What Defines Craft Beer?
(You're Not Actually Drinking Craft Beer)
If you’re 21 or older and you like beer, you’re sure to have encountered the term “craft beer.” Whether the beer is a Stout, India Pale Ale, Saison, or a Hefeweizen, craft brews seem to be the currency of millennial beer drinkers looking for booze cred.
It’s with good reason, as craftbeer.com reports that craft breweries now make up 98% of all breweries in the U.S. And even though the overall beer market was down 1% in 2018, the craft beer segment was up 4%. One last statistic for you – the craft beer market alone generated $27.6 billion in 2018, making up more than 24% of the U.S. beer market. In other words, craft beer has become an important part of the alcohol industry, and it doesn’t look to be slowing down any time soon.
But there is another disturbing trend developing within the craft beer world. While many claim to love craft beer, oftentimes they confuse craft beers with non-craft beers. While everyone should drink what they like, you should be aware of whether or not the pint in your hand is craft.
So what is craft beer anyway? We want to do everything we can to support every craft brewery in this great country, so we put together this definitive guide with details about what craft beer is and what it isn’t.
What is Craft Beer?
According to the Brewers Association, three attributes define craft brewing. Craft brewers are, by definition, small, independent, and traditional. Let’s break down what those qualifications actually mean.
Requirements of a Craft Brewery
- Small: To be considered a small brewer, a brewery must make 6 million barrels of beer or less annually.
- Independent: A craft brewery cannot have more than a 25% stake in the company owned by a non-craft brewer.
- Brewer: A craft brewer must have an official TTB Brewer’s notice from the government to be considered an official brewer.
Common Characteristics of a Craft Brewery
In addition to these requirements, other characteristics are common among craft breweries.
- Craft brewers pride themselves on innovation. That’s one of the advantages of having a small brewery. At a large brewery, it can be hard to experiment without potentially wasting large amounts of ingredients. Smaller breweries can be more daring. Sure, an experimental beer might not make it into the regular lineup, but many craft beer fans relish the opportunity to sample works in progress.
District Brew Yards, a PourMyBeer location with 40 taps, is bringing innovation to Chicago. Their location has four breweries under one roof, where customers can sample and pour a variety of craft brews! District Brew Yards uses PourMyBeer’s integration with Toast to bring an even smoother, more efficient experience to their guests. Check it out below!
- Craft brewers aren’t afraid to put their personality into their beer. Because this results in bold flavors and interesting combinations, some beer fans won’t fall in love with every beer from every brewer. But that diversity of flavor is what hooks beer fans. Every serious craft beer drinker has a particular beer that they love intensely, with each drinker’s tastes as diverse as the brewers making craft beer.
- Craft brewers tend to be invested in their communities. They care about the people around them, and as such, will throw charity events and community celebrations.
Top 5 Craft Breweries (By Sales Volume)
Source: (2020) Brewer’s Association
- D. G. Yuengling & Son, Inc.
- Boston Beer Co. (pushing ‘craft’ status)
- Sierra Nevada Brewing Co.
- Duvel Moortgat
Source: (2019) Brewer’s Association
- D. G. Yuengling & Son, Inc.
- Boston Beer Co. (pushing ‘craft’ status)
- Sierra Nevada Brewing Co.
- New Belgium Brewing Co.
- Duvel Moortgat
Top 3 Examples of Non-Craft Breweries
& The Beers They Own That Some Think Are "Craft"
Source: (2018) Forbes
- Anheuser-Busch (Bud Light, Goose Island)
- MillerCoors (Blue Moon, Redd’s Cider, Terrapin Beer Co.)
- Constellation Brands (Corona, Modelo, Ballast Point)
History of Craft Beer
The Move from “Micro” to “Craft”
A few years ago, people spoke less about “craft” breweries and instead opted for the term microbreweries. This term distinguishes small-scale brewers from “macro” brewers, such as Anheuser-Busch and Miller.
