Craft Beer

I’ve written posts on alcohol labels, wine grapes, and sparkling wine. Now it’s time for another beverage, craft beer. I’m guessing you’ve heard the term, considering the number of breweries in the U.S. has skyrocketed to 7,450 last year from 1,574 just a decade ago.

But, wait. What’s the difference between regular beer and craft beer? Scale. The Brewers Association is the nonprofit trade group of the industry. They define a craft brewer as producing no more than 6 million barrels per year and having no more than 25% of the brewery owned or controlled by a non-craft industry member. This last point means that small breweries owned by large holding companies do not qualify as craft beer. You may be surprised to find out how many brands this excludes.

The two largest alcohol companies in the world are Anheuser-Busch InBev and Heineken Holding. You can find the brands they own here and here. The site has lists of brands owned by other holding companies as well. Despite how much you might hear and read about craft beer, it only makes up about 13.2% of the overall beer market. Most of what you see in grocery and convenience stores is “craftish” beer that isn’t really from independently owned breweries.

Why do holding companies buy small brands? Business and economics. Brewing has traditionally been an industry with thin margins. It’s also capital intensive, requiring a high initial investment for equipment. Combine that with a shortage of cold storage warehousing and trucking in recent years and it becomes logistically difficult and expensive. Large companies that already have a distribution infrastructure have a cost advantage over small craft and microbreweries, especially new ones. They can easily take on an additional brand and add it to their existing contracts, getting a price break in the process. Small operations don’t have the leverage to negotiate such deals and are often priced out of retail avenues.

Are the ingredients used in craft beer different than regular beer? Yes and no. Like how I’m not letting up on that theme? At it’s base, beer is made up of just four ingredients: water, barley, hops, and yeast. However, as I wrote about previously, alcohol is regulated by the TTB rather than the FDA. No ingredient label required, even if additives are used. It means that when you see something like a fruit-flavored beer, a typical consumer has no way of knowing whether actual fruit was used in the brewing process or a flavor concentrate was added before bottling.

Breweries can voluntarily disclose this information, but if they’re using flavorings or concentrate, I’d guess they won’t go out of their way to tell you. There are other additives that may be used as well, and few of them are required to be on a label. Traditionally, alcoholic products have used fewer additives than processed food, however that may be changing as once-craft breweries scale up in size and become “crafty.”

What information will I find on a beer label? All labels must receive approval by the TTB before sale. They are required to have the following information, whether they are a large brewery or a small one:

  • Brand name
  • Alcohol by volume

There are some label claims relating to alcohol content that have volume requirements. “Reduced alcohol” or “low alcohol” must be below 2.5% abv, “non-alcoholic” must be below 0.5% abv, and “alcohol free” must be at 0%.

The class and type are the terms used to help identify beer. Classes are broad categories like ale, lager, or stout. Types get more specific, like pale ale, golden lager, or cream stout. The TTB’s definitions are fairly vague, so it’s not uncommon to see breweries use their own interpretation of a beer type.

  • Country of origin
  • Total volume
  • FD&C Yellow #5, saccharin, sulfite, and aspartame (if used)

Remember when I wrote that additives don’t have to be listed? Well that’s any additives except the four in that last bullet point. If any of them are used, you legally have to see them on the beer label. As you can guess, they’re not all that common.

So, do I like craft beer more than regular beer? Why should I buy it? I won’t get too in-depth here, because I’m sure there are a plethora of bearded men nearby who will debate this very thing with you. When it comes to food and beverage, you usually find a level of creativity and experimentation in small operations that just doesn’t exist in large ones. If you like that sort of thing, craft beer might be for you. That’s not to say that craft beer doesn’t have its downsides as well. The industry is lacking in diversity and the jobs aren’t known for providing a high-quality of life. Having worked at a then-craft brewery, I can personally attest to this.

I hope this article helped you understand the industry a little more. There’s so much on the subject that I didn’t cover and will have to get to another day. Stay tuned for more posts, and in the meantime, let me know which breweries are on your must-try list!

Image by: Gonzalo Remy

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