Data Lab| Fed up with mundane beer options? A brewing revolution is underway in the US

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The craft beer sector in the United States can rejoice as the sun is finally shining again. This impression is reinforced by the Brewers Association’s recent report, the industry’s main trade group, which shows the sector’s strong recovery from pandemic-related losses. Even while there might still be some gloomy days ahead, the storm has hopefully gone for good.

As per the Brewers Association of the United States, a craft brewery, often known as a microbrewery, is a brewery that normally produces less beer than big brewers and is frequently privately owned. These breweries are typically marketed and seen as placing focus on traditional ingredients, novel flavours, and a variety of brewing techniques.

An industry predicated on human interactions saw its first-ever volume decrease in 2020, down by 9 per cent, as a result of the widespread closures of bars, tasting rooms, and virtually every other meeting place. However, 2021 brought good news. The BarthHaas Report 2021-2022 indicates that the share of the top 40 brewers has increased from 88.7 per cent of the total production in 2017 to 91.4 per cent of the total production in 2021.

This is a positive development for the industry, which saw 36 of the top 50 brewers post losses in 2019. The unprecedented run of continuous development it had experienced over the previous ten years began to diminish even before the epidemic. Craft beer was finally able to become a part of every aspect of the American beer landscape during that time. By 2021, there would be 9247 breweries operating, up from 1813 in 2010.

In 2021, the top 40 brewers of the world produced 91.4 per cent of the total beer output, out of which the top 10 brewers claimed 73.8 per cent of market output as per the BarthHaas Report. Some of these breweries have subsequently outgrown the “micro” level due to their success, but they are still referred to as microbreweries because of the type of beer they are making. The term “speciality brewers” is now used to describe some. This effectively demonstrates how the development of microbreweries has led to a full circle in the consolidation, international mergers, and acquisitions of the world’s beer industry.

The beer transition 

The only locations in Europe where beer was produced on a scale that could be considered commercial up until the thirteenth century were monasteries. The monks, visitors, pilgrims, and the underprivileged were all served beer. Later, monks began brewing beer for noblemen, selling it in “monastery pubs,” and offering it for free use during church festivities and feasts.

From the fourteenth century onward, commercial brewers began to seriously threaten monastery beer production. Beer demand increased as income levels rose, trade and communities grew, and people became more concerned about water pollution. Travelling merchants needed a place to stay, food, and drink, and “inns” and “taverns” tried to provide for their needs. Trade centres like London, Bruges, Hamburg, and Munich quickly developed into significant brewing hubs. 

The beer industry underwent a significant transition globally due to scientific advancements made in the eighteenth and nineteenth centuries. New types of beer could be manufactured and the production process could be more precisely managed thanks to advances in our understanding of yeast, steam engines, and refrigeration. As a result, the brewery sector started down the path of industrialization, which significantly consolidated the market.

As per the BarthHaas Report 2021-2022, the top 10 beer brewing countries in the world are – China, the United States of America, Brazil, Mexico, Germany, Russia, Japan, Vietnam, the United Kingdom, and Poland.

But there has been a counter-movement, which began in the US, against the growing dominance of increasingly standardised lager and light beers made by fewer and fewer brewing enterprises. Due to their modest size, new breweries producing “special beers” and “older” styles of beer were given the moniker “microbreweries.” Similar trends are currently being seen in several nations. Even though they still produce a small portion of the world’s beer, microbreweries are expanding quickly.

Although the aggregate growth figures could suggest brighter times ahead, craft beer still faces several difficulties. Government initiatives that helped many brewers weather the most difficult phases of the shutdowns have come to an end, supply chain concerns are straining already thin bottom lines, and the alcohol market is becoming increasingly competitive with new players vying for consumers’ attention.

Nonetheless, craft brewers can concentrate on doing what they do best—brewing the finest of suds. 

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