How Many 6 Oz Bottles In A Can Of Formula Craft Beer Brewing Options and Thoughts

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Craft Beer Brewing Options and Thoughts

If you’re into craft beer, there are probably plenty of reasons to spend a little more on a quality brew. Obviously, there are many ways to define this special quality of beer. For some, the nomenclature “craft” is enough. Here are some facts to put ‘craft’ in context.

According to the Brewers Association, the general definition of craft beer is: “An American craft brewer is a small, independent brewery.” Small is defined as 6 million barrels of beer per year or less (about 3 percent of annual US sales). Independent is a brewing operation that is less than 25 percent owned or controlled (or an equivalent economic interest) by a member of the alcohol industry who is not a craft brewer.

The TTB (Tax and Trade Bureau, TTB.gov) is responsible for regulating the craft beer industry. Anyone can go to ttb.gov and get more information than even an informed consumer could ever want.

A general definition of craft brewing can be summarized as follows:

  • Innovative approaches to historic styles with new, evolving ingredients and techniques.

  • Distinctive flavors, aromas and character from new ingredients such as yeast, hops and grains.

  • Small independent brewers immersed in a region or community.

  • Brewers with an individual approach to customers and defined markets/regions.

  • Craft brewers have a market identity because they are independently owned, develop product styles and create a brand identity.

  • Most Americans live within 10 miles of a craft brewery, so they are local by nature.

The craft beer industry can be divided into the following segments: microbreweries, microbreweries, taproom breweries, regional breweries, contract brewers, and spin-offs.

A microbrewery: 1952 in total in 2019

Produces less than 15,000 barrels of beer per year and sells 75 percent or more of its beer externally. Off-site retail stores, outlets, or on-site taprooms/restaurants are defined. Individual states regulate the marketing of craft beer through state laws. For example, some states allow brewers to self-distribute, while others only require a system called three-tier distribution. (Average consumers call this a monopoly.)

A brew pub: 2929 in total in 2019

A single-site restaurant and brewery that sells 25 percent or more of its beer on-site and provides substantial catering services. The produced beer is sold in the restaurant and bar. Here again, local and state laws govern Brewpubs and their ability to sell takeout and distribute to off-site accounts.

Taproom Brewery: 3073 in total in 2019

A professional brewery that sells 25 percent or more of its beer on-site and does not provide significant food service.

Regional brewery: 238 in total in 2019

A brewery with an annual beer production between 15,000 and 6,000,000 barrels.

Contract brewer:

A company that hires another brewery to produce its beer. It can also be a brewery that hires another brewery to produce additional beer under its own brand. A contract brewer handles the marketing, sales, and distribution of their beer, usually leaving the brewing and packaging of the beer to their producer-brewery (sometimes called a contract brewery).

Changing owner:

Recognized by TTB with specific regulations. “A licensed tenant brewery that takes physical possession of a shared brewery during brewing. Unlike contract breweries, the alternate owners are the brewery that records all of the responsibilities of a licensed brewery, including record keeping, tax payments, and label or formula approval. “Brewers Association/TTB.

In 2019, there were a total of 8,500 breweries in all categories defined by the US Brewers Association. The state-by-state distribution generally follows population patterns. Annual growth in 2019 compared to 2018 was +8.9% change.

2020 could be an extremely difficult year to assess the craft brewing sector. In one year, 2018 versus 2019, the number of openings in the Microbrewery category alone increased from 700 to 100. The number of openings increased from 15% in 2017 to 80% in 2019. Basically, the number of closings in 2019 almost equaled the number of openings. 2020 is likely to see negative growth, especially in the Brewpub (brewing and food) category.

There’s no shortage of opinions on what the craft brew market will look like post-Covid19, so I’m not afraid to join the ranks of self-proclaimed experts. If one is committed to the brewing industry and involved in the science and art of brewing, 2020 and 2021 may offer opportunities for turnkey operations. But remember that the watchwords of all transactions are fairness and honesty. I know because I lost a business during the recession.

How to best plan/position to increase craft beer sales? In a July 2nd blog I recently read (How Wine Can Stop Its Return to An Era of Snoot), Dorothy Gaiter advised the wine industry to rebuke the image of wine as a snoot drink. One assumption was that fencing off wine to those with education and privilege meant they were selling to a shrinking demographic. He accurately commented, “The diverse demographics of the wine industry can only benefit greatly. My opinion is that any industry that has embraced these ideals has grown exponentially and opened up markets that were previously untouched.”

Geiter’s comments can be extrapolated to apply to the craft beer industry; from grain to bottled beer is as complex as making wine. Craft beer as an industry aims to convey the message that craft beer is worth its price and respect for quality, style selection, inviting packaging, new and innovative complex flavors and aromas, and mouthfeel. Brewers should be engaged, inviting and interested in the consumer. The average bottle of wine is about $12 to $14 for a 22-ounce bottle; it’s not cheap compared to craft beer. Remember crafters, not everyone likes hops. Some people like a nice malty finish with a toasty aroma.

Beer is not always a low-ball product. Jim Koch, CEO of Boston Beer Company, marketed the beer in the party drink category, which Jim claimed rivaled champagne. The most expensive premium beer made in America came from the Boston Beer Company and is sold at 27% ABV in a 700ml bottle and retails for $275.

As a beverage, beer has a universal market appeal that evolves more than it changes. For example, there are more choices of styles and flavors, today’s offer is innovative, beer is consumed by more women, it is a convenient/portable product, branding options are diverse, beer is affordable.

Let’s talk about beer. Enjoy your heart,

Cheers!

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