Craft Brewers and the Economy

As an avid home-brewer and beer drinker I wanted to share a few articles and some insight into the craft beer industry. Historically, the beer industry has been labeled recession proof because people drink when they have money and they drink more when they don’t. This time appears to be a little different as the total U.S. beer market actually declined 2.9% in overall sales volume. The one bright spot for the industry has been the craft breweries that had a 9.0% increase in total volume sales. In 2009 craft brewers made up about 7.2% of total industry volume compared to 5.9% in 2008. That doesn’t sound like much but it is a 22% increase year over year. Companies like Boston Beer Company, Sierra Nevada, and Dogfish Head are beneficiaries(and some of my favorite brews) of this trend. Our Senators are even looking at ways to reduce taxes on smaller breweries.  The larger brewers are now developing plans to either start buying some of the smaller companies or re-branding some of their current beers to look more appealing to the craft brew crowd. Michelob has come out with a handful of “craft” beers, the most popular being the Shock Top.  They did such a good job branding this beer you wouldn’t even know it was Michelob unless you checked the small label.

So why are craft breweries making a comeback and why are they appealing to consumers?  I think part of it goes all the way back to prohibition when many of the breweries closed down, effectively strangling the U.S. beer industry. The industry was then dominated by a few very large corporations that formulated their beer to be enjoyable by the masses and not necessarily to the individual.  Starting in the late 1970’s and early 1980’s smaller breweries started opening up in response to the bland beer and lack of choice.  Today, a beer culture is starting to emerge the same way it did for wine many years ago.  Craft brewers and micro-brewers are making all different types of beers and beer aficionados and connoisseurs are becoming more common.  Whether you’re looking for a ridiculously hoppy beer or a fruity lambic, you can almost find any ingredient in beer these days. So raise your glass and have a craft beer, all while helping the economy.  Cheers!

Marcus Green

Disclaimer: This post does not intend to constitute legal, tax, securities, investment advice, or an opinion regarding the appropriateness of any investment presented. It is not the intent to promote mis-use of alcohol, alcoholism, binge drinking or any other form of alcohol abuse.