So without further ado, here’s some perspective on the current state of craft beer.
In my opinion, the most important story in the numbers is unquestionably the “breweries in planning.” As of June 30 there were 725. In case you’re confused, that means exactly what it appears to mean:
breweries that are not yet brewing beer but which have filed some paperwork for licensing and/or are working on getting going.
That number says nothing about when all these breweries intend to start operation.
Some may be selling beer in a month; others may have another year or more of work before their brews are flowing.
Note that at the same point last year there were only 389 breweries in planning.
And at the same point in 2009, only 260.
The total number of currently operating breweries as of June 30 was 1,740. So, the number of breweries in planning right now is 42 percent of the total number of operational breweries in the country.
The point I’m driving at is, “HOLY CRAP. Over the last decade the, total number of craft breweries only grew by a bit more than 200. Now there are over 700 being planned at this very moment. I have two simultaneous and opposite reactions to this news. First, as a craft beer aficionado, I’m happy at the enthusiasm of new brewers and the potential growth of good beer, but I have serious concerns about the sustainability of this pace of growth. Craft beer is not yet even 7 percent of the entire American beer market. If all 725 of those planned breweries opened tomorrow, they would mostly be pulling sales from existing craft breweries, not stealing market share from domestic lagers. There is sustainable growth, and there is insanity. In my opinion, we may be gazing at insanity.
I am in favor of continued growth of the craft segment of the beer industry. But if the number of breweries almost doubles over the course of a few years while craft’s share of total beer sales only inches up a couple percentage points, it’s a recipe for craft breweries cannibalizing each other’s sales, not growing together.
Another issue to fret over in light of this explosion is the availability of malt and hops. The companies that supply these ingredients have to plant new fields to handle an ever-growing customer base and in the case of hops, it can take a couple years for new plants to produce decent yields.
Many of these new breweries are going to find themselves unable to get sufficient raw ingredients for their beers since existing breweries have contracts guaranteeing them priority on malt and hops.
The good news for you, Birmingham, is that we are so far behind most of the country when it comes to craft beer that our region can handle insane growth. If we just catch up to the beer culture of places like Boston and San Francisco, we’ll have at least a few dozen more breweries in Alabama–if they can get the malt and hops they need.
The other noteworthy headline from the press release is all good news: the volume of craft beer sold in the first half of this year grew 14 percent, compared to 9 percent growth for the same period last year. So even though the economy is still in very rough shape, sales of craft beer continue to enjoy impressive growth. In contrast, most of the big domestic lagers are seeing sales volume decrease.
On a related note, look for Avondale Brewing to start selling beer very soon, and look for Back Forty to begin producing beer in Gadsden in a couple weeks or so.
Avondale was about ready to start production when they realized they needed to have a special vent hood fabricated to go over their brewing equipment, and that delayed things a bit. Meanwhile, the guys at Back Forty have been patiently waiting for their shiny new tanks to be delivered. The tanks are en route and should arrive soon.
Avondale is going to debut with Spring Street Saison as their flagship, and Back Forty’s opening in Gadsden will give them the ability to expand their portfolio, so you’ll soon see a new IPA and porter from them in bars around town.
“Hopped Up” is a weekly brew review by Danner Kline, founder of Free the Hops and co-organizer of the annual Magic City Brewfest. Send your feedback to email@example.com.