Beer Nut: The '6 percent' slowly losing grip on beer market

AB InBev-SABMiller

This Associated Press file photo shows signs for Miller and Anheuser-Busch products above a liquor store cooler in St. Louis

In the political/economics world, people talk about "the 1 percent" -- a small group of elites that control an unbalanced amount of the world's wealth.

In beer, I guess it's "the 6 percent."

According to a new study by Alltech and The Brewers Journal, the number of breweries across the globe is now more than 19,000. The survey found that 17,732, or 94 percent, of these breweries can be defined as craft breweries, meaning that large industrial beer-makers make up just 6 percent. (For the purpose of the survey, a craft brewery was defined as having fewer than 30 staff members or producing less than 5,000 hectolitres per year or having more than 50 percent of the brewery being privately owned.)

Despite this overwhelming percentage of the world's brewery's being categorized as "craft" breweries, the larger breweries still represent 88 percent of the market share by volume, and about 78 percent by retail dollar value (as craft beer is more expensive as a rule). Part of this is due to the fact that many craft breweries are nanobreweries that make very small batches and maybe only a handful of beers. Another reason is that large industrial brands have had a huge head start along with the financial clout that came with being the only games in town for so long after Prohibition.

But it's a war of attrition. By drips and drabs, the slow flow of craft beer is a steadily rising tide. While no one expects the big brands to go belly up anytime soon, there is a sense that someday, some of them will suffer the proverbial death by 1,000 paper cuts.

As I've noted many times over the past 14 years, craft beer keeps inching upward in the market. The study found that the largest craft beer producer is the U.S. with 4,750 craft breweries out of a total of 5,025 breweries. The U.K. has the most craft breweries per capita with 25 breweries per million people, compared with 15 per million in the U.S. and 16 per million in Germany.

And while the U.S. Has been the trailblazer in the recent craft beer movement, there are still more craft breweries in Europe than in North America, with the top nations being the U.K., Germany, Italy, Spain, France, the Netherlands, Switzerland and Australia.

"The U.S. and the U.K. fermented their lead in craft beer production as a result of legislation that paved the way for craft brewers," Tim Sheahan, editor of The Brewers Journal, said in a press release. "In the U.S., the pivotal point was in 1978, when President Jimmy Carter allowed home brewing for the first time since Prohibition. The U.K.'s watershed moment came in 2002 with Prime Minister Gordon Brown's progressive beer duty legislation, which reduced beer duty to nil for breweries producing less than 5,000 hectolitres."

It probably won't happen in my lifetime, and there are sure to be years when craft beer flatlines a bit, but I believe that before 2100, craft beer will grab at least 50 percent of the market. None of us will be around then, so I won't be able to say I told you so. Unless it's on my tombstone.

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