2015 was a big year for beer. New breweries continued to open at a rapid pace. Craft beer’s share of overall beer sales hit record levels. Alcoholic root beer became a national craze. And some of America’s most beloved craft breweries caved to big brew, selling their respective businesses for tens of millions of dollars.
There are far too many newsworthy stories to cover them all, but here are seven stories Great Beer Now ranks among the significant happenings in the world of beer circa 2015:
Total number of breweries tops 4,000: The Brewers Association reported in September that the number of breweries in the United States topped the 4,000 mark for the first time since the 1800’s. I cannot find any recent updates to this number, but it’s a safe bet that, right now or within a few weeks, the total number of breweries will surpass the previous all- time record high of approximately 4,131 reached in 1873.
Craft beer market share hits new heights: Craft beer production, as reported by the Brewers Association, accounts for more than 11 percent of all beer produced in the United States. Based on sales dollars, the figure is even more impressive, with craft beer contributing more than 19 percent of all the money consumers spent on beer.
Small Town Brewery releases alcoholic root beer: Not many people saw this one coming. Small Town Brewery, which is part of Pabst, released a new product called Not Your Father’s Root Beer. With its sweet flavor and similar taste to actual root beer, it quickly won over legions of fans, many of whom do not necessarily like beer but cannot get enough of a product that tastes like the A&W they enjoyed growing up, but with an adult kick.
Big brew goes on a buying spree: Many takeovers occurred this year. Included in the ranks of the fallen are such beloved small batch breweries as Elysian, Breckenridge, Golden Road, Four Peaks, and London’s Camden Town Brewery, all of which were swallowed whole by Anheuser- Busch InBev. Saint Archer sold to Miller Coors and Ballast Point was sold to Constellation Brands. Craft beer fans were in a tizzy over these takeovers, but have since come to accept them for the most part.
Investment maneuvers change the face of craft beer: Besides the buyouts, there were other ownership changes and partnership creations that grabbed headlines nationwide in 2015. The largest of them all was Heineken’s purchase of a 50 percent stake in Lagunitas Brewing. Oskar Blues sold a significant stake of its business to a private equity firm. Left Hand Brewing and Odell Brewing launched an Employee Stock Ownership Plan (ESOP). And the employees at Full Sail Brewing agreed to sell their business to an equity investor. The Full Sail story was among the most interesting, as it was originally an ESOP and seemed to be doing well, but the employees agreed to sell regardless, likely adding a good deal of cash to the bank accounts of each worker.
Big Beer gets bigger: The beer industry was rocked in ways unimaginable when Anheuser- Busch announced its intention to purchase fellow beer giant and rival SAB Miller for more than $100 billion (yes, billion, with a “b”). This was an industry equivalent of the “shot heard round the world” and it did indeed send shockwaves throughout the industry, not just because of the amount of money involved, but because of competitive concerns, anti- trust issues, etc.
FDA modifies regulations: New rules set forth by the Food and Drug Administration will require some restaurants (depending on size and other factors) to disclose the caloric value and other nutritional facts of everything on their menus, and that includes craft beer. The big beer companies will not have any problem complying, but this could be a very expensive undertaking for a small craft brewery. Special analysis of each beer will now be a requirement in order for the beer to be sold in restaurants bound by these new rules.
Another Year, Another Beer
What trends can we expect in craft beer and big beer in 2016? For one, expect to see more takeovers of regional and local craft breweries. The big guys realize that craft beer is on the rise and it makes sense to seek out acquisitions as part of their competitive strategies. There are downsides to this, among them the loss of local identity, potential for higher consumer prices, and reduced competition. On the upside, it means greater distribution for certain craft beer brands. And that increases the possibility of getting your lips around a bottle of craft beer that was once geographically unreachable.
With the popularity of Not Your Father’s Root Beer, we can expect more entries into this market. Anheuser- Busch has already launched Best Damn Root Beer and smaller breweries are also getting in on the act, with Sprecher, Coney Island, Fitz’s, and others selling their own adult version of the popular drink. Consumers should expect this trend to continue and expect it to spill over into other soft drink flavors in 2016.
Craft beer will continue to expand and more breweries are going to open in 2016. Market share will also increase, but it could prove a little more difficult to find your favorite local beer at restaurants due to the FDA regulations. Great Beer Now expects that most small breweries will bite the bullet and pay for a full nutritional analysis of each beer they produce and sell in restaurants, but the new FDA rules could still discourage startup breweries from entering restaurants at all, at least until they get on their financial feet.
Craft beer has come a long way in the last decade and 2016 promises to be another year of industry milestones, financial dealings, and creative undertakings. The year is also likely to include more buyouts and while there are some small brewery owners who will never sell out regardless of price, we all know that money talks and there are a good number of brewery owners who would be all- too- willing to sign over ownership for the right price. So, as 2016 progresses, be sure to look over your shoulder every so often. Your favorite local brewery may suddenly sport “A-B InBev” in its signage’s fine print.
Look for continued progress on the craft beer scene, but also expect the unexpected. And cheers to a great year of beer in 2016!
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