Craft Beer Growth

Craft Beer Growth

Source: Brewers Association, Boulder, CO

Ah, the last week of January… the week leading up to what many believe is the most important day of the year (with plenty of petitions to make the day after a new federal holiday). Super Bowl Sunday is almost upon us, and the event and beer seem to go together perfectly. With an exciting game on tap, viewership may hit a record. Ditto for craft beer growth.

Despite beer losing overall market share to wine and spirits, craft beer sales are increasing. Demeter Group Investment Bank (a leading mergers and acquisitions advisory firm serving the wine, spirits, food and craft beer industries) notes that beer lost six percentage points of market share from 2000 to 2011 in its report “State of Craft Beer Industry.” However, craft beer production and sales are up, and craft beer is projected to represent nearly 15 percent of the beer industry by 2020 at current growth rates.

Brewers Association Report

The report for the first half of 2013 from the Brewers Association reflects the same growth for craft beer and breweries. According to this trade association that represents the majority of U.S. breweries, during the first half of 2013, sales dollars were up 15 percent and volume was up 13 percent. Comparing the same period for the previous year, growth for sales and volume had increased 14 and 12 percent, respectively.

According to Brewers Association Director, Paul Gatza (quoted in its report, “Brewers Association Reports Continued Growth for U.S. Craft Brewers), “More breweries are currently operating in the U.S. than at any time since the 1870s. It’s a very good time to be an American beer lover.”

In June 2013, there were 2,538 breweries operating in the U.S., up from 2,092 during the same period in the previous year. Of that number, 2,483 are craft breweries that provide over 100,000 full- and part-time jobs. Members of the Brewers Association make up over 99 percent of the beer brewed in the U.S.

Just how far can the craft beer industry go? Experts in the industry believe there’s plenty of room for additional growth and expansion of the number of breweries. Bart Watson, Brewers Association economist said, “I think at one point it will look like the restaurant industry, with a lot of small players entering and exiting,” (quoted in CNBC’s “More pour into craft beer market.”) He believes the industry’s future will reflect Europe’s with greater numbers of craft brewers serving local demands.

In the same article, Jim Koch, Sam Adams founder and chairman of Boston Beer, agrees and sees room for up to 2,000 to 4,000 more craft breweries to meet growing demand, comparing it to the wine industry with over 7,000 wineries in the U.S.

Defining Craft Beer

As palettes for beer are changing and refining, the craft beer growth is good news. (For more, see Craft Beer Diversity and Beer Wine Hybrids.) The Brewers Association defines a craft brewer very specifically:

“An American craft brewer is small, independent, and traditional. Small: Annual production of beer less than 6 million barrels. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition. Independent: Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer. Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50 percent of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.”

There’s no denying craft beer growth; however, is what you’re drinking craft beer or not? (Stay tuned for Fake Craft Beer.)

Trackbacks

  1. […] shared the Brewers Association (BA) definition of craft beer (Craft Beer Growth), and BA is using the word “crafty” to describe the brewing behemoths’ products that are […]