Big Beer, Local Beer

My proposal for a sabbatical this fall did not include beer tasting, but a break from the routine in a different location did afford to the opportunity to visit two breweries on Boston’s North Shore, Ipswich Ale Brewery and True New Ale Company. Truth be told, in the IPA sampling, True North’s Northern Haze came out ahead of Ipswich’s 1620 IPA but a hop or two. The crisp, slightly bitter flavor had none of the sweetness or fruitiness that sometimes afflicts IPAs.

The outing also provoked a discussion of questions about the market for small breweries, how many there are now compared even to 15 years ago, and how they fare in a nation dominated by mass produced American lagers. Lo and behold, The American Conservative was ready.

In 1983, there were 49 breweries. Today, there are 7,480 active craft breweries, up from 6,464 last year. The number of breweries is at a 150-year high. The two majors are losing market share. This would appear to be a triumph of competition and consumer choice. They view the explosion of craft breweries as vindication that we live in a golden age of competition and proof that antitrust enforcement is unnecessary.

A little bit of knowledge is a dangerous thing. While the number of breweries has never been higher, the total number of breweries is a completely misleading metric. Consider how irrelevant they are to the average American:

Over half of all breweries brew less than 1,000 barrels and represent less than 1 percent of all volume.

Over 95 percent of all breweries make fewer than 15,000 barrels per year and account for less than 4 percent of total volume.

Almost a quarter of breweries were classified as brewpubs that only brew beer for direct-to-consumer sale on brewery-restaurant premises.

Most craft brews do not get sold or distributed off premises.

Libertarians in Manhattan and D.C. think tanks may have choice, but most people don’t. As of 2018, only 8.4 percent of breweries fell outside of Census Bureau defined urban areas, and the areas that have the most breweries are seeing the most new breweries.

Despite the explosion in craft breweries, Big Beer still rules the game. Bart Watson, chief economist of the Brewers Association, put it succinctly: “The majority of growth continues to come from microbreweries, taprooms, and brewpubs, whereas the distribution landscape remains more challenging for regional craft brewers.”

Jonathan Tepper’s article is largely negative, about how states and big beer conspire to prevent small brewers from increasing their market share. One example is this:

Texas, up until this year, was the only state where visitors to craft brewery tap rooms couldn’t buy cases of beer and take them home. In Texas, craft brewers were forced to give the distribution rights away to local distributors for free. In 2016, a court ruled that it was unconstitutional for the legislature to pass laws that enriched one business at the expense of another.

Texas is not much of an anomaly. Most other states force craft brewers to give up their distribution after exceeding a low level of production. For example, in North Carolina, most craft brewers do not go over 25,000 barrels a year to avoid giving away distribution. Small brewers start small and stay small, while distributors and Big Beer control the market.

I get it. But for a magazine that does a good job of making a case for localism, the proliferation of craft beer with limited distribution is precisely what conservatives who are critical of the big box stores wish would happen in the world of retail and fast food.

So, I can’t get True North in Michigan. It won’t kill me with Dark Horse and Founders (not that one) in state. But when we return to the Methodist Camp Ground for summer rest, the local breweries will be there.

What am I missing?

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9 thoughts on “Big Beer, Local Beer

  1. What’s really interesting about all of this is that back in the 17th and 16th Centuries local breweries were common if not the norm. Luther, in fact, wrote about this, that, and another brewery in the various cities he visited. He also said that the preferred his wife’s home brew at one point.

    What’s even more interesting is how and why (and maybe you can equate some of these facts into the mix) mega-breweries that sprung up more or less post-postprohibition became so popular with the masses, having brewed their swill with adjunct ingredients (corn, rice, etc.) in addition to or in lieu of barely. Whereas the craft or micro breweries try to stay as close as possible to the norm by using only barley and the best hops as possible to produce a great product.

    Anyway, your own state has plenty to offer, Bell’s for example, not to mention Great Lakes just to the East. On top of those, there are probably plenty of small local breweries in and around the SE Michigan area. That’s what you’re missing.

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  2. I don’t get tipsy about localism, because I like the idea of true free trade more. The American Conservative has other things worth reading. But I’m excited that I’m able to get Founders KBS a few hours southeast of Grand Rapids.

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  3. George, I am not missing my mouth (which was the phrase a writer for the Atlantic used in a piece on micro breweries circa 1985 for Bud and Miller, “what, did I miss my mouth?”).

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  4. George,
    The growth of mega-breweries may have depended on rail and better roads. Beer is mostly water which is heavy and expensive to transport.

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  5. Localism: home grown scratch brew. If you think that it is impossible to home brew world class beer… your wrong. And equally wrong to think that it is impossible to brew it from home grown yeast, hops and barley malt. I see Micros as local fronts for highly globalized and colluded gain and brewing industry. Micros do have skilled brewers, (secret: brewing is not hard) but that is all that is local about them. I see no difference between Yeungling and a Micro. They both buy from the same sources. Even if I found malting barley seed on the road, it would be illegal for me to grow it. Mircos could all brew nearly identical beer if they wanted to. . This is why a brewery like Victory can competently brew any brewing style in the world. Dial in Dupont Saison and you get a clone of Dupont Saison. I have found a few reasonable malting barley seed varieties I can grow legally. I wrote to the family who owns Maris Otter Barley seed, (best malt for IPA uses Mars Otter) in England.. They sent me a nasty letter….”how dare you think you could grow Maris Otter in your back yard” I guess I should have felt ashamed but being an American, there is always another way. Some day, I will visit England in August. Go to the those fields of ripe Maris Otter malting barley, take a photograph, resist stealing the seed and then go weep into some nasty bland British IPA in some nasty British pub. Then take a ferry to Belgium and stock up on better malting barley seed. With 6,000 square feet of land, I could sustain all the malting barley seed I need to keep it going year in and year out to brew 15-20 cases of great beer a year for nothing more than some hard physical labor. But growing apples and making hard cider has become much easier for an old guy like myself.

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