If you've spent any time around a college campus, you've doubtless seen the T-shirt, "Beer, it's not just for breakfast anymore." Well, this would have been puzzling to medieval people, because of course beer was for breakfast, as well as for the rest of the day.
Beer was the normal medieval drink, consumed at all meals and by people of all ages. The alcohol content was relatively low, and it was consumed primarily to provide calories, not to get drunk--modern "lite" beers would have seemed bizarre in the Middle Ages. But one still gets the impression that a lot of the medieval population wandered through life half-buzzed.
Beer goes back to the dawn of agriculture in the ancient Middle East. It was originally a way to use germinated grain, that is grain that had sprouted while in storage and thus could neither be ground into flour nor saved and planted for next year's crop. Although one could make beer out of virtually any grain, barley was the favorite. Ancient Mesopotamian temples brewed beer for use in their rituals, and in Old Norse bior was the drink of the gods.
Medieval beer-making followed the same general steps that are still used in modern industrialized brewing, although of course skipping modern pasteurization and bottling. First one got the barley to sprout, by spreading it out and getting and keeping it damp. This was called malting the grain. Next the sprouted grain was dried to stop the germination process, most efficiently by being baked in an oven. Bakeries and breweries were often the same thing in the Middle Ages, and could be run by a husband and wife team.
Next the dried grain was coarsely ground, hulls and all. Hot water was added to create the mash. The resulting liquid, known as the wort and full of the essence of the sprouted grain (as well as some bits of it), was drawn off. The leftover mash was fed to animals.
Next, in the actual "brewing" phase, the wort was boiled up, which sterilized it. Hops or other herbs could be added at this stage. As the beer cooled, yeast was added to ferment it. (Another reason baking and brewing went together.) Once fermented and strained, the beer was ready to drink.
People could and did brew beer at home, but most medieval villages and monasteries had a combination bakery-brewery. Some regions developed what would have to be considered an industry in beer-making, producing big barrels of beer to be be shipped to other areas. What is now the Netherlands and Belgium became an especially important beer-producing region.
If you are interested in medieval brewing, an especially good book is by Richard W. Unger, Beer in the Middle Ages and the Renaissance (University of Pennsylvania Press, 2007).