10 takeaways from the 2016 Craft Brewers Conference

Globalization of American craft beer

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2016 Craft Brewers Conference // Photo © David J. Reimer Sr.

American craft beer has seen unprecedented growth in our domestic market, but the business of American beer doesn’t end at our borders. From Chinese equipment manufacturers to Patagonian malt producers, craft beer as an industry is commanding attention in the international beverage market. According to the Brewers Association, roughly 14% of this year’s CBC attendees were from outside the United States and data shows that craft beer export volumes increased by 16.3 percent in 2015, now totaling 446,151 barrels and worth $116 million. So, who’s buying that beer? Asia, and Korea specifically, is a surprisingly big player. South Korea, the top Asian country for alcohol consumption, and 21st in the world, according to the 2014 WHO Global Status report on alcohol and health, is now the 5th largest importer of American craft beer in the world.

The changing face of craft beards

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2016 Craft Brewers Conference // Photo © David J. Reimer Sr.

Is it just us, or has the brewer’s beard jumped the shark? One noticeable difference in the appearance of this gathering was an apparent decline in the beards-per-brewery average. Given, we didn’t measure this index in any official terms, and perhaps there is a margin of error to consider based of the spring season, or perhaps we’re seeing the tipping point in craft beer’s fashion future. We’re so very curious to see what’s next.

IPA is still king

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The 2016 Craft Brewers Conference // Photo © Brewers Association

Eight percent of the craft beer produced in the U.S. in 2008 was India Pale Ale. By the end of next year the IPA category is projected to have grown to a full one-third of the nation’s total volume of craft beer. One-third. While IPA doesn’t seem like it’s going away anytime soon, there were a number of other interesting conversations taking place last week in Philadelphia about the smaller trends in craft beer and other beverage segments that pose potential threats to craft beer’s growth potential.

While the excitement surrounding sour and mixed-fermentation beer was abounding at the conference, the experts charged with measuring market growth acknowledged that because of labeling inconsistencies and loose style presentations, the sales and production data of this growing category is hard to pin down. While we can’t imagine the sour market share ever nearing that of IPA, we are sure sour beers are going to have a few more years of wild growth.

Beer Business Daily shared an interesting observation on what they called the “vodkafication of beer,” and though we wholeheartedly reject this new, terrible word—we agree with the idea. The spirits market—specifically vodka—has thrived on short, specific trends in flavor. BBD editors Harry Schuhmacher and Jennifer Litz-Kirk predict craft beer will see similar spikes in the flavored beer segments.

An even more disturbing trend: In 2015, the hard soda market (think Not Your Father’s Root Beer) grew to match the market share of cider consumed in the U.S. C’mon, America. We simply can’t let this happen.

Spontaneous fermentation spontaneously popular

The best attended seminar we saw all week was Spontaneous Fermentation in a Production Brewery, a presentation led by Vinnie Cilurzo of Russian River, Jason Perkins of Allagash Brewing, Jeffrey Stuffings of Jester King Brewery, and Chase Healy of Prairie Artisan Ales.

All four speakers walked through the processes used at their breweries. Some basics were consistent across the board, but each brewer did things a little differently from the others, and differently from traditional lambic brewers in Belgium. For a long time, it was thought that lambic-style beers could only be brewed in Belgium, but the wide geographic range of the presenters (California, Maine, Texas, and Oklahoma, respectively) proves what Cantillon’s Jean Van Roy told Cilurzo on a visit to Brussels: “You can spontaneously ferment anywhere in the world, you might just have to come up with your own method.”

From the amount of interest expressed by the roomful of brewers, we’re likely to see more breweries dabbling in the near future with their own methods of spontaneous fermentation.

Mr. Brewer goes to Washington

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Brewers Association President and CEO Bob Pease // Photo © Brewers Association

As a $55 billion industry, craft brewing is increasingly becoming a political player with a voice in Washington. Brewers Association President and CEO Bob Pease discussed the two major policy topics that the industry is watching. The first is the impending mega-merger between AB-InBev and SABMiller and its implications for craft brewers. Pease explained that while the merger will make AB-InBev the largest the brewer in the world, the BA’s biggest concern is that it will make AB-InBev the largest distributor in the U.S.

“By and large, small independent breweries need to use a distributor, generally speaking, to get their products to market. AB-InBev has over the last eight months purchased five independent distributors, and when that happens that closes off one of the routes to market for smaller independent breweries,” Pease said. He also reaffirmed the BA’s stance that AB-InBev should have to divest its interests in all distributorships it has ownership stake in.

The second policy Pease addressed is working to pass the Craft Beverage Modernization and Tax Reform Act. The bill, which has the support of 202 representatives in the House and 38 senators in the Senate, would cut the excise tax on the first 60,000 barrels of beer produced by a domestic brewery from $7.00 to $3.50. The act will appear before the House Committee on Ways and Means on May 12 and Pease is optimistic that the act will eventually pass into law.

Editors Joseph Alton and Brian Kaufenberg contributed to this article.

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