And if so, when approximately did we switch from beer to water?
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Source - Daily Life in Middle Ages by Paul B. Newman. This answer will mostly concern European countries during the Middle Ages (here meaning the period between A.D. 1000 and the beginning of 1500s)
Indeed, beer was a far more hygienic beverage than water during the Middle Ages - this was because of the lack of technology to purify the water that was available so that it would be safe for drinking.
The fermentation process made water safe(r) to drink by producing alcohol which killed most of the harmful bacteria that were in it.
Consumption levels varied by countries. In England, the Low Countries, and the Germanic countries, beer was the primary beverage of the common man and even the nobility of these countries who consumed significant quantities tities of wine certainly did not spurn good beer. Monastic houses had daily beer allowances, and so did some of labour regulations that mandated that beer rations be a part of daily compensation for some classes of workers.
By contrast, in countries like Spain, France, and Italy, wine was more popular.
In all cases most of the production was very small scale - but there were quite a lot of brewers to satisfy the demand. In some cases in the aforementioned high-beer-consumption territories there were as many as 1 brewer per 100 citizens. In some cities that posed a threat to water supply, which was still needed for other uses, and certain cities, like London, have imposed limits on the amounts of water that brewers could draw, with fines and penalties for excess usage.
As for water as a way to quench one's thirst, it was also popular, but people were quite aware of the health risks due to contaminated sources. Thus, spring water was considered to be the best possible water for drinking and cooking. Water from clear running streams was a poor second choice. Most people didn't have access to either and had to make do with well water or rivers and lakes. The situation did not really change until water purification treatments were developed centuries later.
Edit: fixing phone's autocorrect