Two reports on the state of the 2014 U.S. beer industry were released this month.
One from the Brewers Association (BA), on 'craft' beer1 sales in the U.S. The other, from the National Beer Wholesalers Association, on how beer as a whole fared.
As to the first: the state of 'craft' beer is hearty and hale.
- By dollars, 'craft' beer sales totaled $19.6 billion dollars, representing 19.3% of all beer sold in the U.S. (which is $101.5 billion dollars!).
- By volume share, 'craft' breweries sold 22.2 million barrels, 18% growth over 2013, accounting for 11% of the total of all beer sold in 2014 (which came to more than two hundred million barrels)2.
- Not in the report, but the BA's mission statement calls for achieving a 20% market share by volume by the year 2020.
- By the end of 2014, there were 3,814 'craft' breweries operating in the U.S., accounting for 98.6% of all U.S. breweries.
Brewers Association Reports Annual Growth Figures for Small and Independent BrewersBoulder, CO • March 16, 2015—The Brewers Association (BA), the trade association representing small and independent American craft brewers, today released 2014 data on U.S. craft brewing growth. For the first-time ever, craft brewers reached double-digit (11 percent) volume share of the marketplace.
In 2014, craft brewers produced 22.2 million barrels, and saw an 18 percent rise in volume and a 22 percent increase in retail dollar value. Retail dollar value was estimated at $19.6 billion representing 19.3 percent market share. 3
“With the total beer market up only 0.5 percent in 2014, craft brewers are key in keeping the overall industry innovative and growing. This steady growth shows that craft brewing is part of a profound shift in American beer culture—a shift that will help craft brewers achieve their ambitious goal of 20 percent market share by 2020,” said Bart Watson, chief economist, Brewers Association. “Small and independent brewers are deepening their connection to local beer lovers while continuing to create excitement and attract even more appreciators.”
Additionally, the number of operating breweries in the U.S. in 2014 grew 19 percent, totaling 3,464 breweries, with 3,418 considered craft broken down as follows: 1,871 microbreweries, 1,412 brewpubs and 135 regional craft breweries. Throughout the year, there were 615 new brewery openings and only 46 closings.
Combined with already existing and established breweries and brew pubs, craft brewers provided 115,469 jobs, an increase of almost 5,000 from the previous year.
“These small businesses are one of the bright spots in both our economy and culture. Craft brewers are serving their local communities, brewing up jobs and boosting tourism,” added Watson. “Craft brewers are creating high quality, differentiated beers; new brewers that match this standard will be welcomed in the market with open arms.”
Note: Numbers are preliminary.
The Brewers Association will release the list of Top 50 craft brewing companies and overall brewing companies by volume sales on March 31 . Additionally, a more extensive analysis will be released during the Craft Brewers Conference & BrewExpo America® in Portland, Oregon from April 14-17 . The full 2014 industry analysis will be published in the May/June 2015 issue of The New Brewer, highlighting regional trends and production by individual breweries.
- The Brewers Association was founded "to promote and protect American craft brewers, their beers and the community of brewing enthusiasts." It is an organization of brewers, for brewers and by brewers. More than 2,300 U.S. brewery members and 43,000 members of the American Homebrewers Association are joined by members of the allied trade, beer wholesalers, retailers, individuals, other associate members and the Brewers Association staff to make up the Brewers Association.
- 1 The BA defines an American 'craft' brewer (and thus any of its brewery-members) as "small, independent, and traditional."
Annual production of 6 million barrels of beer or less (approximately 3 percent of U.S. annual sales). Beer production is attributed to the rules of alternating proprietorships.
Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member that is not itself a craft brewer.
A brewer that has a majority of its total beverage alcohol volume in beers whose flavor derives from traditional or innovative brewing ingredients and their fermentation. Flavored malt beverages (FMBs) are not considered beers.
- The BA further differentiates between six categories of breweries:
A brewery that produces less than 15,000 barrels (17,600 hectoliters) of beer per year with 75 percent or more of its beer sold off-site.
A restaurant-brewery that sells 25 percent or more of its beer on site. The beer is brewed primarily for sale in the restaurant and bar. The beer is often dispensed directly from the brewery’s storage tanks. Where allowed by law, brewpubs often sell beer “to go” and /or distribute to off site accounts. Note: BA re-categorizes a company as a microbrewery if its off-site (distributed) beer sales exceed 75 percent.
- Contract Brewing Company
A business that hires another brewery to produce its beer. It can also be a brewery that hires another brewery to produce additional beer.
- Regional Brewery
A brewery with an annual beer production of between 15,000 and 6,000,000 barrels.
- Regional Craft Brewery An independent regional brewery (between 15,000 and 6,000,000 barrels) with a majority of volume in “traditional” or “innovative” beer(s).
- Large Brewery
A brewery with an annual beer production over 6,000,000 barrels.
- 2There is a discrepancy between the numbers supplied by the BA and those offered by the NBWA. Calculating the total beer volume in 2014 —using the BA's number of 'craft' beer volumes of 22.2 million barrels as 11% of the total volume— yields 201.82 million barrels of beer. The NBWA based its numbers on the TTB's report of beer produced: 2,843,141,000 case equivalents (CEs). Since one barrel of a beer (31 gallons) is approximately 13.78 CEs, total U.S. beer production in 2014 can be calculated to 206.32 million barrels. A big discrepancy, even if allowing for rounding errors.
- 3 In 2014, the BA changed its definition of 'small' brewery from two to six million barrels of annual production. That, in and of itself, could have increased the volume of 'craft' beer sold during the year. But, in a footnote to its press release, the BA stated: "[Volume of craft beer sold] figure derived from comparable data set based on 2014 update of craft brewer definition.". Thus, it appears appears that there may have been some sort of weighting of the numbers. Learning if so, and what exactly that might have been, will have to wait for the release of the final numbers at the Craft Brewers Conference in Portland, in April. In terms of number of breweries, the effect would have been negligible, however. The few number of formerly "large' breweries now considered 'craft' would have been overwhelmed by the large growth in the number of microbreweries, brewpubs, and regional craft breweries.
- If the BA significantly modifies its numbers and/or releases more information about its methodology, I'll amend this post to reflect that.
- For more from YFGF: