Craft beer is a classic example of history repeating itself; what’s old is new once again.
What started for many people as a hobby enjoyed in individual garages and basements surged into the cultural mainstream as more people learned they loved to raise a glass with something other than the typical six-pack of beer.
Strong growth numbers for craft brewing
The craft brewing business boomed even during tough economic times. Over the last decade, the industry experienced unprecedented growth. In 2015, the craft beer sales market increased 15 percent to a total of $22.3 billion, according to the Brewers Association annual report. Total barrel production rose to 24.5 million in 2015 compared to only 10.1 million barrels back in 2010.
As of 2015, the number of United States’ craft breweries stood at 4,225 — compared to 1,754 locations just five years before.
Brewers look to local demand for direction
Craft brewers and industry experts attribute the industry’s nationwide success to an interesting paradox in today’s culture: people’s modern tastes combined with a growing need to connect with our past.
Los Angeles-based marketing research company IBISWorld released a report in August 2015 highlighting craft beer’s diversity as a critical element to its rising popularity.
“The craft beer production industry brews virtually all styles of beer and regularly experiments with different ingredients to create variant styles of beer,” the IBISWorld report states. “As a result, the industry’s range of products is diverse.”
Craft beer brewers work with a variety of flavor profiles, including chocolate, vanilla, citrus (lemon, grapefruit), coffee, chai and much more. Combining these flavors requires a special touch.
“There is a trend; I compare it with what we’ve been seeing with the ‘farm to fork’ movement,” said Shane Pearson, owner of the Daredevil Brewing Company in Indianapolis, Indiana. “The unfortunate thing in our country is that there was a huge push to industrialize the food and beverage industry from 1940 to 1980. And, while I understand that need, that push caused a loss of community’s getting their products from local providers. This affected quality, originality and knowing the source of the product. Today, people want that sense of security in knowing where things come from, as well as looking for a variety of options.”
Rather than having eyes on the big prize of national distribution, many craft brewers understand the need to tap into their community’s preferences to continue their business’ growth.
According to a 2015 Nielsen Marketing research study, consumers’ desire for locally sourced beer is on the rise.
“Consumers' desire to search for and buy local is growing,” the report found. “Among all alcoholic beverage categories, local has grown in importance the most among beer drinkers. In fact, 22 percent of beer drinkers said they think the importance of being made locally has grown over the last couple of years, compared with 14 percent of wine drinkers and only 5 percent of spirit drinkers.”
Pearson said he’s noticed this market shift and believes this trend will continue in the coming years.
“I truly believe we’re going back to that ‘hyperlocal’ model,” he continued. “Having a taproom as part of our brewery has changed everything. Now, we can have complete focus on our audience of fans—or even people who don’t know us—who want to come and see what we do. That’s a game changer. It changes the dynamic between the brewer and the customer. It’s all about wanting a local experience and that’s what separates the good locations from the national brands or chains.”