Craft brewers bet on growth

A man samples beer at Savor, a craft beer show, at the Building Museum in Washington on June 8, 2012. A growing number of Americans have developed a passion for full-flavored beers from small-volume, fiercely independent local breweries that are redefining how the United States takes its favorite tipple.

Jeff Horwich: In the world of beer, big breweries keep getting bigger -- just look at last week's buyout of Mexico's Grupo Modelo by Anheuser-Busch InBev. But, just in time for your Independence Day barbecue, many smaller breweries see an opportunity in the rapid consolidation of their industry.

Here's Marketplace's John Dimsdale.


John Dimsdale: Almost 90 percent of all beer sold in the U.S. comes from two brewing conglomerates: Anheuser Busch InBev and SAB MillerCoors.

Industry analyst Bump Williams says that concentration has led to higher prices and a dropoff in overall beer drinking in the last few years.

Bump Williams: I think the elimination of competition is bad. It leads to complacency and mediocrity and then there’s no innovation at all.

But one segment of the industry is innovating. Some craft brewers like Sierra Nevada, Lagunitas and New Belgium are doubling their capacity. Freelance beer writer John Holl says more consumers are willing to pay a premium for flavorful ales and lagers.

John Holl: It’s a more educated beer public these days. So people know styles they like and they seek them out. And with more choice out there, the craft breweries have benefited greatly.

Craft brewers make up less than 8 percent of the beer market now. But analyst Bump Williams figures their growth is sustainable, evidenced by the number of home brewers, like me, fermenting hops and grains in garages and basements all over the country.

Bump Williams: There’s more and more homebrewing supplies being sold in the United States now than I think has ever been sold in the past. That’s a real tribute to consumers wanting to experiment and try and make their own home beers. 

After all, one of the country’s first homebrewers was George Washington.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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