2011 U.S. Craft Beer Grows 13%

Posted On March 27, 2012

Total U.S. brewery count tops 2,000

Boulder, CO • March 26, 2012 —The Brewers Association (BA), the trade association representing small and independent brewers, today released 2011 data on U.S. craft brewing¹. Craft brewers saw volume² rise 13 percent, with a 15 percent increase in retail sales from 2010 to 2011, representing a total barrel increase of 1.3 million.
In 2011, craft brewers represented 5.68 percent of volume of the U.S. beer market, up from 4.97 in 2010, with production reaching 11,468,152 barrels. Additionally, the BA estimates the actual dollar sales figure from craft brewers in 2011 was $8.7 billion, up from $7.6 billion in 2010. Increased retails sales represented 9.1 percent of the $95.5 million dollar U.S. beer market³.
“While the overall beer market experienced a 1.32 percent volume decrease in 2011, craft brewing saw significant growth, surpassing five percent total market volume share for the first time,” said Paul Gatza, director, Brewers Association. “It’s becoming increasingly clear that with the variety of styles and flavors to choose from, Americans are developing a strong taste for high-quality, small-batch beer from independent brewers.”

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With 250 brewery openings and only 37 closings, the BA also reported that 1,989 breweries were operating in the U.S. in 2011—an 11 percent increase from the previous year. Small brewers employed approximately 103,585 workers in the U.S in 2011.

“We saw rapid growth in brewery openings last year, particularly with microbrewery start-ups, and these numbers are poised to rise even more in 2012,” added Gatza. “In February 2012, we already topped 2,000 operating breweries—a truly remarkable milestone. We look forward to even more success and the continued expansion of the craft beer market.”

Note: Numbers are preliminary. The Association will publish its full 2011 industry analysis in the May/June 2012 issue of The New Brewer, highlighting regional trends and sales by individual breweries. Additionally, a more extensive analysis will be released during the Craft Brewers Conference in San Diego, Calif., from May 2-5.

¹ The definition of a craft brewer as stated by the Brewers Association: An American craft brewer is small, independent, and traditional. Small: Annual production of beer less than 6 million barrels. Beer production is attributed to a brewer according to the rules of alternating proprietorships. Flavored malt beverages are not considered beer for purposes of this definition. Independent: Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member who is not themselves a craft brewer. Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50 percent of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.

² Volume by craft brewers represent total taxable production.

³The Brewers Association does not include flavored malt beverages in its beer data set.

Contact:

Abby Berman (on behalf of the Brewers Association)
[email protected]
646.695.7044

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About the Brewers Association:

The Brewers Association is the not-for-profit trade association dedicated to small and independent American brewers, their craft beers and the community of brewing enthusiasts. The Brewers Association (BA) represents more than 70 percent of the brewing industry, and its members make more than 99 percent of the beer brewed in the U.S. The BA organizes events including the World Beer Cup®, Great American Beer Festival®, Craft Brewers Conference and BrewExpo America®, SAVOR?: An American Craft Beer & Food Experience and American Craft Beer Week. The BA publishes The New Brewer magazine and its Brewers Publications division is the largest publisher of contemporary and relevant brewing literature for today’s craft brewers and homebrewers. Beer lovers are invited to learn more about the dynamic world of craft beer at CraftBeer.com and about homebrewing via the BA’s American Homebrewers Association. Follow us on Twitter.

Kettlehouse nears 10,000 Barrel Limit – Pulls from Markets

Posted On March 16, 2012

Kettlehouse Brewing Company of Missoula announced on March 1 that it is pulling out of the Helena, Kalispell, and Great Falls markets in order to be able to continue to maintain its current tap room operations.  Tim O’Leary’s decision didn’t come easy but state law requires breweries who make over 10,000 barrel within a year to cease selling beer for on premise consumption.  Kettlehouse is rapidly approaching that limit, and would rather operate tap rooms in Missoula, than continue to push to these markets.

In 1999 when the legislature smartly approved the current sample room exception law which has be instrumental in helping the craft industry grow, probably no Montana breweries had 10,000 barrels in their headlights.  Republished from the Growler Fills March 5th post, this article provides a good look at some of the rationale and implications of the current circumstances.

