The American brewing industry reached another milestone at the end of June, with more than 3,000 breweries operating for all or part of the month (3,040 to be precise), according to a recent report by the Brewers Association (BA). Although precise numbers from the 19th century are difficult to confirm, this is likely the first time the United States has crossed the 3,000 brewery barrier since the 1870s. Apparently, the Internal Revenue Department counted 2,830 “ale and lager breweries in operation” in 1880, down from a high point of 4,131 in 1873, according to the BA.
Bart Watson, chief economist for the Brewers Association, had this to say on the association website:
What does 3,000 breweries mean? For one, it represents a return to the localization of beer production, with almost 99 percent of the 3,040 breweries being small and independent. The majority of Americans live within 10 miles of a local brewery, and with almost 2,000 planning breweries in the BA database, that percentage is only going to climb in the coming years.
Secondly, it means that competition continues to increase, and that brewers will need to further differentiate and focus on quality if they are going to succeed in a crowded marketplace. While a national brewery number is fairly irrelevant without understanding local marketplaces, 3,040 breweries could not happen without increased competition in many localities.
What it does not mean is that we’ve reached a saturation point. Most of the new entrants continue to be small and local, operating in neighborhoods or towns. What it means to be a brewery is shifting, back toward an era when breweries were largely local, and operated as a neighborhood bar or restaurant. How many neighborhoods in the country could still stand to gain from a high-quality brewpub or micro taproom? While a return to the per capita ratio of 1873 seems unlikely (that would mean more than 30,000 breweries), the resurgence of American brewing is far from over.
Bart Watson, Chief Economist for the Brewers Association, is a stats geek and beer lover. He holds a PhD from the University of California, Berkeley, where in addition to his dissertation, he completed a comprehensive survey of Bay Area brewpubs one pint at a time.