In 1889, a well-known Manila businessman, Don Enrique María Barretto de Ycaza y Esteban applied for a royal grant from Spain to brew beer in the Philippines. He was awarded the grant for a period of twenty years and on 29 September (Michaelmas, or the feast day of Saint Michael the Archangel) the following year, La Fábrica de Cerveza de San Miguel was declared open for business. Located at 6 Calzada de Malacañang (later called Avilés), the brewery took its name from its neighbourhood, the arrabal (suburb or district) of San Miguel. The facility had two sections: one devoted to the production of ice with a daily capacity of 5 tonnes, and the other to beer production.

The brewery was the first in Southeast Asia using the most modern equipment and facilities of the day. With 70 employees, the plant produced 3,600 hectolitres (about 47,000 cases) of lager beer during the first year and subsequently produced other types of beer, notably Cerveza Negra, Eagle Extra Stout and Doble Bock.

Early success led to the expansion of the business and Barretto decided to incorporate his brewery. On 6 June 1893, the company was incorporated and registered with a capital of P180,000. Those forming the corporation were Don Pedro P. Roxas y Castro, Don Gonzalo Tuazón y Patiño, Don Vicente D. Fernández y Castro, Don Albino Goyenechea, Benito Legarda y Tuazón, the heirs of Don Mariano Buenaventura y Chuidan and Barretto.  

Roxas was soon appointed manager, playing a prominent role in the development of the firm. Don Pedro was the active member of the firm until 1896 when he left for Europe. Prior to his departure, he bought from Don Enrique Barretto, a share of his interest in the firm worth P42,000. When Barretto retired in May of the same year, Don Pedro through his attorneys bought the balance of Barretto’s stake in the business. In 1895, San Miguel Beer won its first of many awards as a product of the highest quality at the Exposición Regional de Filipinas. By 1896, San Miguel beer was outselling by more than five-to-one all imported beers in the country.

The 1900s ushered in a period of prosperity after the Philippine Revolution and the beginning of the American Occupation. Demand for beer increased, and for San Miguel, still under Roxas' leadership, modernisation of their operations included installation of electric conveyors and automatic machines, with the brewery’s equipment modernised by 1910.By 1913, imported beer represented only 12% of the total consumption in the Philippines; San Miguel held an 88% share of the industry.Don Pedro Roxas died in Paris, France in 1913. He had died soon after Don Benito Legarda and Don Gonzalo Tuazón, made it advisable to change the form of the company from a firm of co-participants to a corporation. Roxas's son, Don Antonio R. Roxas, was appointed president, with Don Enrique Brías de Coya and Don Ramón J. Fernández as managers

By 1914, San Miguel had branched out into the exporting business and its products had found ready markets in such neighbouring ports as Hong Kong, Shanghai and Guam. When the First World War broke out, exports came to a temporary halt due to difficulties such as shortage of raw materials and the consequent rise in manufacturing costs. It was not until Prohibition was repealed in the United States that San Miguel was able to resume exports to Guam and later to Honolulu, Territory of Hawaii.By the end of 1914, Don Enrique Brías de Coya, after seeing that his efforts and industry had resulted in a progressive and prosperous business, retired from active business life in favour of his son, Don Antonio Brías Roxas. In 1918, Don Antonio R. Roxas resigned from his position as president.