Wednesday, March 23, 2011

Alert! Craft Beer A Growing Industry!

Yes, I know. Comes as a shock to all of us. But, seriously, this is good news. Volume is up 11% and sales dollars are up 12% from 2009. Fantastic.

Remember, though. 11% of a small number is still a small number. Craft brewers sold approximately 10 million barrels of beer in 2010, up from approximately 9 million barrels. Still, 10 million barrels represents a mere fraction, only 4.9%, of the total amount of beer consumed in the United States. For those keeping score at home that means that total US consumption was approximately 204,081,633 barrels in 2010.

Also, remember when we said that Sam Adams was causing a problem for the Brewers Association because it had outgrown the definition of "craft beer" set by the lobbying group? Sam Adams produced over 2 million of that 10 million barrels, or a full 20% of the craft beer output for the year. Boston Beer's gain is all of our gain, I suppose.

Of course, just looking at Wisconsin, it would be hard to argue that the rest of the industry wasn't at least coming along for the ride. New Glarus, Central Waters, O'So, Milwaukee Brewing Company, and Ale Asylum have all recently built new breweries or are in the process of building a new brewery. Tyranena is doing well in the Chicago market and other breweries like Lakefront and Capital, not to mention Hinterland, Furthermore, and Pearl Street have all increased production. New breweries are opening this year in the Dells and Madison.

But, to get to even 10% of the domestic market, craft beer, as a whole, needs to double its current output. 20 million barrels will not all come from Sam Adams. The industry needs to find a way for breweries like Dogfish Head, Harpoon, Great Lakes, Bells, Goose Island, Lagunitas, Stone, and ... dare I say ... New Glarus to make significant in-roads on the swill-guzzling masses.

How do you get my father to drink craft beer is an interesting problem. How do you get stadiums to serve craft beer is an interesting problem. How do you get students to party with craft beer is an interesting problem. How do you get distributors to stop giving incentives to retailers for pushing non-craft beer is an interesting problem. How do you get non-craft beer producers to stop bribing and extorting distributors is an interesting problem.

How do you get people to pay for craft beer is a really interesting problem.

5 comments:

  1. Why does the craft beer market need to grow, necessarily? Growth does have its drawbacks, as New Glarus knows all to well. I'd be interested to see what you have to say about how the craft beer market can escape the problems that come with growth, namely consolidation and homogenization of the market.


    While I would most definitely welcome a diversification of the distribution of craft beers, and if growth is the only way for this to happen - I'm cool with growth, in some ways, I'm pretty damn happy with the way things are.

    ReplyDelete
  2. Hey Anon, I completely agree with you from the perspectives of a consumer and a hypothetical brewmaster. Unfortunately, most people can't open breweries without investment capital, and most investors will only fund businesses that plan to grow and have the potential to do so. Whoever has the gold makes the rules!

    ReplyDelete
  3. I was a High Life drinker until one of my roommates got me involved in homebrewing. If you don't understand the brewing process, it's hard to comprehend the array of styles in the craft cooler or to appreciate the unfamiliar flavors of malt hops and yeast. If consumers literally don't know what beer is or how it's made, they're not going to pay more for the fancy stuff.

    Invite your friends over for homebrew parties. Take your co-workers on a brewery tour. Hel create more demand and supply will follow.

    ReplyDelete
  4. nate peck assistant brewer Sand Creek breweryMarch 25, 2011 at 8:33 PM

    I believe almost every Wisconsin micro or regional brewery is up in sales in some percentage or another some more some less. I think this is not only good for those directly involved but also Wisconsin in general. Sand Creek has seen incredible growth in just the time that I have been there. When I started we were at about 3500 and now are currently at about 7000 bbls per year. We have hired many additional employees. This is all thanks to the great Wisconsin consumer opening their eyes to craft beer so thanks. It takes time, commitment, and dedication to a quality product for growth to occur and I think this trend will continue.

    ReplyDelete
  5. Interesting news about Goose Island being bought by the King ABI. Wow, will they still make some of the 4pks like Bourbon County? Are they going to add rice to Honkers? I'm not joking...

    ReplyDelete

Note: Only a member of this blog may post a comment.