Hopheads Rejoice! Craft Beer Is Now a $23.5 Billion Industry

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Today, the Brewers Association released their annual growth numbers for the craft brewing industry. The yearly analysis provides top line numbers of beer produced by small and independent brewers in the U.S. according to data collected by the BA from breweries across the country. Among their main findings is that as of 2016, there are 5,301 breweries operating in the U.S.

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As any beer drinker or observant consumer could venture to guess, craft brewery numbers are rising, with increases across craft brewers’ market share, sales, and barrels of beer produced. Even as more craft brewers enter the marketplace, however — with more than 800 breweries opening each year over the past three years, according to BA Chief Economist Bart Watson — it is important to look at how these numbers are changing over time, as competition grows more fierce and global brewing companies continue to snatch up regional craft brewers even as sales of their own beers are dominating.

More Breweries Than Ever

The good news for craft breweries and craft beer enthusiasts is that there are now more than 5,300 breweries operating in the U.S. with the BA’s 2016 numbers showing a total of 5,301 breweries in operation throughout the country. This shows a 17 percent increase over last year, with the brewery count clocking in at a revised 4,548 for 2015. Of those 5,301 breweries, 99 percent are craft, according to the BA.

These 5,301 breweries in operation in the U.S. in 2016 include:

3,132 microbreweries, which are craft breweries that produce less than 15,000 barrels of beer per year, with 75 percent or more sold off-site.

1,916 brewpubs, or brewery/restaurants, that sell 25 percent or more of their beer on site.

186 regional craft breweries, or those producing between 15,000 and 6,000,000 barrels per year (like Sierra Nevada, Stone Brewing and Bell’s Brewery).

67 large or otherwise non-craft brewers; those whose annual beer production exceeds 6,000,000 barrels (meaning Anheuser-Busch, MillerCoors, and their many acquisitions).

Craft Brewery Growth By the Numbers

In 2016, the U.S. saw 826 new brewery openings, with 97 closings. In beer produced by volume, craft brewers saw 6 percent growth overall and a 10 percent increase in dollar sales over 2015.

The current craft brewer market share by volume stands at 12.3 percent, a small increase over last year’s market share of 12.2; however, this percentage is a significant increase over craft market share in 2011, which was 5.7 percent.

In 2016, craft brewers produced 24.6 million barrels of beer — that’s about 775 million gallons, or 6.2 billion pints — which also takes into account the 1.2 million barrels that were “lost” to large brewer acquisitions.

In dollars, the craft share rose to $23.5 billion, a 10 percent increase over 2015, making up about 22 percent of the total U.S. beer market retail dollar value of $107.6 billion.

The good news for craft brewers is that there are more breweries in the U.S. now than ever before, with more breweries opening every year (the number has steadily hovered around 800 new brewery openings year over year since 2014).

Craft Vs. Macro: Why it Matters

Although the BA report shows steady growth for small and independent brewers, when you look at the other side, you see how much macro or large global brands are still controlling the marketplace. The vast majority of beer production, dollars ($84 billion) and market share (88 percent) continue to funnel into one or two global companies.

Craft brewers’ value lies not only in their ability to provide access to more full-flavored beer, but in the effect their businesses have on local communities and economies. For example, in 2016, craft brewers provided nearly 129,000 jobs across the U.S., an increase of almost 7,000 jobs since 2015.

This economic impact (which the BA reports on every two years, with the next report for 2016 on the way) showed in 2014 that the craft beer business contributed about $55.5 billion to the U.S. economy, with over 424,000 jobs connected to the craft brewing industry.

And these added jobs, and their subsequent economic boost, are diffused throughout the U.S., Watson said. “We’re seeing those jobs not just concentrated in a few pockets throughout the country, but everywhere, from rural to urban and suburban communities. It’s really making an impact in a whole lot of communities.”

Here’s another fun statistic: 75 percent of last year’s craft breweries were producing less than one thousand barrels a year each, collectively less than what Sierra Nevada produces, which in turn is only 1 percent of the beer Anheuser-Busch produces, Watson said.

“I think what we’re going to see as the number of small breweries increases — and it looks like that is continuing — [is] diversity of growth across a lot of different places,” Watson said.

Though the challenge to maintain growth up against global brewers and their craft acquisitions remains, overall, it seems, the craft beer boom looks promising as brewers put their efforts toward producing beer for their local communities.

“Many breweries we see opening now are very locally focused and are content to stay that way,” Watson said. 

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