Commentary

The Economics of Craft Beer

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“I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts and beer.”
― Abraham Lincoln

Mankind has a special relationship with beer that goes back for centuries. After generations of refining and perfecting the flavor of beer, our European cousins brought the legendary pint-sized favorite with them around the world. Demand soon sprang up on all continents, creating a new economy that has grown only stronger in recent years. The popularity of the beverage is apparent when compared to the sister markets of wine and distilled spirits.

Maine is at the tip of the spear when it comes to this growing trend. Why, you may wonder? Grab a pen,  paper, and a pint of your favorite ale and follow along.

In spite of the recent economic recession in the United States, the craft brewing industry has been expanding at an impressive rate. Industry leaders have excelled at looking outside the box to expand as the popularity of mass-produced brews has fallen.

Simultaneously, the “localvore” movement has grown in Maine in recent years, increasing the demand for locally-sourced food and goods substantially. It is not surprising that this trend has extended to the craft brewery scene as well.

Craft breweries often use local hops, grain, and flavoring from local farms, creating employment opportunities that extend far beyond the pub doors. These businesses are creating new jobs across the board and are providing a boon to the Maine economy.

The craft beer industry isn’t done growing, either. According to the Brewers Association, in fiscal year 2014, craft breweries generated $55.7 billion. The state of Maine alone contributed over $432 million. These are significant numbers, especially when considering that larger breweries such as Coors, Miller and Budweiser are not included in those figures.

While overall the beer market is in decline (-0.2% FY2015), craft beer production grew 12.8% in the last year alone, and there is still plenty of room to expand before the market is saturated. In 2015, craft breweries and brewpubs only accounted for 12.2 % of the national brewing market, with the remaining split between large-scale domestic beers and a smaller portion of imported beer. This indicates that American taste buds are moving away from the generic pale ales and lagers of previous generations, and are moving toward the new expansive selections provided by smaller, local brew pubs.

It’s not only Americans that thirst for American craft beer, either. For the first time, American brews are being held to the same standard as their European counterparts. Last year, craft beer exports rose sharply by 16.3 %, a larger jump than years prior and Maine is well prepared to welcome this new trend.

Just last week, the Matador Network named Portland, ME the number one city in the world for craft beer. With local brewpubs seemingly on every corner, this comes as no surprise. In the small agricultural communities of Maine, hop farms and granaries are sprouting up to answer the call.

Supporting small-scale breweries in our state is a no brainer, as it benefits all of us. Our breweries bring people from all walks of life together. These are not bars or clubs. These businesses are community builders run by parents, neighbors and friends.

So raise your glass and drink towards a future of prosperity, hope and new horizons. Cheers!

About Dominic DeLuca

Dominic DeLuca is currently a Junior in the Environmental Science program at the University of Maine at Fort Kent. He serves as Chairman of the University of Maine at Fort Kent College Republicans, and as Treasurer of the Maine Federation of College Republicans.

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