While the traditional beer industry is in decline, craft beer is seeing explosive growth and there's plenty of room for more brewers to join the party.
That was one of several key insights delivered by three of the nation’s top brewers, who shared a stage at the ArtsQuest Center at SteelStacks in Bethlehem last week for Meeting of the Malts V, presented by Wegmans.
Hosted by the Brewers of Pennsylvania, the state’s official brewers guild, the event drew about 500, said Dan LaBert, executive director of the Brewers of Pennsylvania.
Beer continues to bring in significant business for the state.
The Brewers of Pennsylvania brings together breweries throughout the state and its members employ about 10,000 workers, earning $296 million in wages and generating $1.1 billion in direct economic benefits to communities throughout the state, LaBert said.
The event was particularly noteworthy in that Jim Koch, founder and owner of Boston Beer Co., and producer of Sam Adams; Dick Yuengling, owner and president of D.G. Yuengling & Sons Inc. and Ken Grossman, founder and owner of California-based Sierra Nevada Brewing Co. all shared the stage for a panel discussion on the state of the industry.
“Since our first Meeting of the Malts in 2011, we’ve continued to see the craft beer revolution spread across the country,” said Koch, who has a brewery in Upper Macungie Township. “Today, there’s more than 4,500 breweries operating in the U.S. and more than 130 of those are in the Commonwealth.”
Bump Williams, beer industry expert, emceed the panel discussion, which focused on the growth of the craft beer industry and the changes that have occurred over the years.
“We’ve been so fortunate in the last 30 years. We’ve been very lucky,” Yuengling said, noting that when he took over his father’s Pottsville brewery in 1985 he made a commitment to improve the facility and boost production, and last year, made 2.9 million barrels.
Yuengling introduced the brand’s India Pale Lager or IPL, which is similar to the IPA style products.
The craft beer industry has been pretty dynamic, Grossman said, noting that when he started brewing in 1980, there were only a handful of small craft brewers.
“There was really no knowledge of how beer was made among the consuming public,” Grossman said. “It was a very different marketplace.”
Since the beer industry as a whole has been flat over the past couple of years and Pennsylvania as a state has been down 4 percent, Williams asked the panelists if they thought retailers and distributors were aligned in helping Pennsylvania brewers be successful.
“We always assume they want the same thing, to sell more beer,” Koch said. “Wholesalers, they love that. The same is true for retailers. What they really want is to engage their customers with something they want…beer that has better taste, good stories. We as brewers are in a declining industry. But craft beer is the exact opposite of that end.”
Koch said the focus should be in giving customers what they want.
“What we as craft brewers are doing is to bring beer back,” Koch said. “Bring romance and bring stories back.”
With the explosion of craft brewers, can everyone co-exist, nationally and regionally?
“Not everyone can co-exist,” Grossman said. “We’re competitive but we are all friends. The beer industry has always been tough. It’s very competitive.”
Yuengling said when he took over the business, there were between 1,000 and 2,000 breweries in the nation. Now, there are more than 4,000.
“Not everyone is going to invest the way we have,” Yuengling said. “My suggestion is that if they stay small, stay a brewpub and have fun with it, they’ll be successful.”
The quality stakes are high for craft brewers.
“You gotta give consumers a reason to drink your beer,” Koch said. “Today, if you don’t make a quality beer every day, you’re screwed. There’s four new craft brewers opening every day. There’s about 10,000 wineries in the U.S. There’s definitely room for about 5,000 or 6,000 more breweries.”