This spring, Garrett Oliver, the brewmaster at Brooklyn Brewery, received the James Beard Award for “Outstanding Wine, Beer, or Spirits Professional.” Although Oliver and others from the craft beer world have been nominated in this category for over a decade, it was only last year that the word “beer” was inserted into the award’s title.
The creative drive behind today’s craft brewing is perfectly aligned with the James Beard Foundation’s mission “to celebrate, nurture, and preserve America’s diverse culinary heritage and future.” Yet, like many other bastions of fine food, the venerable foundation was slow to grasp the dramatic change that has overtaken beer in the last 20 to 30 years.
Phil Vettel, who chairs the Restaurant and Chef’s Committee for the foundation, described the group’s thinking when the name change was enacted. “At the time, the committee felt there was so much going on in the world of craft beer and it was so influential that we needed to get that language into the name of the award, to have some way of honoring this work. We changed the language beginning in 2013.”
With that change, the foundation signaled what major culinary schools and their graduates are also realizing: that the steady growth of craft beer has pushed it into the mainstream of American consumer culture. But not only in the context of fine dining: just as Americans came to expect something beyond “red” or “white” in their wine selections many years ago, beer drinkers are looking for a variety of craft beer from a range of outlets, whether in fine or casual restaurants, bars, liquor stores, grocery, big-box and even convenience stores.
The growth of craft beer is fueled by an audience that extends far beyond the “beer geeks” that are its original, most ardent supporters.
More Breweries, More Barrels
It’s hard to believe that in 1980, there were fewer than 100 breweries in the U.S., and only a couple of these were brewing beer that we would recognize today as styles in the craft beer tradition. Leap to 2013: there were 2,822 brewing companies operating in the country. Of these, 2,768 were considered to be craft breweries as defined by the Brewers Association (BA), the trade group for craft brewers, up from 2,347 in 2012. This past spring, the annual Craft Brewers Conference (CBC), hosted by the BA, applauded the 1,744 potential brewing companies in the planning stages, about a third more than in 2012.
The number of companies producing specialty beer is staggering, raising the question whether some communities might be maxed out when it comes to locally-brewed beers. If that is the case, that maximum has yet to be reached. Paul Gatza, director of the Brewers Association, told the CBC audience, “It’s pretty easy for me to see that there will someday be 4,000, maybe 5,000, breweries: this could be our future as a country.”
The volume of craft beer is also growing. Once again this past year, the U.S. craft beer volume grew at a rate that exceeded the year previous — and on a larger base. According to the annual survey by the BA, the craft beer category grew by 18% in volume, the highest rate of growth since 2009, and at a time when overall beer volume fell by 2%.
For 2013, this growth represents an increase of 2.3 million barrels of beer. It’s worth wondering which consumers are being recruited into the craft fold, which breweries are accommodating these new drinkers, and which styles of craft beer are drawing them in.
The BA divides it membership of craft brewers into three categories based on size and business model: brewpubs, microbreweries and regional breweries. While all three groups grew in 2013, they do so at different rates, they experience different challenges, and to some extent, they appeal to different consumers and offer a different mix of craft styles.
Brewpubs — basically a restaurant with a brewery on-site — were once the most numerous craft beer businesses. This year, they grew in number to a peak 1,237 across the U.S., and contributed 103,000 barrels to those 2.3 million new barrels.
For new consumers, brewpubs have been a powerful point of first contact with craft beer culture. As they are restaurants, not bars, brewpubs can attract customers new to craft beer who may come for a meal and then discover the beer. At the same time, with their generally small brewing systems, brewpubs have been innovators, able to take greater risks with new recipes and novel ingredients than larger operations for whom an experimental brew represents a much larger commitment. Brewpubs are nimble, because they can “think small.”
On the downside, a brewpub faces the same challenges as any other restaurant, and many fail for reasons completely unrelated to their beer.
The microbrewery category is the most diverse of the three craft categories: they are distributing breweries (as opposed to restaurant-breweries) that can range in size from so-called nano-breweries, producing a minuscule amount, up to substantial production facilities with wide distribution, producing up to 15,000 barrels per year (the definitional limit set by the BA). The smallest of these companies have been just as important as brewpubs in the role of beer-style incubators, for the same reason: smaller equipment and smaller batches mean less risk tied to experimentation.