Leading the way in the micro revolution were two brewers, Boston Beer Company, which makes Sam Adams, and Sierra Nevada. Both breweries were some of the earliest adopters of the hallmarks of craft brewing and succeeded despite their small production scale.
However, as their renown grew, so did their breweries. Despite continuing to brew beer with the same level of care, they were producing too much beer to be considered micro.
Drinkers who were happy to see these brewers succeed while adhering to the highest-quality brewing principles decided to adopt the title “craft brewer.” Sam Adams and Sierra Nevada may still be under the 6 million barrels sold per year threshold, but they’re pushing the limits. Yet beer fans haven’t soured on their wonderful brews. In fact, Boston Beer Co. has officially surpassed the 6 million barrel threshold in 2020, coming in at approximately 7.37 million barrels. Though beer experts had expected this to cause the definition of a craft brewery to change, Boston Beer Co. is still considered one of the largest craft breweries in the U.S.
“Nano” Brewers Respond
Not everyone is happy with the sliding scale of craft brewing. For some, the ability to keep beers locally focused and production small is an important aspect of the craft brewing mentality. Sure, Sam Adams may be a good beer to drink, but it’s no longer playing the same role in beer-drinking culture, many argue.
Thus, so-called nano breweries have begun to draw attention. Although there isn’t a rigid definition of how small they need to be, nano breweries typically only brew one batch at a time, and they don’t have distribution beyond local markets. The majority of their sales come from either a brew-pub or on-site beer sales, meaning you’ve got to go where the beer is made to drink or buy it.
While experimentation is a hallmark of craft brewing, the nano brewing approach amplifies creativity. Strange ingredients that might be hard to source on larger scales can be used to create entirely new flavors. Big beers — which are intentionally higher in alcohol and require more malt — are popular among nano brewers, even though their profit margins are slimmer.
Although some may argue that Sierra Nevada and Sam Adams are no longer true craft brewers, no one can deny that nano brewers are. If you’re an adventurous beer drinker, nano breweries are often the most rewarding.
Craft Breweries Being Bought by Macro Brewing Companies
This leads us to the kind of craft beer shenanigans that prompted us to write this guide in the first place. Craft beer is growing, while major brewing conglomerates are watching their sales flatten. Budweiser isn’t going out of business any time soon, but they’re seeing their market share chipped away by younger upstarts.
To stem this tide, major brewing companies, such as AB InBev (which owns Anheuser-Busch and countless other brands around the world), have decided to get into the craft beer game, with massive financial investment.
In other words, they’re buying craft breweries and then continuing to sell their beers hoping that the consumer won’t notice.
As of September 30, 2020, Anheuser-Busch and Craft Brew Alliance announced the closing of their new merger. Now, the AB family gains the portfolio associated with CBA. Some of these include Kona Brewing Co., Wynwood Brewing, and Omission Brewing Co. – just to name a few.
Examples of Craft Breweries That Are Not "Craft" (But People Think They Are)
- Blue Moon: owned by MillerCoors
- Shock Top: owned by Anheuser-Busch
- Goose Island: bought by Anheuser-Busch in 2011
- Magic Hat: acquired by North American Breweries in 2010 (owned by Florida Ice & Farm Co)
- Pyramid: owned by North American Breweries
- Leinenkugel: subsidiary of MillerCoors
- Mendocino: owned by United Breweries Group
- Redhook: merged with Widmer Brothers to form Craft Brew Alliance (owned by Anheuser-Busch)
- Lagunitas: owned by Heineken
- Kona Brewing Company: bought by Craft Brew Alliance in 2010
- Elysium: bought by Anheuser-Busch in 2015
- Widmer Brothers: merged with Redhook to form Craft Brew Alliance (owned by Anheuser-Busch)
- Blue-Point Brewing Company: subsidiary of Anheuser-Busch since 2014
One of the most famous instances of this shift involves the popular Chicago brewer, Goose Island.
Goose Island was a small brewery established in 1988. They slowly grew and became a popular attraction for beer drinkers who were in the know and traveling through the Second City.