BY ERIC CIOE – Kettlehouse Brewing has unfortunately been forced to make a tough decision: either pull out of some of their markets, or shut down their two tap rooms in Missoula.  The decision isn’t forced by capacity demands.  In fact Kettlehouse has recently expanded their production brewery on Missoula’s Northside, more than doubling capacity with two new 90 barrel fermenters.  The issue is a legislative one, an issue that at least one other state has just dealt with quickly and justly, providing a blueprint for Montana legislators to support a popular and growing local business.

The rub is caused by the definition of ‘small brewery’ in statute 16-3-213:

(2) (a) For the purposes of this section, a “small brewery” is a brewery that has an annual nationwide production of not less than 100 barrels or more than 10,000 barrels.

(b) A small brewery may, at one location for each brewery license, provide samples of beer that were brewed and fermented on the premises in a sample room located on the licensed premises. The samples may be provided with or without charge between the hours of 10 a.m. and 8 p.m. No more than 48 ounces of malt beverage may be sold or given to each individual customer during a business day.

What these parts mean put together is that breweries that produce more than 10,000 barrels a year are no longer considered a “small brewery” and can no longer sell pints of their beer on premises.

Big Sky Brewing is so far the only brewery in Montana that exceeds that limit.  Because of this, they have to give away their beer rather than sell it in their taproom, and in quantities less than 48 oz.  One gets the feeling that this is not an issue for Big Sky, who have successfully built a regional brewery that distributes to almost half of the states in the country.  Their goals and circumstances are unique among Montana breweries.

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Kettlehouse is a different animal entirely.  Their Myrtle Street taproom is an obvious hangout for the university and downtown communities, more relaxed and kid-friendly than nearby bars.

Even more obviously community oriented is the Northside taproom. There, Kettlehouse hosts Community UNite each Wednesday where $.50 of every pint poured goes towards varying organizations within Missoula.  These events are booked through the end of 2012 already.  Important community groups like the Big Sky Documentary Film Festival, the Caras Park Fund, and the Missoula Senior Center are all being represented in the first few months of 2012.  Every Wednesday there are bikes chained up outside and street parking full for a hundred yards in both directions.

With both of their taprooms, Kettlehouse supports the Missoula that has supported them through the years.

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So when faced with the choice of brewing beyond the 10,000 barrel limit for selling beer in their taprooms in Missoula, or reigning in production by pulling out of markets where their beers are popular, Kettlehouse has chosen to side with Missoula.  No doubt Cold Smoke fans in Kalispell, Helena, and Great Falls are disappointed with the choice, but Tim O’Leary recognizes the importance that his taprooms have in Missoula and is unwilling to give them up, even at the cost of potential profits.

But he should not have been faced with this choice to begin with.  While arguments can be made for most of the other provisions that govern breweries, such as the 48 oz law and the 8 pm last call, one can scarcely see a point in the 10,000 barrel limitation for beer sales in taprooms.

Who are the beneficiaries of such a law?

Not the bar owners in Missoula.  Because of the other regulations on the Kettlehouse, there is hardly competition between local bars and local breweries as is.

Not the bar owners in Kalispell, Helena, and Great Falls.  They will no longer be able to supply their customers with the Cold Smoke that they enjoy.

Not local small brewers.  Missoula newcomer Draught Works is already pouring beer as fast as they can brew it and, like both Kettlehouse locations, are busy almost every night of the week.

Not the state.  The more beer Kettlehouse sells, the more tax dollars that go to Helena.

Not the local economy.  Kettlehouse employs brewers and bartenders at two locations in a town with a distinct job shortage.  Their growth would mean more jobs in Missoula.

Not the local communities.  Both taprooms are friendly, safe places where locals can grab a pint after work without being in bar environment.

Those who will benefit most of all from the Kettlehouse not being in three large Montana markets are large out of state brewers like Sierra Nevada and Deschutes, who will doubtless fill major parts of the void left by Kettlehouse’s departure.  And as much as I enjoy the beer from those breweries, I can’t help but feel they are doing fine without help from the Montana legislature.

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Fortunately we are not in uncharted waters.  In 2010 and 2011 I watched a similar regulatory hitch encountered and eventually overcome while living in the Midwest.

The Three Floyds Brewery in Munster, Indiana realized in 2010 they were on course to surpass the 20,000 barrel limit that the state government had imposed in the early 1990s.  After reaching that limit breweries would no longer be able to operate a taproom, among other things.  Three Floyds teamed up with Sun King and Upland, two other breweries in the state who were approaching 20,000 barrels per year to lobby for raising the limit.