In 2013, microbreweries passed brewpubs in number for the first time, with 1,412 such companies in operation (a 23% increase), adding 486,000 barrels to the annual growth in volume.
One reason for their growing business appeal may be expanded sources of revenue, as microbreweries offer onsite-service in their own taprooms and tasting rooms. Where the law allows it, this can turn the brewery into a destination for its fans. Add food trucks or cooperating local restaurants to the mix, and a microbrewery can offer the amenities of a brewpub, without the headache of running a kitchen.
However, these beer-only taprooms are not as likely to attract novice craft drinkers; microbreweries win new converts through distribution, their original function. Retailers — including supermarket chains and big box stores once thought too centralized in their buying to accommodate highly local products — now realize that local beers are a significant draw in the beer aisles. On-premise, craft leads the combined beer sales of Anheuser Busch and MillerCoors, particularly in draft sales, according to data from GuestSciences. And the most appealing tap selection includes both reliable national brands and local micro offerings.
The Bigger Guys
Those breweries that pass the 15,000 barrel limit graduate into the group of 119 the BA refers to as regional breweries (though, for many, that “region” is most or all of the U.S.). These companies were responsible for adding 1.73 million barrels in 2013, or three-quarters of the growth in craft beer volume. It is these largest companies whose beers customers will encounter most frequently — Sam Adams Boston Lager in Costco, Sierra Nevada Pale Ale on tap in airport bars, or New Belgium’s Fat Tire in the convenience store cooler.
Regionals are the companies leading the volume growth, and are most influential in moving public taste. Almost by definition, they are older, more stable companies: many were established in the 1980s, including Boston Beer, Sierra Nevada, Bell’s, Anderson Valley and Rogue. The 1990s brought us the more cutting-edge breweries in their ranks, among them Dogfish Head, Allagash, Avery, Smuttynose, Lagunitas, and Stone. The 1990 class also includes New Belgium and Brewery Ommegang, the first of these now regional-scale companies to popularize the unfamiliar beer styles of Belgium.
A small number of breweries founded since 2000 have made the extraordinary leap into the regional category, including Short’s in Michigan, Florida’s Cigar City, Green Flash in Southern California and Rahr & Sons in Texas.
All successful brewing companies eventually have to face the question of when, how, and where to add brewing capacity. For small companies, it may be a question of a new fermenter, but for large companies, this means serious expansion or, in recent years, whole new facilities sited across the country.
Early this year, Sierra Nevada opened a new brewery in Mills River, NC, under the leadership of Brian Grossman, whose father Ken founded the California-based company in 1979. “Our sales are roughly 50 percent east of the Mississippi and 50 percent west of the Mississippi,” said the younger Grossman. “Our current trends show that the area east of the Mississippi has more of the growth, so that’s where the barrels will come from to scale this brewery to its ultimate capacity.”
New Belgium and Oskar Blues, both Colorado breweries, have also chosen North Carolina for second plants, and Lagunitas—the fastest-growing regional—set its sights on Chicago. Now, San Diego’s Stone Brewing Co. is shopping for a location, making it the fifth major western brewery looking for better ways to satisfy demand out east.
Beer Styles—What’s Popular and What’s Trendy?
American craft brewers are rightly renowned for their restless creativity when it comes to beer styles, but it’s the flagship brands that pay the rent. With few exceptions, even the breweries with the most outlandish public images rely for their steady income on styles that were established at the start of the craft beer revolution.
Leading the beer style field in popularity are India pale ales, which grew by an eye-popping 41% in volume. As the American palate has evolved, these hop-heavy beers have overtaken pale ale, their tamer sibling.
Lisa Morrison, a beer writer and broadcaster, is also a partner in Belmont Station, the oldest and best-known beer store in beer-besotted Portland, OR. In a city where craft beer outsells mainstream beer and more experimental breweries find a welcome, she observes “IPAs are still king. I’ve actually had conversations with many new breweries that have opened around here lately and have said, ‘Well, you know, we weren’t going to brew an IPA, but then we had to.’ But why would somebody not start with an IPA? Do they think there are too many out there?”
