Craft Beer Quick Books

Fun facts: a snapshot of the brewing and craft brewing business in the U.S. and globally.

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U.S. beer production & sales

• In 2016, the U.S. beer market totaled $107.6 billion dollars, 0.5% of the entire U.S. gross domestic product ($18.6 trillion).


• By volume in 2015, the U.S. beer industry sold 206.7 million barrels of beer – equivalent to more than 2.8 billion cases of 24-12 ounce servings.


• However, the overall U.S. beer market volume is expected to decline 1.5% this year.


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Craft beer production & sales

• In 2016, 'craft' beer accounted for $23.5 billion, 0.1% of U.S. GDP.


• But, if all related industries are included (retail, wholesalers, suppliers, etc.), the 'craft' brewing industry contributed $67.8 billion to the U.S. economy in 2016.


• 'Craft' beer sales growth is projected to be 8 or 9 percent this year, but that's below the 10 percent pace of 2016.


• 'Craft' beer's volume growth is forecast to be 5 to 6 percent, also below recent double-digit growth.


• This year, that translates to 1.5 million barrels more than in 2016.


• The peak year for 'craft' beer was 2014, when it added 3.3 million barrels.


• Most of the new volume growth for 'craft' this year will come from smaller breweries, not big-name 'craft' brands such as Boston Beer or Sierra Nevada. Larger brands are suffering from a perception of not being authentic 'craft.'


• Grocery chains are not adding total space this year for 'craft' brands.


• 'Craft' beer is forecast to represent about 12 percent of total beer volume this year, up slightly from 2016 levels.


• In 2017, homebrewers will have produced approximately 1.4 million barrels of beer, 1% of all beer produced in the U.S.


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Brewery & beer employment

• Directly and indirectly, the beer industry employs nearly 2.23 million Americans (including breweries, suppliers, wholesalers, retailers, and importers).


• In 2016, 'craft' breweries, themselves, employed 128,768.


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Total number of breweries

• Nearly 6,000 U.S. breweries are expected to be in operation by the end of this year, up from about 5,300 at the end of 2016. The vast majority of them will be 'craft'(small, independently-oned, and/or locally focused).


• In 1970, there were 4,000 breweries in the world. At the end of 2016, there were 20,000.


• The number of beer brands, worldwide (excluding one-offs), is close to 250,000.


• In 2016, worldwide 'craft' beer sales totaled $85 billion.


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Beer vs. wine & spirits?

• In 2016, consumer preference for beer increased from 42% to 43%, for wine decreased from 34% to 32%, and for spirits decreased from 21% to 20%. 36% of the population does not consume alcohol. (This is an interesting poll result from Gallup. Numerous other media are saying the opposite: that Americans are shifting away from beer to wine and spirits.)

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What's the economic impact of 'craft' beer in your state?

Small and independent American craft brewers contributed $67.8 billion to the U.S. economy in 2016. The figure is derived from the total impact of beer brewed by craft brewers as it moves through the three-tier system (breweries, wholesalers, and retailers), as well as all non-beer products like food and merchandise that brewpub restaurants and brewery taprooms sell. [...] The industry also provided more than 456,000 full-time equivalent jobs, with more than 128,000 jobs directly at breweries and brewpubs, including serving staff at brewpubs.

On Tuesday, the [U.S.] Brewers Association (BA) released the 2017 edition of its Economic Impact Report, a biennial analysis featuring the economic contribution of 'craft' brewing of all fifty states and the District of Columbia. It assembled those data (from 2016) in five categories, by state:

• Total Economic Contribution

  1. California $7.3 billion

  2. Pennsylvania $5.8 billion

  3. Texas $4.5 billion

  4. New York $3.4 billion

  5. Florida $3.1 billion
  [...]

  51. Rhode Island $152.3 million

• Economic Contribution, per capita

  1. Colorado $764.34

  2. Vermont $666.78

  3. Oregon $659.12

  4. Pennsylvania $615.77

  5. Montana $549.98
  [...]

  51. Mississippi $148.33

• Craft Jobs

  1. California 49,308

  2. Pennsylvania 39,841

  3. Texas 26,506

  4. Florida 23,077

  5. Colorado 22,220
  [...]

  51. Wyoming 1,108

• Craft Labor Contribution

  1. California $2.71 billion

  2. Pennsylvania $1.87 billion

  3. Texas $1.42 billion

  4. New York $1.31 billion

  5. $1.05 billion
  [...]

