Describing the early years of the brewing industry in Texas is difficult since few records are available that detail Texas industries before the end of the Civil War. The breweries that were in operation were home breweries or small, local operations, generally in areas inhabited by large numbers of Germans. Before 1840 the beers produced in the United States were principally top-fermented brews that did not need aging or maturing. These were ales, porters, and stouts and were brewed mainly by British immigrants with recipes they brought to America. About 1840, German immigrants in Texas and throughout the United States had begun expressing their preference for lager beer, which was brewed with a bottom-fermenting yeast that used secondary fermentation. It had to be aged at a cool temperature for four weeks to nine months. The majority of the Texas breweries built during this period brewed only lager beer. Since there was little artificial refrigeration or mechanization in Texas before 1860, almost all beer was brewed in the cool months. It was usually stored in some form of cool cellar until the aging was completed. The small breweries used only hand-operated brewing equipment. The limited capabilities of these breweries usually required no more than four workers. The 1850 census population schedule listed nineteen brewers and distillers in Texas. However, the 1850 manufacturing schedule did not list any. This indicates there were people who considered themselves to be in the brewing business, even though they operated only small home breweries.
William A. Menger's Western Brewery (1855–78), located on Alamo Square in San Antonio, is usually considered the first commercial Texas brewery. By its last year of business in 1878, it was the largest operating brewery in Texas. In 1859, Menger also opened a very popular hotel next to his brewery. The Menger Hotel still contains the large cellar, constructed of three-foot-thick stone walls, that was used to chill the beer produced by the brewery. The cellars were cooled by the Alamo Madre ditch that flowed through what is now the patio of the hotel. Menger hired Charles Degen as his brewmaster. When Menger died in 1871, Degen continued with the brewery until it closed in 1878. The 1860 population census listed eleven breweries in Texas. Houston had three that were producing an estimated total of 4,300 barrels of beer annually, and two of the three were powered by steam engines. One of the San Antonio breweries was producing both a lager and a bock beer, and was probably doing its own malting. All of the breweries were located in areas of sizable German population, except for those in El Paso and Nacogdoches. The number of Texas breweries had increased to twenty-seven by 1870. They were all small and continued to be in areas with large German populations. Dallas, La Grange (Fayette County), and Brenham each had two breweries; others were located in Jefferson, Paris, Sherman, Austin, Industry, Hallettsville, High Hill, Waco, Marlin, Bastrop, Bellville, Victoria, San Antonio, Castroville, Fredericksburg, and New Braunfels. Houston was the leader in the state with three breweries. The 1870 census also indicated a total of seventy-seven employees in the breweries. Only four of the breweries were equipped with steam engines.
The period between 1870 and 1890 witnessed a rapid growth and decline in the Texas brewery industry. In 1875 the Brewers License Tax Records of the Internal Revenue Service indicated that there were forty-four breweries licensed to sell beer. The number of breweries increased to fifty-eight in 1876, with a production of 16,806 barrels. Beginning in 1877, however, the number of Texas breweries steadily declined. In 1879 there were twenty-seven, with a total production of 7,749 barrels. The decline continued throughout the 1880s. By June 1889 the state had only eight breweries operating. The largest in 1878 was Menger's Western Brewery of San Antonio with a production of 1,666 barrels a year. It was followed by the G. F. Giesecke and Brothers Brewery of Brenham (1,137 barrels), the H. L. Kreisch Brewery of La Grange (774), and the Lorenz Zeiss Brewery of Brenham (722). The smallest documented brewery, owned by W. F. Both and Company of Weatherford, sold forty-nine barrels in 1878. Total production for all of the breweries in the state that year was 10,050 barrels. The decline of the industry was caused by a combination of factors of the free enterprise system. National breweries, such as Anheuser-Busch of St. Louis, came to Texas with a superior product that sold at a competitive price. The national breweries could afford improved brewing and packaging techniques and massive advertising campaigns. In addition, Texas breweries were undercapitalized and did not have the financial or production capabilities to compete with the national breweries.
