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?