News Craft up 14% Mid-year!

Dollar growth up 15% in first six months of 2011; U.S. sees rapid growth in breweries in planning

The Brewers Association has released strong mid-year numbers for the industry with dollar sales were up 15 percent in the first half of 2011. This number excludes brewers who left the craft segment in 2010 due to ownership changes that led them to no longer meet the Brewers Association’s definition of independence.

Volume of craft brewed beer sold grew 14 percent for the first six months in 2011, compared to 9 percent growth in the first half of 2010.

Barrels sold by craft brewers for the first half of the year are an estimated 5.1 million barrels. Despite many challenges, the mid-year numbers show signs of continued growth for craft breweries. The industry currently provides an estimated 100,000 jobs, contributing significantly to the U.S. economy.

“Craft brewers continue to innovate and brew beers of excellent quality,” noted Paul Gatza, director of the Brewers Association. “America’s beer drinkers are rapidly switching to craft because of the variety of flavors they are discovering. And they are connecting with small and independent craft brewers as companies they choose to support.”

The U.S. now boasts 1,790 breweries—an increase of 165 additional breweries since June 2010. The Brewers Association also tracks breweries in planning as an indicator of potential new entrants into the craft category, and lists 725 breweries in planning today compared to 389 a year ago. Additionally, the count of craft brewers was at 1,740 as of June 30, 2011.

“There is a growing interest in establishing new breweries,” Gatza added. “It seems like every day we are hearing about a brewery in planning. Will they all make it? No, but many will if they produce high-quality, interesting craft beers and can get them to market through self-distribution and beer wholesalers and beer retailers.”

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0 Comments on “Craft up 14% Mid-year!”

  • gitchegumee

    says:

    Most of the “breweries in planning” that I’ve seen on this discussion board are tiny. They are not going to raise the brewed volume of craft beer by much at all. Is it a good thing to have more small (saucepan nanos) breweries employing a disproportionately high number of workers for a relatively small volume? Or for larger companies backed with solid capital and experience to raise the volume? I dunno.

  • banjolawyer

    says:

    gitchegumee wrote: Is it a good thing to have more small (saucepan nanos) breweries employing a disproportionately high number of workers for a relatively small volume? Or for larger companies backed with solid capital and experience to raise the volume? I dunno.

    You really dunno? It sounds like you’re mind is made up. Do nanos bug you? Anyone reading that needs to get it off their chest that the nano movement bugs the sh!t out of them?

    Some of the ones I’ve seen are pretty fvcking cool and hardcore. Much better than alot of the sh!tty beer brewed on 15bbl systems during the expansion of the 90s.

    Any nanos reading… good luck. Kick ass. Hope you make it big and are able to keep all that equity for yourself and your family.

  • Scott M

    says:

    gitchegumee wrote: Most of the “breweries in planning” that I’ve seen on this discussion board are tiny. They are not going to raise the brewed volume of craft beer by much at all. Is it a good thing to have more small (saucepan nanos) breweries employing a disproportionately high number of workers for a relatively small volume? Or for larger companies backed with solid capital and experience to raise the volume? I dunno.

    Smaller operations are the breeding grounds for the next generation of great American brewers. The operation at Triple Rock Brewery and Alehouse in Berkeley, Ca. is one that comes to mind, but there are many others around the country. They inspire and provide that much needed base upon which you build your brewing expertise. As for employing a disproportionately high number of employees for the volume produced, “You have to shuck many an oyster before you find a pearl.” New Albion has been gone for many years yet Jack McAuliffe’s micro remains an inspiration for many fledgling craft brewers. Some have grown their operations to the point where they contribute some modest volume from the craft brewing industry, like Russian River and Sierra Nevada. JMHO, that small operations have their place; for what its worth.

  • South County

    says:

    I think Phil is just expressing the idea that we should be cautiously optimistic about the “numbers” and “stats” that get pumped out of the BA and other sources. The point must be made that the 725 breweries in planning, while wonderful, doesn’t support the BA’s picture of breweries in planning = increased market share. The larger majority of the 1-2% increase we’ll see over the next years will come from the big boys Boston Beer, DFH, NB, Sierra, etc…. Other concerns to stay alert for should be the looming cloud of a bust on the horizon and the ever increasing problem of sheer number of brands exceeding available retail space. Will the proliferation of brands drive an unprecedented movement towards local beer verses beer from 3000 miles away….lets hope!?!

