Tuesday, April 01, 2014

Craft Beer 2013: by the numbers

According to the Brewers Association (BA), the growth rate of the 'craft' beer business has averaged 10.9 percent per year over the past decade. That's in the face of flat overall beer sales, dominated by the international big boys. 1

Continuing that growth, the most recent figures show that 2013 'craft' beer sales controlled 7.8% of the total U.S. beer market. (In 2012, the share was 6.5%.) Put in dollar terms, it's dramatic: 'craft' beer is 14.3% of the U.S. market. That's $14.3 billion in sales (versus $11.9 billion in 2012).2

Who is the Brewers Association?

It's a 2005 merger of the Association of Brewers (a somewhat happy-go-lucky group representing microbreweries, when it was created in 1975 with only a few onboard) with the Brewers' Association of America (the remnant of what was once a powerful, small brewery caucus, formed during World War II, as a counterweight to the United States Brewers Association).3 In 2013, here's how the now influential BA defined its membership:
An American craft brewer is small, independent, and traditional.
  • Small: 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.
  • Independent: Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by a beverage alcohol industry member that is not itself a craft brewer.
  • Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.

So, here are the top 50 'craft' breweries in the United States, as determined by the BA's 2013 definition: 4

The top 5 are: Rounding out the list is 21st Amendment Brewery (of San Francisco, California), at 50th, new to the list.

Now, compare that list to the BA's list of the top 50 overall brewing companies operating in the U.S. in 2013. 5 Note that the No.1 'craft' brewery of the first list, Boston Beer, falls to the 5th position overall.

Years ago, I worried that 5% was the Rubicon for a no-holds-barred beer war pitting big against small. 5%? How about 14.3%?

Do you think that, in 2013, the international beverage-and-beer conglomerates, such as Anheuser-Busch InBev, SABMiller, Miller/Coors, Heineken, and their ilk, hadn't noticed that 14.3% share they'd lost? You bet your pallid I.L.L.s (International Light Lagers), they had.

Which may be a reason the Brewers Association, this year, changed its definition of traditional to be more inclusive.
  • A brewer that has a majority of its total beverage alcohol volume in beers whose flavor derives from traditional or innovative brewing ingredients [emphasis mine] and their fermentation. Flavored malt beverages (FMBs) are not considered beers.

  • Breweries, such as family-owned Yuengling, will now be part of the 'craft' beer coalition. The BA will need as many allies as it can get for the battles to come.

    Light the watchtowers. The conglomerates are coming. And they aren't happy.

    • YFGF is based in the mid-Atlantic area. So: a shout-out to Flying Dog Brewery, of Frederick, Maryland. Although it's slipped a few position spots since 2012, it's still the 33rd largest 'craft' brewery in the U.S. That's a lot of good beer: "no shit."
    • 1 Overall beer sales, dominated by the international conglomerates, have actually been on the decline, for example, down 1.4 percent during 2013, according to CNBC. Anheuser-Busch InBev and others have countered the slump with an increase in prices, and by introducing new brands they position as being of higher or "premium" quality, with concomitant higher pricing. Whether that's sustainable is debatable. Via Time.
    • 2 Read the entire press release from the Brewers Association on the growth of craft beer in 2013: here.
    • 3 Source: The Oxford Companion to Beer, 2012. (p. 160)
    • 4,5 Read the BA's press release on the top 50 breweries of 2013: here.

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