USA: History suggests there could be more room for craft industry growth - experts

There are more U.S. breweries than ever before. And they are opening at a record pace of two-a-day, SCTimes reported on December 17.

Yet history suggest there could be more room for growth.

“We are still way off the all-time per capita total," argues Bart Watson, economist for the Brewer's Association. "We have a long ways to catch the 1870s.

"People talk about bubble (burst) but they don't understand what it means. The key is to continuing to find a local demand."

By the end of 2013, there were 2,863 craft breweries, a growth of about 400 from 2012.

In 2015, the total number surpassed 4,000. And specifically at the end of November, the number of U.S. breweries surpassed the previous high total of 4,131 set in 1873.

Watson said the industry saw the biggest growth in IPA styles — he refers to it the 'IPA-fication' of beer. Also growing is lower-alcohol "sessionable" beers. Watson speculates the next style growth could come in lighter blonde ale and gose-style beers.

Much of the brewery growth is coming outside of communities like Denver and Seattle, cities known for their established craft beer scenes. Many are also setting up in smaller communities, often without an extensive previous brewing history.

"To me that signals craft is more in the mainstream," Watson said. "Craft is now reaching the larger population.

"The majority of these breweries opening are independents, small and locally focused. They aren't large regional production facilities. Yet they are still finding a niche market."

Still, with all the growth there are bound to be challenges.

A CNBC report speculates that 2016 could feature a hop shortage due to a higher demand combined with the impact from the summer drought on the West Coast. A Forbes report also speculates an aluminum can shortage could impact the craft industry.

There's also concern in the industry over how proposed calorie listing laws and recent Anheuser-Busch InBev acquisitions could impact craft beer in 2016.

The biggest challenges for craft brewers could come with distribution.

"(Distribution) is more competitive now than ever before," Watson said. "The large brewers have already started to flex their muscles a bit with incentive programs. It will be interesting to see (how the distribution industry evolves)."

18 December, 2015