    On the Nano front, I think the animosity stems from the fact that small breweries in rental spaces and garages can get the same “press hype” as an established operation that took the risk to build a true to fashion brewery via the net and the current uptick for beer. Eventually Nano’s will meet the issue of the lack of beer geeks to sell to and the large portion of people that want a “bit” of wow factor that they cant offer. In the end it is marketing and market presence that sells beer, period. If your a brewery with a $20 marketing budget its hard to edge out the breweries that can support keep the pint nights, attend multiple brew-fests, and achieving mass coverage because they have in the brewing capacity (our current issue that we are dealing with). So lots of ups and downs, we are living in interesting times for beer.

  • KaskaskiaBrew

    says:

    I think we shouldn’t look at this as skewed numbers, optomistic thinking, or nano’s vs. established large production craft breweries. Instead, we should focus on the fact that everytime a brewery opens up in general, it gets people drinking something besides the big guys and all craft beer feels the benefit. Even in areas where breweries seem like they are all over the place (Colorado, Northwest), we have to remember that the market share for craft beer is still under 25% and I’d venture to say it might even be lower than that. When a new brewery opens, family, friends, and locals (most who probably drink big beer) almost always will try to support the brewery and you’ve basically just partially converted an entire group of people to try new beers and maybe even try other craft beer.

    Personally, I have seen this in the town we are opening our 3bbl system in. Until we decided to put in the brewery, there wasn’t even a hint of craft beer to be found and the beer selections on tap would make the average craft drinker cringe. Since they found out we were putting in a brewery, the main bar removed the Stag tap (yes I know, Stag) and traded it out for Fat Tire. They have also started carrying Bells 2 hearted, plus 2 relatively local breweries (Crown Valley & Big Muddy). So by us putting in our nano level system, we are basically helping out other breweries get on tap places where they never could before.

    Here are some interesting stats I tell people who seem to think craft beer is getting flooded with breweries: In Illinois where I live, the average person drinks about 1bbl of beer per year and there are about 12 million people in the state which means about 12 million bbl’s are sold/year just in Illinois. In all of the craft beer world (big and nano), there was only about 10 million bbl’s of beer sold last year. That means if all 1790 breweries were located in Illinois, we would still need 2 million bbl’s of AB just to keep people from getting thirsty. Just some food for thought.

    Cheers

  • South County

    says:

    KaskaskiaBrew wrote:

    Here are some interesting stats I tell people who seem to think craft beer is getting flooded with breweries: In Illinois where I live, the average person drinks about 1bbl of beer per year and there are about 12 million people in the state which means about 12 million bbl’s are sold/year just in Illinois. In all of the craft beer world (big and nano), there was only about 10 million bbl’s of beer sold last year. That means if all 1790 breweries were located in Illinois, we would still need 2 million bbl’s of AB just to keep people from getting thirsty. Just some food for thought.

    Cheers

    12 million barrels for the state as a whole is a far different picture than the 600,000 barrels that are actually craft produced. Point being that, by segment, craft has the largest number of total breweries with the least amount of barrelage. Just like with every boom there is a bust. I fully subscribe to the, “a rising tide floats all boats”, but the sheer number of in plannings and startups just makes me cautious about whats going on in the industry, eventually there will be a stagnation. Just like the current amount of 4 yr degree graduates that are jobless, eventually someone has to go back to laying bricks.

  • yap

    says:

    As one of the 700+ “in planning” breweries in those stats, I have to say I agree with many points on both sides of this argument. Is there room for more breweries (of any size) – yes. How many is there room for? Who knows. As a lifelong pessimist I do worry that a bust is on the horizon, or that I will get lost in the shuffle if three new breweries open in my town within 6 months of mine and we all have to fight for the same (limited) tap space. Like all industries there are boom and bust periods. If/when a “bust” occurs it will take down some decent sized overcapitalized breweries along with some tiny nano’s that have almost no distribution.