Recognizing the economic benefit to the community and the state as a whole that these three successful business provided, the Indiana legislature quickly voted to raise the limit to 30,000 barrels per year in May of 2011. With Three Floyds recently growing at a rate of almost 5,000 barrels annually, this law will no doubt be challenged again in the next few years.  But when pressed on the issue, the Indiana legislature was able to take quick action to prevent successful businesses in their state from being forced to make tough decisions regarding their production.

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Unfortunately for Montana, Kettlehouse has already had to make a tough decision to comply with state law. Kalispell, Helena, and Great Falls residents are already beginning to see fewer Kettlehouse cases at their beer stores and fewer Kettlehouse kegs at their bars.

Tim O’Leary has committed himself to raising the 10,000 barrel limit through legislative action.  Doubtless the beer communities of Kalispell, Helena, and Great Falls support his efforts.  And Bayern Brewing, who is likely the next brewery to reach 10,000 barrels in Montana, also stands behind him.  But beyond that, any Montanan who cares about the growth of its local business, especially those who support the community they are part of as much as Kettlehouse does, should support him to get the limit raised or even eliminated.

Of course there will be complications involved.  Any alcohol-related decision made in Montana must contend with the biggest lobby in the state, the Montana Tavern Association, who have not proven flexible with previous challenges to brewery regulations.  But because the main beneficiaries of the limit seem to be out of state brewers who stand to gain sales while Kettlehouse loses them, the Montana legislature and any other interested parties should work quickly so that the natural growth of this successful business is not inhibited any more than it already has been.
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* Eric Cioe lives in Missoula, MT, having arrived not long ago from the great beer havens around Lake Michigan. He’s a fan of big stouts, cask-conditioned ales, fresh local brews and – as I can attest – sharing brews with friends.  You can find more from Eric over at Montana Beer Finder. Posted by Alan at Monday, March 05, 2012

Senator Baucus Highlight Montana Brewers in Economic Engine Initiative

Posted On November 23, 2011

Baucus Congratulates Montana Award-Winning Breweries

Posted On October 18, 2011

Senator’s Small Brewers Caucus Highlights Economic Impact of Local Breweries

(Washington, D.C.) – Montana’s senior U.S. Senator and co-chair of the Bipartisan Small Brewers Caucus, Max Baucus congratulated three Montana breweries for landing top awards at the 30^th Annual Great American Beer Festival last weekend.

• Carter’s Brewing in Billings won a Silver medal in the American-Style Black Ale Category for its Blackened CDA.
• Kettlehouse Brewing Company in Missoula won a Bronze medal in the Gluten-Free Beer category for its Seeley Axe White beer.
• Montana Brewing Company in Billings won a Silver Medal in the Baltic-Style Porter category for its White Eagle Baltic Porter.

“These highly coveted awards show Montana’s small brewers mean business. I applaud Carter’s, Kettlehouse and Montana Brewing Company for representing our state so well at this national competition. Montana’s small brewers support good-paying jobs and these awards will help draw even more attention to this important business in our state,” said Baucus.

526 breweries representing 48 states plus Washington D.C. and Puerto Rico entered the 2011 competition. Awards from the professional judge panel at the festival are recognized around the world as symbols of brewing excellence.

Baucus led the formation of the Bipartisan Small Brewers Caucus to highlight the economic impact of small brewers in Montana.

Montana has the second-highest number of small breweries per capita in the nation, with 28 registered breweries. Small brewers use over 5.6 million pounds of malted grain, approximately half of which is grown in Montana. They employ more than 250 Montanans.

Facts about the Montana brewing industry:

· Small brewers utilize over 5000 retailers, and sell their products in 24 states.

· Small brewers manufacture and package over 88,000 barrels (2,728,000 gallons) of fine handcrafted beer in pints, bottles, cans, and kegs each year.

· Small brewers experienced 10% growth in barrels of beer produced in 2010, and had sales over $24,000,000.

For a full list of award winners from last weekend’s Great American Beer Festival click HERE.

Contact: Kate Downen 406-224-5056/Jenny Donohue 202-224-2651/Kathy Weber 406-329-3123

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