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Craft Beer Industry Update Damon Scott Technical Brewing Projects Coordinator

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Page 1: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Craft Beer Industry Update

Damon ScottTechnical Brewing Projects Coordinator

Page 2: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Brewers Association Technical Committee

Draught Beer Quality

Quality

Safety

Sustainability

Supply Chain

Engineering

Information Technology

Page 3: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Brewers Association Technical Resources

Page 4: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is
Page 5: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Click to Edit Subtitle

BA CRAFT BREWER DEFINITION:

An American craft brewer is small, independent and traditional.

Small

• Annual production of 6 million barrels of beer or less (approximately 3 percent of U.S. annual sales). Beer production is attributed to the rules of alternating proprietorships.

Independent

• Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member that is not itself a craft brewer.

Traditional

• A brewer that has a majority of its total beverage alcohol volume in beers whose flavor derives from traditional or innovative brewing ingredients and their fermentation. Flavored malt beverages (FMBs) are not considered beers.

Page 6: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

It’s 2018

Where are we now?

Page 7: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

More Breweries Than Even Before!

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Number of Breweries, 1873 - 2017Sources:

Brewers Assoication

and Beer Institute

6200

Page 8: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

More Breweries Than Even Before!

179 Regional Breweries• Produce more than 15K bbls

6000+ Microbreweries/Brewpubs• Produce less than 15K bbls

Page 9: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Click to Edit SubtitleCRAFT BEER IS NO LONGER LOCALIZED…IT IS EVERYWHERE

Michigan: 318

Ohio: 213

Indiana: 135

Pennsylvania: 284

New York: 332

Illinois: 195

Minnesota: 158

Wisconsin: 161

Page 10: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

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More Americans live near a Craft Brewery

83% of Americans live within 10 miles of a brewery!

Those breweries employ ~130,000 people directly!

Page 11: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

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1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Breweries and Brewery Permits, 1995-2017

2500

Page 12: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual Growth Rate, 2007-2017

Page 13: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

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Years of double-digit growth lead to large base:

~ 25 million bbls(2017 year-end)

Equivalent of adding 1 New Belgium in one year!

~ 1 million bbls (added over 2016)

Page 14: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

2016 Size (bbls) % of 2017 Growth

>100,000 -11.9%

10K-100K 38.9%

<10K 72.9%

Beer Industry Production Survey

Page 15: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

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Craft Beer Wine Spirits

Nielsen Surveys: Sum of very/somewhat important

Total 21+ 21-34

Page 16: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

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400,000

600,000

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2010 2011 2012 2013 2014 2015 2016

Premise Use Production, 2010-2016

Page 17: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Channel

Small & Independent Craft Beer

All Beer

ON-PREMISES 27% 18%

OFF-PREMISES 64% 82%

AT THE BREWERY 9.2% <1%

Growth of “Own-Premise” Consumption

Page 18: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Craft Maltsters Guild Member Malt Houses

Page 19: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

Craft Beer makes up only ~13% of

total beer sales by volume, but

accounts for about 35% of U.S

barley consumption!

Page 20: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

BA has invested in a research grant program:

• Test current varieties in growing regions

outside current dominant regions (ESBN)

• Develop winter barley lines

• Investigate flavor contributions of different

varieties

Over $1.2 million invested since 2015

Page 21: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is
Page 22: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

11.7%13.9%

17.6%

22.5%

26.5%

29.3%

0.6% 0.8% 1.1% 1.5% 1.9% 2.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2012 2013 2014 2015 2016 2017

IPAs as % of Craft and Overall Beer

Craft All Beer

IPA is still the new IPA

Page 23: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

BA is also investing in Public Hop Breeding

Program:

• Novel flavor and aroma attributes

• Increased downy mildew resistance

• Increased powdery mildew resistance

• Comparable, or improved agronomic

performance

Page 24: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

2011 2012 2013 2014 2015 2016

2012 2013 2014 2015 2016 2017

Cascade Cascade Cascade Cascade Cascade Cascade

Centennial Centennial Centennial Centennial Centennial Centennial

Chinook Chinook Simcoe Chinook Chinook Chinook

Willamette CTZ Chinook Simcoe Simcoe Simcoe

Simcoe Simcoe CTZ Citra Citra Crystal

CTZ Amarillo Amarillo Hall Mitt (Ger) Amarillo Citra

US Golding Crystal Crystal Amarillo Mosaic Nugget

Crystal Willamette Willamette Crystal Crystal Amarillo

Amarillo Saaz (CZ) Citra Magnum (Ger) Hall Mitt (Ger) Mosaic

Ahtanum US Golding Saaz (CZ) CTZ CTZ Magnum (Ger)

Top 10 Hop Varieties – Annual Hop Survey Results

Page 25: Craft Beer Industry Update · 2018-04-05 · Beer production is attributed to the rules of alternating proprietorships. Independent • Less than 25 percent of the craft brewery is

CHEERS!