Small suppliers of beer, wine and distilled spirits continue to grow albeit at a slower rate overall. Some areas of the country do better than others for some products and there are spots where local markets may be saturated. Here is a summary:
Beer: The growth of breweries continues upward and surpassed 7,000 in 2018 according to the Brewers Association. While the overall 2017 beer sales and production dropped by about 1%, craft beer (as defined by the Brewers Association) grew by 5%–not the double-digit rates of the past, but still healthy. This equates to a 12.7% market share. Because a number of small beer companies have been purchased by large corporate entities, they no longer meet the Brewers Association definition of “craft.” Thus, the total share of these products is probably higher. The “craft” segment is dominated by “regional” breweries which account for 70% of production.
- While beer can be made anywhere, small beer suppliers have predominated in a few states, but that is changing.
- The most populous states had the greatest number of breweries: California (764), Washington (369), Colorado (348), Michigan (330) and New York (329). But the top five per capita are Vermont (11.5), Montana (9.6), Maine (9.6), Oregon (8.5) and Colorado (8.4), according to VinePair.
- “Craft” beer has shown higher growth elsewhere: New Jersey (43%), Kentucky (43%), Oklahoma (39%), North Carolina (37%), Virginia (36%), New Hampshire (33%) according to a report by C + R research.
- Economic impact was substantial, but varied greatly from one state to another. According to the Brewers Association, total economic impact in 2017 was over $76 billion with wages averaging $48,905. Twenty-two states had an annual economic impact of over a billion dollars. The highest per capita economic impact occurred in Colorado, Oregon, Pennsylvania, and Vermont.
- Closures and bankruptcies increased. Among brewpubs, there were fewer openings in 2017 and more closings than in 2016 although the overall number of closures was small. For micro-breweries, there were both more openings and closings…again the number was small. There were a few high-profile closures that seem to happen as expansion efforts soured. One was the San Diego brewer, Green Flash, which had expanded nation-wide and via exports, but they took on too much debt. “Most recently, Oregon’s Deschutes Brewery slashed 7 percent of its workforce, and affected positions came from sales, marketing and operations.” Several others, including the large companies cut staff. Various reasons have been offered for cut-backs such as increased competition from large companies with “craft” products and out-of-state microbrewers, lack of customer loyalty, the overall slowing of sales due to health concerns and possible marijuana substitution.