  51. Rhode Island $55.3 million

• Average Craft Wage

  1. Washington, D.C. $64,300

  2. New York $59,952

  3. Oklahoma $57,167

  4. California $55,019

  5. Connecticut $54,755
  [...]

  51. Mississippi $38,176

The BA offers two lists at its website —the top five states for economic contribution and the top five for per capita economic contribution— and the same on an interactive map. The remainder of the state data is available in a pdf table, with the states listed alphabetically. I spent a few minutes to enter the data into a spreadsheet, sorting by rank in each of the five categories. Here: the state rankings, by total economic impact.

Go here to see a larger view of the table. Click each of the links above to see the state data sorted by the other four categories.

California dominates —as would be expected by its size— in total economic contribution, craft jobs, average wage, and the economic contribution of those jobs. It falls out of the top five in per capita impact (to 27th), where the top spot is held by Colorado. Pennsylvania is also a powerhouse appearing in the top five for four of the five categories: economic contribution, per capita contribution, jobs, and labor contribution. In terms of a state's average craft beer wage, the best in the nation is Washington, D.C., offering its beer workers an average wage of $64,300. The worst in the U.S. is Mississippi, at $38,176.

According to the BA, the data for this Economic Impact Report is based on two national surveys it conducts: the annual Beer Industry Production Survey (BIPS) and the bi-annual Brewery Operations Benchmarking Survey (BOBS), as well as additional government and market data. The BA then entered the data into an IMPLAM software input-output analysis "in order to examine the broader ripples of craft brewers in the national and state economies." Breweries that did not fit the BA's criteria for 'craft' brewery were not included. In addition, the association excluded non-beer beverage alcohol products of craft breweries such as cider and flavored malt beverages (FMB), while including certain other non-beer products such as food at brewpubs.

Unlike the BA, the Beer Institute looks at the U.S. beer industry as a whole. Its most recent data show that the U.S. beer industry provided jobs to nearly 2.23 million Americans, contributed over $350 billion to America’s economy, and paid $63.5 billion in annual taxes. Brewers and importers directly employed 64,745 Americans. Suppliers to the brewing industry employed more than 491,800 Americans. Beer wholesalers directly employed more than 134,240 Americans. Beer retailers employed 915,700 Americans.

Comparing statistics produced by different methodologies can be problematic, but, nonetheless, the BA's Economic Impact Report shows that 'craft' beer stands well compared with the entire beer industry: contributing an economic impact of $67.8 billion produced via 456,000 full-time equivalent jobs. I'd say those are significant contributions.

Bart Watson is the chief economist for the BA, ultimately responsible for preparing this report. I'll leave it to him, and others smarter than me, to 'drill down' and offer more thorough analysis.

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Pic(k) of the week: Brewers Walt Dickinson & Nathan Zeender (and ...)

Mixed fermentation of wild and sour beers was the topic of a discussion "between two [three] powerhouses of funk": *

• Walt Dickinson (l) —brewer/owner, Wicked Weed Brewing of Asheville, North Carolina;
• Michael Tonsmeire (c) —aka The Mad Fermentationist, award-winning homebrewer and mixed-fermentation researcher, author of American Sour Beers;
• Nathan Zeender (r) —brewer, Right Proper Brewing Company, of Washington, D.C.

