It was a startling announcement: As of Dec. 1, the Brewers Association had counted 4,144 breweries in the United States, the most ever operating simultaneously in the history of the country. According to historians, the previous high-water mark of 4,131 was set in 1873.
The new number includes giant Budweiser, artisan Dogfish Head and your neighborhood brewpub. Although beer industry observers have known this day was coming, the pace of growth was explosive: At the end of 2011, there were 2,033 breweries, or fewer than half as many as now. In 2005, there were only 1,447. And 25 years ago? The Brewers Association, a trade group for small and independent breweries, logged a mere 284 in 1990.
So this is a golden age for beer lovers. It is easier than ever to find a great IPA (the most popular craft beer style in America), stout or session ale.
Previously ignored styles such as gose and Berliner weisse have become trendy, while brewers have a free hand to experiment with Belgian IPAs or saisons packed with unusual herbs.
On the other hand, the expanding market — at least two breweries open every day — has created a new set of problems for brewers. New arrivals, riding the craft beer wave, are finding it difficult to stand out. And it’s not as if bars have doubled the number of their taps in the past five years.
Not only do the new breweries need to squeeze past their rivals even to make it in front of consumers, but they might need to convince bars that they’re more deserving of a chance than better-known beers from Lagunitas or Great Lakes.
Graham MacDonald, the co-founder of Washington, D.C.’s new Handsome Beer, estimates that his beers have been sold at around 140 bars, restaurants and stores in D.C. and Maryland since last fall. Even so, he describes the process of getting into those establishments as “a bit of a challenge.”
“There’s been a huge influx of breweries who’ve come to market in the last year,” he says. “Only two or three years ago … it was easy to go in and say, ‘Here’s a new IPA; here’s a new pale ale; here’s a new stout.’ But now it’s not just the other new guys who are making the same thing; it’s all the other established breweries.”
What to put on tap?
The sentiment is the same on the other side of the bar. “Picking the draft list has become exponentially harder than it was two or three years ago,” says Jace Gonnerman, beer director for Washington’s Meridian Pint, Brookland Pint and Smoke and Barrel. “You have to balance styles, but how many spots do I have for national breweries? What local breweries do I want to focus on?
“Every time a local brewery opens making really, really high-quality beer, it pushes a national brewery off. We keep a good mix of national breweries on because people are looking for that. But you have to say no to people way more than you say yes.”
Even when they are given a chance, some small brewers have expressed frustration with the way beer bars order products. Instead of buying three kegs of a new beer and running through them all, as it might have done when local beers were a novelty, a bar tends to buy a keg and, once it’s empty, fill the draft line with a competitor’s product, and then another one, and so on, before rotating back to the first brewery’s beer weeks or months later.
When brewer Jason zumBrunnen and his partners began planning Ratio Beerworks in Denver’s River North district, they knew what they were up against. “I think we’ve had 10 breweries open in the neighborhood since 2010,” zumBrunnen says. “Colorado is the forefront of craft beer in general. Making great beer is just the barrier to entry. Five years before us, opening a brewery was a very cool thing to do. The difference now is the amount of brands. There’s a finite number of tap handles at Falling Rock or Euclid Hall,” two Denver beer bars known for outstanding craft selections.
Emphasis on localization
Many in the beer industry pin their hopes for small breweries on localization: the idea that consumers would rather drink beers made down the road than across the country. In national surveys conducted by the Brewers Association, 67 percent of craft beer drinkers said it was important to them that their beer be locally made, while 61 percent said it was important that the brewery was independent. Meanwhile, the craft category is growing faster than the total beer market, and in 2014 reached a double-digit (11 percent) share of the marketplace by volume.
Those trends aren’t lost on Terry Haley, vice president for marketing at World of Beer, which has 77 craft-focused locations along the Eastern Seaboard and throughout the South. Haley says his company tries to make sure local and craft regional beers are well represented among the roughly 50 taps found at each tavern, even though “there’s definitely a point of emphasis to have what we call ‘craft’ beers across the major styles: Stone, Lagunitas; here in Tampa, Cigar City’s Jai Alai (IPA).”
Brewers Association economist Bart Watson called the number of brewery openings “pretty incredible,” but he points out that America isn’t exactly saturated with beermakers: In a 2014 article, he noted that the United States has fewer breweries per capita than the United Kingdom, Germany or Latvia. Last summer, after the number of breweries hit 4,000, Watson calculated that “there are also nearly 1,000 cities with a population of more than 10,000 that don’t have a local brewery yet, and numerous neighborhoods in larger cities without a local brewpub or taproom.”
Other markets are hypercompetitive. Mike Sardina, president of the San Diego Brewers Guild, says that while there are at least 100 breweries in the county, there are also plenty of bars that will give a shot to newcomers. “But the beer has to be killer from a quality perspective, and the angle has to be that it’s not just another pale ale,” he says.
That law-of-the-jungle competitiveness will guide whether new breweries make it, says Scot Blair, owner of San Diego’s Hamilton’s Tavern, a fixture on national “Best Beer Bar” lists, and the Monkey Paw and South Park breweries, both of which have been honored at the Great American Beer Festival. “Local doesn’t mean better,” he says. “The emphasis has to be on making good beer. We have maybe 110 breweries in San Diego. We were better when we had less breweries, because we were focused more on quality. It’s like real estate. Everybody jumps on when it’s a bubble.”