Citing new information from the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Beer Institute, an industry trade group, today reported the number of permitted breweries in the U.S. has reached an all time high. The Beer Institute stated that 948 new brewing permits were issued in 2013 — more than double the 442 given out in 2012 — expanding the number of U.S. breweries to 3,699.
That figure, however, isn’t representative of the total number of brewing facilities in the country.
While the TTB’s data does take into account all permitted operational breweries, brick and mortar facilities and alternating proprietorships, it also includes some breweries still in the planning stages as well as breweries that may have recently shut down, but have yet to be delisted by the federal agency. Additionally, the reported figure does not include beer companies that produce beer under contract.
Bart Watson, staff economist for the Brewers Association, said that while the number suggests the demand for craft beer is strong, the most important indicator of growth remains the increased production of beer.
“The number is far less important than the amount of beer that those breweries are producing,” said Watson. “Clearly that number does suggest that there are going to be a lot of breweries opening this year, but I don’t think that’s a perfect correlation.”
Watson added that depending on the size of new breweries, current growth of new brewing companies could be sustainable for the foreseeable future.
“I think we could double the number of brewpub entrants year-over-year for a long time,” he said.
Tom Hogue, congressional liaison for the TTB added that growth in the craft sector, specifically, has been rather explosive when compared to other alcohol beverage categories.
“From 2008 to 2012, we saw increases across three segments,” he said. “Wineries went up about 40 percent, breweries went up 60 percent and craft [breweries] went up 125 percent. So we’ve seen quite a bit of growth over that period.”
Meanwhile, as new breweries continue to enter the space, beer’s economic impact is growing. In 2012, the Beer Institute pegged beer’s total impact on the U.S. economy at $246.5 billion.
“Thanks in great part to the small brewer tax credit, today we’re seeing more small brewers than ever before,” said Chris Thorne, vice president of communications at the Beer Institute, in a press release.
Small brewers — defined by U.S. Tax Code as those that produce no more than 2 million barrels per year — pay $7 a barrel for the first 60,000, compared to $18 a barrel for brewers that produce more than 2 million a year. The Beer Institute notes that 90 percent of permitted breweries produce less than 60,000 barrels annually.
Additionally, the Beer Institute reported that California, Washington, Colorado and Oregon accounted for one-third of all new permits issued in 2013. Nationwide, the majority of new permits were obtained by brewpubs, the trade group said.