This week, beer lovers from coast to coast are raising beer glasses in celebration of American Craft Beer Week – a week highlighting the culture and contributions of local breweries across the country. America’s 3,300 licensed, independent beer distributors are joining in the toast, applauding the excitement that new, entrepreneurial brewers bring to the beer industry and to thirsty consumers.
The craft beer industry continues to be an American success story. In 2014, craft brewers – as defined by the Brewers Association – enjoyed 18 percent growth and pierced the 10 percent volume mark in the U.S. for the first time. It’s hard to find any other product or industry segment performing so well right now, especially when the U.S. economy grew less than three percent overall last year. Additionally, there are more than 3,400 breweries in operation across the United States, including 600 new breweries opening just last year. According to the BA, 99 percent of operating breweries in this country are craft breweries.
So what’s fueling craft beer’s remarkable rise? Visionary brewmasters, savvy entrepreneurs, energized retailers and eager consumers happy to try new flavors, brands and styles. Yet there’s one more ingredient to this successful system: independent beer distributors who invest in new brands; promote them in markets far and wide; and deliver them to bars and stores in some cases hundreds or thousands of miles away.
The Boston Consulting Group explains the open, independent beer distribution system in its report, “For Small and Large Brewers, the U.S. Market Is Open.” BCG notes that the American beer market is “freely competitive, and driven by consumer choice” and explains that craft brewers can “leverage an effective route-to-market distribution system… this open distribution system enables small brewers to avoid significant, if not prohibitive, costs to entry, while also gaining deep access to large and small retailers.”
While this distribution system delivers commercial and economic value today, it has roots in the 21st Amendment to the U.S. Constitution, which empowers the states, not the federal government, to determine how, when and where alcohol is sold within their borders. Today, the independent distribution system created by the states allows distributors to act independently – not beholden to a single brewer – meaning they can take on new brands, helping those new brands get to new markets. This open system levels the playing field so established brands can’t close off distribution channels or block smaller brewers from reaching store shelves and beer menus at local restaurants and pubs.
You’ve probably seen firsthand exactly what I’m talking about. It’s on display in your local beer aisle. What other product has so much selection, sitting next to competing products? Small, upstart brewers fiercely competing side-by-side with established, familiar brands.
To see a comparison, check out the soft drink aisle. It’s a sea of red containers next to blue containers, with a little silver, purple and green sprinkled in. You don’t see robust marketplace competition at play, and there aren’t many new products appearing on the shelves in that aisle.
Because beer distributors work independently, they are able to deliver consumers unprecedented choice with more than 13,000 labels from across the country and around the world. That’s a true American success story worthy of toasting during American Craft Beer Week and throughout the year.
So the next time you walk down the beer aisle, or you read the beer menu at your favorite watering hole, be sure to raise a glass to the effective system that provides so much choice, variety and excitement for the American beer lover. Cheers!
Rebecca Spicer serves as senior vice president of communications and public affairs for the National Beer Wholesalers Association in Alexandria, Virginia.