Navigation
Join our brand new verified AMN Telegram channel and get important news uncensored!
  •  

The year in beer: Cheers, there’s more than 7,000 breweries operating in the US

The Alaskan Brewing Company in Juneau, AK is using a first-of-its-kind steam boiler fueled by spent grain to reduce its use of fuel oil by over 65 percent. The boiler was funded in part through the U.S. Department of Agriculture’s (USDA) Rural Development (RD) Rural Energy for America (REAP) Program. (Alaska Brewing Company/USDA)

America’s beer glass runneth over.

The number of breweries operating in the United States surpassed 7,000 this year, a new high mark, with about 1,000 more new breweries expected to open in 2019, according to the Brewers Association.

Small and independently owned breweries, or craft breweries, were making about 5 percent more beer at the middle of 2018 than the year before, when they produced 24.9 million barrels (about 772 million gallons) for the entire year.

But beer consumption as a whole is expected to, excuse the pun, remain flat.

All U.S. breweries, including major players Anheuser-Busch and MillerCoors, produced 196.3 billion barrels in 2017, a decline of 1.2 percent, the association says. That’s expected to fall another 1 percent once 2018’s amount is tallied.

After years of double-digit sales increases, sales of craft beer continue to grow but at a slower pace. Still, the nation’s regional breweries, microbreweries and brewpubs are expected to set another record sales mark in 2018, with about 7 to 8 percent growth, the association’s chief economist Bart Watson estimates.

And craft beer continues to capture a larger portion of the overall $111 billion-plus U.S. beer industry, increasing its share to 23.4 percent in 2017, or $26.01 billion, the association says. This year, it’s expected to increase slightly to 24 or 25 percent, Watson says.

Craft beer’s continued growth comes from consumers looking to spend local and connect with the people making the beer they drink where they produce it.

“Taprooms are now completely the engine of craft beer,” said Josh Noel, a beer writer at the Chicago Tribune and author of “Barrel-Aged Stout and Selling Out: Goose Island, Anheuser-Busch, and How Craft Beer Became Big Business.”

“It just resonates with the customer so much, you are going into the brewery drinking the beer and it’s so fresh and you are meeting the brewer. You are having this really cool beer experience,” Noel said.

On-site sales also boost a brewery’s bottom line by avoiding revenue split with distributors and retailers, Noel said.

“That is obviously crucial to them and it also provides them an alternative to the store shelves and taps in bars, which are harder to access because there are so many damn breweries out there and there’s so much choice and so many options,” he said.

And bigger players – with the largest being Anheuser-Busch, which has bought 10 craft breweries since 2011 – are able to compete at prices that a smaller, independent business can’t, Noel said.

Breweries bring economic benefits to locales

Breweries are often drivers of local growth, too. Across the U.S., small breweries created more than $76 billion in economic impact, including 500,000 jobs, more than 27 percent of those directly at breweries and brewpubs, the association says.

“Those small breweries add up, and from a jobs perspective there’s beauty in inefficiency,” Watson said. “It takes more people to make the same amount of beer if you’re spreading it across hundreds or thousands of small breweries versus one really large facility.”

Growth has happened across the U.S., in urban and rural places, although the number of breweries in small towns and rural areas has fallen as a percentage of total breweries, Watson says in a recent report. In the association’s latest statistics, Chicago has become the city with the most breweries (167), followed by Seattle (153), San Diego (150), Los Angeles (146), New York (141) and Portland (139).

More than eight in 10 of all U.S. adults ages 21 or older (85 percent) now live within 10 miles of a brewery, Watson says. “That means that impact is going to be felt in a lot of places around the country,” he said, “because these are smaller service-oriented businesses, you have that service jobs component, as well.”

The U.S. has been regularly setting new record highs for the number of breweries in recent years. The pre-Prohibition high mark hit 4,131 in 1873, and the U.S. only passed that in 2015. Prohibition and mass production caused breweries to close, and by the end of the 1970s only 44 brewing companies existed in the U.S.

In one of the historic hotbeds, San Diego County – home to Escondido, California-based Stone Brewing Co., as well as Karl Strauss Brewing Co. and Green Flash Brewing Co. – breweries generated $1.1 billion in economic impact last year, more than the San Diego Padres or the San Diego Zoo, according to a report by the California State University San Marcos Office of Business Research & Analysis.

“It’s a big engine here,” said Ed Ashley, director of business development at the university’s College of Business Administration.

Brewers in the county have seen beer volumes increase 26 percent, while the state’s overall beer volume has been flat, he says. A possible cause: saturation is occurring, Ashley says.

“Location has started to matter more and doing new and interesting beers isn’t enough any more,” he said.

To entice customers, many breweries and brewpubs are doing specialty beer-food pairings and areas are being set aside in some breweries for tasting of special limited releases.

“Barrel-aged beers seem to be taking off and that lends itself to speakeasies,” Ashley said.

There’s growing pains elsewhere, too. Consumers’ choice to drink local makes it harder for a Montana brewer to expand regionally, for instance, to a neighboring state like Colorado, says Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana.

“They are actually having problems continuing to grow,” he said.

Montana ranked second in breweries per capita with 9.6 breweries per 100,000 adults ages 21 or older, behind only Vermont, which had 11.5. The state’s breweries contributed $417 million in economic impact, the Brewers Association 2017 sales and production report says. The state’s breweries contribute more than 1,040 jobs to the local economy, according to a 2016 report by the university’s bureau.

IPAs evolve with new styles

Innovation and new styles have helped craft beer continue to grow. Just as bitter India pale ales became the big driver of craft beer sales over the last decade, more recently less-bitter hazy, citrusy and juicy IPAs have become popular.

“A lot of this style is attributed to breweries in New England, particularly Vermont but has caught on worldwide,” said John Holl, author of “Drink Beer, Think Beer: Getting to the Bottom of Every Pint. “While they might not always be pleasant to look at, because they are so thick or even pulpy, many (hazy IPAs) are bursting with delightful hop aromatics, especially from newer varieties … (and) you can get mango, pineapple and other tropical fruits coming from the glass.”

Hazy, juicy IPAs went mainstream this year, Watson says. “We saw that move from the smallest breweries and taprooms to the regional breweries and having big brands like Sierra Nevada’s Hazy Little Thing (IPA),” he said.

Another emerging new style is the brut IPA, also less bitter, but dry and refreshing with an “almost champagne-like feel,” which emerged last year at the Social Kitchen and Brewery in San Francisco “and really has taken off,” Holl said. “Right now, brewers are experimenting with the enzyme that helps achieve this flavor and mouthfeel and there’s a lot of runway to drive. I hope to see more of them on tap in the coming months.”

Other tempting tastes

Sour beers continue to gain fans, too. “I’ve seen that when people get past the word ‘sour’ but actually see it to more tart, or wild, or lively, they quickly come around,” Holl said. “It’s also a category that is popular with wine drinkers, who often like the fruit additions, the wood aging and the general effervescence of some of these beers.”

IPAs will continue to be experimented with, and pastry stouts, which are made with ingredients to recall the tastes of beloved baked goods are not going away, he says.

“The great thing about beer is that the brewers are always innovating,” Holl said. “Right now there’s likely a brewer tinkering with a recipe or an ingredient, and if it hits we’ll be talking about it soon enough.”

———

© 2018 USA Today

Distributed by Tribune Content Agency, LLC.