BA Redefines ‘Small’ Brewer

Association bumps production from 2 to 6 million barrels for definition

The board of directors of the Brewers Association has voted to change the BA’s designation of “small” in its definition of a “craft brewer.” The Association’s board of directors also has revised its bylaws to reflect the change.

In the BA’s craft brewer definition, the term “small” now refers to any independent brewery that produces up to 6 million barrels of traditional beer. The previous definition capped production at 2 million barrels. The changed definition is currently in effect and can be reviewed on the BA website, BrewersAssociation.org. The change to the bylaws went into effect December 20, 2010.

In the Brewers Association’s bylaws, two classes of membership (Professional Packaging Brewers and Associate membership) have been redefined with a qualifying barrelage of 6 million barrels versus 2 million barrels.

The association cited several reasons for the change, including the recognition that “small” is a descriptive term relative to the overall size of the industry.

“Thirty-four years have passed since the original small brewers tax differential defined small brewers as producing less than 2 million barrels,” said Nick Matt, chair of the Brewers Association board of directors and chairman and CEO of F.X. Matt Brewing Company. “A lot has changed since 1976. The largest brewer in the U.S. has grown from 45 million barrels to 300 million barrels of global beer production.”

Matt added, “The craft brewer definition and bylaws now more accurately reflect and align with our government affairs efforts.” On the legislative front in 2010, the Brewers Association supported H.R. 4278/S. 3339, which sought to update the cap on an excise tax differential for small brewers to 6 million barrels per year in production for their first 2 million barrels.

The industry’s largest craft brewer, The Boston Beer Company, is poised to become the first craft brewer to surpass 2 million barrels of traditional beer within the next few years. Loss of The Boston Beer Company’s production in craft brewing industry statistics would inaccurately reflect on the craft brewing industry’s market share.

In addition to Boston Beer, the current growth trajectory of other sizable BA member breweries places them on a course approaching the 2 million barrel threshold in the coming years.

“With this change to the craft brewer definition and BA bylaws, statistics will continue to accurately reflect the 30-year growth of market share for craft brewed beer,” said Matt. “Brewers Association statistics on craft brewers will continue to keep pace with the growth of the industry.”

Craft brewed beer market share is now approximately five percent of the U.S. beer industry, and growing. The BA has a stated mission of helping America’s craft brewers achieve more than five percent market share by 2013.

Matt added, “Rather than removing members due to their success, the craft brewing industry should be celebrating our growth.”

Comments

  1. Sulfur says

    I agree one shouldn’t be disadvantaged due to success, but I have to laugh at 6 Million BBL’s being considered “small”. At this rate we (all U.S. pro brewers) should all be under one hat. United we stand 🙂

  2. einhorn says

    Think of the consequences: less dues for the BA and SA being called a “macro” – yucky news for everyone!

  3. liammckenna says

    Of course they changed the definition.

    Have to maintain that growth curve. Don’t want some of the currently dominant ‘small’ producers to fall outside of their definition as they grow past the previous parameter.

    Does it reflect reality. Maybe. Could it reflect a little panic that the growth curve was facing collapse? Your guess is as good as mine.

    To me, their definition has always sucked anyways. The only ‘meat’ to it is about ownership structure and size. They just changed the latter.

    Are quality, integrity, great beer, good people, good corporate citizenship etc. related to size? I certainly believe not.

    I will admit that to most of us, myself included, looking at that number, the use of the word ‘small’ seems a non sequitur.

    Pax.

    Liam

  4. BrewinLou says

    Should have changed it to Mid-major. “Small” should not play a roll in describing the 800k barrels rolling out of SA’s Cincinnati plant much less the other plants. Mid-major craft brewer even sounds good.

  5. liammckenna says

    I’m with you Joel.

    Why wouldn’t they just redefine the categories?

    It would be interested to survey drinkers of SA and ask them if they think they are consuming beer from a ‘small’ craft brewer.

    Pax.