    Also keep in mind that 700 breweries in planning doesn’t mean 700 breweries are going to open next year. I use the analogy that for every ten people you meet that say they want to start a brewery, 5 never do anything more than talk. Three of the remaining five actually get through some sort of a business planning stage. Two of those three may actually get started and one may survive more than a year.

    The trick is being in a position to survive the lean times. I don’t know if I’ll make it or not, but at least I’ll be able to say I tried….

  • liammckenna

    says:

    yap wrote: As one of the 700+ “in planning” breweries in those stats, I have to say I agree with many points on both sides of this argument. Is there room for more breweries (of any size) – yes. How many is there room for? Who knows. … I don’t know if I’ll make it or not, but at least I’ll be able to say I tried….

    And very good luck to you.

    I am wary of anything the BA says. When they changed the definition of craft to accommodate megamicros like SA and thereby support their statistical growth curve (and make themselves look good, conveniently), I really stopped paying attention. Most of the future growth will indeed occur in ‘craft’ brands like SA. Very little of the growth will be with nano’s.

    Their ilk will continue to reap the rewards of the real craft brewing revolutionaries like many nano’s who continue to push the envelope.

    Does that mean that nano’s are pointless?

    Can’t say. I will venture to say that any nano that ‘breaks through’ will be producing at least one balanced drinkable , repeatedly saleable beer.

    Just like SA (occasionally at least). It is business after all. And labour components at the nano level are indeed huge.

    While I find malty alcoholic hop teas interesting, I like session beers better.

    I also find 18-30 year old single malts interesting but I prefer a good 8 year old. There’s only so much wood I want with my malt. Some 18+ year olds are like having a whisky while licking a plank.

    Interesting/intriguing? Definitely. Saleable? As a collectable/novelty perhaps.

    I digress.

    Pax.

    Liam

  • Graydon

    says:

    I believe that Nano’s are great for the craft brewing industry. You can have five of these in a town that you could only have one Micro, and in doing so you will not only get people excited about craft beer but help teach them what a good beer is(not all craft beers are good).

    I do agree with Liam that SA and like brands don’t excite me.

    Graydon

    (please don’t crash your Lager):eek:

  • gitchegumee

    says:

    Hello Banjo! Please don’t put words in my mouth or put me in any camp. I was merely pointing out that future volume growth cannot be based on historical data. Old data is based on larger, well-funded, well-connected businesses that had relatively significant impact on volume. I suggest that the trend now seems to be smaller. Basing future volumes on current numbers of breweries in planning doesn’t work.
    And for the record, I’m all in favor of nano breweries. Have had some great beers at nanos. My personal career has had me brewing at many small installations. Size doesn’t matter to me. What I am concerned about is the relative lack of brewing knowledge in a few of these aspiring business owners–many of which have never brewed commercially. In the arena of public health, I think it prudent to have a minimum skill set to commercially produce such an important part of our food chain. You must have a license to cut hair, but you can produce libations for the public with cobbed-up equipment from second-hand industrial supply houses? It won’t take but one instance of some idiot weighing down his whole hops in sack with scuba weights to make headlines and impact the whole craft brewery segment by implication. And before you say this example of lunacy can’t or won’t ever happen–it did. Just not commercially. That said, anyone want to buy Chinese infant formula? So, off of the soap box. Good luck to everyone aspiring to open their own business. Spend some time in an operating brewery to learn what you need to know to safeguard the integrity of what is currently considered a wholesome product. The rest of us depend on it.

  • banjolawyer

    says:

    Hey Git. Much respect. Chest thump. Peace sign.

    I wonder how 6HL cobbled together European countryside brewers were ever able to gain such worldwide admiration and renown without having apprenticed at Budvar.

  • otsegobrewer

    says:

    I totally agree that bad beer hurts everybody. A friend of mine’s father worked for Coors up until the seventies. He told me that Coors purchased major amounts of formaldehyde (sanitizing agent?) while he worked there. I don’t know if it is true, but he had no reason to lie to me.
    On a more sane note- I have a brew pub in planning-mailed the Federal Brewers Notice application yesterday. I have a background in chemistry, hold a valid restaurant managers sanitation certificate, and I know my state health dept. will inspect me very closely. There are three excellent micro’s within 10 miles of my pub and my pro brewer friends will keep an eye on me. If the beer sucks they will not hesitate to let me know.

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