Today, beer is considered to be any fermented beverage that has as its main ingredients malt barley, hops, yeast and water. Certainly, it is possible to use other ingredients, such as wheat, corn, rice, and sorgum, among others. However, on principle, the term beer alludes to the fermented beverage of a malt of barley, with an addition of hops for the characteristic aroma and bitter taste and eventual other ingredients, like sugar and salt.
Beer throughout the ages
The acceptance that beer has gained with Dominicans developed over various periods of national historical processes. The history of Dominican beer is characterized by ideological and economic stages. Its consumption has varied depending on the processes of modernization that have brought about the adoption of institutions, concepts and economic procedures utilized in the principal countries of the Western world. Since the 19th century, its production was considered an indicator of the arrival of favorable industrialist trends.
The beginning of beer making in the Dominican Republic, at the end of the 19th century, connected with the use of ice. Soon the association brought about a rejection of the previous ways to consume beer and a preference for a cold beverage, giving birth to the moniker “la fria” (a cold one) in the popular vernacular. Dominicans prefer it almost at freezing point, whose proof is the “ceniza”, or frost, on the bottle. Also, Dominican beer barely foams when served, as its consumers have popularized the style of serving the beer slowly, tipping the glass.
Many centuries before the arrival of the Europeans to America, the native people of the Antilles produced a type of beer based on yucca and corn fermentation. It was consumed by the Tainos exclusively for festivals, areítos, which were quite frequent. Production of this beer ceased some time after the Spanish conquista due to the loss of pre-Hispanic cultural traditions among those born after it. Apparentely, the Spaniards in Santo Domingo did not take interest in consuming the indigenous beer.
Little is known about the beer consumption of the Dominicans of that period. It is probable that only reduced quantities of beer entered Santo Domingo and Monte Cristi, where foreign markets had been established.
After the Treaty of Basel of 1795, in which Spain ceded its possession of Santo Domingo to France, an opening in international trade occurred, between 1809 and 1821, and during the Haitian domination, between 1822 and 1844, during which very little information on beer appears. There is no doubt that the permanent establishment of foreign traders introduced the consumption of the drink in the Dominican Republic. The beverage’s popular consumption after 1835 was restricted to a very limited urban sector, as beer was considered a luxury item.
Around 1865, the majority of beer sold was English (one of the most consumed of the period) and German. Around 1872, and only on some occasions, mentions of brands began to appear: Bobée, Tennents and Allsopp.
At the end of the 19th century, the foundation of the sugar refineries definitively inserted the Dominican economy into international economic circuits, increasing the import capacity of goods of consumption, which in turn improved the national economic dynamic. The correlation between economic growth and the increase in beer consumption was clear. From then on, beer consumption continued to grow; in periods of economic growth it accelerated; in economic decline, it too tended to decrease. As a result, the information on merchant ship cargo arriving to Dominican ports began to feature beer repeatedly, especially on those ships from Germany.
The First Dominican Brewery
In order to promote local investments, the governments of the last decades of the 19th century decided to launch a policy of concessions, granting fiscal privileges to investors, sometimes by exemption from customs taxes and other times by direct income subsidies.
In keeping with the level of beer consumption, it was logical that the establishment of a factory for its production drew interest. The first resolution of the Dominican State for the concession of a beer factory was granted in 1882 to the French engineer G. Petitpierre Pellion. There are no subsequent mentions of this project, as the concession recipient never found an interested investor. A few years passed before another request for a for beer production concession was filed. It was in 1890 when the U.S. citizen Simon J. Flatow obtained a concession from the Dominican Government for beer production. The concession was requested in favor of a company recently founded in the United States, the New Jersey & San Domingo Brewing Co. The company changed its name to “Gran Fábrica de Cerveza Nacional” and was widely favored with donated lands and important ceremonies. In addition to its majestic building – without precedent in the country – the factory, located in Ciudad Nueva, enjoyed distinction for its tank, with a capacity of 30,000 barrels of 50 gallons or rather, 1,500,000 gallons.
It sold beer to the public in the first week of July 1893 and enjoyed great loyalty from its consumers. However, the company passed through a lack of resources and did not manage to find new contributions of capital that would allow it to maintain a convenient rhythm of production. After a loan, in July 1893, it re-launched the production under the brand Cerveza Nacional, but it seems that the quality did not meet the expectations of the public. The company functioned from the middle of 1893 until the end of 1897.
