For the second straight year U.S. craft brewers increased production volumes at a double-digit clip, growing 18 percent in 2014 according to new data from the Brewers Association.
As part of its annual “Growth in the Beer Category” report — which highlights market share, production and brewery opening statistics, among others – the BA emphasized a key milestone for craft: for the first time ever, craft brewers achieved double-digit volume share of the marketplace.
BA-defined craft brewers now collectively own 11 percent, or 22.2 million barrels, of what the BA said is a 197-million barrel U.S. beer marketplace. That’s up from 7.8 percent in 2013 and represents a retail value of $19.6 billion.
It’s important to note, however, that 2014 market share statistics were bolstered by the inclusion of about 3.5 million “new” craft brewer barrels, added after the organization changed its definition to include some previously non-craft brands, like Yuengling.
Yuengling made 2.9 million barrels of beer in 2014, the company told Brewbound.
BA chief economist Bart Watson wouldn’t comment on specific breweries now being counted towards its 22.2 million barrel total, but confirmed that Yuengling was on the list.
The BA, which represents the interests of the country’s small and independent brewers, teased out flavored malt-beverages and ciders from its reporting to only reflect traditional “beer” offerings available in the marketplace. According shipment figures prepared by the Beer Institute and obtained by Brewbound, the entire U.S. beer market actually totaled 206 million barrels in 2014, 9 million more than the BA’s data set.
But no matter how you slice it, craft and the entire “high-end” beer segment is still growing at a tremendous pace. Shipments of imported beer were also up 6.3 percent in 2014, to more than 29 million barrels, according to the Beer Institute.
“2014 was the year where the high-end really, fully asserted itself,” said Watson.
Changing consumer tastes and the continued high-end growth has plenty of entrepreneurs rushing into the craft segment, hoping to cash in on a shift towards more flavorful beers. The BA counted 615 new brewery openings in 2014, more than 200 more than the 413 it counted in 2013.
In total, there were 3,464 breweries in operation last year, an increase of 19 percent.
“The opening numbers suggest that people are still betting on the growth opportunities within craft,” said Watson.
And with new business openings, comes new jobs. According to the BA, the craft segment added more than 5,000 jobs in 2014, 4.3 percent more than 2013.
So where is most of this growth coming from?
“In absolute terms, the gains are coming from the top 50 and the top 100,” said Watson. “That said, you are seeing incredible growth from the smaller breweries and the long tail shows no signs of abating.”
It’s not yet known exactly how many of the 22 million barrels came from top 50 BA-defined brewers, but in 2013, that group produced about 10.4 million barrels of all craft beer sold.
“As the overall market grows, the regional craft brewers have continued to grow and I see no signs of that changing,” said Watson.”
One of those fast-growing top-50 breweries that made significant strides in 2014 was Atlanta’s SweetWater Brewing, which grew production 33 percent, to 192,500 barrels. And, after investing more than $25 million to improve its production and packaging capabilities, the company now believes it is well positioned for continued double-digit growth.
“I think consumers are getting more educated by the day and expecting better beer out of their local breweries,” said Steve Farace, the director of marketing “For us, we are positioning ourselves to have greater partnerships with our wholesalers and strong relationships with our retailers. Once we made all of the investments in infrastructure, it was all about investing in people and we’re growing our organization to support additional volume.”
The company said it plans to hire more than two dozen sales reps, market managers and brewery employees in 2015.
But what happens if (or when) category growth slows?
“18 percent as an industry, year-over-year, is tremendous,” said Farace. “That will slow down but it doesn’t mean that the overall growth of craft will slow. We aren’t overcommitting ourselves to new markets just to drive a number. We want to manage growth, not let growth manage us.”
Sweetwater, which just opened its 14th state, Illinois, also plans to launch in Pennsylvania and Delaware later this year, said Farace.
“Then we will stop and catch our breath,” he joked.
Additional 2014 growth statistics are available in the Brewers Association press release.