Brewpub Right Proper hosted the seminar on 11 April 2017, during the week that the [U.S.] Brewers Association had travelled to Washington, D.C, to host its Craft Brewers Conference in Washington, D.C.

Almost one month later, to the day, Wicked Weed was purchased by Anheuser-Busch InBev. And many 'craft' drinkers (and brewers) cried foul. Did they believe that all that had been discussed that evening now had been transmuted into "alternative facts"?

A more thoughtful reaction was this from a brewer, said recently to me over beers: "It makes me sad."

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More 'craft' barley, please!

The 'craft' beer world buzzes about hops. On the other hand, it often seems to relegate barley malt —just the essential principal source of beer's starch and thus its fermentation— to the level of inconvenience. In 2013, I attended a short presentation at the Craft Brewers Conference at which the lecturers almost begged 'craft' brewers to tell them what characteristics they wanted in their barley malt.

In their choice of barley, craft brewers share, with the macro-brewers, a need for lower free amino nitrogen, lower total protein levels, and a lower Kolbach Index (ratio of soluble protein to total protein). The macros, however, use a high amount of adjuncts in their grists, usually corn and/or rice. A higher diastatic power is needed in their preferred barley to convert the starches of the adjuncts to fermentable sugar. 'Craft' brewers generally rely on all-malt grists; thus, diastatic power is not as important a parameter for them. Macro brewers want neutrally flavored barley. 'Craft' brewers prefer the opposite. They want the barley malt to contribute unique and discernible flavors.

Up to this point, barley has been developed and grown almost exclusively for the macros; where it has been grown in North America, it has been geographically limited. To be clear, there are numerous malting companies and there are some specifically targeted at 'craft' breweries. But, as to the barley varieties themselves, except for some imports, 'craft' brewers have not had much of a say.

According to the [U.S.] Brewers Association (BA) —the association for American 'craft' brewers, i.e., small American-owned breweries— when 'craft' beer reaches a twenty percent volume share in a few years (possibly as soon as 2020), 'craft' brewers will be snapping up fifty-one percent of all malt used by U.S. brewers. To satisfy that demand, malting capacity in North America will have to increase by twenty-eight percent —even as total barley acreage decreases.

Things are beginning to change.

A few years ago, the Craft Malsters Guild was created. Last year, the BA joined the Brewing and Malting Barley Research Institute (BMBRI) as a corporate associate member. The BMBRI works to identify and evaluate barley varieties that are suitable for the production of high-quality malt and beer.

And yesterday, the BA announced that is granting nearly a half-million dollars —$440,000 to be precise— to nineteen unique research projects. Thirteen of those are devoted to research on growing barley specifically for 'craft' brewing.

As North Dakota State University (et al.) stated about its funded project, identifying (and commercializing) malting barley varieties better suited to all-malt brewing for cultivation in the U.S.:

Craft brewers represent a 36% customer for U.S. malt consumption as of 2016. And yet, there are currently no malting barley varieties specifically bred for all-malt brewing in production in the U.S. Craft brewers currently use malt made from barley varieties bred for adjunct brewing, with negative stability outcomes in packaged beer.

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The other twelve BA 'craft' barley grants

• Understanding the Genetics of Barley Contributions to Beer Flavor —Oregon State University

  Mapping the genetic determinants of barley contributions to beer flavor using two very different types of germplasm and mapping strategies.



• Metabolite Profiling of Heirloom Barley to Breed for Flavor and Sustainability
  —Colorado State University

  This research will perform metabolite profiling of heirloom barley breeding lines developed at Montana State University (MSU) to facilitate breeding for flavor. Investigating the relationship between barley chemical composition and beer flavor is an important area of research. Some craft brewers have preference for malts from older, ‘heirloom’ varieties, although the chemical basis for this preference is unclear. Further, heirloom varieties are not adapted to many U.S. growing regions, and barley growers would be hesitant to adopt them for their poor agronomic performance, yield and malting quality.