In 1905, we have the first figures of beer importation on a national level, in dozens of bottles: 25,563. Between 1909 and 1929, beer importation went from 372,000 liters to almost 1,700,000, with a 7.9% average annual growth rate. The prosperity created by the outbreak of the First World War, due to the increase in the price of sugar and other exports, raised beer consumption significantly. This situation prepared the conditions for local beer production on a larger scale, which would prove to be a lasting development.
The German predominance in imports indicated that the majority of beer drinkers continued to prefer beers with a strong taste, as were the most common beers of the country. These preferences set the basis for the beer that the Cervecería Nacional Dominicana would produce from 1929 on.
Among the brands of beer that were consumed in that period, Favorita, Caballo, Machete, Boya, Spatten, Guinness, Schlitz, Budweiser and Pabst were the most common.
The founding of the Cervecería Nacional Dominicana
The governmental policy that preceded the founding of the Cervecería Nacional Dominicana was a definition of the convenience for the country to produce beer as a mean of foreign currency savings.
The North American businessman Charles Wanzer, founder of the Cervecería Nacional Dominicana, understood this governmental vision and decided to embark on the project, judging possible the installation of a plant for beer production in the country. Wanzer and Edward Paine acquired the old Cervecería Palma Real, whose proprietor was the Spaniard Teódulo Llamas, and injected capital for its expansion.
In a private signing before notary Emilio E. Ravelo, in the city of Santo Domingo, March 11, 1929, the Cervecería Nacional Dominicana was formally established. The social capital of the company was fixed at 10,000 dollars, divided into 100 stocks of 100 dollars. The officials designated to the Administrative Council were the following: President, Wanzer; Vicepresident, Milton S. Briggs, businessman from New York; Secretary, Julio Ortega Frier, local attorney of the company; Sub-Secretary, Nelson Gammans, attorney from New York; Treasurer, Edward Paine, banker from Woodmore, Long Island; and Vice-Treasurer, H.B. Senior, Santo Domingo businessman. Another member, J.B. Whitworth, was added, a U.S. businessman based in Santo Domingo.
From the beginning, Charles Wanzer thought that, to make the brewery project successful, he would have to achieve a penetration of the Dominican market to the extent that the population would consider it part of the country and would not visualize it as a foreign company. Also, he saw product quality as the key to the project’s success. For this reason, he placed emphasis on the acquisition of materials of superior quality. At the very least, the hops was an important addition, which was, from the outset, acquired in Czechoslovakia, and commonly considered the best in the world. Excellence was pursued to later explore the competitive possibilities and to export to neighboring countries.
It is evident that, for the moment of its creation and the characteristics of its founder, Trujillo used Wanzer for power with organizations in the United States. Wanzer, in this way, protected his investment and eventually obtained support from the Dominican Government. However, fundamentally, the CND did not need special state support, as it operated as an efficient business that closely followed the legislation of the day.
The launch of the Colón and Reina brands
In the days before the elections of May 16, 1930, the imminent launch of Colón beer was announced, the first brand of the Cervecería Nacional Dominicana. Colón received a cold welcome, as its aim was to compete with the rum market. The percentage of alcohol of Colón received many negative critiques, as it was judged to be excessive. Those with sufficient resources continued to prefer imported brands. Generally, until the 1940s, nationally produced beer was typically consumed by those seeking low prices.
Quickly recognizing the limitations that welcomed the Colón brand, in a few months the CND introduced a new brand, Reina. While it had a more positive reception than the first, it still did not overcome the imported brands.
Presidente, at last!
No matter the wider acceptance of the Reina brand, the CND management thought it prudent to further improve the quality of the beer, a labor assigned to Henry William Gronau. There was immediate consensus that this third brand was far superior to the two previous. From the moment Presidente, a type of Pilsner, was launched in 1935, CND retired the Colón brand from the market. On the other hand, Reina endured until the end of 1940 and into the beginning of 1941. The public imposed its preference for one type of beer, which Presidente embodied. From then on, the new brand enjoyed success and acceptance among people of all social and cultural statuses.
At the start, the majority of local beer production operations functioned manually. Toward the end of the 1930s, this production experienced sweeping changes. The process can be quickly summarized, in a period of ten years. Production went from a plant relying on manual labor to a process of semi-automatic labor, with various departments connected through distribution chains.
