According to the Brewers Association, the number of craft breweries in the U.S. passed 4,000 in the fall of 2015. The current number of craft breweries approaches America’s historical high of 4,131 breweries over a century ago in 1873. This growth stretches from coast to coast, and now three-quarters of legal drinking aged adults live within 10 miles of a local brewery—meaning there's a 75% chance that if you want, you can to walk to happy hour.
The Brewers Association stores a database of information on the closings and the openings of breweries. Due to the widespread local support of these local breweries, approximately two are opening daily. Factoring in closings, approximately 1.9 breweries across the U.S. open their doors for the first time per day.
Beer Connoisseurs: The New Wine Snobs
America’s beer culture has spread like wildfire, as local pubs shine the light on unique tasting beers with diverse flavours. Most of us know that beer can be light and heavy. But how would you handle yourself if you were asked to describe the body, head, and finish of your (hopefully) cold one?
A growing number of beer connoisseurs demand innovative beers such as sour beers, jalapeno beers, double IPAs, chocolate peanut butter porters, and other creative combinations.
Market Saturation vs. Growth Potential
The rise of American craft beer is surely not losing momentum. As the demand for local breweries grows, new players enter the market. For these breweries, production generally stays local and does not scale, making room for new breweries to become their neighborhoods' go-to restaurant and bar. The trend is towards obtaining a multi-purpose status as a local joint that serves homemade beer and food.
Bart Watson, chief economist for the Brewers Association, suggests that although “a return to the per capita ratio of 1873 seems unlikely (that would mean for than 30,000 breweries), the resurgence of American brewing is far from over.” He supports the prospect for immense and continual industry growth with the fact that over 1,000 cities with populations over 10,000, and other neighborhoods within bigger cities, do not have a local brewpub or taproom. We’re likely to see more innovative, local entrances that capitalize on this supply vacancy.
Challenges For the Future
Despite the upside prospects, challenges exist for craft breweries to differentiate themselves from the competition. Breweries develop competitive advantage best by appealing to specific local markets. Producers should conduct thorough market research to gauge the population and decipher key competitors' market hold.