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Craft Beer Brewing Options and Thoughts
If you like craft beer there are probably many reasons you rationalize spending a little more on the well brewed drink. Obviously, there are many ways to define exceptional quality in beer. For some nomenclature “craft” is enough. Here are some facts to put ‘craft’ into context.
The main definition of ‘craft beer’, as stated by the Brewers Association is: “An American craft beer from a small and independent brewer”. Small is defined as having an annual production of 6 million barrels of beer or less (about 3 percent of US sales each year). An independent brewing business has less than 25 percent ownership or control (or equal financial interest) by a member of the brewing industry that is not its own. self made craft brewer.
The TTB (Tax and Trade Bureau, TTB.gov) is responsible for regulating the brewing industry. Anyone can go to the ttb.gov website and get more information and even customer information.
The general definition of craft brewing can be summarized as:
A new approach to traditional styles with new ingredients and working methods.
Distinctive flavors, aromas, and characters from new ingredients such as yeast and hops and grains.
Small independent brewers who are immersed in and with a region or community.
Brewers with a personal approach to customers and businesses/regions.
Craft brewers have their own businesses based on independent ownership, create signature products, and have creative influence on brands.
Most Americans live within 10 miles of a craft brewer so that means they’re local.
The craft beer industry can be classified as: Microbreweries, Brewpubs, Taproom Breweries, Regional Breweries, Contract Brewing, and Alternating Proprietorships.
Microbrewery: 1,952 Total Year 2019
Produces less than 15,000 barrels of beer a year and sells 75 percent or more of its beer off-site. Off-site means retail, take-out or on-site restrooms/restaurants. A state regulates the distribution of craft beer through state law. For example, some states allow brewers to self-distribute while others require a system called Three Tier Distribution only. (Average consumers call this a monopoly.)
Brewpub: 2,929 Total Year 2019
A restaurant and brewery, located on one site, that sells 25 percent or more of its beer on site and serves main meals. Beer is sold in the restaurant and bar. Here are additional local and state laws governing Brewpubs and their ability to sell takeout and distribution for outside funds.
Taproom Brewery: 3,073 Total Year 2019
A professional brewery that sells 25 percent or more of its beer on-premises and has no significant food service.
Regional Brewery: 238 Total in 2019
The brewery has an annual beer production of between 15,000 and 6,000,000 barrels.
Contract Brewing Company:
A business that hires another brewery to produce its beer. It can also be a brewery that hires another brewery to produce additional specialty beers. A contract brewing company manages the marketing, sales, and distribution of its beer, while leaving most of the brewing and bottling to its producer-brewery (which is sometimes called a contract brewery) .
Accredited by TTB with special privileges. “A license to rent a brewery that uses a physical share of the brewery when brewing. In contrast to contract brewers, alternating proprietors is the brewery of record for all the obligations of a brewery license, including record keeping, tax, and label or formula license.”, Brewers Association/TTB.
Each category is listed by the Brewers Association in the United States of all 8,500 breweries in 2019. The distribution by state is usually based on the population structure. The annual increase, 2019 compared to 2018, represents a change of +8.9%.
2020 could be a very difficult year to assess craft brewing. In the space of 1-year 2018 compared to 2019 the openings in only the Microbrewery category went from 700 openings to 100. The closure of openings went from 15% in 2017 to 80% in 2019. , in 2019 closed almost equal open. 2020 will have a particularly negative growth in the Brewpub (brewing and food) category.
There is no shortage of ideas about what the craft food industry will look like after Covid19, so I am not afraid to join the crowd of self-professors. If someone is committed to the beer industry and is involved in the science and art of brewing 2020 and 2021 can be given the opportunity to choose important projects. Remember, however, fair, and honest are the watch words in all negotiations. I know because I lost my business during a recession.
What is the best way to plan/position for more sales in craft beer? In the July 2nd blog, I just read (How Wine should not return to an Era of Snoot) where Dorothy Gaiter advises the wine industry to blame the image of wine as a snooty drink. One of the areas is that the fence off alcohol made people of education and qualifications means that they are sold to the declining population. He clearly said, “A diversity of people included in the wine industry can only bring positive results. It is my opinion that any business that adopts these ideas is great grow exponentially and open markets that were previously untouchable.”
Gaiters’ words can be added to suit the beer industry as well; from rice to a bottle of beer is as difficult as making wine. The problem for craft beer, according to the industry, is to spread the word that craft beer is worth the price and respect because of quality, selection of models, wine packaging, new and innovative complex flavors and aromas, and mouth. Brewers must engage, invite, and delight customers. An average bottle of wine is about $12-14 per 22 oz bottle; which is not competitive compared to craft beer. Please remember, you crafters out there, not everyone likes hops. Some people prefer a malt finish with a toasted aroma.
Beer is not a cheap product. Boston Beer Company’s CEO Jim Koch has marketed a beer that is in the category of a celebration drink that, Jim claims, rivals champagne. The most expensive beer produced in America is from the Boston Beer Company and comes at 27% ABV in a 700 ml bottle and sells for $275.
As an alcoholic beverage, beer has a global market appeal that evolves rather than changes. For example, there are many options for styles and flavors, today’s products are new, many women are drinking beer, it is a simple / portable product, branding time is diverse, and beer is cheap.
Let’s talk beer. Enjoy to your heart’s content,
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