drinktec 2017

Brewers Association CEO: ‘Craft beer revolution is now a global phenomenon’

By Mary Ellen Shoup

- Last updated on GMT

Craft beer sales are increasingly coming from local taprooms instead of packaged beer at retail ©GettyImages/blizzard_77
Craft beer sales are increasingly coming from local taprooms instead of packaged beer at retail ©GettyImages/blizzard_77

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The US craft beer market has softened in recent years, but Brewers Association CEO, Bob Pease, said he is bullish about the industry’s future and is encouraged by the prevalence of American beer styles appearing in international markets. 

Between 2015 and 2016, US craft beer volumes grew by roughly 6%​ with 2017 growth projected to hover in the mid-single digit range, according to the Brewers Association.

However, this slowdown is completely in line with what has occurred in the US beer market, Pease told BeverageDaily at drinktec 2017 in Munich, Germany.

“We have to keep a couple of things in mind here: [firstly] the 16 to 18 breweries that no longer meet the BA’s definition of ‘craft’.”

To meet the Brewers Association definition of “craft,”​ a brewer must have no more than 25% ownership by another party other than the craft brewer itself.

“If they hadn’t sold, the volume for small and independent craft brewers would still be greater and our growth rates would be higher.”

Rise of the taproom

Another important factor to consider is the shifting business model of many small and independent US brewers: shelf space and distribution have become much more competitive and the Brewers Association has noticed a move towards a taproom model in which brewers choose to focus on building a local taproom rather than invest in packaging lines and regional distribution of their beer.

“People are investing in the necessary infrastructure and hardware to open a brewery, but they’re not canning or bottling their beer,”​ Pease said.

“They’re selling everything they make at their place of business and the profit there for the operator is much higher.”

The growing taproom business model is also supported by a change in the beer drinkers’ consumption pattern, according to Pease.

“The beer drinker is going out and having the experience of the taproom, they’re not going to store and buying a six pack to take home with them,”​ he said.

“The beer drinkers’ consumption patterns have changed, helping the small, local brewery but probably hurting the larger established regional craft brewers.”

American beer abroad

At drinktec, the Brewers Association highlighted a number of small and independent American beer brands to an international audience including: Allagash Brewing Co., Epic Brewing Co, Lefthand Brewing Co, and West Sixth Brewing Co.

Pease noted that the types of beer showcased at drinktec have come “full circle”​ with American beer styles such as IPA, pales ale, Saisson, becoming more prevalent in international markets.

“So many European brewers are emulating the business models, the beer styles, the beer processes of American craft beer,”​ he said.

“We think that’s really cool because, for us, craft beer brewing started 35 years ago with the pioneers of the American craft beer movement emulating the brew processes styles, flavors of the UK, Germany, and Belgium.”

The Brewers Association Export Development Program saw exports of American craft beer grow by double digits to some global markets such as the UK and Japan.

“The ‘craft beer revolution’ is not just contained to the United States, it is now a global phenomenon,” ​Pease said.

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