California Craft Beer Contributes $6.5 Billion to State Economy

cali craft beer

California’s craft beer industry still has a way to go before it can hold a candle to its celebrated wine trade, but it’s certainly trending in the right direction.

In 2014, the market for craft beer in the state continued to flourish, contributing more than $6.5 billion to the economy, according to a newly released report from the California Craft Brewers Association (CCBA).

While the figure is representative of a “fairly conservative” uptick of 18 percent over the year prior, craft beer still boasted a higher economic impact in California than anywhere else in the nation, the CCBA said.

Tom McCormick, executive director of the CCBA, attributed the growth to a number of things, including lenient rules that govern both startup and established businesses.

“It’s a very, very vibrant state,” he told Brewbound. “For the most part, our regulatory structure here is very conducive both to startups and the growth of craft breweries, and I think that makes a big difference.”

All in, the state’s brewers – which include nationwide top 10 craft players Sierra Nevada, Stone, and Lagunitas – produced more than 3.4 million barrels of beer in 2014, while employing more than 48,000 people.

The industry’s growth, in part, was driven by the arrival of new players on the scene. In 2014, there were 519 operating craft breweries in the state, up from 418 the year prior (though as of March, California has 554 operating breweries). In 2012, California played host to only 313.

McCormick said he was only aware of one or two brewery closings in the state in 2014, though, as the space continues to crowd, he expects to see “the dynamics of that change” sometime in the next few years.

Together, the report continues, California’s brewers paid more than $56 million in both state and federal excise taxes in 2014, and more than $1.3 billion in income and other federal, state and local taxes.

Looking ahead, McCormick concluded he still sees a lot of run room for craft to continue to nab market share of the overall beer market, which he pegged currently somewhere between 20 and 22 percent.

There is, of course, also a severe drought plaguing the state that has been a popular talking point as it relates to the craft beer industry — and its future growth.

“If we can get rain out here, I think we’ll be in great shape,” added McCormick.

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