The social acceptance of beer spread spatially, passing from the principle urban centers to a gradual acceptance in small cities, towns and rural areas.
From the establishment of CND, publicity was at the heart of its strategy. In spite of its status as a company with limited resources at its start, it always introduced its brands with an impressive public display. From the start, it made clear its interest in convincing the Dominican public that CND was a Dominican company, though the majority of its shareholders were from the United States.
The industrial complex of Trujillo
After World War II, the dictator centered his industrial program on the sugar sector, founding various massive industrial companies, which provoked a change in the very economic structure of the country. It was inevitable that, in one way or another, as a part of his voracious appetite for control of all economic activities, Trujillo attempted to take part in the growing beer business. The relations of Trujillo with the CND were tinged with political considerations that obligated him to behave in a manner different from his typical conduct with the majority of Dominican property owners. However, after a certain time, Trujillo was interested in participating as a shareholder of CND, a proposal that was rejected by Wanzer. This rejection caused Trujillo to authorize the creation of a rival company. Trujillo was an important stockholder in the Sociedad Cervecera Antillana from the first day; he had chosen this route to involve himself in the world of beer, though he did not own the majority of the stock.
La Dominicana and Cibao brands
The Sociedad Cervecera Antillana, the new company known as the company of Ramfís Trujillo, came out with two brands, La Dominicana and Cibao, both with the same content: only the label was changed. The product had less bitterness in its flavor than Presidente, which pleased a sector of the population. However, Presidente always maintained the favor of a large percentage of the public, which was accustomed to its flavor and found the flavor of the new brands to be too smooth. It is possible that at its peak, the SCA occupied 50% of the market, or perhaps even more, which represented an impressive success for a recently established company.
War with the CND and the Transfer of the SCA to the CND
Among the mechanisms of the SCA created to lower the consumption of Presidente, it found the ploy of exclusive sales to the largest possible number of businesses. Agents of the Trujillo regime began to visit the places where beer was sold in order to intimidate those that bought Presidente. But the customers resisted, convinced that no beer was comparable to Presidente, which in turn became a form of resistance to dictatorial power. The business owners responded by using tricks against the regime, relying on the complicity of their clients: they offered La Dominicana up front to prevent any reprisal from the regime, but continue selling Presidente under the table.
Suddenly, by order of the Chief, the intimidation campaign ceased. The company prepared itself to create a new product that could recover the public interest; from that effort, the Pilsener brand emerged. It was launched in the middle of 1952, with a display of intense but ineffective propaganda. It was already too late: in the eyes of the public, SCA products fell irremissibly short of the Presidente brand. Trujillo put the company up for sale by merger with CND, where he would remain a minor shareholder. Acquired by CND, SCA immediately fell subject to the managerial regulations of the former. La Dominicana and Cibao were scrapped and the new brand Pilsener was marketed exclusively, which came to be more widely known by its nickname, Banda Blanca.
The state of CND on its thirtieth anniversary
Throughout the 1950s, CND experienced considerable technological transformations in parallel to dynamic growth in beer consumption in the country. The total beer sales doubled in less than a decade, rising from 3.1 million Dominican pesos in 1950 to almost 7 million in 1958. In 1930, the company had around 40 employees, while in 1958 it had surpassed 400. The paid investment of barely 10,000 pesos in 1929 reached 3 million by the early 1950s. But the evolution of sales illustrates the point more effectively: from 50,000 crates annually, sales reached 680,000 in 1954 and 105,000 in 1958. The situation also highlighted beer production’s impact on the country’s fiscal system. In the 1930s, no more than 50,000 pesos were paid in taxes during the 1930s, while the sum surpassed 3 million in 1958, an amount that represented approximately 2% of the total fiscal income.
Beer after Trujillo
The death of Trujillo, May 30, 1961, marked the beginning of a new era. The level and quality of life of the population, in general, notably improved after the fall of the dictatorship. After three years of economic stagnation, a phase of growth began that ever surpassed the period experienced in the post-war years. In 1962, along with the country, the beer market entered into an expansion phase.
After the civil war of April 1965, the Dominican Republic faced one of the most conflictive situations in its history, leading to another U.S. intervention in the country. These events paralyzed the trade and industrial activities in Santo Domingo and a modicum of normalcy returned only in the last months of the year. Like nearly all businesses, CND had to temporarily pause its activities. Its closing was even considered. However, Dominican officials, led by Del Toro, as interim administrator, and Menicucci, took measures to normalize operations. It was not until 1968 that the total sales of CND returned to the levels of 1963-64.
