Craft beer sales have grown 15% in the past year alone. Export sales also reached a new record.
What exactly is craft beer? The Brewers Association, the trade industry group for craft beer, defines craft breweries as ones that are " small, independent and traditional ."
Craft brewers annually produce less than 6 million barrels, don't have a large financial investments from non-craft brewers, and brew beers using traditional ingredients, like malt barley.
The sector still makes up just 10% of the nation's total beer sales, not coming close to the profits of Anheuser-Busch or MillerCoors. But it's difficult to ignore the impact the country's 2,300-plus craft breweries are making.
We talked with Brewers Association Director Paul Gatza to get his take on why the craft beer industry is taking off.
Beer drinkers are experimenting. A Bud Light isn't cutting it for many people anymore. Gatza said more and more beer lovers are turning toward full-flavored beers, especially India Pale Ales, seasonal beers, and Belgians.
IPAs in particular have grown 40% during the past three years, which Gatza attributes to a growing number of people who are starting to like the strong hops flavor. "It's never been a better time to be a beer drinker than right now," he said.
Breweries are experimenting, too. Brewers are constantly coming up with new hops and beer flavors to keep customers coming back for more. New breweries are popping up nearly every day, with varieties ranging from Dogfish Head's Aprihop to Alaskan Brewing Company's Smoked Porter.
"Craft brewers themselves are continuing to innovate with new beers, new beers styles," Gatza said. "They started their own business with that idea that, 'I want to do something different.'"
"Because craft has started picking up more attention and (been) what customers are looking for, it's encouraged wholesalers and retailers to get more out there," he said.
Craft beer is becoming more social. Gatza said if you walked into a bar ten years ago, all you would see were the big name beers. Now, it's common to see those name brands along with a few imports and a couple of craft beers. And most craft breweries also have a restaurant or tasting room attached, making it easy to spend a night out there with friends.
These on-premise markets are where a lot of people's beer habits change. "T hat’s the front lines of the competition," Gatza said. "From there, when people find something they like, they're more likely to buy it when they go out to buy beer at the liquor store."
Plus, it's getting more portable. Hundreds of craft brewers are putting to put their beer in cans for the first time, making it easier to lug around than bottled brews while hiking or spending time outdoors. Places like golf courses and tennis often ban bottles, so canned craft beer is a good next step to expand the market. "Part of it goes to who the craft beer drinker is — a lot of times it's someone who tends to be an outdoorsy type, tend to go out with friends more," Gatza said. "There are some places where cans work a little better."
More From Business Insider
- Only One Group Is Safe From The Beer Industry's Collapse
- Budweiser Has Begun To Question The 'Very Nature' Of Its Beer
- 11 Craft Beer Companies That Went From Little To Big Time
- Consumer Discretionary
- Food & Cooking
- Brewers Association
- craft beer