Dollar growth up 15% in first six months of 2011; U.S. sees rapid growth in breweries in planning

Boulder, CO – The Brewers Association, the trade association representing the majority of U.S. brewing companies, has released strong mid-year numbers for America’s small and independent craft brewers¹. Dollar sales were up 15 percent in the first half of 2011, excluding brewers who left the craft segment in 2010². Volume of craft brewed beer sold grew 14 percent for the first six months in 2011, compared to 9 percent growth in the first half of 2010.

Barrels sold by craft brewers for the first half of the year are an estimated 5.1 million barrels. Despite many challenges, the mid-year numbers show signs of continued growth for craft breweries. The industry currently provides an estimated 100,000 jobs, contributing significantly to the U.S. economy.

“Craft brewers continue to innovate and brew beers of excellent quality,” noted Paul Gatza, director of the Brewers Association. “America’s beer drinkers are rapidly switching to craft because of the variety of flavors they are discovering. And they are connecting with small and independent craft brewers as companies they choose to support.”

The U.S. now boasts 1,790 breweries—an increase of 165 additional breweries since June 2010. The Brewers Association also tracks breweries in planning as an indicator of potential new entrants into the craft category, and lists 725 breweries in planning today compared to 389 a year ago. Additionally, the count of craft brewers was at 1,740 as of June 30, 2011.

“There is a growing interest in establishing new breweries,” Gatza added. “It seems like every day we are hearing about a brewery in planning. Will they all make it? No, but many will if they produce high-quality, interesting craft beers and can get them to market through self-distribution and beer wholesalers and beer retailers.”

Growth of the craft brewing industry in 2010 was 11% by volume and 12% by dollars compared to growth in 2009 of 7.2% by volume and 10.3% by dollars. – Brewers Association

Craft beer has been exploding in recent years, showing incredible growth from quarter to quarter and year to year. With this incredible and rapid growth that the breweries have been experiencing, many breweries have been maxing out their production capacity even after expanding their production facilities and adding additional fermenters with some breweries at a rate of ten 200 barrel tanks within an eight month period as seen with Oskar Blues.

It’s unfortunate, but with the fast growth that these breweries have been experiencing it’s necessary to keep up with demand. Great Divide, for instance, who is pulling out of 12 markets is one of a handful of breweries that saw a growth of 60% in 2010. Allagash who is pulling out of 20 markets saw a growth of 40% in 2010 and ended the year at 24,000 barrels. Dogfish Head and Left Hand Brewing have pulled from four and five markets respectively.

I find it bittersweet. Bitter in that people will not be able to try these incredible brews, but sweet in that our amazing craft beer scene is not only thriving, but growing at an astronomical rate and there are now more options of craft beer available for us to enjoy. According to Sam Calagione, Founder and President of Dogfish Head, pulling out of certain markets is part of their philosophy to “grow strong and smart instead of just growing fast” and I agree that it’s a smart move.

Boulder, CO - Avery Brewing Company plans to withdraw from eight states and seven other partial-state markets beginning in April. Faced with skyrocketing demand–first quarter 2011 production growth for their home state of Colorado is 81% and overall production growth is 75%–the brewery has been forced to make the tough decision or lose the ability to support all markets with a steady supply of fresh beer.

Avery Brewing Company is one of several craft breweries to announce such cuts in 2011, but these disappointing changes are actually the sign of a very positive trend in the industry. Exponential sales growth for craft brewers can only mean one thing: the craft beer movement is on fire, attracting more followers and gaining mindshare with people of all demographics across the country. More fans means more market potential for all of the craft industry, and that’s a very good thing that will bring more great beer into the lives of Americans everywhere. Here’s to American craft beer in 2011 and beyond!!

Boulder, CO • March 21, 2011—The Brewers Association, the trade association representing the majority of U.S. brewing companies, today released 2010 data on the U.S. craft brewing industry. Small and independent craft brewers1 saw volume2 increase 11 percent and retail sales dollars increase 12 percent over 2009, representing a growth of over 1 million barrels (31 gallons per U.S. barrel), equal to more than 14 million new craft cases.

“Beer lovers increased their appreciation for American craft brewers and their beers in 2010,” said Paul Gatza, director, Brewers Association. “Craft brewers’ stories resonate with Americans who are choosing small, independent companies making delicious beers in more than 100 different styles.”

The Association also reported a growth in the number of U.S. breweries, with eight percent more breweries than the previous year. In 2010, there were 1,759 operating breweries. Craft brewers produced 9,951,956 barrels, up from an adjusted3 8,934,446 barrels in 2009.

“Prohibition caused a dramatic decline in the number of breweries in the United States, but the number of breweries is now at an all-time high,” added Gatza. “With well over 100 new brewery openings in 2010, plus 618 breweries in planning stages, all signs point to continued growth for the industry.”

In 2010, craft brewers represented 4.9 percent of volume and 7.6 percent of retail dollars of the total U.S. beer category. The Brewers Association estimates the actual dollar sales figure from craft brewers in 2010 was $7.6 billion, up from $7 billion in 2009.

Overall, the U.S. beer industry represented an estimated retail dollar value of $101 billion. U.S. beer sales were down approximately one percent, or 2 million barrels, in 2010 compared to being down 2.2 percent in 2009. Total beer industry barrels dropped to 203.6 million, down from 205.7 million barrels in 2009. Imports were up five percent in 2010, compared to being down 9.8 percent in 2009. (Note: the Brewers Association does not count flavored malt beverages as beer.)

Gatza added, “We also found that three percent of craft brewer barrels, by volume, are distributed in cans, confirming a growing trend.”

One sector that is obviously not suffering at all is the beer industry. A new report from the Brewers Association puts new breweries that have surfaced thus far in 2010 number some 155. That is getting close to one new brewery per day. To put this number in perspective, all of 2009 only brought 110 new breweries to market.

This number doesn’t just cover the latest craze in beer, nanobrewing, but the Brewers Association is also seeing strong growth in the microbrewery sector as well as brewpubs. What is even more encouraging from these outstanding growth numbers is that the breweries-in-planning list they have has an outstanding 389 projects. Obviously not all of these will come to fruition, but the sheer amount as compared to last years 260 give a good outlook on the brewing sector. Continue Reading »