A new plant: Cervecería Cibao
Cervecería Cibao was founded in La Vega on August 10, 1963 by a group of 87 shareholders. Given the impossibility of starting production for various reasons, the Cervecería Cibao management found itself obliged to enter into negotiations with beer companies of other countries to arrive at an eventual co-participation agreement. The most significant offer was made by the Bacardí Corporation, based in Puerto Rico.
In December 1967, Criolla malt was launched, as was the beer of the same name four months later. The plant was built to produce 13.8 million liters annually of light beer and 6.9 million of malt. This new product reached 47% of the sales of nationally produced beer, which represented a clear success. This situation, however, lasted but a short time. It seems that the key issue of this failure was the problem of distribution.
Cervecería Vegana, CERVESA
The next company to enter the Dominican beer market was the Cervecería Vegana, S.A. It was created in 1975 and still exists today. Casa Bermúdez lent the capital necessary to start the project and it was Poppy Bermúdez who managed it in its initial stages.
CERVESA chose the name Quisqueya for its brand that was launched September 24, 1975. Quisqueya was created with the characteristics that it still exhibits: a Pilsner lager produced with hops imported from Europe. The brand made a strong impact on its consumers for the variation in flavor as much as for the curiosity that generally surrounds the launch of a new product.
At the beginning of the 1980s, due to the difficulties that plagued Quisqueya, CERVESA decided to introduce a new brand: Brava. In 1990, it also launched the Dry brand. The company maintained this trend of innovation, despite the reserved response of its consumers. The most important landmark in this sense was Guinness, the well-known Irish brand with one of the largest plants in the world, which came to be produced under license. The Guinness produced in the country did not find the following sufficient to survive for long. And so the three brands of beer with which CERVESA initially began its diversification program were discontinued.
CERVESA signed an agreement with Labatt Breweries International, subsidiary of the Canadian company of the same name, for the creation of the Cervecería Domínico-Canadiense, which began to operate in plants in La Vega. Initially, the relationship with Labatt was restricted to local distribution of the brands of this Canadian company, one of the largest in the world. However, in 1996, the creation of the Cervecería Domínico-Canadiense brought with it the launch of a new brand, Soberana, which still exists today. It is a Pilsner whose flavor tends toward that of the Presidente brand. It had its peak moment with the public, reaching 15% of the total beer consumption. But with the passing of time, its market share has decreased.
In spite of this, Cervecería Vegana has managed to maintain a position in the Dominican beer market, though the company, for the most part, is sustained by its malt production. The Quisqueya brand has also continued, thanks to its connection with tourism in the country: the brand is supplied to the hotels in kegs. Projects of exportation have also been initiated, mainly to the United States.
The Diversification of E. León Jimenes. Cervecería Bohemia.
In the late 70s, the firm E. León Jimenes occupied an important position in the Dominican business world for its cigar and cigarette production. The company decided to diversify its activities and chose beer as its new undertaking. In this way, what would become the national company with the greatest investment since 1965 began to form. This coincided with the entry of Philip Morris into the beer field with the acquisition of Miller, one of the largest beer companies in the world. It so happened that the top executive of Miller, after its acquisition by Philip Morris, would be John Murphy, who had led the negotiations for the participation of his company in E. León Jimenes. He considered the possibility of acquiring CND, an option not welcomed by its owners. He also discarded the possibility of producing Miller in the country, which allowed E. León Jimenes to establish a new company.
On June 23, 2979, Cervecería Bohemia S.A. (CB) was created by the initiative of E. León Jimenes. Midway through 1981, a plant arrived that had been dismantled in Alaska and transferred to Santo Domingo, with the support of Miller, with a capacity of 100,000 kegs annually, each holding 117.33 liters.
CB launched its Bohemia brand, a Pilsner lager, as Dominican tastes demanded. It fulfilled expectations and not long after its unveiling in 1984, Bohemia commanded almost 25% of the market. It participated in two international competitions, in which it received wide recognition. In Spain, it won a gold medal for quality and in Italy it qualified as a brand of exceptional quality by Monde Selection.