The year 1883 proved to be the turning point for a competitive Texas brewery industry when Adolphus Busch took his technology to San Antonio and with a group of San Antonio businessmen built the first large, mechanized brewery in Texas. The Lone Star Brewery (1884–1918) produced its first beer in 1884, when the total Texas production increased to 3,083 barrels. Production had an even larger increase in 1885, when it jumped to 17,246 barrels. The Lone Star Brewery used the same principles as the national breweries, which forced some smaller breweries out of business. Lone Star built a modern plant with the latest equipment. It had its own bottling plant; and it transported beer by wagon and railroad throughout most of Texas, into Mexico, and as far west as California. The Lone Star Brewery prospered until Prohibition with sales of as much as 65,000 barrels of lager beer annually, marketed under the labels Buck, Erlanger, Cabinet, Alamo, and Standard. The brewery did not reopen its doors after Prohibition. The name, Lone Star, however, was used taken up by another San Antonio brewery in 1940. The only other large brewery to start in Texas in the 1880s was the San Antonio Brewing Association. A group of San Antonio businessmen purchased the existing J. B. Behloradsky Brewery (1881–83) and started producing Pearl Beer in 1886. In 1916 Pearl was the largest brewery in Texas, with a capacity of 110,000 barrels a year. Otto Koehler managed the brewery until his death in 1914, when his wife, Emma, took over management and guided the brewery through the lean Prohibition years of 1918 to 1933. Besides the Pearl and Lone Star Breweries, the only other breweries in operation in Texas in 1890 were a few small, locally operated enterprises that were sustained by loyalty, low prices, and fresher products. These breweries included the Herman Frank Home Brewery in Belleville (1882–1918), the Simon Mayer Brewery in Dallas (1895–1900), the Dallas Brewing Company in Dallas (1889–93), the Texas Brewing Company in Fort Worth (1890–1918), the Frederick Probst Brewery in Fredericksburg (1874–95), the Gustave Franke Brewery in Meyersville (1884–1903), the Felix Bachrach Brewery in San Antonio (1890), the Charles Degen Brewery in San Antonio (1879–1911), the Alamo Brewing Association in San Antonio (1888–93), the Lorenz Ochs and George Aschbacher Brewery in San Antonio (1890–1904), and the Michael Cellmer Brewery in Yorktown (1878–91). Of the thirteen Texas breweries that were operating in 1890, only Lone Star, the San Antonio Brewing Association (Pearl), Herman Frank, the Dallas Brewing Company, and the Texas Brewing Company in Fort Worth survived intact until Prohibition in 1919. Of those five, only the San Antonio Brewing Association and the Dallas Brewing Company made beer after Prohibition. The breweries that did manage to survive until 1918 concentrated on serving local markets, maintaining low overhead, and producing superior beers.
On January 16, 1919, national Prohibition forced thirteen Texas breweries to stop the legal production of beer. Of these, eight were large, regional breweries, and the other five were small breweries that served a local market. Breweries either closed their doors or switched to the production of nonalcoholic beverages such as sodas or "near beers." The Galveston Brewing Company (1895–1918) was one of the few regional breweries that survived Prohibition. Adolphus Busch and William J. Lemp of St. Louis were both major stockholders of the corporation that raised $400,000 to found the Galveston Brewing Company in 1895. The brewery formally began operations on February 3, 1896. The pre-Prohibition physical plant consisted of a large ice plant that could produce seventy-five tons of ice, and a modern brewery that could produce 75,000 barrels of beer a year. The plant also had cold-storage rooms and railroad tracks on two sides of the building. The company dug several wells that gave a water supply of two million gallons a day. The Galveston brewery was so well constructed that it survived the Galveston hurricane of 1900 with only minor damage. The major product of the Galveston brewery before Prohibition was a beer called High Grade. The other popular brand produced by the Galveston brewery was Seawall Bond. The majority of the Galveston beer was consumed in Galveston and Harris counties. After Prohibition forced the legal production of beer to cease, the brewery turned to a "nonintoxicating cereal beverage" called Galvo. When this proved unsuccessful, the company removed the brewing equipment and produced soft drinks under the name XXX Company. The Galveston brewery changed owners three more times before it opened again in 1934 as Galveston-Houston Breweries, Incorporated (1934–55).Between 1890 and 1918, Texas had as many as forty-three breweries; many, however, started and ended within a few years. They either suffered from lack of capital, produced an inferior product, or could not compete with the national or large San Antonio breweries. Of the forty-three, seventeen were in San Antonio. Many were operated in the same plants under successively different names. One brewery in San Antonio changed names and owners five times in six years.
After Prohibition the number of small speciality brewers like the Galveston Brewing Company continued to decline, as national chains such as Anheuser-Busch and Miller moved into Texas. The decline in number of breweries had little to do, however, with the level of consumption or production of beer. In 1940 the per capita consumption of malt beverages, including beer, in Texas was 7.5 gallons. In 1980 it was 30.1 gallons, approximately a 300 percent increase. In 1994 per capita beer consumption was at 27.8 gallons. Texas progressed from a production rank of twenty-eighth among the states in 1878, when it had roughly thirty-seven breweries, to second place in 1983, when it had only six breweries. Those six were Anheuser-Busch, Miller, Schlitz, Lone Star, Pearl, and Spoetzl. The industry consolidation in Texas reflected a larger national trend. In 1876 the United States had more than 2,685 breweries. By 1947 that number had dropped below 500, and by 1980 there were only 90 plants operating in the United States.
