How the Beer to Have with Dinner got the Ball Rolling
Matthew Reich’s goal for his New Amsterdam amber lager in the summer of 1982 was fairly modest.
Here it was in a nutshell, according to the business plan that the Hearst Magazines executive and wine aficionado drew up: “To sell 4,000 cases per month by the end of the first operating year; 6,000 cases per month by the end of the second year; and 8,000 by the end of the third year.”
Reich’s New York City concern ended up averaging more than 8,000 cases by its second year. Within five years, he and investors opened a gorgeous, 110,000-square-foot brewpub in Manhattan’s West Chelsea neighborhood. It had a capacity for some 30,000 barrels—or roughly 413,000 cases.
New Amsterdam, and the Old New York Brewing Co. Reich set up to run it, was a roaring success.
Beyond the commercial numbers, though, the startup that started up 35 years ago ended up having immense influence in the then-toddling world of microbrewing.
For one thing, the way Reich went about it would serve as a model for many others.
Reich originally expected to raise $350,000 to start a brewery in New York City, which had lost its last one, Rheingold, in 1976. He approached Joseph Owades, a respected consultant and biochemist best-known for inventing the recipe for modern light beer, and explained his plans.
When Reich got to the part about $350,000 in funding, Owades cut him off. That would not be enough to launch a brewery in New York City, much less expand it were it successful.
But there was another way, Owades explained: contract brewing. Reich could hire one of several regional breweries operating under capacity to brew his New Amsterdam. There were plenty that had the room—American brewing was in a period of rapid consolidation, with the bigger players getting bigger and pretty much everyone else losing business.
So that’s what Reich did. He approached the then-struggling F.X. Matt Brewing Co. in Utica, N.Y., to brew the amber lager he and Owades developed.
By the fall of 1982, Reich and a tiny sales force would be marketing New Amsterdam to Manhattan bars, restaurants and specialty grocers. From that point, its influence grew that much more immense because the marketing proved so successful.
“It’s the beer to have if you’re having one. With dinner.” That was Reich’s pitch—the pause between “one” and “with” deliberate—an appeal to consumers to see his more expensive lager as worthy of the price, a culinary experience as much as a beer to drink.
It was a positively revolutionary approach to selling beer in America in the early 1980s, especially on the East Coast, which was geographically and chronologically far removed from the older startups on the West Coast such as Anchor Brewing and Sierra Nevada.
Reich’s approach attracted not only consumers, but entrepreneurs interested in following in his footsteps. These included Jim Koch of the Boston Beer Co. as well as Steve Hindy and Tom Potter of Brooklyn Brewery. These eventual brewers not only pitched their wares in much the same way Reich did, they also contract brewed much of their beer (in the case of Hindy and Potter, at F.X. Matt in Utica).
New Amsterdam, the brand and the brewpub, would peter out by the early 1990s. The costs of doing business in New York proved too high; and the startups that New Amsterdam inspired ate into its marketshare—a marketshare that was supposed to grow slowly to maybe 8,000 cases a year.
Tom Acitelli is the author of The Audacity of Hops: The History of America’s Craft Beer Revolution and the forthcoming Whiskey Business: How Small-Batch Distillers Are Transforming American Spirits. He is at work on a biography of Michael Jackson.