Growing Market For Craft Breweries

First off, let me define a craft brewery:

The Brewers Association, a Boulder, CO. based industry group, defines craft breweries as: Those that brew with only barley malts as opposed to cheaper substitutes such as rice and corn. Those that produce fewer than two million barrels per year. Those that are independently owned, with no more than 25 percent ownership by a larger brewer or importer.

According to the Brewers Association, craft brewery dollar sales have increased 58% since 2004, reaching $5.74 billion in sales last year. The Great Lakes Region – comprised of Wisconsin, Illinois, Michigan, Indiana and Ohio – saw a 28.1 percent increase in sales from $54.4 million in 2006 to $69.6 million in 2007. The Southeast Region – comprised of Mississippi, Alabama, Georgia, South Carolina and Florida – experienced the largest increase in sales, up 31.6 percent to $41 million in 2007.

However, craft beers still only account for a small segment of the overall beer category – about 4% of production and 6% of retail sales. Nearly 70% of craft breweries, defined by the Brewers Association as an independent brewer selling fewer than 2 million barrels and having at least 50% of its volume sold in malt beers, sell most or all of their beer on site.

With the craft beer segment growing as quickly as it has, some of the larger breweries are taking even more notice–either by acquiring smaller brands or creating their own small batch brands.

Craft brewers are starting to face higher commodity costs for ingredients such as hops and barley. The cost of barley, wheat and packaging materials has all gone up in the past year due to crop disease, drought and demand for alternative fuel ethanol which has enticed farmers to plant more acres of corn and less of everything else. In addition, hops is in short supply due to a drought.

Lucky for craft brewers, there are die-hards like me, ready to support them 100%. And by support, I mean buy and drink craft brews! Next time you drink beer, make it a craft.