Small brewers become big business in craft beer industry | Crain's

Small brewers become big business in craft beer industry

  • Crowds gather in the taproom at Community Beer Company in Dallas. | Photo courtesy of Community Beer Company.

  • Brewer Brett Kennison samples beer midway through the barrel-aging process at Night Shift Brewing in Everett, Massachusetts. | Photo courtesy of Night Shift Brewing

  • A few dozen visitors to Austin's Jester King Brewery each weekend turned into well over 1,000 not long after opening, said owner Jeffrey Stuffings. | Photo courtesy of Jester King Brewery

  • Denver's annual Beer Festivus is a big draw for brewers and beer drinkers alike. | | Photo courtesy of Alyson McClaran, Two Parts

  • Vera Deckard owns Künstler Brewing in San Antonio with her husband, Brent. | Photo courtesy of Vera Deckard

Craft brewing may be an art, but it's also becoming big business.

In the last five years, craft beer sales have more than doubled, from $10.12 billion in 2011 to $23.5 billion in 2016, according to the Brewers Association, a trade group. The number of craft breweries has also ballooned, growing from 2,000 in 2011 to 5,200 in 2016. 

With that success, of course, has come more competition, particularly as big beer conglomerates buy up smaller players in hopes of capitalizing on the trend. Meanwhile, even among smaller craft brewers, the market has begun to get crowded.

Here's a look at the trends we're seeing around the U.S. — from beer tourism to seasonal brews to a push to get more women in the industry.

Market is growing, but it's also getting crowded

  • According to the Oregon Employment Department, the craft beer industry added around 1,340 jobs over the past two years, a growth of nearly 22 percent.
  • Nationally, roughly one in eight breweries specializes in craft beer, according to the California Craft Brewers Association. In California, it’s one in four. But there are signs that the joyride is leveling off.
  • “Those who distribute see that it’s getting tighter and harder to place your beer. And the quality has gone up so much that a lot of local brewers tend to fight for the same taps,” says Jon Lane, owner of Arizona's O.H.S.O. Brewery & Distillery.
  • John Giannopoulos of Sly Fox Brewing Co. in Pottstown, Pa., believes the entry of big players in the business is going to grow more significant as they add to their offerings to appeal to craft beer fans. 

Craft brews are a draw for tourists, not just locals

  • Travel industry analysts say craft beer is a proven draw, and the Sunshine State is the fifth-fastest growing market in the nation, with 212 breweries.
  • Nevada's craft brewers are getting help from a powerful force – tourists. "Travelers go to a bar or restaurant and ask what they have that's local,” says Wyndee Forrest of CraftHaus Brewery. 

Industry growth goes hand in hand with regulations

  • Four years ago, Texas lawmakers opened up the craft brewing market, allowing small brewers of no more than 10,000 barrels a year to sell their product in on-site tap rooms — and brewers like Jester King Brewery, outside of Austin, reaped the benefits.
  • Earlier this year, the Texas Legislature approved a bill blocking a loophole that could let conglomerates skirt some of the state's strict regulations for large beer manufacturers — sending shockwaves through the state’s thriving craft beer industry.
  • In Ontario, grocery stores couldn’t sell beer until 2015; this has been a game-changer for small brewers who were formerly squeezed out at the government-run stores as well as the stores operated by the major players under government oversight.
  • Last year Night Shift Brewing launched its own distribution company, reacting to Massachusetts’ state’s so-called franchise law, which many brewers say handcuffs them to their distributors

Brewers get creative — and consumers are on board

  • Rather than give up the pint, best friends Doug Foster and Ryan Bove, who must adhere to gluten-free diets, decided to make their own beer.
  • Those serving a formal holiday meal have traditionally opted to pair it with wine. But craft brewers in North Carolina are serving up ways to start a new tradition.
  • Wellbeing Brewing Co. has been sampling its first nonalcoholic craft brew — a wheat beer called Heavenly Body — around St. Louis and is set to sell it in local bars and restaurants in January.
  • The variety of beer at Denver's Beer Festivus is constantly evolving, reflecting the industry at large; this year, organizers say they're seeing fewer barrel-aged holiday beers and more straightforward stouts and porters.
  • “People used to drink what their parents were drinking. Now it’s a little more that parents are getting exposed to what the younger generations drink,” observes Hilary Cocalis, vice president of marketing for Ballast Point in San Diego.
  • “Seasonals only come around once a year at most, so it’s kind of like meeting up with an old friend,” says Rob MacLeod, brewmaster for Rock Bottom Restaurant and Brewery in Charlotte, N.C.
  • Dating all the way back to 1981, Seattle's Redhook Brewlab is pioneering some of the most modern methods of making beer fast enough, and in batches small enough, to crank out 100 styles a single year.

Many brewers took the leap from another field

  • Adam Cryer was a Rice University-trained engineer before he and his wife, Sara Pope, decided to launch Baileson Brewing Co. in Houston, joining a growing wave of small-batch brewers opening in Texas.
  • Bailey Spaulding of Jackalope Brewing Company moved to Nashville to attend Vanderbilt Law School – but upon graduating, realized her true passion was beer.
  • For Chris Burns, president of Old Ox Brewery in Ashburn, Va., the journey toward the craft brewing industry began in 2000 when he was working in the tech industry and a buddy suggested attending a happy hour at a local pub.

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December 18, 2017 - 1:05pm