The Explosive Growth of Craft Beer in America

Craft Beer

Part One of a Three-Part Series on the State of the Craft Beer Industry in America

By Bill Sysak, Foodable Industry Expert

This year is a milestone in the craft beer industry. As any beer historian will tell you, 2015 marks the 50th anniversary of the craft beer revolution beginning.

How it All Started

The transformation first started brewing in 1965, when Fritz Maytag, who was a recent graduate of Stanford University and the great-grandson of Maytag Corp. founder, Frederick Louis Maytag I, was sitting in his favorite bar at North Beach San Francisco while enjoying his favorite beer.

A beauty called Anchor Steam.

Its producer, Anchor Brewing Company, was one of the last regional breweries left in America that made a beer other than an American adjunct lager. (You know American adjunct lagers, those beers with mountains on the can that turn blue when it gets cold or the ones with big shaggy horses kicking footballs in commercials during the Super Bowl. But anyway, let’s get back to Fritz.)

That night, the bartender told Fritz the brewery was going out of business. And that Fritz was sipping on his last Anchor Steam.

Being a man of action, he didn’t bottle up his displeasure. Instead, he rushed to buy a 51 percent share of the brewery for a few thousand dollars. Thus, the beer landscape in America changed forever. During the first 11 years running Anchor, Fritz stood even as the number of breweries in America dropped from 163 to 89.
 

1976-1980: the Next Phrase of the Craft Beer Revolution and the Four Key Events that Changed it All

Brewery

The first was in 1976 when Jack McAuliffe, a retired navy veteran, opened the first “microbrewery” called New Albion in Sonoma, Calif. McAuliffe was the first person to use Cascade hops in his beers, especially in his pale ale.

The following year, Michael Jackson -- not the gentleman who couldn’t find his other glove, but the esteemed English beer and whisky expert -- wrote “The World’s Guide to Beer,” which many beer experts consider the industry's seminal book. It was the first of its kind to truly categorize the world’s beers into different styles.

In 1978, President Jimmy Carter signed a bill into law legalizing home brewing. Within months of legalization, Charlie Papazian founded the Brewers Association and American Homebrewers Association. In 1984, Papazian published “The Complete Joy of Home Brewing,” allowing tens of thousands of brewers over the following decades to create amazingly flavorful and complex beers, many of whom have gone on to become professionals.

Finally, Ken Grossman and fellow homebrewer Paul Camusi founded Sierra Nevada Brewing Company in 1979, currently one of the largest craft breweries in America. His Sierra Nevada Pale Ale with Cascade hops became the gold standard for the use of west coast hops.

Craft Beer Today

Since then, craft brewing has grown into a powerful force to be reckoned with. In the beginning, American craft brewers were influenced by the great brewing nations of Germany, England and Belgium. Today, American craft brewing is the one influencing beer styles and trends around the world.

Last year, the industry reached heights never before achieved. Volume share for craft brewers reached double-digit numbers for the first time at 11 percent in 2014 -- an up from 7.8 percent in 2013. That is an 18 percent growth in volume when the beer industry as a whole grew only 0.5 percent. Craft retail dollar value growth is at $19.6 billion, a 22 percent growth over 2013. Craft dollar share is 19.3 percent of the total U.S. beer market of $101.5 billion.

Beer Close Up

The craft beer industry has exploded. In 2008, there were only 1,521 craft breweries. There are now 3,464 breweries operating in America. That is almost a 50 percent growth in the last 6 years. Of today’s breweries, 3,014 are craft breweries, with more than 1,500 in the planning stages. In the last year alone, 614 new breweries opened with only 46 closures. There is no doubt that craft beer is here to stay. This is only the beginning.

Look for part two next month, where I detail what the big boys are doing about the pesky phenomenon that is craft beer.