Once again, the major news from the Craft Brewers Conference & BrewExpo America is industry growth. The number of breweries, brewing facilities and breweries-in-planning are up, as are the industry sales and market share data. But with great growth comes great responsibility, and the Brewers Association (BA) made it a point to mention the importance of quality several times throughout the opening session and following press conference.
Paul Gatza, BA Director, made the point that if the newer brewers riding the craft beer momentum are pushing sub-par beers into the marketplace, that they could unintentionally start to halt that momentum. Craft beer is gaining steam in part because of the consumer’s interest in quality, and if the new supply matching that demand can’t live up to that consistent quality, the industry overall could feel the effects.
“If a lot of newer brewers are not focusing on quality that reflects on the overall community,” Gatza said. “Sending beer samples to a lab, or counting bacteria in beer… these are the things new brewers are just not doing. We need to get more science behind the art.”
That was the main message. Onto the numbers and other association news from the conference:
BA economist Bart Watson relayed the following stats:
- The craft brewing industry in 2013 hit 15.6 million bbls, which was an 18 percent increase.
- In overall beer market, craft beer now has 7.8 percent of the market (more on this number later).
- In retail dollar value, craft is now at $14.3 billion out of $100 billion beer market — which is a 14.3 percent share of the market. The $14.3 billion is a 20 percent growth over the previous year.
- The BA counted 2,768 breweries in 2013.
- Micro breweries passed brewpubs for the first time in the total count.
- The BA counted 2,866 brewing facilities in 2013, and of those 99 percent are craft breweries.
- There are 1,898 breweries in planning.
- The BA’s economic impact study in 2013 showed about 110,000 craft brewing industry jobs. Many of these are manufacturing jobs, which is a nice nugget for the BA to mention when talking to lawmakers.
Speaking of lawmakers…
Spent-grain. The BA was on top of the controversial spent-grain rule written by the Food and Drug Administration. As we reported previously, the FDA is now reviewing and revising the language of that rulemaking, in no small part to the 2,100 comments it received during the open comment period.
Gatza said that when the FDA emerges again with revised language, there will be a second round of comments. So, the regulator is listening to the industry, and the BA is hopeful that a sensible outcome will be reached after this process has concluded.
Excise tax. The BA remains hopeful about the passage of federal excise tax legislation. The House version of the bill has the bipartisan support of 156 co-sponsors, and the Senate version has 40 co-sponsors.
Guilds update. News broke today that Wyoming now has a state guild, which completes the map. All 50 states have a craft brewer’s guild now.
Revised craft beer definition. The BA also discussed its updated craft brewer definition, which we also reported on previously. The big bit of confusion the BA’s board of directors cleared up with the revised rule concerns the use of adjuncts in brewing. Gatza said it himself, “Is it right to say that a brewery that’s been in business since the 1800s isn’t traditional?” The board’s change finally answers that with a resounding “No.”
20 percent market share. The BA mentioned its stated long-term industry goal of hitting 20 percent beer market share by 2020. It’s definitely a lofty goal, and whether this was intentional or not (the BA execs said it was not) the altered craft brewer definition will provide a market share boost when Yuengling and a few others are factored into the stats.
Here again, a 20 percent market share by 2020 would be a huge hop leaf in the cap of the craft brewing industry, but how the industry gets there remains a concern for the BA, in terms of quality, as stated earlier, but also in the creation pipeline — making sure there is enough raw materials and technical brewing research for brewers.
The BA is also focused on the quality component on the retail end of the equation. There’s already been a lot done here to educate retailers about cleaning keg lines, etc., but the BA has added a retailer membership option and is looking to engage that group even more going forward with a retailer version of its draft beer quality manual.
Exports. Another tool in the industry growth tool belt is the BA’s Export Development Program. This program is funded in part by the U.S. Dept. of Agriculture to the tune of $600,000 in 2014, which is its biggest contribution since the start of this program in 2004. Essentially, the BA uses the program to facilitate the best matches it can between craft brewery, international distributor and overseas market. The program funding also goes to ‘reverse trade missions,’ which are basically marketing promotions of U.S. craft beer with the media and decision makers in other countries. There are 82 BA members in the Export Program (which requires an additional fee to join).
The latest returns aren’t a huge part of the whole (at 282,500 bbls), but international interest is certainly increasing. 2013 saw exports grow by 49 percent, with the top markets being Canada, Sweden, the United Kingdom, Australia and Japan.
And as these other countries take a page from the U.S. craft brewing book and start to produce innovative beer, the BA is making its Best Practices Guide to Quality Craft Beer available in multiple languages so that the highest standards of (say it with me) quality will be maintained across the globe.