Craft beer industry continues to grow, report shows
March 29, 2017 - 11:19 AM- by Kendall Jones, Washington Beer Blog -
Today the Brewers Association reported on the growth of the craft beer industry in 2016. Not surprisingly, growth continues in every measurable form: production, sales, number of breweries, jobs and so on.
The Brewers Association is the national organization that represents America's small and independent breweries. As we've explained in the past, the Brewers Association's definition of craft brewery is not perfect, but it's the closest thing we have to an "official" definition.
The report shows that craft beer continues to enjoy steady overall growth in volume share, accounting for an increasing portion of overall beer production in America. Volume share and dollar sales are different, but if you think about it, breweries produce beer for sale, so if you want to talk about growth, you just gotta pick one metric and go with it.
At the end of 2016, craft beer accounted for 12.7 percent of all beer produced in the USA, a modest increase from 12.6 the year before. The biggest leap happened between 2013 and 2014, when craft beer production rose from 7.8 percent to 11 percent. Since then, production has continued to grow steadily, albeit slowly. Sure, growth wasn't as vigorous as it has been in some years past, but it is still growth, and growth is something that the big beer companies haven't seen in years.
In terms of retail dollar value, craft beer enjoyed a 10 percent increase in 2016 when compared to the previous year, with craft beer sales for 2016 totaling over $23 billion.
In terms of jobs, the craft beer industry continues to be a jobs creation machine. The Brewers Association says that last year's industry growth created nearly 7,000 new jobs.
Perhaps the most astonishing growth was in the total number of breweries. In 2016, a total of 826 craft breweries opened in America.
Only 97 breweries closed last year. Approximately one brewery closed for every nine breweries that opened. Good thing there are still 5,000 other breweries that didn't close last year. Why do breweries close? I can only speak to what I know. I know a local brewery that closed because one of the owners got seriously ill and needed to focus on staying alive. Another closed because of unfortunate, insurmountable circumstances with their landlord. Another closed because, to be honest, they never made very good beer. I don't know of a brewery that closed because of increased competition or a shrinking market. That doesn't mean it didn't happen, it just means I don't know.
At year's end, their were 5,301 breweries in America. Of those, 5,234 were craft breweries. Meaning, only 67 breweries in America failed to meet the Brewers Association's definition of craft brewery. Putting it another way, less than one percent of all breweries in America are something other than craft breweries.
Putting it all together, think of it this way. Craft breweries account for over 99 percent of all breweries in America, yet they produced less than 13 percent of the beer. Less than one percent of the breweries in America account for 87 percent of the beer produced. So when people wonder if there is room for more growth in the craft beer industry, think about that.
Will the Beer Bubble Burst?
What will it look like when craft beer accounts for 20 or 25 percent of beer production? How many more breweries can we support if (when) that happens? The obvious trend is that people now favor the idea more, smaller producers instead of just a few large producers. Thus far, it seems that every time Big Beer loses another one percent of the market share, 500 more craft breweries open. (Admittedly, I haven't done the math.)
Another thing to consider, if you think you know what the craft beer landscape will look like ten years from now, you are a couple pints over your limit. This is a dynamic thing, where the unprecedented and the unexpected continues to be the norm.
You can read more about the Brewers Association's annual report here.
Here's the complete infographic from the Brewers Association.