Craft brews and microbrews have been making tremendous gains over the past few decades. In 1980, there were only 50 craft breweries in the United States; now, there are 2715. Craft beers come from extremely small breweries and have industry standards to uphold in order to maintain their title. They tend to taste better than big beer companies and sell for a bit more, but people are now more willing to shell out the big bucks for, dare I say it, better beer (my personal favorite is Left Hand Milk Stout).
The only companies that seem to have a problem with it are Anheuser-Busch InBev and MillerCoors. Three guesses as to why that is.
These two giants have dominated the beer industry since the 1970s. Advertising Age writes, “Beer has seen its piece of the total alcohol market fall to 48.8% last year from 56% of sales in 1999… [Craft beers] are now mainstream options for Joe Sixpack, a development that has contributed to eight of the top 10 U.S. beer brands losing share at stores in the 52 weeks ending August 11.” In other words, craft beers are taking money out of the pockets of big brewers and into the pockets of local, artisan beer makers.
Anheuser-Busch InBev and MillerCoors have an oligopoly over the beer industry. That is no exaggeration—together, they own 97% of the light beer industry and 74% of beer-shipment volume in the US. Naturally, they have used regulation to position themselves to own a majority of the beer market. Until President Carter was in office, old prohibition laws knocked out almost all home brewing. Since he deregulated, the craft beer industry has slowly begun to flourish.
Of course, Big Beer started to panic, and has since put pressure on the FDA to create more scrutiny when approving craft breweries. Reason reports that FDA regulations have “amped up steadily in the past decade and will only increase under the Food Safety Modernization Act. Still, while FDA regulators are increasingly coming into contact with brewers, it appears… these regulators often have little idea what craft beer is and how it’s produced.” Reason also notes that the FDA is used to inspecting kitchens as clean as laboratories or doctors offices but doesn’t have the experience to know what is and isn’t acceptable in a brewery. This has led to undue standards and regulations, forcing many microbreweries to close out their tabs early.
The government shutdown has also caused problems for craft beers. The shutdown has “closed an obscure agency that quietly approves new breweries, recipes and labels,” leaving breweries poised to open strumming their fingers as they wait for governmental approval to begin sales. If these brewers did not have their paperwork done by mid-August, they might not gain approval to open until after the holiday season.
As a shock to no one, MillerCoors or Anheuser-Busch can continue with business as usual.
In spite of these setbacks, craft brews are only going to continue to grow so long as our taste buds are active. From the young to the old, people want diversity in their beer. There is so little flavor in Coors or Budweiser that there’s barely a competition with most craft beer. Crowding these players out of the beer market is not going to work unless Anheuser-Busch and MillerCoors innovates and finds something new. Consumers have spoken: We want flavor. We want variation from what the big brands have offered us for so long. We want beer with a story and beer that comes with an experience. Anheuser-Busch and MillerCoors are not offering that… but they will have to should they want to compete with their small but growing rivals.