Sadly I’m a day late to this party as I spent the majority of yesterday traveling, but the Brewers Association released some big news yesterday when they announced changes they made to the Brewers Association designation of “small” in its definition of a “craft brewer.” Also changed were the Brewers Associations bylaws to reflect the change and within the context of the Brewers Association.
This was a big discussion topic on Twitter, Facebook and other online beer communities and there seemed to be mixed feelings all across the board as this helps one brewery in particular, The Boston Beer Company, most commonly known as Sam Adams. The largest American-owned brewery in the United States, Sam Adams is soon to eclipse the 2 million barrel mark and because of this, the qualifying barrelage has been raised to 6 million barrels instead of 2 million, essentially keeping Sam Adams a craft brewery by definition.
Some people are happy about this because they are a great company and brewery. Some people are angry because they like to picture craft breweries as small and boutique. Some people are just left bewildered because they don’t know where or when the line will be drawn, but they like Sam Adams. Me personally, I welcome the idea. Sam Adams produces great beer that is widely available and always for a great price. Some of their beers aren’t my favorite, but I will certainly never refuse one either. Also, with their size, power, and money, I think this will be for the greater good of the craft beer community as they can use that influence to support the Brewers Association and help lobby for the craft beer community as a whole. If people think Sam Adams only has their own interest at heart, let us not forget the worldwide hop shortage of 2008 and Sam Adams’ hop sharing program where they sold 40,000 pounds of their own hops to US-based American craft breweries at their very low cost, a perfect example of them using their power, money, and even their long term hop contracts for the greater good of American craft brewers.
Also, it’s no secret that they are quite large, but their quality assurance is second to none and they pull millions of dollars worth of out of date products off the shelves each year and even given their size, if you have an issue with one of their products and you write or email them, you can expect a hand signed letter from the owner Jim Koch and a refund check. To me, that’s world class. I can think of a handful of much smaller craft breweries that have been under their fair share of scrutiny over the last year or two and I would never even dream of receiving a response like that.
Here is the press release from the Brewers Association:
Boulder, CO • January 3, 2011-The board of directors of the Brewers Association (BA), the trade association representing the majority of U.S. brewing companies, has voted to change the BA’s designation of “small” in its definition of a “craft brewer.” The Association’s board of directors also has revised its bylaws to reflect the change.
In the BA’s craft brewer definition, the term “small” now refers to any independent brewery that produces up to 6 million barrels of traditional beer. The previous definition capped production at 2 million barrels. The changed definition is currently in effect and can be reviewed on the BA website, BrewersAssociation.org. The change to the bylaws went into effect December 20, 2010.
In the Brewers Association’s bylaws, two classes of membership (Professional Packaging Brewers and Associate membership) have been redefined with a qualifying barrelage of 6 million barrels versus 2 million barrels.
The association cited several reasons for the change, including the recognition that “small” is a descriptive term relative to the overall size of the industry.
“Thirty-four years have passed since the original small brewers tax differential defined small brewers as producing less than 2 million barrels,” said Nick Matt, chair of the Brewers Association board of directors and chairman and CEO of F.X. Matt Brewing Company. “A lot has changed since 1976. The largest brewer in the U.S. has grown from 45 million barrels to 300 million barrels of global beer production.”
Matt added, “The craft brewer definition and bylaws now more accurately reflect and align with our government affairs efforts.” On the legislative front in 2010, the Brewers Association supported H.R. 4278/S. 3339, which sought to update the cap on an excise tax differential for small brewers to 6 million barrels per year in production for their first 2 million barrels.
Retaining Market Share for Craft Brewers
The industry’s largest craft brewer, The Boston Beer Company, is poised to become the first craft brewer to surpass 2 million barrels of traditional beer within the next few years. Loss of The Boston Beer Company’s production in craft brewing industry statistics would inaccurately reflect on the craft brewing industry’s market share.
In addition to Boston Beer, the current growth trajectory of other sizable BA member breweries places them on a course approaching the 2 million barrel threshold in the coming years.
“With this change to the craft brewer definition and BA bylaws, statistics will continue to accurately reflect the 30-year growth of market share for craft brewed beer,” said Matt. “Brewers Association statistics on craft brewers will continue to keep pace with the growth of the industry.”
Craft brewed beer market share is now approximately five percent of the U.S. beer industry, and growing. The BA has a stated mission of helping America’s craft brewers achieve more than five percent market share by 2013.
Matt added, “Rather than removing members due to their success, the craft brewing industry should be celebrating our growth.”
My stance is pretty transparent with how I feel regarding the situation and as mentioned above, I’m embracing it. I understand many feel differently than I do and we are interested in hearing your opinion!