How Distilleries Thrived or Faltered During the Era of Prohibition

Introduction

The era of Prohibition, spanning from 1920 to 1933, was a tumultuous period for the American distilling industry. While some distilleries went out of business, others managed to adapt and even thrive. This article explores the strategies employed by distilleries during this time and the long-term impacts of the Prohibition era.

Strategies during Prohibition

Going Out of Business or Going into Hiding

For many distilleries, the most common approach was to cease operations or temporarily relocate. When prohibition meant the end of legal alcohol production, many distilleries simply shut down. Others sought to stay under the radar by continuing to distill liquor but keeping it on the down-low, away from the eyes of law-enforcement.

Medicinal Alcohol Licenses

A relatively small number of distilleries found a way to survive by obtaining licenses to sell medicinal alcohol. However, these early medicinal producers initially faced restrictions. Not until the late 1920s did the government allow these distilleries to resume normal production, which was a significant breakthrough.

International Shoppers: Bootleggers and Canadian Imports

Bootlegging and imports became key roles for a few distilleries. Some, like those in Scotland, had to leave their core markets entirely as the US represented a major part of their customer base. Imports from Canada and Mexico helped sustain some of these operations during the dry spell.

Impact on Industries and Communities

Phenomenal Economic Backlash: Prohibition and the Corn Belt

The economic effects of prohibition extended far beyond just distilleries. The corn belt, once considered a wasteland, became a major producer of corn whiskey, driving down its prices and exacerbating consumption. Cheap corn whiskey was sometimes even cheaper than water, leading to a staggering increase in consumption rates.

Tragic Loss: Apple Orchards and Distilled Ciders

Prohibition also had a significant impact on orchards and cider production. It was common practice to pay laborers a portion of their wages in cider, leading to the loss of many apple strains specifically developed for cider. This loss is a profound example of how economic policy can impact agricultural diversity and heritage.

Long-Term Recoveries and Innovations

Medicinal Alcohol Restricted Licenses and Failures

Only a handful of distilleries were initially allowed to sell medicinal alcohol, but these licenses came with restrictions. Most distilleries eventually sold off their equipment or merged with others. Some distilleries, like Jim Beam, explored other ventures that ultimately failed but left legacies in the industry.

National Distillers’ Innovative Approach

In contrast, some distilleries like National Distillers, saw opportunities in stockpiling aging alcohol. This foresight paid off handsomely when Prohibition was repealed, as these companies were able to hit the ground running while others faced setbacks due to the aging process.

The Beam Family’s Legacy

The Prohibition era did not merely mark the absence of distilling; it reshaped the industry. By the 1930s, the repeal brought about a period of recovery, where many distilleries, including those in the Beam family line, emerged dominant in the Kentucky bourbon industry.

Conclusion

The era of Prohibition was a complex and transformative time for the distilling industry. While many distilleries struggled or even disappeared, others adapted and thrived. This period is a testament to the resilience and ingenuity of the industry, and its lasting impact reverberates through American history.