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Tuesday, April 05, 2016

The Future of Beer is Hiding in the Footnotes

For decades, folks in Denver have been tracking the growth of craft beer and the size of American craft breweries, and each year the Brewers Association releases figures on both. This has become an increasingly difficult exercise in recent years, however, because many of the flagship breweries making craft beer have changed their organizational structures to better compete in the marketplace. And that puts them outside the Brewers Association defintion.  According to the revised definition, the Brewers Association says a craft brewery is "small, independent and traditional." (I'd have liked an Oxford comma in that definition, but that's a different debate for a different time.)

Craft beer is, tautologically, beer made by craft breweries. But 2015 was the year that brewing broke "craft beer." The once-elegant dichotomy between craft and noncraft, fraying at the edges since the formation of Craft Brewers Alliance, was shattered with brewery acquisitions, mergers, sales of minority stakes, and mission creep into non-beer products.

As usual, April heralds the annual Brewers Association list of largest breweries. The most startling element of this year's tally is how many breweries have a small letter appended after the name. Those footnotes connect to a description of the compromises and deviations from the pure essence of "craft brewing" each brewery has taken. (I'll include the entire, extremely long list in the first comment below this post.) In other words, these are in some sense all "crafty" breweries. And even with all those footnotes the BA elided some of the changes by failing to notice sales of minority stakes--which I've addressed by adding an asterisk.

So, of the largest 25 breweries in the United States, how many unambiguously meet the definition of "craft?" Six.

Brewing Company
Anheuser-Busch, Inc (a)
MillerCoors (b)
Pabst Brewing Co (c)
D. G. Yuengling and Son
Boston Beer Co (d)
North American Breweries (e)
Sierra Nevada Brewing Co
New Belgium Brewing Co
Craft Brew Alliance (f)
Lagunitas Brewing Co (g)
Gambrinus (h)
Bell's Brewery, Inc (i)
Deschutes Brewery
Minhas Craft Brewery (j)
Stone Brewing Co
Sleeman Brewing Co (k)
Ballast Point (l)
Brooklyn Brewery
Firestone Walker (m)
Founders Brewing Co*
Oskar Blues Brewing (n)
Duvel Moortgat USA (o)
Dogfish Head Craft Brewery*
Matt Brewing Co (p)
SweetWater Brewing Co*

This is not a list of the largest American breweries, it's an obituary for "craft brewing." It demonstrates that a mature market is not one in which the big players are "small, independent and traditional." No amount of fiddling with the definition will ever repair this breach, either--because "craft beer" won. It has become mainstream and is in the process of entering the mass market. And companies that make hundreds of thousands of barrels of beer a year need to use all the advantages size affords. So of course "craft breweries" now look a lot like "macro breweries." The difference between the former craft and macro segments never had anything to do with beer, it had to do with size.  The absurdity of a list that has to include a 300-word footnote to account for all the complexity in a market makes this reality explicit. We have entered the post-craft era; welcome to the future.

Craft beer is dead. Long live beer.


  1. The footnotes to this list provided by the Brewers Association:

    2Top 50 Overall U.S. Brewing Companies notes: (a) includes 10 Barrel, Bass, Beck’s, Blue Point, Bud Light, Budweiser, Busch, Golden Road (partial year) Goose Island, Elysian (partial year) Landshark, Michelob, Rolling Rock, Shock Top and Wild Series brands. Does not include partially owned Coastal, Craft Brew Alliance, Fordham, Kona, Old Dominion, Omission, Red Hook and Widmer Brothers brands; (b) includes A.C. Golden, Batch 19, Blue Moon, Colorado Native, Coors, Keystone, Killian’s, Leinenkugel’s, Miller, Saint Archer (partial year), and Tenth & Blake brands; (c) includes Pabst, Schlitz, Small Town, and 28+ other brand families; (d) includes Alchemy & Science and Sam Adams brands. Does not include Twisted Tea or Angry Orchard brands; (e) includes Dundee, Genesee, Labatt Lime, Magic Hat and Pyramid brands; (f) includes Kona, Omission, Red Hook and Widmer Brothers brands; (g) full year volume; craft rank reflects pro-rated volume due to sale of stake to Heineken (h) includes BridgePort, Shiner and Trumer brands; (i) includes Bell’s and Upper Hand brands; (j) includes Mountain Crest and 10 other brand families as well as export volume; (k) includes Sleeman and Sapporo brands as well as export volume; (l) volume will be pro-rated in 2016 data set due to sale to Constellation Brands; (m) will be part of control group with Duvel Moortgat USA starting in 2016; (n) includes Utah Brewers Cooperative and Perrin Brewing Company brands, will include Cigar City brands starting in 2016; (o) includes Boulevard and Ommegang brands; (p) includes Flying Bison, Saranac and Utica Club brands; (q) includes James Page, Point and Whole Hog brands; (r) includes Grain Belt and Schell’s brands; (s) includes Long Trail, Otter Creek, The Shed and Wolaver’s brands; (t) includes Casco Bay, Sea Dog and Shipyard brands; (u) includes Iron City and 17 other brand families.

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  3. For me, nothing changes: it's always been more about the beer than it is about who makes it. This may be because I started drinking non-mainstream beer in 1981, and where I was, Pennsylvania, there were no microbreweries. There were beers, and breweries made them. When micros started, they were also breweries, and they made beer. I've argued this since 1998. I suppose I'm a stopped clock who's finally right. And will be wrong again tomorrow when "indie beer" becomes the next rallying cry. God help us.

  4. This is not to disagree with your larger point suggesting that the market is not one in which the players are "small, independent and traditional" -- I think you're spot on with your conclusions as to the absurdity of this list. It's simply to point out that some of the footnotes don't take out breweries from the "small, independent & traditional" definition. I think the Bell's footnote merely suggests they have two "brands", as Upper Hand is a tiny brewery they started that brews beers sold exclusively on Michigan's Upper Peninsula and in far northern Wisconsin. Technically, they could have footnoted Stone Brewing, which produces the Arrogant Bastard brands as well as Stone brands.

  5. It's all one industry. Different alliances and trends and products will come and go over time.

  6. This just begs that consumers learn the background and policies and processes of their favorite beer and breweries. This makes it no different than any other food category. Take bread for instance. There is no all encompassing term for local bakeries making good sandwich bread in a bag for sale in mainstream grocery stores. They're just "small" compared to Wonder. Same for my industry, cider. There are "local" producers in the PNW who use nearly identical ingredients (read: no Apple juice) as the big "macros", and there are others with just as shady business practices.

  7. The sad thing is when business owners better option is to sell versus going to banks/private equity to fund their growth – they actually maintain more freedom as managers if they sell than to be an owner and have covenants to fulfill

  8. I think you're wrong. If you buy something you should care about who makes it, and how that company treats its employees, the earth, competitors etc. There should be more to your decision in purchasing goods than just the quality of the end product.

  9. Nat--I'd add that in brewing, the inverse is generally true, too. There are a few tricks big breweries can use like employing mash filters and high-gravity brewing, but they're still just making beer. At the beer level, perhaps more than with any other fermented beverage, beer is beer. It's industrial at a small scale, and it's industrial at a large scale. Even "nano" breweries make beer in 100-gallon batches.

  10. That comment was for lew by the way