Dive Brief:
- An Ohio law took effect Wednesday that removed caps on alcohol content for beer.
- Craft brewers struggled against caps in the past because it restricted their ability to make stronger varieties.
- Removing the alcohol content cap could make Ohio a more attractive destination for smaller breweries, legislators said.
Dive Insight:
This type of legislation is becoming more common nationwide. Various states have removed alcohol content caps or lifted them to less restrictive levels over the past decade, including North Carolina, Iowa and Tennessee, the latter of which takes effect in 2017.
Lifting or removing these caps may be even more important to craft breweries than major ones. Larger beer producers don't tend to experiment with higher alcohol content in their products as much, while stronger beers are give craft beer an edge for many consumers.
Also, because major beer companies tend to have a wider, nationwide reach, it's more difficult to sell higher beer varieties in states that still have these alcohol content caps in place. Craft beer tends to sell on a more local or regional basis, so that's one less hurdle for craft brewers until they further expand.
Craft beer production volume in the U.S. grew 13%, with a 16% increase in retail dollar value last year. The number of operating breweries in the U.S. also expanded by 15% to total a record-high 4,269 breweries.
Major producers may begin taking the opposite approach to appeal to a different crowd. In July, Anheuser-Busch InBev announced it would be pushing and expanding its low- and nonalcoholic beer portfolio. The company expects these segments will account for 20% of its sales by the end of 2025.