Book Review: The Craft Beer Revolution

Craft beers have taken the US by storm, now representing 6.5% of US beer by volume and >10% by dollar in the last year. Production grew with demand, with 1 microbrewery in 1965 to >2,700 craft breweries in 2013. But as with any trend, there are two main questions: how did it get to today, and will it continue? Steve Hindy, the cofounder of the Brooklyn Brewery, thinks that the craft beer revolution will continue, and he makes a compelling case by giving an account of the past.

The rise of craft beers has not been a gentle upward trend. The book is divided into specific time frames each with its own theme (The Pioneers, First Generation, Big Money Meets Craft, etc.) and, thus, their own challenges. From ’65-’84, the idea of craft beers had not occurred to most Americans as legislation made it easier for microbreweries to thrive (1976 and 1979). From ’84-’94, it was the “first true generation” that produced brands like Sam Adams. From ’94-’00, investors tried to take advantage of the craft beer trend as major companies tried to lock down the distribution channels. This brings us to the current generation, as producers try to discover the formula to not just surviving but thriving.

However, the overarching problem has always been, and will always be, distribution. AB InBev and MillerCoors still have 74% of the market due to their ability to pressure distributors, even, in some years, force distributors to carry only their respective brands (see ’94-’00). The book attempts to address this with 3 options: 1. Stay small; 2. Become a national brewery; 3. Contract brewery. Each option has its pros and cons, but the book implicitly (whether on purpose or not) disdains contract brewing, and the author has had several spats with Koch (founder of Sam Adams, a national brewery).

After all these years, the craft beer survived, and it seems like it is here to stay. It is a profitable venture if executed properly (fun fact: restaurants that focus on craft beers had a 50% success rate of staying open since 1980, much higher than the usual rate of restaurant successes), and the people who participate in the industry are very passionate. The large brewers have taken notice and are trying to produce their own versions (i.e. Blue Moon). Though the future is unclear for this product, the demand is there, and the craft beer industry is still amorphous with room for innovation and players.

Link: http://www.amazon.com/The-Craft-Beer-Revolution-Microbrewers/dp/1137278765

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s