• Stable and Sustainable Dryland Production of High Quality Malt Barley
  —Montana State University

  Barley is well adapted to dryland farming, however historic production of malting barley has been in higher moisture to ensure malt quality. In dryland conditions, current barley varieties have an increased risk of rejection due to poor malt quality, resulting in a significant economic loss to farmers. This research will facilitate regional production of malt for brewing in the Rocky Mountain region.



• Sustainable Grower Production Practices: 2-Row Barley and Nitrogen Usage
  —University of Idaho

  Identification of two-row-barley cultivars with the best fit for all-malt brewing, and development of best practices for sustainable cultivation of those varieties.



• Eastern United States Spring Barley Nursery (ESBN)
  —North Dakota State University

  The 2017 ESBN [Eastern States Spring Barley Nursery organized by the Craft Maltsters Guild] includes 25 barley varieties from ten different breeding programs being grown in Indiana, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, and Vermont. Trial data will be available for use by local university/extension personnel to educate growers and other stakeholders on varieties that perform best in their region.



• Building a Multi-state Dataset to Support Coordinated Breeding of Local Malting Barley
  —University of Minnesota

  The University of Minnesota will organize a coordinated project with 14 breeders/researchers across 12 states/provinces to evaluate two-row spring malting barley lines in the upstream stages of breeding.



• Barley Breeding For All-Malt Brewing
  —United States Department of Agiculture (USDA)-Agricultural Research Service, Aberdeen, Idaho

  Selecting low protein 2-row barley lines from all over the world will greatly enrich the genetic diversity of barley breeding and germplasm resources; and help ensure a supply of barley varieties suitable for all-malt brewing. To improve the genetic background of North American barley lines, genetic sources for stress tolerance, better malting and brewing quality traits, and disease resistance will be introduced to create genetic diversity and improve on current barley qualities for use in all-malt beer production.



• Enhancement of Winter Hardiness in Two-Rowed Barley Varieties for the Craft Brewing Industry
  —University of Minnesota

  The overall goal of this research is the establishment of a sustainable Midwest winter barley industry for U.S. craft brewers. This requires the development of cultivars with acceptable malt quality profiles and adaptation to the climate. This project will exploit Russian barley accessions to develop winter two-rowed barley cultivars suitable for growing malt-quality barley in the Midwest; which will provide the Midwest craft brewing industry with more locally grown ingredients.



• Mapping Malt Quality Traits to Facilitate Marker Assisted Breeding and Development of Winter Malt Barley
  —Virginia Tech

  [DNA] markers will be identified to facilitate and expedite the process of developing high quality, high yielding malt barley varieties for the Mid-Atlantic and eastern regions of the U.S.



• Building a Winter Malting Barley Market for the Great Plains
  —University of Nebraska

  The ultimate outcome and impact will be new cultivars and an expanding barley market for malting barley (as well as feed and forage) in the Great Plains, a region with generally few diseases (very little Fusarium head blight), but known for abiotic stresses (harsh winters and heat/drought) and aphid pressure.



• Breeding for Winter 2-row Malting Barley Cultivars for the Eastern U.S.
  —USDA Agricultural Research Service, Raleigh, North Carolina

  Our goal is to develop superior malting quality barleys having high grain yield, desirable agronomic qualities, and the disease and insect resistance needed for production in the high-humidity environments of the eastern U.S.[...] from Georgia to New York.



• Ensuring Malt Quality from the Field to the Malthouse
  —North American Craft Maltsters Guild

  The Craft Maltsters Guild would like to develop a guide for barley producers outlining storage and handling [specifically for the craft brewing industry].

The Craft Malsters Guild will be meeting and exhibiting at April's Craft Brewers Conference in Washington, D.C. But the conference itself —the annual, premier conference of/for American 'craft' brewers— has scheduled only one seminar on the subject of barley.

More, please. More 'craft' barley, please.

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