Big Changes in Craft Beer

In case you haven't noticed yet, Craft Beer is now Big Business. Gone are the days of the business plan being few guys in an old warehouse dumping anything in a kettle and seeing what they get. With each passing month, and with the opening of each new brewery, the culture is changing as the competition increases. And beer lovers everywhere get to reap the rewards.

Putting into words the massive changes that are going on in the Craft Beer industry is no small feat. Since the industry is inherently built upon change, trends and innovation it's easy to take for granted the "next big thing" as being one of many. Emerging markets like Brazil, Argentina and South Korea are now industry stalwarts in their own right while associated industries like hop farming and malting are likewise benefiting from the increase in demand for craft beer.

The culture of craft beer is finding itself at a bit of a crossroads. The definition as established by the industry voice, the Brewer's Association, now declares that breweries which produce less than 6 million barrels per year and are at least 75% owned by an independent brewer are considered "craft." Admittedly, that definition typically applies to breweries in the US but many other markets generally go along with the Association's assertion.

The very essence of craft--being independent, small and doing things their own way--is being challenged. For example, in the UK, more than 1700 craft brewers--up more than 50% in the past five years--make up 5% of all beer sales. With US sales of over $22.3 BILLION in 20151 it's no surprise that founders and owners of craft breweries are making more strategic business decisions so as to ensure a place in the future of this ever-expanding market.

A New Perception of Craft Beer

I think it's interesting to see how seriously Craft Beer is finally being taken. No longer is Craft Beer this "outsider" that is direct competition to Big Beer, rather it is now viewed as an opportunity; we all know the stories about various craft breweries being acquired by the likes of AB-Inbev*: Goose Island, Camden Town, Birra del Borgo. Several breweries Stateside have also taken to acquiring each other with private money, à la Oskar Blues and Cigar City. These alliances are intended to pool together resources, talent and logistics in order gather together like-minded businesses so that they can maintain their competitive edge in the industry.

While that is all well and good, acquisitions by Big Beer and consolidation of breweries are creating a big problem when it comes to the definition of craft beer. No longer is a brewery 75% owned by an independent brewer, in the matter of an acquisition by Big Beer. Likewise, if breweries combine forces (or, as the case with other craft breweries like Stone, Oskar Blues and even BrewDog who have opened up other breweries) their capacity could well reach above the 6 million barrel/yr limit, thus stripping them of their "Craft Beer" crown. But should that matter?

I'll follow up on my response in the upcoming Changes of Craft Beer: Part 2. In the meantime, crack open one of your favorites and have a ponder--do I like what's inside the bottle? Is it craft?

I'd love to hear your thoughts.

 

Cheers

Maggie

Beer Sommelier

  1 "National Beer Sales and Production Data." Brewers Association. Web. 23 June 2016. *As I'm sure you know, but in case you don't, Beer Hawk, was made part of the AB-InBev family in February 2016. All views are my own but, of course, I'm not going to talk badly about those who sign my paycheck. I'm sure you understand!
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