In 1985, E. León Jimenes arrived at an agreement with Heineken, a transnational Dutch company recognized for the quality of its brands. In exchange for the license to produce Heineken in the Dominican Republic, the Dutch company would acquire approximately 10% of CB’s stock. Quickly, the Heineken brand gained the segment of the market searching for a superior product, even at a higher price.
CND took on the competition through the creation of brands. In essence, it decided to create two successive brands: Carlsberg, a world-famous Danish brand, produced under license around 1981, a surprise welcomed by the public; and, at the end of 1985, Coral, which had less body and a lighter flavor than Presidente. Coral failed: its presence on the market barely survived a year. Before this event, CND decided to start marketing Coral Light, the first light beer produced in the country. The experiment lasted little time, as consumers inclined to this type of beer still did not exist.
The take-off of Dominican beer exports
CND wanted to widen its operations through exports. It took into account the increase of the Dominican community in the United States, concentrated in New York City and also in Puerto Rico; the growth of tourism, which helped foreigners to discover the Presidente brand; and in the longer term a third factor entered: the opening of the Dominican economy to the world market. In 1984, total beer exports surpassed 2.2 million dollars.
The impact of the 1984 devaluation
After the devaluation of Dominican currency in 1984, which raised costs and made price indexing impossible, CB’s operations stumbled. In 1984, CB registered losses of four million dollars. This devaluation brought about the León family’s interest in expansion through the acquisition of a larger company, CND.
Some of the owners of CND were pessimistic about the devaluation process. In addition, due to the creation of CB, CND had lost a large percentage of the market, a great challenge for the company, despite its unarguable advantages, above all the prestige of Presidente and an impressive distribution mechanism.
Thus, León Jimenes’s intentions to expand coincided with various CND shareholders’ willingness to sell. At the end of 1985, E. León Jimenes and Heineken bought 92% of CND’s shares. Heineken’s share in Cervecería Bohemia for the local production of its brand implied that the transnational company would own 9% of the CND stock. In January 1986, E. León Jimenes took possession of CND’s plants and in 1988, Bohemia became a subsidiary of CND. After a transition process, the companies’ operations were unified.
The beer market experienced a reanimation after years of slow evolution. Between 1980 and 1985, the average annual growth for beer and malt consumption had been 7%, while in the years that followed the integration of the two companies, it reached 12%. From then on, numerous investments began, introducing improvements in productivity. For 2000, the installed capacity of both plants reached 4.2 million barrels annually, of which one half million belonged to Cervecería Bohemia and 3.7 million to CND. Therefore, in 13 years, the productive capacity of the beer area of Leon Jimenes experienced an astonishing multiplication of more than five times its original state. This expansion created an increase of more than 150% in the volume produced in the country between the years 1988 and 2000. This process of expansion has not stopped in recent years.
Since 1993, the company steadily exports its Presidente brand to United States and the Caribbean, achieving an average annual growth of 31.5%. Presidente is recognized in the United States as one of the most renowned foreign brands. Figures indicate that Presidente sales place the Dominican Republic as the Latin American country whose brands are the second-most preferred in United States market.
Impacts of beer on the Dominican economy and society
The CND contribution to the national economy is 3% of the Gross Domestic Product (GDP) and together with the Cervecería Bohemia, it nears 7% of all tributary income that the State receives. The companies generate 2,500 direct jobs and more than 65,000 indirect jobs (2003).
In the Dominican Republic, beer has been one of the products that has most affected the establishment of certain modern patterns of sociability.
Also, the CND, practically since its foundation, has been one of the companies offering the most support to sports and culture in the Dominican Republic. In addition to baseball and softball, the beer company has sponsored other sports like athletics, golf, rally races, volleyball, martial arts, soccer, fishing, boxing, water sports, basketball, cycling, dominoes, tennis, bowling, go-kart, auto racing, motocross, equestrianism, ping-pong, and amateur baseball. In cultural events, in addition to music concerts and theater events, for 15 years, CND has sponsored the Premio Casandra, unarguably the greatest honor that a Dominican artist can receive from his or her country. It also sponsors the Festival Internacional de Fotografía and the Concurso Nacional de Música de Casa de Teatro, as well as carnival parties and the famous Festival Presidente de Música Latina.
Odd facts about Beer and its history in the Dominican Republic
Taken from Raíces y Desarrollo de un Orgullo Dominicano
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