However, in 2011, 100% of the company was bought by AB InBev. Goose Island beers that had grown popular and were brewed in either Chicago or New Hampshire could now be brewed in any Anheuser-Busch brewery. Their beers could travel in the same trucks that delivered Bud Light. In other words, Goose Island sold out and could no longer be considered a craft brewery. This deal started the buyout movement in the craft beer industry, and the founders of Goose Island are still enjoying and dealing with the repercussions (2016).
But they aren’t alone. Redhook, Magic Hat, Kona, Elysium, and Widmer Brothers all sold portions of their company to larger macros. While many retained certain levels of independence, all exceeded that important 25% threshold required to be considered a craft brewer (as defined by the Brewers Association).
Does The ‘Craft’ Beer Title Matter to Beer Drinkers
The Effects of Craft Breweries Being Bought By Macro Beer Companies
If you’ve been sipping on Redhook or Goose Island and only now discovered that the two aren’t technically craft beers, you’re likely to ask if the “craft” label really matters. There is a lot of debate on that question. Some argue that as long as you’re enjoying your beer, you’re drinking it right. However, others fear that even if some beers continue to be good in the short term, the selling of craft beers to large corporations will eventually erode their quality in the long term.
Let’s return to Goose Island. When Goose Island went from being independently produced to being brewed in Anheuser-Busch’s breweries, production ramped up from 50 barrel batches to 1,000 barrel batches. Unfortunately, converting production between a 50 barrel and a 1,000 barrel system requires a lot more than simply multiplying ingredients by 20.
Many fans feel like they lost some of their distinctiveness since making the switch.
However, other breweries that are technically no longer craft still retain much of their independence. Such is the case for Widmer Brothers. They still brew their beer as they always have, while benefiting from AB InBev’s distribution and capital. That being said, just recently, Widmer Brothers announced that they’re going to start brewing certain beers within Anheuser-Busch breweries, much like Goose Island. Beer drinkers will once again have to decide if the larger scale production hurts quality.
This incremental change is what makes many craft beer drinkers so suspicious of breweries that sell out. While they may continue making high-quality beer initially, the constant appeal of higher quantity batches, larger profit margins, and cheaper production all work to move once beloved craft breweries into the arms of macros.
The Undercover Agents: Breweries That Never Were ‘Craft’
(But People Think They Are)
However, while some craft brewers have sold their breweries and thus lost the right to be called craft, others never were and only market themselves as if they were.
Such is the case for Shock Top. Looking at a bottle of Shock Top, with its bold design and aggressive marketing, one might easily be fooled into thinking that it’s a craft beer. And that’s what its brewer, Anheuser-Busch, wants you to think.
The same can be said about Blue Moon, which is brewed by MillerCoors.
Both of these brews, along with a host of others, are another attempt by macros to infiltrate the craft beer market. Unfortunately, they’re brewed with the same approach that pushed drinkers into the arms of craft brewers in the first place. They don’t have the same depth of character and are often over-flavored with adjuncts, which are non-traditional brewing ingredients used to make beers taste less like beer. Shock Top for one offers a wide range of heavily fruited beers. While some may find fruity sweetness as a welcome addition to an otherwise bitter beer, craft beer drinkers are actually in it for the hoppiness and prefer that their beer be free of such added sweeteners.
Why Do People Only Drink ‘Craft’?
In the end, the reason “beer snobs” are so eager to seek out craft brews is because they have exacting tastes. They have developed palates that can taste quality while also picking up on those cost-cutting adjuncts that macros use to increase profits.
While the best beer is the one that you enjoy, regardless of who made it, there is a definite separation between a high-quality craft beer made with care and a large-scale production beer.
Supporting Independent Business
Millennials are seeking out and supporting small, independent, or local businesses more than any generation ever before, and the craft beer industry is no exception. Newer generations prefer to give their dollars to smaller companies, rather than large money giants.
Craft Beer Drinkers Today
So if you think you’ve been drinking craft beer, only to discover that your drink of choice is in fact a macro, be a little adventurous and order a true craft brew next time. And don’t be afraid to do a little research before heading out to the bar.