In Houston, the Anheuser-Busch brewery opened its doors in 1966 with the capacity to produce 900,000 barrels a year. With the rise in consumption, the plant increased its facilities and its production levels. In 1982 it was producing 3.5 million barrels a year. The brewery, on a 126-acre site, achieved its enormous output through the use of automated equipment. In 1983 it employed about 500 people and produced such brands as Budweiser, Budweiser Light, Michelob, and Michelob Light for the Texas and Southern Louisiana market. In 1994 Anheuser-Busch employed about 1,100 people at its Houston facility. The Miller Brewing Company bought the Carling Brewing Company in Fort Worth in 1966. After a $12 million expansion, Miller began brewing its own brands in 1969. In 1975 it was the largest brewery in Texas, with an output of six million barrels. By 1979 it was producing eight million barrels. In 1983, Miller's Fort Worth plant employed around 1,600 workers. Its brands included Miller High Life, Miller Lite, Löwenbräu, and Magnum Malt Liquor. Its products were distributed to twelve states, including Alabama, Kansas, Missouri, and Hawaii. In 1995 Miller employed 1,000 people. In 1966 the Joseph Schlitz brewing company began producing a million barrels a year in its newly opened Longview facility. In conjunction with the brewery the company also opened an aluminum-can plant in 1974. The combined payroll of the two in 1981 was over $24.3 million. Stroh Brewery bought out Schlitz in 1982 but continued to produce beer under the Schlitz label. The Lone Star Brewing Company, which opened its doors in 1940, began producing the "national beer of Texas" after owners acquired the Lone Star Beer copyright. They produced 39,000 barrels in their first year of production. Lone Star is currently marketed in Texas, Louisiana, Arkansas, and New Mexico. The brewery is noted for developing the milipore filter system, which made nonrefrigerated draft beer feasible. In 1976, the Olympia Brewing Company of Washington state bought the brewery. In 1983, Olympia sold Lone Star to Heileman Brewing Company of LaCrosse, Wisconsin. In 1981 the brewery produced 1.5 million barrels of Lone Star, Lone Star Light, and Buckhorn. In 1995 Lone Star had 230 employees. The Pearl Brewing Company, originally the San Antonio Brewing Association, is one of the oldest breweries in Texas. In the 1960s and 1970s the company acquired Goetz Brewing of Missouri and merged with Southdown Corporation of Houston. These changes allowed Pearl to move into national markets. It expanded its product line by buying the formula and label of Jax beer, a popular New Orleans product. In 1981, Pearl's 1.8 million barrels of beer was distributed in forty-five states. The company employed 535 people at its San Antonio facility. As of 1995 Pearl employees numbered 350 and production was 1.1 million barrels. In 1995 S&P Company of Mill Valley, California, owned Pearl, which makes Pearl, Pearl Light, Jax, Falstaff, and 900 Malt Liquor. The Spoetzl Brewery, started in 1909 by the Shiner Brewing Association in Shiner, was operated by the Spoetzl family from 1914 to 1966, when it was sold to William Bigler of San Antonio. It was sold again in 1984 to a consortium of native Texans. In the 1970s and 1980s the brewery's Shiner Beer and Shiner Bock had less than 1 percent of the Texas market. Following the tradition of its founders, Spoetzl continued to utilized more manual labor than the larger plants. In 1983 Spoetzl produced 60,000 barrels of beer. The fortunes of the company took a downturn in the late 1980s; production was only 36,000 barrels in 1990. Sales and production improved after Carlos Alvarez of San Antonio purchased the brewery in 1989. Improved marketing techniques and changes in consumer tastes brought production to 100,000 barrels in 1994. Spoetzl brands include Shiner Premium, Shiner Bock, and Kosmos Reserve Lager. Spoetzl beers are distributed in Texas and fourteen other states.
In addition to these large breweries, Texas also has several "microbreweries," i.e., businesses that produce less than 75,000 barrels a year. The first microbrewery in Texas, the Reinheitsgebot Brewing Company, opened in Plano in 1982 and produced the Collin County Pure Gold and Collin County Black Gold beers. In 1995, they included Frio Brewing and Yellow Rose Brewing in San Antonio, Saint Arnold Brewing Company in Houston, and the Texas Brewing Company in Dallas. The Dallas plant operated on the site of the historic Dallas Brewing Company (1890). Hill Country Brewing was in Austin, as was the Celis Brewery, which distributed their beers in more than thirty states and in Europe. In the 1990s, a revival of small, regional breweries was initiated with the passage in 1993 of a law that allowed restaurants and bars to produce and sell on their premises their own brews. The eighteen brew pubs operating in 1995 were legally classified as retail businesses rather than breweries. Brew pubs are allowed to sell up to 5,000 barrels a year. Though they may sell it at their establishments, they may not distribute it through retail outlets.