Apparently not. Such is their popularity that breweries are grafting “IPA” onto an ever-expanding roster of beers: black IPAs, white IPAs, red IPAs, Belgian IPAs and lower alcohol “session IPAs.”
The biggest sellers come from the big regional brewers: Sierra Nevada Torpedo, New Belgium Ranger, Lagunitas IPA, and the new Samuel Adams Rebel IPA. Among those with more limited distribution, IPAs from Hill Farmstead Brewery, Surly, Russian River, Bell’s or Firestone Walker have passionate supporters.
Also popular are “styles” that aren’t really styles, but which are meaningful categories for retailers: seasonal beers and variety packs, with the former appealing to beer drinkers’ love of novelty and the latter to the convenience of picking up a range of beer choices in one single package.
The volume growth of craft beer reflects more established tastes, but it is nourished by the enthusiasm of the most devoted beer geeks; there are big producers who can cater to a broad range of palates, and small specialty companies with rare beverages and big price tags.
In recent years, the buzz has been about sour or wild-fermented beers, and the barrel-aging that can promote such tart flavors or impart to the beer the character of the beverage previously stored in the barrel. Many breweries large and small experiment with barrels — New Belgium’s La Folie launched the trend, and Samuel Adams is an active player. But one new Berkeley, CA, brewery has made sour beers its exclusive focus.
The founders of The Rare Barrel realize that sours will always be a niche interest, and embrace the fact. “For us, this project was unique because sour beer is well-loved by the most extreme beer geeks, but it’s hard to find and no one has dedicated themselves to it exclusively,” brewer Jay Goodwin acknowledged. “So, while we did constrain ourselves by brewing all-sour, we like to say that constraint breeds creativity.”
Another talked-about trend is notable for its almost mundane nature: the move to “session” beers of low alcoholic power, generally under 4.5%. After years of increasing infatuation with ever stronger, ever more eccentric beers, session beers promise full — but not crazy — flavor at a strength that allows the drinker to enjoy several over the course of an evening.
Notch Brewing in Massachusetts is devoted entirely to session beer—an interesting parallel to the sour-only approach of Rare Barrel. Other breweries have added a session beer to their portfolio. Beer writer Lew Bryson, who is widely associated with support for session beer, notes that All Day IPA from Michigan’s Founders Brewing Co. has “done so well that they made it their year-round flagship, which is astonishing for a brewery with the big beer rep of Founders.”
Odell’s in Colorado has moved their Loose Leaf American Session Ale from seasonal to year-round production. Marketing and brand manager Amanda Johnson-King says, “It was a style that was missing from out portfolio, which many of our customers and fans and co-workers were asking for. Loose Leaf is dry-hopped, delicate but with a good malt backbone and delicate citrus characteristics.”
The session trend seems to sum up much about what is really happening in craft beer today: the drinking public is cooling on mainstream light lagers, and many will be intrigued but not won over by the more experimental fringe of craft beer. Can session craft beer — full of malt and hop flavor, but highly drinkable — become the functional replacement for tired old light lager?
What is craft beer? The answer to that question depends on who’s speaking. To the Brewers Association (BA), keen to act in the interests of its members, a craft brewer is defined by a complicated list of conditions that cover company size, beer traditions and ingredients, and brewery governance and ownership.
To the big brewers who have eyed the growth of craft numbers with potentially predatory interest, a craft brewer is anyone brewing craft beer styles, including themselves.
To the general drinking public, a craft beer can be anything that is not mainstream lager, including top-sellers Blue Moon (MillerCoors) or Shock Top (Anheuser-Busch).
This year, the BA’s evolving definition will change again. After much heated discussion in the press and on-line, the association has modified it’s three “pillars.” The definition of a craft brewer as small (six million barrels or fewer), independent (less than 25% owned by a company that is not, itself, a craft brewer) and traditional (generally all-malt beers with adjuncts used to “enhance rather than lighten flavor) was amended by the board of directors to be more inclusive, accepting that for many brewers, use of adjuncts is, indeed traditional.
This won’t remove the confusion. Goose Island, whose beers are highly sought-after by many craft beer drinkers, ceased to be a craft brewery upon its sale to Anheuser Busch, even though its beer portfolio is unchanged. However, some regional breweries that have been in family hands for generations — and there’s nothing more traditional than that — will be admitted to the club.