How Indie Brewers are Outpacing Beer Industry Growth

ONE NATION, UNDER HOPS THE U.S. INDEPENDENT BEER MOVEMENT Over the last few decades, small, independent breweries in the U.S. have been quietly growing. And though large breweries outpace smaller ones in annual production, craft beers are using their local roots, small scale, and unique offerings to attract devout followers and loyal customers. We take a closer look at the rising tide of craft beer in the U.S. THREE QUALITIES OF A CRAFT BREWERY* * Small e The brewery produces fewer than 6 million barrels of beer per year. Independent. Less than 25 percent of the brewery is owned or controlled by a member of the alcoholic beverage industry who is not a craft brewer himself. Traditional - The brewery's flagship (the beer with the greatest volume produced) is either all malt, or at least half the brewery's volume is in all-malt beers-or in beers that use adjuncts to enhance flavor. THE CRAFT BEER FAMILY TREE -- Brewpub Produces primarily for sale in restaurants and bars and sells 25 percent or more on-site. Produces less than 15,000 barrels per year Microbrewery with up to 25 percent sold on-site. Regional Craft Brewery Produces between 15, 000 and 6 million barrels per year. Handles marketing, sales, and distribution of a beer that's been produced by a hired brewery. Contract Brewing Compony * US. BREWERIES BREAKDOWN ** * Today, independent craft breweries make up the lion's share of all operating breweries but only produce a small amount of all U.S. beer sold. PERCENTAGE OF OPERATING U.S. BREWERIES IN 2010 5% Regional Craft Breweries 100% 59% 34% Microbreweries Brewpubs 98% U.S. Craft Breweries 1% Large Non-Craft Breweries 1% Other Breweries Barrels of Beer Sold in 2010 (203,576,450 Total) 5% Domestic Craft Breweries 95% All Other Beer Sales SMALL BREWERIES DRIVE OVER THE LAST FEW DECADES, THE GROWTH OF INDUSTRY GROWIH OVERALL INDUSTRY GROWTH. HERE'S A GLIMPSE. CRAFT BEER INDEPENDENT BREWERIES HAS BEEN ECLIPSING BEER U.S. Beer Sales Growth 2004 2005 2006 2007 1% +7% -1% 8% 2% 11% 1% 11% THE RISING TIDE OF INDEPENDENT BREWERS The number of operating independent brewers in the U.S. is growing. As of November 2011, there were 1,927 craft breweries that operated during the year-the most since 1900. 2,000 1,500 1,000 500 1900 1910 1919 1930 1936 1940 1950 1960 1970 1980 1990 2000 2010 Credit: Brewers Association, Boulder, CO YEAR TOP CHALLENGES FACING TODAY'S SMALL BREWERS Though independent brewers have enjoyed significant growth these last few decades, they face unique challenges as small businesses in a big industry. ACCESS TO MARKET • COST OF RAW INGREDIENTS & MATERIALS REGULATIONS & TAXES BREWERS ASSOCIATION/ CRAFTBEER.COM/ BEERAPPRECIATION.COM/ CHICAGO TRIBUNE intuit. SOURCES: NUMBER OF BREWERIES