On the other hand, if you’re a bar owner looking to reach out to the beer snob crowd, why not give them the power to control their own selection? Such is the approach with the innovative PourMyBeer system, a self-serve tap system designed to give customers complete control over their orders and portion sizes.
As beer experts are always eager to try a new brew, beer sampling has become a great way to get a sense of a beer’s flavor before ordering a whole pint. Unfortunately, as craft beer drinkers increasingly ask for samples, many bars are seeing their profits decline due to serving free portions, no matter how small.
The PourMyBeer system gives customers complete control over portioning, charging them by the ounce as opposed to full pint servings. While the small samples are still very affordable for the customer, those small portions add up, helping you avoid losing money.
Additionally, craft beer drinkers like to feel in control of the beer that they drink. That’s why they don’t like macro breweries that hide adjuncts in their beer or offer brands that appear to be “craft” but are in fact far from it. The PourMyBeer system, by being self-serve, gives that same level of control to the customer. They can make their selection, pour it themselves and drink it in the glass that they prefer. No wonder craft beer drinkers are jumping at the opportunity to use this innovative beer service system.
Finally, as new beers earn reputations while others start to become less popular, the data tracking included in the PourMyBeer system will give you the information you need to make purchasing decisions, ensuring that you have the hottest, most popular beers in stock while helping you avoid overbuying and thus keeping stale beer on tap.
So if you’re ready to start exploring how the PourMyBeer system can help you reach the ever-expanding craft beer drinking community, contact us today. No matter how big of an operation you have, we can provide you with a free quote.
With unrivaled ROI for a tap system installation, we are confident that our beer serving solution is best suited to help you increase profits while expanding your beer lineup in an exceptionally diverse and selective market.
Challenges Faced by Craft Brewers
Before financing your craft beer operation, it’s essential to understand the risks involved with being a craft brewer so that you can prepare for them.
The craft beer industry regularly experiences supply chain issues, which can cause revenue loss and operational delays. Many breweries have trouble sourcing ingredients, ordering aluminum cans, and acquiring suitable craft beer distribution services. This difficulty within the industry is often tied to environmental challenges, an oversaturated marketplace, and price increases.
Many steps go into creating a beer that customers enjoy drinking time and time again. You must meticulously control every part of the brewing process to ensure you’re producing a tasty and safe beer. This requires using precise tools and instruments, including hydrometers, pH meters, and temperature probes.
Quality assurance also means following strict safety guidelines set forth by organizations like the Food and Drug Administration (FDA) and the Brewer’s Association (BA). For example, the FDA requires all breweries to have active food safety programs. By creating an effective quality assurance program, you can ensure you comply with regulations and create consistently high-quality brews.
Like any business, financing a craft beer operation requires a lot of capital to start and maintain. You’ll have to source equipment and obtain the ingredients to produce your products.
Aside from great-tasting beer, customers value spaces where they can hang out with friends and enjoy their drinks in comfort. As a result, you’ll also have to purchase or lease a space, remodeling as you need and filling it with decor to engage your patrons.
If you want to open a brewery, create a detailed business plan to outline how you will handle your finances. This process will give you a clear picture of how much you need and ensure you’re staying within your budget. The key to a thriving brewery is to cover your expenses while investing in your business to stand out from your competition and attract more customers.
State and Government Regulations
When opening your business, you must meet all local and federal requirements. You’ll have to purchase various permits and licenses to legally produce and serve your beer to customers. Staying on top of these deadlines is important to avoid fines or late fees. Some of the permits you’ll have to obtain include:
- Liquor licenses
- Alcohol and Tobacco Tax and Trade Bureau license
- Business license
- Seller’s permit
In addition to federal government restrictions, every state in the United States has the right to control the production, sale, and distribution of alcohol, which they do through their Alcohol Control Board. They often set craft beer regulations on labeling, hours of sale, sanitation, and more. It’s wise to check with your state’s local department to ensure you’re complying with the appropriate regulations.