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Monday, July 25, 2011

How Many Breweries ... ?

Stan Hieronymus, newly moved to St. Louis, writes:
The other day I had a quick keep-it-to-less-than-140-characters exchange with a professional brewer not in St. Louis. He asked, in view of the number of relatively new breweries and additional ones about to open here, how many I think the region can support. I copped out and answered I’m too new to town to guess.
Always keen to promote Oregon, I'll offer a few benchmarks. (Keeping in mind that no macro-breweries Portland/Oregon is different from notable macro St Louis/Missouri.) Based on our fair city (population 583,776, forty breweries) and state (population 3,831,074, ninety-one brewing companies), Stan's new home could support 22 breweries in St. Louis or 142 in Missouri. The actual numbers are 11 and 39 respectively.

In fact, it is nearly always the case that mental ceilings placed on the number of breweries a state can support or amount of craft beer it will buy are lower than totals already enjoyed in Oregon. More than 15% of the beer sold in Oregon is craft-brewed. If the rest of the US matched this mark, the volume of craft beer would be 30.6 million barrels sold--in 2010, the actual figure was 10 million. Maybe the rest of the country won't ever reach this point (though there's not a shred of evidence to suggest why), but clearly, it's got a lot of room to grow.

Sources: Oregon Brewers Guild for Oregon stats, Wikipedia for population stats, and Beer Me! and for Missouri stats.


  1. "...Stan's new home could support 22 breweries in St. Louis or 142 in Missouri."

    I wish.

  2. I don't know what the ceiling is for craft breweries in Portland. But I don't think all the places that have opened in the last year or two will survive in the long run. Not because there isn't demand for good beer, or even necessarily because they don't make good beer. I just think some of these folks have no idea how to run a business. No need to mention any names. We'll see what happens. It's getting increasingly competitive out there. If you want to open a brewery, the wise thing to do is locate it somewhere other than Portland.

  3. You could strengthen your model by using the state-by-state craft penetration as a modifier. What's Colorado's penetration? What's Cali's? What's MA's? Clearly OR is an outlier, but if you can build a relationship between craft penetration percentage, and existing breweries per capita, you should get a more realistic result...

  4. TJ, unfortunately, the rest of the country doesn't keep the stats Brian Butenschoen, ED of the OR Brewers Guild, does. I would love to find out what's selling where, but the only way to find it is through IRI data, which is super expensive.

    Pete, I think that's been true all along. A number of breweries have failed in Portland and Oregon. But strong ones thrive because we continue to see more people drink good beer. The market is expanding as fast as the breweries--which indicates a healthy market.

  5. I did a informal study of the population of various California counties divided by the number of breweries in each county. Now mind you, I didn't make any distinction between brewery types (the Budweiser brewery in Fairfield is included) but it gives some idea what might be expected for the country if craft beer had the same penetration as it currently does in Northern California. One brewery for 150,000 people seems a typical penetration which you will find in suburban Northern California counties which ends up being 2,000 breweries for the whole United States of 300 million people. Were closing in rather fast on that number of breweries nationally. If you use cities like San Francisco or San Diego where the penetration is about one brewery for 80,000 people, then the nation could sustain something like 3,750 breweries.

    By the way, the surprising take away for this study is that wine growing regions like Napa, Sonoma and Mendocino Counties have very high rates of breweries per population. I had always wanted to study different wine growing states like Washington, Oregon, and New York to see if that correlation held up, but never got around to it.

    You can read the informal study here:

  6. I've noticed the coexistence of craft beer brewery, ciderworks, and vineyards. I take it to be associate with all being artisan crafted fermented beverages.

    I have also noticed a greater density of craft beer breweries where there is a greater density of slackers, trustafarians, non-corporate life styles; ie, persons of leisure.

    Conversely, in 'work-your-ass-off and get-rich-young' Silicon Valley [Santa Clara County, Calif.] there are few small independent, craft beer breweries [?2?] while the three 'corporate' brewpubs [BJ's, Gordon-Biersch, RockBottom] are well [over] represented.

  7. Interestingly, according to the BA website, oregon sits number 2 on the list of breweries per capita. Number one is actually Vermont (21 breweries or one brewery for every 29797 people, oregon os one for every 31,662 people). And I hardly think anyone thinks of Vermont as a fantastic beer state (yeah, Long Trail is alright, but when was the last time you enjoyed anything magic hat made?). Even further down the list than you might expect: Colorado at number 4, Washington at #8, Michigan at #14, and California (who have nearly twice as many breweries as #2 and #3 Oregon and Washington at 245 breweries) sit all the way at #21.

    Point is - does discussing population have anything to do with the number of breweries a state can support? Clearly not. To me, as long as all craft beers are still covering only 15% of sales, there is no place to go but up. The more the public gets educated, the more people will trade up, and in that aspect, sky is the limit...

  8. Re: "I hardly think anyone thinks of Vermont as a fantastic beer state..."

    People who have been paying attention see Vermont as an awesome Beer State. Between Hill Farmstead, Lawson's Finest, the Alchemist, and Rock Art (to name a few), Vermont is quickly becoming a beer mecca in it's own right.

  9. Actually, in Santa Clara County, I count at least 7 independent breweries (Los Gatos Brewing Co., Faultline, Tied House, Firehouse, El Toro, Campbell Brewing, Palo Alto Brewing) without getting into more corporate spots like Rock Bottom, BJ's, or Gordon-Biersch).

    "The more the public gets educated, the more people will trade up, and in that aspect, sky is the limit..."

    I appreciate your optimism, but comments like this typically start appearing on the upside of a bubble, and yes, population can only support so many breweries. We just haven't figured out that number yet.

  10. I stand corrected on the number of breweries and independent brewpubs in SCC. I was wrong. My count was erroneously based on the Sunnyvale region.

    To my point, the 2- million population of SCC is more than the sum of the population of metropolitan Asheville, Boulder, and Portland combined. Boulder has more breweries and independent brewpubs than all of SCC.