    Liam

  6. mmussen says

    I’m not happy with what they are calling “small” either. Then again when you compare 6 mill BBL to what the big guys make it is pretty small. There really should be another category in between the rest though

  7. Jephro says

    BrewinLou wrote: Should have changed it to Mid-major. “Small” should not play a roll in describing the 800k barrels rolling out of SA’s Cincinnati plant much less the other plants. Mid-major craft brewer even sounds good.

    I with you here too, 6 Million anything is a long way away from “small”. I support and respect the BA, but as this “Craft” industry grows there will be many game changers and i think the BA needs to be careful that they do not redefine the game just to suit “an old buddy”.

    They (SA and a few others) are in a different League and have been for quite some time. We should embrace SA’s sucess, they are paving a new road for the industry. But lets not kid ourselves, coast to coast distro, and now to Canada… news flash, that aint small – I mean, they are the Largest Craft Brewery… right?

    What is the advantage of remaining “small” by the BA’s definition anyway?? :confused:

  8. gitchegumee says

    “I mean, they are the Largest Craft Brewery… right?”
    They are the largest American-owned brewer. Craft or not. That means that American owned breweries are predominantly “craft”? I think not. You can try to define it, but I know it when I taste it.

  9. jesskidden says

    gitchegumee wrote: They are the largest American-owned brewer. Craft or not.

    That claim’s popularly tossed around (by Koch, ever the huckster, himself in some interviews) but according to most figures I’ve seen for 2009, non-craft designated Yuengling brewed more beer – 2,025,000 bbl. vs BBC’s 2,021,000. Subtract BBC’s malternatives (Twisted Tea, HardCore Cider) as the B.A. does, and it’s an even larger difference. Yuengling and BBC have been neck and neck for a number of years now.

    And, tho’ they don’t brew, American-owned Pabst – the “virtual brewer” – is larger than both by a factor of close to 3. Since for many years much of BBC’s beer was contract-brewed (much by Miller, the same as Pabst), it seems odd to not count Pabst now, because BBC is entirely in-house.

  10. burcher says

    what’s the next metric prefix below ‘nano’? Will I have to start using another prefix I don’t like? Atomic? Molecular?

  11. mmussen says

    burcher wrote: what’s the next metric prefix below ‘nano’? Will I have to start using another prefix I don’t like? Atomic? Molecular?

    Pico is the next one down. After that comes Femto and atto

  12. LuskusDelph says

    ParishBrewingCo wrote: 6 million bbls = small craft brewer?

    Doesn’t smell right to me.

    It smells just fine. Why should small brewers who become big brewers suddenly be considered to be less “craft”?

    The “craft” is in the quality of the product, not the size of the brewery.
    And Boston Brewing has made and continues to make fine beers, as well crafted (and in some cases, better crafted) than some smaller operations.

    In any case, the term “craft” beer” will eventually go away, because with more and more small brewers starting up there is already ample proof that a small brewery isn’t a guarantee of better quality. Fortunately for the industry, the lesser quality efforts are still in the minority.

    “Good Beer” and “Not So Good Beer” are the only distinctions that really matter aanyway, and the beer drinking public is finally getting hip to that.

  13. Woolsocks says

    I think one litmus test for whether you’re a craft brewer is whether you refer to your products as “beers” or “brands”.

  14. BrewinLou says

    I do not have a problem with them calling themselves, or the high quality beer they produce CRAFT. SA is one of the only larger size crafts that has been able to grow without changing their flavor profile by too much. I respect the L out of them.
    I do not like them calling themselves small, it is a misrepresentation of what they are. Mid level/ large scale… craft brewery would be fine. The word craft does not associate with a size for me.

  15. burcher says

    What gets me, and why this is important, and it goes for Sam and his TV show, too, is that our fringe customers, the ones who haven’t been hooked on craft yet, think that we, and other truly small brewers, are like Dogfishhead or Boston. This does the real small brewer a tremendous disservice with respect to distribution/wholesalers and retailers. I’m just saying.