Why are there so many breweries?

Corporate goliats are taking over the U.S. UU.

Why are there so many breweries?

Corporate goliats are taking over the U.S. UU. In almost every economic sector, including television, books, music, grocery stores, pharmacies and advertising, a handful of companies control prodigious market share. But what explains the nature of the craft beer boom? From several interviews with economists and experts in the beer industry, I have deduced that there seem to be two big reasons: a direct cause and a more complex and interesting story.

Craft breweries have focused on flavors that were underrepresented in the hyper-consolidated beer market. Big breweries ignored burgeoning niches, Watson said, particularly India Pale Ales Hops, or IPA, which make up a large part of the craft beer market. It is also significant that the craft beer movement took off during the Great Recession, as unemployment created a generation of entrepreneurs “out of necessity” who, lacking formal offers, opened small breweries. But the triumph of craft beer isn't just about a preference for hops and sour.

It's also a story about the regulatory history of the United States and how a certain combination of rules can cause innovation to flourish or wither. At the beginning of the 20th century, alcohol producers owned or subsidized many bars and lounges. These establishments were known as “tied houses”, since the bars were “tied” to brewers and distillers. Tied houses were mortal enemies of the temperance movement.

They were vertical monopolies that drove prices down, drunk customers with cheap alcohol, and sold them more in gambling, prostitution and other vices. At the end of the Prohibition, legislators considered that the elimination of these vertical monopolies was essential to promote safe alcohol consumption. Following the passage of the 21st Amendment, citizens of all states voted to abolish linked houses by separating producers, such as brewers, from retailers, such as bars. This led to a “three-tier system” in which producers (level one) sold to independent brokers who were wholesalers or distributors (level two), who then sold to retailers (level three).

By dividing the alcoholic beverage business into three distinct groups, these state-by-state rules made the alcohol industry deliberately inefficient and difficult to monopolize. The modern alcohol sector is specially designed to promote variety, in other ways. So-called “thing of value” laws make it illegal for beer producers to offer gifts to retailers in an attempt to buy favorable shelf space. Other rules make it illegal for producers to buy shelf space, which saves space for smaller brewers to thrive in supermarkets and liquor stores.

Taken together, these rules are designed to control the political and economic power of the largest alcohol companies while creating ample space for newcomers. After Ronald Reagan Election, Justice Department Relaxed Enforcement of Antitrust Laws. This began a period of consolidation in several sectors of the economy, including the beer industry. Through a series of mergers over the past 30 years, 48 major brewers came together to form two superbrewing giants: Anheuser-Busch, InBev and MillerCoors.

Therefore, an old system established to avoid concentration was characterized by extreme consolidation. But even though federal antitrust enforcement over the past 30 years has changed to favor conglomerates, a surge has created the perfect conditions for the craft beer revolution or, more precisely, several revolutions other than craft beer. In the early 1980s, a smaller beer boomlet, with then-new breweries such as Sierra Nevada and Samuel Adams, foreshadowed the current craft craze. In 1978, Congress passed a resolution legalizing home-brewing, unleashing a generation of brewers who experimented with flavors far more complex than the simplicity of Schlitz, Budweiser and other staple beers that reigned for decades.

More recently, many states have made exceptions for small craft breweries to sell beer directly to consumers in taverns. Technically, they create an exception to the prized three-tier system in a way that benefits smaller breweries. But economists and beer fans alike often defend these rules, as they can help small businesses establish a fan base and then gradually disappear when a brewery succeeds. So what are the lessons of the triumph of craft beer for the rest of the economy? First, just as research shows that giant companies are bad for innovation and job creation, the craft beer boom shows that the boom in small businesses stimulates both product variety and employment.

Second, sometimes consumers have their own reasons for turning against monopolies, particularly in flavor-driven industries, just as they are moving away from Budweiser and popular light beers to tastier IPAs and stouts produced by smaller breweries. Third, even in an economy obsessed with efficiency, it's sometimes just as prudent to design for inefficiency. Alcohol regulations have long discouraged vertical consolidation, encouraged retailers to make room for new brands, and more recently, have made it easier for people to bring their own batch of beer to market. Those are the objectives that the country must adopt at the national level, both to facilitate the growth of small businesses and to make it difficult for large companies to relax.

A phalanx of small businesses does not automatically constitute a perfect economy. Larger companies can support higher production and, as a result, often pay the highest salaries and attract top talent. The economy seems to suffer now: it is not a fetishism for smallness, but a complacency with enormity. The craft beer movement is an exception to that rule.

It should be a model for the country. Too many breweries to sustain them economically in the long term? Absolutely not. Craft beer is often a beacon of positivity that creates jobs and generates friendships. On the other hand, the market expansion of at least two breweries open every day has created a new set of problems for brewers.

Newcomers, riding the craft beer wave, struggle to stand out. And it's not like bars have doubled the number of faucets in the last five years. So not only do new breweries need to outperform their rivals even to reach consumers, but they may need to convince bars that they deserve more of a chance than the best-known beers in Lagunitas or the Great Lakes. The feeling is the same on the other side of the bar.

But is there such a thing as too much beer?. . .

Aimee Blane
Aimee Blane

Proud beer trailblazer. Certified music evangelist. Subtly charming pop culture advocate. Total pizza junkie. Lifelong social media enthusiast. Friendly web buff.

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