Craft or crafty? Consumers deserve to know the truth

(12/18/2012) By Charlie Papazian, Bob Pease and Dan Kopman

Beer has had roots in this country for centuries. Virtually every Founding Father either made or enjoyed it. Today, thanks to the ingenuity of small and independent brewers, the U.S. has moved beyond offering only light American lager and now has more beer styles and brands to choose from than any other market in the world.

This is a movement — and one that is growing quite rapidly. In 2011, craft beer grew 13 percent by volume and 15 percent by dollars, with retail dollar value estimated at $8.7 billion. By mid-2012, the growth continued and dollar sales for craft brewers were up 14 percent, while volume of craft brewed beer sold hopped 12 percent. Overall, beer sales are responsible for 1.6 percent of the gross domestic product.

Yet even as craft grows, those who dominate the market are large international conglomerates. A-B InBev, headquartered in Belgium, and SABMiller, headquartered in London, now control 75 percent of the U.S. beer market between them. Heineken and Modelo (Corona) and other imports are 14 percent, and A-B InBev has a deal in place which, if approved by the Department of Justice, would allow them to buy the half of Modelo it doesn’t currently own.

While America’s small and independent craft brewers have reached a record 6 percent market share, they lack the economies of scale and the huge marketing resources of the big brewers. They’ve relied on grassroots efforts, an appreciation for local, and authentic and delicious products to attract their consumer base.

Beer enthusiasts have responded by embracing these breweries and their unique, innovative and flavorful beers, brewed locally by neighbors and friends who are very visibly involved in their communities. They have chosen to support small-business entrepreneurs, who are the embodiment of the American dream. These entrepreneurs are the underdogs bent on reviving a sense of independent craftsmanship.

Noting the expansion of the craft brewers’ niche and also that many beer drinkers are turning away from the mass-produced light lagers that they are historically known for, the large brewers started producing their own craftlike beers. However, they don’t label these faux-craft beers as products of A-B InBev and MillerCoors. So if you are drinking a Blue Moon Belgian Wheat Beer, you are not told it is a SABMiller product. If you crack open a Shock Top, you are not told this brand is 100 percent owned by A-B InBev.

The large brewers also have bought or own 100 percent of smaller breweries like Goose Island, Leinenkugel and Henry Weinhard. They own significant equity stakes in Red Hook, Widmer and Kona breweries. They sell these beers through their strong distribution channels, but market these faux-craft beers as if they were from independent, locally owned craft breweries.

Today, there are craft breweries in just about every city in the country, lifting the local economies and giving those communities unique products that reflect their native character. Most Americans now live within 10 miles of an independent, locally owned craft brewery.

This country thrives on innovation, and small-business and craft brewers are the epitome of both. The large brewers employ 25,000 people in their stateside brewing facilities and, undoubtedly, in cities like Milwaukee, Denver and St. Louis, these jobs are important to the local economies. But across the entire U.S., small and independent craft brewers employ more than 103,500 Americans in local, Main Street jobs.

If you think craft breweries are a good force in America, take the time to familiarize yourself with who is brewing the beer you are drinking.

Is it truly from a brewer that is small (producing less than 6 million barrels of beer a year) and independent (less than 25 percent of the craft brewery is owned or controlled by an alcoholic beverage industry member who is not themselves craft)?

Or is it a product of a large international brewer, capitalizing on the unprecedented growth of the sector to produce a faux-craft beer?

It makes a difference. By supporting small and independent craft brewers across the country, we are giving them a chance to thrive in business, create more jobs, boost the economy and compete against the massive corporations that have controlled the market for so long.

Charlie Papazian is president and Bob Pease is COO of the Brewers Association, the trade association representing America’s small, independent brewers. Dan Kopman serves as a member of the Brewers Association Government Affairs Committee and is CEO of Schlafly Beer in St. Louis.