Breweries in large cities had all the business they needed within a couple miles of the brewery, so had little need to expand. Brewers in smaller cities like Milwaukee and St. Louis had to transport their beer elsewhere to expand their markets. As they shipped to more and more distant cities, their capacities grew. Thus, the fact that these cities didn't have large local markets ironically became the reason most of the major brewers were located there (similarly true later on for Coors).
(via Arts & Letters Daily)
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