No, There Aren’t Too Many Breweries in the United States

Not yet, at least. But for some odd reason, the subject keeps climbing back into the mainstream, most recently in a story by Joshua Bernstein in Bon Appétit online, which when shared on Facebook emerges with the headline “The U.S. Craft Beer Market Is Way Overcrowded – Bon Appétit.”

That sentiment is not actually reflected directly in the story, the online version of which boasts the more equivocal title of “America Now Has Over 3,000 Craft Breweries—and That’s Not Necessarily Great for Beer Drinkers,” but the sentiment has launched a flurry of discussion around the web.

So let’s get this straight: 3,000 breweries are NOT too many for the United States and increased selection is NOT bad for beer drinkers.

Got it? Good! Now, here’s why.

At 3,000 breweries, the United States is now beginning to approach the breweries per population ratio we have in Canada, and in fact, depending on the brewery count for Canada you use – an accurate count in the country is almost impossible to ascertain – could already have reached the same level. But we’re not exactly awash in breweries north of the border, and I have yet to witness the “bloodbath” predicted by Sam Calagione in Bernstein’s story.

That brewery to population ratio, by the way, is about one per every 105,000 people. Which in a global context is actually pretty laughable.

How so? Look at the United Kingdom, for starters, where they boast a brewery for roughly every 55,500 citizens. Or Germany, with one for every 61,500 people. Or little Belgium, where every 70,000 individuals could claim a brewery of their own, should they be so inclined.

And that’s counting only traditional brewing powers. Wade into the numbers of nations that are experiencing their own craft beer renaissances, as is the U.S., and some of the numbers drop even further, like Switzerland, Denmark and New Zealand.

But wait, I hear American brewers arguing, we have the three tier system, which means that distributors are going to fill up and not want to carry any more brands. Which is why, I counter, microdistributors are beginning to appear all around the USA, and will no doubt continue to do so for as long as the demand for their services persists. Besides, more and more states are allowing self-distribution, which is surely sufficient for smaller operations.

But even so, I hear in the distance, it’s not necessarily about the distributors, but the proliferation of SKUs (the acronym for “store keeping units,” the short form for a distinct item in retail sale, such as a bomber of beer, a six-pack or a case, which represent three SKUs even if they are of the same brand). Except that most of these little start-ups are selling not from variety stores or supermarkets, where SKU quantity is an issue, but from their own stores or pubs or one or two of a handful of specialty retailers. And as for bars, well, more taps are coming on-stream daily in the United States, both from new bars and restaurants and existing ones which are changing from regular brews to crafts. (Even Pete Coors sees that happening, although he hasn’t yet quite figured out why.)

Regardless of all the above, however, I’ve still the most compelling reason why a beer bloodbath is not forthcoming in my hip pocket. Now pay attention, because here it comes.

Roughly 92% of the overall American beer market is NOT craft.

That’s about 180 million barrels of beer, folks, which is a whole frigging lot! So long as craft brewers continue to eat away at that part of the market, as they have been doing for decades now, there will remain plenty of room in the marketplace for 3,000 or even 4,000 breweries. And for brewers who don’t think they can chip away at that massive core of the marketplace, well, you might as well hang up your wellies now.