Smaller beer brewers taste growing success
As 466 brewers show off their wares this weekend at the nation’s biggest beer festival, they don’t need an industry stat sheet to know they’re onto something good.
Still, the numbers show, well, heady performance.
Sales of craft beer are soaring, and they show no signs of going flat.
American consumers increasingly are forgoing their traditional Bud, Coors and Miller in favor of low-volume yet full-flavored crafts.
“People are voting with their dollars, and they want a good-tasting beer,” said Chris Lennert, vice president of operations at Left Hand Brewing in Longmont.
Craft beers tallied $7.65 billion in sales last year, up nearly 12 percent from 2009, according to the Boulder-based Brewers Association. A one-year burp? Hardly. The industry’s growth has averaged 12 percent a year over the past five years.
This year could be bigger. Sales in the first half of 2011 were up 15 percent compared with last year.
On the other end of the beer bar, consumption of mass-produced brews was down 3.1 percent from 2009 to 2010, according to the Beverage Information Group, an industry research firm.
Lingering economic weakness has taken a greater toll on the big players in the industry than on smaller craft brewers, said Paul Gatza, director of the Brewers Association.
“Craft beer is an affordable luxury,” he said. “People are willing to spend a little bit more for something they really want to drink.”
The Brewers Association defines a craft brewer as producing less than 6 million barrels a year, having no more than 25 percent ownership by a noncraft alcoholic-beverage company, and using only malt rather than adjunct grains for a majority of its production.
Amid the excitement and crowd- mashing fervor of this weekend’s Great American Beer Festival — where 49,000 attendees taste a virtually endless succession of 1-ounce pours — it can be easy to lose perspective on the craft
industry.
Despite its impressive growth, the small-batch beer sector accounts for just 4.9 percent of all U.S. beer sales.
Five of every 10 American drinkers go straight to the “light” shelf, with Bud Light, Coors Light, Miller Lite and Natural Lite holding four of the top five best-selling-beer positions.
Even so, the light-beer category saw consumption fall by 1.9 percent last year, said Eric Schmidt, director of information services for the Beverage Information Group.
Schmidt said big brewers are emphasizing consolidation and generating profits, even at the expense of losing ground to crafts.
Industry analysts say the craft industry’s toehold on market share is likely to rise.
“I used to be a light (beer) drinker, but I’m branching out now,” said Kristen Callahan, who on a recent evening sipped an Odell 90 Shilling at the Park Tavern in Denver. “I don’t want something too strong or hoppy, but I want it to have some taste.”
The number of craft-beer enthusiasts has been a revelation to Tim Myers, who with business partner John Fletcher started the tiny Strange Brewing Co. in Denver last year.
After being laid off from their information-technology jobs, the pair used their combined retirement savings to start the operation using Myers’ 20-gallon homebrew equipment.
Strange is part of a growing phenomenon of upstart “nano-brewers” whose minuscule production makes even small craft brewers look large.
“People were teasing us that we should be in whatever is below the ‘nano’ category, like maybe a pico-brewery,” Myers said.
But after a year of brewing one-barrel batches and immediately selling the beer in a small central Denver tasting room, Strange has upgraded to a seven-barrel capacity.
Myers said the brewery saw a big sales surge last year after it was one of the participating brewers at the 2010 Great American Beer Festival.
“That was our coming-out party,” he said. “Now we’re going to try to continue growing and serve our customers and make good beer.”
Steve Raabe: 303-954-1948 or [email protected]
