The holiday season is upon us, and what better way to celebrate the end of another great year than to toast each other to good health with a great craft beer? I have been brewing the stuff for a year or so now, transforming grains into glorious amber-colored ales.
Craft brewing is not only a great personal activity it seems to be making great waves in business as well. A lot of people aren’t sure what defines a craft beer, but they know it when they see it. The Brewers Association defines craft breweries as those that produce six million barrels of beer or less per year and being less than 25 percent owned or controlled by an alcoholic beverage industry member (not itself a craft brewer).
Although there is no legal definition of a craft brewer, craft beer has been gaining in popularity. According to the Brewers Association, overall beer sales from 2013 to 2014 increased by only 0.5 percent, while craft beer saw 17.5 percent growth in the U.S. market. Overall beer sales are $101.5 billion; while craft brew takes up only $19.6 billion of the market, it had 22 percent market share growth from 2013 to 2014. From current statistics, we are seeing the same type of growth in the current year as well.
With low entry to market (one can start selling craft beer with the proper permits and tax stamps), it’s easily saturated, but consumers seem to crave the creation of new brews and new brands. Industry statistics show that craft brewing has contributed $55.7 billion to the U.S. economy and more than 424,000 jobs with more than $6.8 billion of this directly benefiting the state of California.
With all this growth comes a high potential for investment, along with the attention of the larger, more established breweries. A local favorite of Los Angeles, Golden Road Brewing was recently acquired along with a number of popular out-of-state breweries by Anheuser-Busch InBev. The acquisition has left a bitter taste in some people’s palates, but Anheuser-Busch InBev has vowed to stay away from managing the day-to-day operations.
Convincing consumers that they have kept their promise may spell fortune or disaster for this burgeoning industry. While some believe that this may be a bubble ripe to burst, we can’t forget that the industry will be fueled by a consistently hungry market for new types and flavors of beer. There are certainly more than enough combinations of malts, hops, yeast and even flavors of water to keep the industry fresh and new for as long as people enjoy, and pay for, a cold one.
About Alexander Brown (Senior Associate, GHJ)
Alexander Brown is a senior associate auditor in the Food and Beverage practice at GHJ. He has been with the firm more than two years and previously served as an intern during the summer of 2012. Prior to officially joining the Firm in 2013, he worked as both a senior accountant and bookkeeper for various firms. He is a licensed CPA in the State of California holds a bachelor’s in Accountancy from California State University, Northridge.