The Surprising Success of the Craft Beer Revolution

If you drink beer, you've probably noticed that the variety of flavors and breweries have grown tremendously in the last few years. (And if you don't drink beer, your beer-loving friends have probably tried to tempt you into trying a pint from a local brewery at some point in the recent past.)

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Derek Thompson at The Atlantic recently ran an extended story about how and why craft breweries have seen such enormous growth over the last ten years. He writes:

In the last decade, something strange and extraordinary has happened. Between 2008 and 2016, the number of brewery establishments expanded by a factor of six, and the number of brewery workers grew by 120 percent. Yes, a 200-year-old industry has sextupled its establishments and more than doubled its workforce in less than a decade. Even more incredibly, this has happened during a time when U.S. beer consumption declined.

Adding to the surprising nature of this upsurge in the brewing economy is the fact that, counter to many industries which have moved toward increasing automation and outsourcing, "today’s breweries require more people to produce fewer barrels of beer."

Thompson points to two factors that have helped the growth of craft brewing. The first is a change in consumer tastes, which now favor local products and greater variety over the more basic, mass-produced foods of previous decades. This is happening in many food and beverage industries, from coffee to pizza and beyond.

The other factor contributing to the increase in local breweries has to do with the history of beer regulation. Thompson writes:

After the passage of the 21st Amendment, citizens in all states voted to abolish tied houses by separating the producers, like brewers, from the retailers, like bars. This led to a “three-tier system” in which producers (tier one) sold to independent middlemen that were wholesalers or distributors (tier two), who then sold to retailers (tier three).

By dividing the liquor business into three distinct groups, these state-by-state rules made the alcohol industry deliberately inefficient and hard to monopolize.

We, at Strong Towns, have been saying for years that efficiency is a flawed value. In fact, redundancy — as displayed in the myriad of craft breweries popping up in every state — is often more valuable than efficiency when it comes to building strong towns.

When Congress legalized home-brewing in 1978, the floodgates really opened for small-scale beer making and a much greater variety of flavors than the major national brewing companies were manufacturing. "More recently," Thompson writes, "many states have made exceptions for small craft breweries to sell beer directly to consumers in taprooms."

I've seen this craft brewery revolution up close in my city of Milwaukee, Wisconsin. We've been called the "Brew City" for as long as residents can remember, but in just the last three years since I moved here, I've seen dozens of new breweries open up in my region. In my neighborhood alone, I can walk to three different breweries and taprooms.

Anecdotally, I would point to a couple other factors that have helped breweries grow, in addition to the two that Thompson highlights in his Atlantic article. Like the farm-to-table revolution, I think there's something appealing to people about being able to consume a product that's been made just steps (or blocks) away from where you're eating or drinking. There's also the local pride aspect; when I sit down to dinner in a new city, the first thing I ask the waiter is usually "What local beers do you have on tap?" It's a tactile way to get to know a new place. Combine these things with the interactive and laid-back nature of many breweries which offer everything from tours to lawn games to kid- and dog-friendly environments, and I can understand why they're so popular.

Now the only question is, does this craft brewery revolution have staying power?

(Top photo source: Tama Leaver)

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