Remember back in 2003 at the New Orleans Craft Brewers Conference when Kim Jordan, co-founder of New Belgium Brewing Company prodded the craft beer industry to reach for a 10% market share? Well, it turns out that may not have been so far-fetched after all.
The Brewers Association, which tabulates industry growth data for U.S. breweries, announced that today’s small independent craft brewers are gaining alcohol market share due to a shift toward full flavor beer and increased support for local breweries. From 2007 to 2008, estimated sales by craft brewers were up 5.8 percent by volume and 10.5 percent in dollars. Overall share of the beer category from craft brewers was 4.0 percent of production and 6.3 percent of retail sales. More than 1 million new barrels of beer were sold in 2008, and close to half of those barrels were beer from craft brewers.
Yes, that is still far short of Kim’s stated goal back when the craft segment was growing in strong double-digits. But with the continued globalization of Big Beer and the persistent desire for local and quality foods, even in a repressed economy, a 10% market share looks conceivable.
“2008 was a historic year for beer with the large brewers consolidating and imports losing share, while the top ten selling beer brands dropped in sales. At the same time, small independent craft brewers continued to gain share and attention,” said Paul Gatza, Director of the Brewers Association.
With total U.S. beer being more than a $100 billion industry, the Brewers Association estimates the actual dollar sales from craft brewers in 2008 were $6.34 billion, up from $5.74 billion in 2007. Taxable barrels of the total beer category was 1,210,018 more in 2008 with craft brewers producing 473,364 of those barrels. Total craft brewer barrels for 2008 was 8,596,971, up from 8,123,607 barrels in 2007.
These increases in share and barrels for craft brewers come at a time when, according to the Brewers Association, the cost of operating a small brewery increased over 39 percent in the period of November 2007 to November 2008.