The other day the Brewers Association announced that they have changed their definition of “small” brewery. In addition to getting the press release (below), I just read an article in the Baltimore Sun about the topic which made me think about the fact that some of you would probably be interested.
According to the new definition, a craft brewery is one that brews less than 6 million barrels per year. The number used to be 2 million barrels per year, but the Boston Beer Company is selling a lot of Sam Adams these days.
In Woodinville, Redhook and Foggy Noggin both make less than 6 million barrels per year. Along with Boston Beer Company, they are considered “small” breweries according to the Brewers Association definition of a “craft” brewery.
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The Brewers Association is a not-for-profit trade and education association dedicated to small and independent American brewers, their craft beers and the community of brewing enthusiasts. I guess you could say that it is the most official trade organization for the industry we love. No doubt, their motives are pure.
The Brewers Association is not exactly hiding the fact that they changed the definition in order to maintain Boston Beer Company’s status as a craft brewery. Jim Koch is doing pretty well for himself these days and apparently his brewery is about to smash through the 2 million barrel ceiling.
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We all love to hear reports that say, “Craft beer sales are up,” so I guess we shouldn’t complain that the Brewers Association continues to consider Boston Beer Company a craft brewery. I don’t know.
To me, it doesn’t matter much. Would not a rose by any other name smell so sweet? Call it whatever you want, I just like good beer.
Here’s the press release from the Brewers Association.
Boulder, CO • January 3, 2011-The board of directors of the Brewers Association (BA), the trade association representing the majority of U.S. brewing companies, has voted to change the BA’s designation of “small” in its definition of a “craft brewer.” The Association’s board of directors also has revised its bylaws to reflect the change.
In the BA’s craft brewer definition, the term “small” now refers to any independent brewery that produces up to 6 million barrels of traditional beer. The previous definition capped production at 2 million barrels. The changed definition is currently in effect and can be reviewed on the BA website, BrewersAssociation.org. The change to the bylaws went into effect December 20, 2010.
In the Brewers Association’s bylaws, two classes of membership (Professional Packaging Brewers and Associate membership) have been redefined with a qualifying barrelage of 6 million barrels versus 2 million barrels.
The association cited several reasons for the change, including the recognition that “small” is a descriptive term relative to the overall size of the industry.
“Thirty-four years have passed since the original small brewers tax differential defined small brewers as producing less than 2 million barrels,” said Nick Matt, chair of the Brewers Association board of directors and chairman and CEO of F.X. Matt Brewing Company. “A lot has changed since 1976. The largest brewer in the U.S. has grown from 45 million barrels to 300 million barrels of global beer production.”
Matt added, “The craft brewer definition and bylaws now more accurately reflect and align with our government affairs efforts.” On the legislative front in 2010, the Brewers Association supported H.R. 4278/S. 3339, which sought to update the cap on an excise tax differential for small brewers to 6 million barrels per year in production for their first 2 million barrels.
Retaining Market Share for Craft Brewers
The industry’s largest craft brewer, The Boston Beer Company, is poised to become the first craft brewer to surpass 2 million barrels of traditional beer within the next few years. Loss of The Boston Beer Company’s production in craft brewing industry statistics would inaccurately reflect on the craft brewing industry’s market share.
In addition to Boston Beer, the current growth trajectory of other sizable BA member breweries places them on a course approaching the 2 million barrel threshold in the coming years.
“With this change to the craft brewer definition and BA bylaws, statistics will continue to accurately reflect the 30-year growth of market share for craft brewed beer,” said Matt. “Brewers Association statistics on craft brewers will continue to keep pace with the growth of the industry.”
Craft brewed beer market share is now approximately five percent of the U.S. beer industry, and growing. The BA has a stated mission of helping America’s craft brewers achieve more than five percent market share by 2013.
Matt added, “Rather than removing members due to their success, the craft brewing industry should be celebrating our growth.”
