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Sustaining the Craft Beer Industry in America

With the growth of the craft beer industry in America over the last few years breweries have experienced an increased growth in demand for quality flavorful beer. Craft breweries face competition in their local economies as well as from the beer industry dominating macro-breweries. The shift in younger consumer tastes has increased their market share, but also forced craft breweries to produce higher quality products. For newer craft breweries branding and business planning is the key. Social media has helped solidify branding and also enabled newer, less-funded breweries to gain recognition in the craft beer community.

Over the past few years America has experienced significant growth in the craft beer industry, but experts say there is still plenty of room. Maureen Oprey, author of Brewing in Baltimore, addresses this in the state of Maryland, which has 34 craft breweries, Maryland is 37th in the nation for craft breweries, 37th, which means we have room for growth. Everybody says every time I turn around, there's another [craft brewery] there is, but there's room for growth. Comparatively, states with the highest number of breweries per capita are still growing, suggesting that the states with the lowest per capita breweries have plenty of space for the craft beer industry to expand. John Holl reported in a Beverage World article, that there are still swaths of the country without local breweries and untapped customer potential.

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According to the Brewers Association, the craft beer industry in America just hit 3,040 operating breweries as of July 2014. Bart Watson, chief economist at Brewers Association, noted that there are two trends fueling the demand with this increase, One is that we've seen a shift in preference towards full flavored beers, the second is that we're seeing a lot of demand products from local independent producers. The increase in production ultimately means an increase in competition. The competition between craft breweries is sure to increase within the local economies, but there's also a challenge from macro-breweries. While macro-brewing companies like MillerCoors and ABinBev held a whopping 92.2 percent share of the overall beer market in 2013 according to the Brewers Association, their portion of market share has decreased by 2.8 percent since 2010 and may continue to decline. As a result larger producers have turned to creating craft-like brands such as Blue Moon, as well as purchasing craft breweries like the ABinBevs purchase of Goose Island in 2011. Many craft breweries have responded to the increased competition against macros by working together to influence the markets palette and create new craft beer consumers. Watson points out, There's still a certain amount of camaraderie [in the craft beer industry] people looking to support each other. Keeping quality high and educating consumers about what craft beer is is importantthecapital to get online is the biggest challenge for craft breweries right now.

Numbered bottles of home brewed craft beer submissions getting judged for the 2014 Earth Bread + Brewery's Homebrew Competition in April, 2014 in Philadelphia, PA. Homebrews submitted up to two different styles that we're judged by a team of six qualified judges. (Sara Sorola/Full Sail University)

James Marcyoniak, co-owner of High and Mighty Beer Co.inMA, agrees that the change in consumer tastes has a big impact on the craft beer industry. Civilization is back on track with buying and drinking locally. This trend is here to stay and will only get stronger and continue to directly impact the robust growth of the craft beer industry.

According to Beverage World, 51 percent of the 25-34 year old age group feels that smaller producers create better quality products than the larger producers do. This is a big deal for craft beer market sustainability. A lot of it is driven by the younger beer lover, not only are more of them coming online, but they are going to be more important as purchasers going forward, says Watson.

A small-scale brewing system set up near the back of the brewery at the Jailbreak Brewing Company in Laural, MD. Breweries use these for pilot and test batches before scaling them up for mainstream production. (Sara Sorola/Full Sail University)

Creating a quality product is only half the battle though. The consensus within the craft beer industry seems to be that quality production and a solid business plan are the necessary ingredients for a craft brewery to succeed in the current and future market. As Jeff Cioletti reported in his Beverage World article, The more breweries in planning and the more actual openings, the likelihood of a few more closures increases, so that'll be a trend to watch in the coming years. There's likely to be some form of Darwinian shake- out, shedding the players whose commitment to quality might not be as solid as that of the survivors, as well as those who are just too under-capitalized to run a successful brewery. Marcyoniak related that, Nobody in the craft beer business can rest on their laurels. Every day you have to think of ways to work smarter. You have you stay in touch with what defines you as a brewery and if it's working. You have to reflect on your integrity daily. You have to endeavor to be diligent at all times while staying creative and relevant.

Marketing and finance play an essential part in the potential for new craft breweries to survive. Since many new craft breweries, like any start-up, struggle with funding for their first few years, social media has become a key tool for branding and increasing sales in the craft beer market.

Jeff Wharton, Cofounder of Drink Craft Beer, points out, People are getting more interested in 'real'foodas we call it. Stuff that's created to taste it's best, not just to be cheap and quick. This is the trend that's helping craft beer grow. Social media justaidsa bit in getting this information. Also, brewers who don't have money for advertising can use social media to tell their story about how they fit into this.

Craft beer tasters walk from brewery tent to brewery tent at the D.C. Beer Fest at Nationals Park in Washington D.C. April 12, 2014. At the Oliver Brewing Company's table Balls to the Wall Opening Day IPA and Cherry Blossom we're offered as samples. (Sara Sorola/Full Sail University)

Steve Hindy of Brooklyn Brewery stated in a Beverage World article, that Social media has come at a perfect time for us. And the big guys are just so burdened with the kind of big-guy attributes to carry around that they find it very difficult to maneuver these little tributaries of media that you have to work with now.

According toWharton itsa natural association, Social media plays a huge role in craft beer. Craft beer is all about community. If you look at many of the breweries that are doing well, especially the newer, smaller players, they've succeeded because they've been able to create a feeling of community. Part of that (and I say part, because social media alone won't do it) is using social media to help create, stay in touch with, and reinforce that community aspect.

The sense of community amongst craft brewers and drinkers could be what's helping to propel the craft beer industry into a larger share of the market, but it will also play a big part in dictatingwho will survive. Social media outlets, such asUntappd, allow consumers to rate and share what they are drinking.It's the community that will advertise through their ratings and reviews which craft breweries are creating quality products, and which are not. Those that fail to provide quality products and sustainable production will suffer from bad reviews and loss of attention from social media word-of-mouth promotion.

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Posted in Home Improvement Post Date 06/19/2018


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