A Banner Year for Craft Beer Small Businesses

By Julia Herz

I propose a toast to the banner year American small and independent craft breweries had in 2012. Despite a challenged economy, despite being in one of the most highly taxed and highly regulated of industries, they are thriving.

Just as in 2011, brewers saw more demand than supply for their craft-brewed gems that I like to refer to as authentic, artistic creations full of substance and soul. This demand comes at a time in our culture where so much of what we purchase and consume is not always authentic.

I feel craft brewers have struck a chord, not only with their flavorful world-class beer, but with their approach to business and market. At least that’s how this little lady of a beer lover feels, and I seem to be in good company with millions of others, including you!

That said, today’s 2,200 plus small and independent craft brewers (comprising 97 percent of America’s breweries) are a small business success story. They have slogged their way into the palates and hearts of America’s beer drinkers via what I call blood, sweat, beers and tears.

Let’s face it. It’s scary to be a small business owner. Many of them put their home mortgages, personal lives and funds from friends, families and lenders on the line. But, it’s also exciting to steer your own ship, and that is where the incredible stories lie.

So what were some of the hot topics in 2012 while these small, yet mighty, brewers continued to ferment their way into the U.S. beer scene?

Breweries Big and Small

The Delicious account I keep on significant articles about U.S. brewers is littered with the following repeat theme: big international brewers are beginning to think small. What I mean by that, is brewing giants like Anheuser-Bush/InBev and South African Breweries/Miller, inspired by craft brewers success, continue to expand their empires and offerings beyond light American lagers.


I seem to get asked daily: “Why now?” and “Why craft?” Innovation, creativity, experimentation and a litany of other descriptors (just get out your Thesaurus peeps) are some of the main reasons why craft brewers continue to shine. The Brewers Association now documents 140 beer styles worldwide and 134 of them were judged at the 2012 Great American Beer Festival (GABF).

Simply put, pre-1980 there were only 42 brewing companies operating in the U.S., brewing mostly mass-produced lager. Fast forward to 2012, and 2,100 craft brewers are innovating both inside the glass by creating new beer styles, and outside the glass with their presentation, packaging and storytelling.

Look at Lefthand Brewing Company’s nitrogenized, creamy and sessionable Milk Stout from the bottle. How did they ensure the beer would not overflow out of the glass as those tan nitrogen bubbles cascade and compress so beautifully into a glorious top collar of foam?

And canned craft beer is an amazing development that has finally become accessible to the little guys. More than 170 craft brewers were canning in 73 different styles in 2011. Once finalized, I predict the 2012 numbers will only reinforce growth again.

As for innovation inside the glass, let’s talk about barrel-aging and sour ales. Today’s small U.S. breweries have taken to barrel-conditioning beer like toast takes to butter. Craft beers gain the flavors from anything previously stored in these barrels like wine and spirits. Flavor descriptors gained from the aging process include: caramel, coconut, ash, butter cream, clove, vanilla and more. They also gain tannins that add complexity. Plus, barrel residents including Brettanomyces, Lactobacillus and Acetobactor take these beers over to the “wild” side. The jump in entries in the 2012 GABF Wood and Barrel-Aged beer category showed a 27.5 percent increase, which to me, means brewers will only continue to  leverage the barrel.

Ways to Enjoy Craft Beer

The number beer dinners, beercations (yes that’s a beer vacation), special tastings, pairings and more added to the CraftBeer.com Calendar in 2012 is proof that there is no slowing down of the variety of ways that craft brewers and beer lovers celebrate this amazing beverage.

A specific trend we’ve been seeing lately (and I only see this growing) is celebrating individual styles. In 2012 #IPADay (August 2) garnered a social media firestorm with 10.2 million impressions on Twitter. This year we’ve also seen celebrations of International Stout Day (November 8) and Sour Beer Day (September 8). I can’t wait to see what’s in store for 2013.

Wine and Craft Beer

Photo © Allie Coremin through Flickr CC

I was asked by one reporter this year: “Should craft beer get the same respect as wine?” Boy did that set my mind into an esoteric tizzy. Here is just some of my reply:

The answer is yes, considering how many adult Americans enjoy beer compared to fermented grape and fruits (also referred to as wine). The U.S. is now literally the world’s most diverse beer destination. The advancement of our epicurean craft beer and food culture, supply and demand, access to market, social media and the grassroots movement by rebel brewers and adventurous beer lovers, are significantly responsible for collectively shifting the $95.5 billion dollar industry.

These are historic beer times, and U.S. craft brewers have not refined beer—they’ve redefined it. This all happened at the same time that the U.S. became known for our advancing wine culture with Napa, Sonoma, New York and the Finger Lakes region. However, the beer shift is rarely mentioned or understood by the masses. Plus, our beer revolution and evolution is more of a market driven demand for craft beer, not as much a marketing driven demand, via traditional advertising. I call it trickle up economics.

I love to share that in the U.S., $8.7 billion of the $95.5 billion dollar beer industry (1.6 percent of our GDP) is due to small and independent producers (a similar amount is attributed to U.S. champagne sales). Today there are an estimated 95 million beer lovers, that’s not the case for wine or spirits. The sales of wine ($40 billion according to Wine Spectator) and spirits ($60 billion) combined just barely beer sales. Interestingly enough the majority of fermented beverage sales come from adult appreciators who enjoy all three beverage categories (“cross drinkers”).

Number of Breweries

Number of Breweries in Planning
2011: 915
2012: 1,381*

Number of Operating U.S. Breweries
2011: 1,829
2012: 2,263*

*As of October 2012

To me these numbers are mind blowing. Because of these numbers, a new topic appeared often in 2012, the potential saturation of the craft beer market. I say forget about it. Being worried that there are too many breweries is like asking the National Restaurant Association if there are too many restaurants, and if new ones should continue to open down the street. First off, there is more demand than supply for craft-brewed beer. Secondly, as long as a brewery makes world-class craft beer and creates a loyal following and differentiate themselves, they will be fine. You can quote me on this.

Tiny Breweries

In a 2012 recap, I would be remiss not mention the nano brewer. To me, on one end of the brewery rainbow are the global breweries, at the opposite end are the smallest of the small, often referred to as nano breweries. This group, although not actually defined or definitively named, is a brewing company that produces 100 barrels per year or less (31 U.S. gallons in one barrel). They usually have very limited distribution, mostly selling to their friends and family network. In 2011, there were over 300 nano breweries in the U.S., and once 2012 numbers are finalized, we expect see this number increase even more.

There’s so much more that I could highlight. If you made it this far into the article then you’re a perfect candidate to scan CraftBeer.com’s Craft Beer Muses and Brewers’ Banter sections, as they are excellent indicators of evolving craft brewer topics.

What trends and craft beer milestones did you notice in 2012?

Julia Herz is the Craft Beer Program Director for the Brewers Association, co-author of the free CraftBeer.com Beer & Food Course, as well co-author of Beer Pairing (Voyageur Press). She is a life-long homebrewer, BJCP beer judge and Certified Cicerone®. Despite her extensive experience, she will always consider herself a beer beginner on an unending journey to learn more about craft beer.

Read more from Julia Herz