THE HEIGHT of the mania in microbrewery investment, which came three years before the crest of a similar psychosis in Internet finance, can be identified with some precision.
On Feb. 12, 1997, Frederick Brewing Co. held grand-opening rites at a big, beautiful, amber-brown factory near where Interstate 270 splits from Interstate 70 in Western Maryland.
The building would soon contain enough brew kettles, mash mixers, fermenters and bottling lines to make 80,000 barrels of beer annually. The fact that in any year Frederick Brewing had never sold more than 11,000 barrels of its Blue Ridge beers was tactfully unmentioned.
Management and public shareholders didn't see the brewery as one-seventh full. They thought of it as six-sevenths brimming with potential, primed for "capitalizing on the on the long-term growth opportunities currently facing the company," as chief executive Kevin Brannon said that day.
The only long-term opportunity Frederick Brewing ended up capitalizing on was the avoidance of bankruptcy court.
The company's beer tastes better than ever, but that is no solace for shareholders, who could buy a warehouse of 1990 Dom Perignon champagne with the money they lost. Frederick's stock, issued at $60 a share in 1996, sells for about a nickel.
But if Frederick Brewing was an emblem of the 1990s microbeer bubble, it also exemplifies today's post-boom "craft beer" industry, with leaner costs, a new capital structure, a new owner, a more-local focus and the absorption of several enemy brands.
Frederick wasn't the only microbrewery to get drunk on capital, but it may have been the most exuberant. The mid-1990s was the blow-off phase of a surge that began a decade earlier and was fueled almost exclusively by the numbers and tastes of the baby boomers.
Microbeers were the perfect boomer product: intoxicating, expensive and snobworthy, claiming pure, high-quality ingredients and made by small, supposedly local companies that presumably weren't bulldozing rainforests or selling Joint Strike Fighters through a corporate affiliate.
As in the Internet boom, when entrepreneurs vowed to transform the economy and enlighten the masses, the profit motive in the microbrew craze was frosted by a layer of philosophy.
By 1996, microbreweries had gained 2 percent of the U.S. beer market, and beer analysts - yes, there are such things - believed the figure could grow to 5 percent and beyond.
What happened to the microbeermeisters is what happens to any industry combining fantasy growth projections with willing, liquid investors. Microbrewers soon had enough tanks and tubes to serve 5 percent of the U.S. beer market, but it turned out only 3 percent wanted to buy what they were selling.
Despite a brilliant but doomed attempt to reach the pothead demographic with its Hempen Ale, Frederick Brewing went flat with the rest of the industry in the late 1990s.
The idea of putting crushed marijuana-like seeds into a malt beverage helped push the brewery's production up to about 36,000 barrels in 1998, but it turned out to be a fad product, and eventually the government banned the name anyway. A 1997 merger with Maryland's Wild Goose Brewery Inc. also boosted Frederick's volume, but it wasn't enough for a profit.
Near bankruptcy, the company ceded majority ownership to Cleveland entrepreneur C. David Snyder in 1999 in return for a dose of capital. After a rough start, Snyder, who made millions by selling technology consulting firm Realogic to Computer Associates, has shown Frederick the pain of cost control, the joy of volume and continued bailouts.
Plant manager John Niziolek thinks he may have posted a profit last month, and he hopes to crack the 40,000-barrel output level this year. A beer barrel holds 31 gallons.
The reason for the company's stabilization is not renewed demand for microbrews, although industrywide sales are still creeping up. Rather, Snyder moved production of several other beer labels he purchased to Frederick, and the plant is cooking up suds on contract for another company.
Frederick Brewing, nestled on the knee of the Blue Ridge Mountains, now makes Crooked River Select Lager, drunk mainly near Lake Erie; Hudy Delight, the pride of Cincinnati; and Little Kings Cream Ale, popular across the Midwest.
The Cincinnati factory that used to make Hudy and Little Kings is owned by Boston Brewing Co., maker of Samuel Adams Lager, which is named after a Founding Father who never got near Cincinnati and probably didn't know what a buckeye was.
This is capitalism. When supply doesn't equal demand, the market reallocates assets to the places and owners where they can do the most good, steamrolling a few hopes, illusions and ideals but leaving the survivors stronger with better products.
Andrew Tveekrem, the tall, blond, bearded brewmaster who runs the kettles in Frederick, walks into the brew room past a beer can collection that somebody donated to the company.
"It's amazing when you look at these," he says, noting brands such as Duke, Brown Derby and Fort Pitt like so many headstones. "Most of the companies that used to make them aren't around anymore. It's tough."