Beer is big in the United States. By the end of 2018, more than 7,000 breweries were operating across the country, with another 1,000 predicted to open in 2019. In 2017, these breweries produced a combined total of almost 200 billion barrels of beer.
This is the Age of the Microbrewery
A lot of the recent growth in the beer market has come from small, independently owned breweries, which are often known in the industry as microbreweries or craft breweries. Beer consumption in the United States is overall not increasing, but microbreweries accounted for 5 percent more of the overall beer production in 2018 compared to the year before.
What is a Microbrewery?
The Brewers Association’s definition of a craft brewery is a brewing company that produces no more than 6 million barrels of beer every year. To meet the definition, the company must also be no more than 25 percent owned by a non-craft brewer. Microbreweries now account for the majority of brewery companies in the United States, as many local brewers have sprung up to create their own unique beer.
American Beer Takes on European Rivals
In the past, many of the craft beers available to buy in the United States were imported from breweries in Europe. In fact, European drinkers have for a long time looked down on American beer, which was seen as being mass-produced and low in quality. However, the tables are starting to turn. Today, consumers who look carefully at the labels in American stores will notice that there are a huge range of beers produced in U.S from which the patriotic but discerning drinker can choose.
Which States Have the Most Microbreweries?
Much of the growth in microbreweries has been taking place in California. The Golden State now has more breweries than any other state, with more than 500 brewing headquarters located here. Colorado is in second place with 252, which is impressive given the state’s comparatively small population. However, when it comes to number of breweries per capita, Oregon and Vermont are the big players. Oregon has 4.7 breweries for every 100,000 residents, which means that people living in the Beaver State have a huge variety of local brews to sample.
Which Cities Have the Most Microbreweries?
As people might predict, trendy Portland is a hot spot for microbreweries. This is a testament to the long history of craft beer in the city that every year hosts the Oregon Brewers Festival. Every year, more than 80,000 people flock to Portland to drink craft beer and learn about the history of brewing in the city, giving a boost to local microbreweries. The cities of Denver, San Diego, Seattle, and Chicago also have thriving microbrewery sectors, each with its own unique neighborhood scene.
How Do Cities Support Craft Brewers?
Some cities are keen to attract microbreweries to bring jobs and investment to the area. For example, San Diego has launched an incentive program that reduces the amount that craft brewers have to pay for the large amounts of water they use. The city has found a way to put unused sewerage capacity back into use to help breweries out.
Microbreweries Are Being Bought Up
Many of the best known “craft” beer brands, including Goose Island, Founders Brewing, and Lagunitas Brewing, no longer count as microbreweries. That is because these companies have been bought up by bigger brands. These acquisitions hold microbreweries back from taking up an even larger share of the market than the one they already hold.
Microbrewery Businesses Have a High Turnover
Although huge numbers of microbreweries have opened over the last few years, the number that have closed is also astonishingly high. In 2017, the annual number of brewery closures increased above 2017 for the first time. Part of the reason for this uptick in brewery closures was high competition. According to Bart Watson, chief economist for the Brewers Association, the current market is highly competitive. “It is a competitive marketplace, and I think we will see the brewery closure number continue to rise,” he said.
The Future of Microbreweries in America
Market data clearly shows that Americans have developed a taste for craft beer. Many beer lovers are keen to support companies in their local community, while others simply want to seek out new and unusual flavors. This change in beer consumption shows no sign of slowing down, which experts predict is likely to fuel a continued increase in the launch of new microbreweries.
On the other hand, acquisitions are likely to continue to move the most successful craft brewers out of the category of microbrewery. As a result, the volume share for craft brewers may not increase much beyond its current 12 percent.
One thing is for sure: Americans have a taste for beer that is unlikely to decline any time soon. The number of new competitors entering the market is good news for consumers, who now have a much wider range of beer styles from which to choose when picking up a few bottles for a party or ordering a drink at the bar.
