With the rise of craft beer and the growing interest in craft beer by the country’s major brewers, the beer market has been bustling with new activity and members.
Each year, the Brewers Association releases a list of the Top 50 U.S. Craft Brewing Companies and the Top 50 Overall U.S. Brewing Companies. The lists are based on the breweries’ beer sales volume for that particular year, and the results are compiled by a national survey. Most breweries respond, though when some do not, the association estimates the data using tax reports and other financial documents.
This year’s list brings newcomers and surprise changes in the rankings.
Introducing a new definition
To be included in this list, a U.S.-based brewery has to fit three parameters of the Brewers Association’s definition of a craft brewery, which slightly changed this year. Under the previous and current definition, a craft brewery has to
- Produce less than 6 million barrels per year.
- Be independent, or have less than 25% ownership by another alcohol or beverage company that is not itself a craft brewer.
- Be considered "traditional."
But traditional has a new definition. The former definition, "A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor."
That definition excluded breweries who used other ingredients, such as corn and rice, including Yuengling, which is "clearly a traditional brewer," says Bart Watson, staff economist of Brewers Association. Yuengling is now not only included but tops this year's list, knocking down the previous reigning brewer, Boston Beer Co, down to spot No. 2.
This change opened the doors for craft brewers experimenting with novel ingredients. Minhas Craft Brewery (10), August Schell Brewing (27), and Narragansett Beer (47) joined the ranks as a result.
"Craft brewers have long histories of being very innovative, using what's available to them, and things like corn and rice were traditional in styles from particular regions," said Watson. "So excluding brewers that had the majority of their production using those ingredients didn’t seem to make sense to our board of directors."
Top 10 U.S. Craft Brewing Companies
1. D.G. Yuengling & Son, Inc
2. Boston Beer Co
3. Sierra Nevada Brewing Co
4. New Belgium Brewing Co
6. Lagunitas Brewing Co
7. Deschutes Brewery
8. Bell's Brewery, Inc
9. Stone Brewing Co
10. Minhas Craft Brewery
The top dogs have remained largely unchanged for the past few years. From 2010 to 2013, the top three breweries remained the same: Boston Beer Co (1), Sierra Nevada Brewing Co (2), and New Belgium Brewing Co (3), though each fell one spot thanks to the introduction of Yuengling to the 2014 list.
The rest of the top 10 have varied over the years, but since 2010 Gambrinus (5), Lagunitas Brewing Co (6), Deschutes Brewery (7), Bell’s Brewery (8), Matt Brewing Co (14), Harpoon Brewery (15), and Stone Brewing Co (9) have usually lingered somewhere around the top 4 to 10 spots. Some have dropped a few spots this year. One newcomer to the top 10 is Minhas Craft Brewery out of Monroe, WI.
"One of the things that’s interesting about this list is that so many breweries are growing incredibly fast, but given the growth of the industry, it’s very difficult to move up in the rankings," said Watson. "Lagunitas has been on an absolute tear the last couple of years and wasn’t able to move up this year because of the growth of all the breweries above it. I think that's true for a lot of these breweries that even with tremendous growth you can end up being ranked in a place that’s very similar to last year."
Where is all this beer coming from? Only two states, California and Massachusetts, have had more than one brewery in any one top 10 list since 2010. As for the entire list, the clear winner for 2014 is California (11), though Colorado (6) and Oregon (4) made a decent showing as well. The South contributes the fewest, only producing SweetWater Brewing Co (18) out of Atlanta, GA, and Abita Brewing Co (21) out of Abita Springs, LA.
How breweries make it on this list
Is there a secret sauce to the inner workings of how these top breweries stay on top or how some can see such successful leaps? Watson says it’s all about giving the customer what they want.
"They’re providing products that beer lovers want first and foremost. It’s always about high demand for the liquid in the keg, can, or bottle. I think they’re being very effective at keeping their beer quality high and keeping the beer lover satisfied even as they grow," said Watson.
For craft brewers though, staying small and true to the mantra of craft brewing while trying to grow a business profitably takes a balancing act.
"I think they’re also doing a good job of balancing the nimbleness of being a small brewer with the different competencies you have to have as you move to a regional and national level," said Watson. "These brewers are building new skills as they transition up from micro to regional and moving to say chain retailing, which is a very different environment than selling to a pub in your local city. … But thinking about your growth strategy and having a conscious strategy is first and foremost the most important thing."
That balancing act isn’t always so appealing to a craft brewer content selling only to pubs in their city.
"You have to want to improve your ranking. Maybe small and independent brewers are perfectly happy with the level they are even if they’re not a top 50 brewer," Watson said. "Being large creates an extended set of headaches and challenges that many breweries don’t wish to engage in."
What these rankings could mean for a brewery
Perhaps the most important benefit to being on the list is exposure to consumers, investors, retail establishments, distributors, farmers, and any other potential operational partners.
A smaller brewery who jumps onto the Top 50 list for the first time could see immediate benefits. Consumers learn the brewery's name and may request its beers at their local grocery, liquor stores or restaurants. These stores may be inspired to browse a brewery's wares and prices to potentially work out a deal. Attention from farmers could mean offers of better quality or better priced ingredients. Distributors could reach out to help expand distribution and increase volume output. Investors could enable breweries to hire more employees, open another facility, or purchase better equipment.
All of these opportunities have the potential to increase a brewery's sales, direct or indirect. This would complement and drive the growth of the craft beer industry overall, as craft beer now commands 11% of the overall beer market in terms of volume and 19.3% of the retail market share. The number of craft breweries, including microbreweries, brewpubs, and regional craft breweries, also jumped 19% in 2014.
If these top 50 lists are an indicator, as craft beer continues to grow, it very well may drive the entire industry forward.