Flexible, diverse breweries are the way forward for small craft

By Beth Newhart contact

- Last updated on GMT

The BA is adapting its definitions to accommodate diverse brewers with more than just beer on the menu.
The BA is adapting its definitions to accommodate diverse brewers with more than just beer on the menu.

Related tags: Beer, Beer market, Craft beer, Craft brewers, Brewers association

The craft beer industry is navigating a more mature growth pattern in 2019: a theme that was explored at the 36th annual Craft Brewers Conference (CBC) in Denver.

Hosted by the Brewers Association (BA), the Craft Brewers Conference was co-located with the BrewExpo America Trade Show, incorporating education seminars, networking events and local tap takeovers.

The BA delivered a state of the industry address for US craft beer at CBC, with details from its annual growth report​ released earlier this month. In 2018, total US beer was down 1%, but craft grew at 4% and imports also grew at 4%.

Last year 219 breweries shut their doors, the highest number yet, but 1,049 opened. And there are more to come, as there were more than 10,000 active TTB permits at the end of 2018. The BA said this suggests that at least 2,500 breweries are still in the planning stages.

Looking ahead, the BA is adapting its definitions to accommodate diverse brewers with more than just beer on the menu. Consumers are interested in variety in terms of beer style and beverage choice. Fruity and hazy beers are now brewing alongside flavored ciders and other craft drinks at US breweries.

A 'living definition' of craft brewers

At-the-brewery beer sales hit a record last year, jumping to 3.1 million barrels. Craft beer on-premise has been growing steadily since 2014 (1.5 million barrels), though it still lags behind dominant retail sales. The BA said there is a much larger capacity for on-premise production than is currently being filled, leaving room for growth in the future.

Different styles and sizes of brewery have found different levels of success, with brewpubs up 13%, microbreweries up 16% and taprooms up 40.2%. Taprooms alone accounted for 24% of craft beer growth last year.

These numbers are likely to change, as the BA changed its definition of a craft brewery​ in late 2018. Ann Obenchain, marketing director for BA, said that the association surveyed its members on their full portfolio, and whether they planned to make drinks other than beer within the next 3-5 years: such as flavored malt beverages, hard seltzers, sodas, ciders, etc.

Since the majority were already exploring those options or planning to, and responded well to the idea of a change, BA decided to expand its criteria and make the craft brewery label more flexible and accessible.

“We want the definition to be a living definition to reflect what our industry is doing,”​ Obenchain told BeverageDaily.

CBC by the numbers

With more than 7,000 active craft breweries in the US, the CBC has grown to a be a key industry event among brewing professionals every April. This year the BA hosted in Denver, its first time back in the mile-high city since 2014.

About 15,000 people attended, with 1,000 exhibitors on the BrewExpo show floor and nearly 100 educational seminars spread across the four-day gathering. Highlights included a keynote address delivered by Bruce Dickinson, craft brewer, commercial pilot and the lead singer of heavy metal band Iron Maiden.

The educational tracks covered technical aspects of brewing with craft malt, gose and dry-hopping. Other seminars focused on running a successful brewery, from employee training and retention to marketing and package design. Still others detailed legal updates from the Alcohol and Tobacco Tax and Trade Bureau (TTB) and what to expect with permit applications.

Reasons for optimism

The BA cited Nielsen data that shows consumers are more open to a variety of craft beer flavors. Nearly half agreed that they are more interested in drinking crisp beers now than they were a few years ago (47%), as well as other types -- dark (36%), juicy/hazy (35%) and hoppy (34%).

Smaller craft brewers are facing some concerns, particularly around tariffs and trade, consistent quality, production capacity and competition in a saturated market. But even with slower growth, craft beer sales are at an all-time high and there are reasons to be optimistic about the industry.

Craft beer is increasingly diverse, and this year the CBC highlighted this with seminars led by women and people of color about representation and leadership in what has traditionally been a white male landscape.

Other positive changes the BA has seen in beer include it developing a ‘health and wellness’ edge with low-carb and low-calorie options, more growth in the high-end sector and the creation of the Independent Craft Brewer Seal.

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