Craft Beer: Steady as She Goes

Brewers

Image Source: Craft Brewers Conference

Many bar operators feel overwhelmed trying to keep up with the wave of India Pale Ales flooding the brewing landscape. But if the trade show floor of the annual Craft Brewers Conference was any indication, the hop boom has only just begun. Hop vendors - from relatively small family farmers to giant international firms that dominate the business for this aromatic beer necessity - were everywhere you turned, while malt companies were relatively rare in comparison.

It speaks to the growth of IPAs but also of craft beer: more than 13,000 attendees drank their way across brew-happy Philadelphia during the trade show. The growth of this event mirrors that of the industry overall; not even 10 years ago barely 1,000 people attended the event.

Even though the percentage of annual double-digit growth among craft brewers can’t continue much longer, all facts and figures point to continued and sustainable growth. Brewery closings have remained relatively low at just about 10% percent of the annual openings (881 new breweries in 2014 and 620 in 2015).

Brewers Association director Paul Gatza remarked that all those openings didn’t really show how explosive craft beer growth has been. For example, more than 25% of all craft brewers increased capacity by 50% or more last year, and about half increased their output by 10% or more. Prices grew as well – up nearly 4% – and overall craft was up 21% in dollar share, compared to 12% in volume.

While IPA continues to be the hot craft trend, accounting for more than 26% of craft beer dollars, the Brewers Association pointed out that sessionable ales were up about 200% last year, and the association predicts that the next area of growth may be those beers considered easier with broader appeal: Pilsners, Golden Ales and other sessionable styles.

Looking again at hops, brewers are working with more contemporary methods of adding hops to the mix, seeking to retain more of those crisp, piney and citrusy flavors without such a high bitterness quotient. This will allow them to broaden appeal and help those who find that powerful IPAs create palate fatigue to enjoy less challenging brews.

Craft brewers were also concerned with the hook up of AB InBev and SABMiller, mainly in terms of how it would affect distribution agreements and expansion. But overall, there was little worry or concern about losing ground and far more about expansion, growth and how to keep up with the demand they have already created, a pretty good place to be.