Germans, famously, coin neologisms when a crisis hits or the culture reels in a new direction. Take die bad bank (toxic lender), kreditklemme (credit crunch), or twittern (sending a message via Twitter). Because Germany's brewing industry has fallen on hard times, especially since the mid-1990s, you'll now hear brauereisterben (literally, "brewery death") muttered across the land as well. That may sound a little ridiculous, but in a country practically synonymous with beer and brewing—buxom servers in dirndls and overflowing steins, the biergarten echoing with song—the possibility of a downturn is a major buzz kill.

The facts are stark: According to German federal statistics released in late January, German brewing has dropped to less than 100 million hectoliters of production for the first time since reunification in 1990. (That's less than half of the United States' annual output.) The same study revealed that consumption dropped almost 3 percent last year alone, to 101.8 liters per person per year, and that it's down about one-third overall since the previous generation. The number of breweries in the country has also dropped—by about half over the last few decades to around 1,300. (There are nearly 1,700 up and running in the U.S.) The vaunted Weihenstephan brew master degree program in Munich adopts a dour tone on its student prospectus, saying the majority of graduates don't actually become brew masters but instead head for jobs in mechanical engineering and the chemical and pharmaceutical industries.

Further evidence of brauereisterben is depressingly easy to pile on. Berlin, which sustained some 700 breweries in the early 19th century, now counts only about a dozen firms. Amid the ruins, highly trained German brew masters are giving up and heading to the United States—even to sleepy Covington, La., where Henryk Orlik, a graduate of Munich's prestigious Doemens Academy, settled down in 1994. "I came here for the great American craft beer indust...