- to rush their products into new markets. But when
 growth stalled in 1997 and 1998, many
retreated to their home states and
the comforting loyalty of customers
in their own backyards.
 

The craze in the 1990's for craft-brewed beers with a variety of tastes
(and names) suddenly jammed store
aisles with fanciful brews like Laughing Skull Bohemian Pilsner, Long Trail
Double Bag Ale, Rogue Shakespeare
Stout and Pig's Eye Pilsner. For consumers used to basic labels like Coors
and Bud, it was a bit much. Some
microbrewers collided  with distributors who refused to carry their products and financiers who clamored for
profits even as sales slowed.

For the first time,
more microbreweries in the United
States closed last year than opened.
And more bottles will head for the
clearance shelves this year.
 Local brewers like Bristol, Middlesex, Pilgrim and
Old Newbury have all closed their
doors.

 There have been a handful of closings in New York as well. In upstate
New York, where the trend was slow to dig in, there are about a dozen
working microbreweries, including  Brewery Ommegan    in Cooperstown, which opened in 1998, and Flying Bison  in Buffalo, which began brewing last year.
 

  Even very good beer makers ran
into problems. Some, expecting the
euphoria of the beer craze to continue, poured borrowed money into
beer-making and were caught with a
lot of shiny equipment to make too
much beer for too few drinkers. Catamount, Vermont's first microbrewery, completed a $5 million
dollar plant just as growth began to
top out. It closed last month.

 The Frederick Brewing Company
of Maryland found itself in a similar
predicament in 1997. It built an $8
million beer-making plant with a
100,000-barrel annual capacity, but
wound up producing only about
32,000 barrels there. Last year,  Frederick was bought by the Snyder International Brewing Group of Ohio.
 
 

  But those craft brewers that lived
through the shake-up -- and there
are many -- are telling a tale of
leaner, more economical brewing,
more conservative growth and more
thoughtful business plans. They are
taking a breather before making another, more sober run on the American beer market, which is dominated
by three companies that have 80 percent of the market: Anheuser-Busch; Miller Brewing; and Coors.
 

  Some have been blissfully unaffected by the turmoil New Belgium
sales were up more than 40 percent
last year. Sierra Nevada, the second-largest craft brewer in the United
States, has grown right along since
its founding in 1981, increasing its
sales nearly 15 percent last year and
26 percent the year before.
 
 
 

  There are still over 420 small
brewers in the United States -- up
from about 200 in 1994 -- and their
stories are as varied as their labels.
Together, sales at four of the largest
specialty brewers -- Boston Beer,
Pete's Wicked,Redhook, and Pyramid -- fell 24 percent between 1996
and 1999. Yet half of the top 50 craft
brewers had double digit sales
growth last year.