Craft Beer is Big Business

In the last few months, I’ve somehow managed to fool people into thinking that my skills as a writer and my knowledge of beer are worthy of financial investment. The only possible way to explain this is to assume somewhere in my ancestry existed a very rich used car salesman.

As a result of my new found career, I’m officially part of the media. No, really. I swear it’s true. This means I am now privy to trade magazines and a plethora of media related emails, which I still read and worry that I’m doing something illegal.

You might be thinking, “Why are you telling us this?”  I don’t blame you. I’m taking forever to make my point, but I do have one. I’m getting there. Please read on.

The ads I read in trade magazines have blown me away. There is a world associated with craft beer that I never truly thought about and that is the world of auxiliary businesses.

Don’t worry, this is not an economics lesson. I promise.

Let me give a few samples:

Real Estate:

I am stunned to find out that several real-estate ads exist with comments on locations that include things such as:

  • Historic downtown somewhere-ville
  • Five billion sq feet of space for both commercial and taproom access
  • Slabs for heavy loading
  • Basement storage
  • Heavy three-phase power capability

Here I am worried that I may not have enough pretzels to go with my wood-aged-seasonal-New Zealand-dry hopped-imperial-doubleslobberknocker. Meanwhile,  these guys are worried about having enough heavy three-phase power for their brewery. 

The point here is this: The rampant growth of breweries have inspired real-estate agencies to pay for ads in trade magazines for the soul purposes of getting new breweries to buy their property.  New brewers can essentially shop around.

Credit: Elliott Brown, Flickr.com
Credit: Elliott Brown, Flickr.com

Branding:

Obviously, beer is canned, bottled, and encased. I know that. You know that. We all know that. But, you’d be stunned to know how many companies are clamouring for you, the brewer, to use their services. Specialized companies handle shrink labels, growlers, mobile canning (to save space), specialized packaging, artistry, and probably a free dancing mascot if you asked for one.

I am serious here. Let me put this in plain English. There are a LOT of them!

I am not an idiot. I see the labels. I know someone is doing it. I just didn’t know that an entire industry had been born simply for the purposes of packaging craft beer. Why is that possible? Easy. There’s a lot of damn breweries around.

Financing and Insurance:

Again, you may be thinking, “duh.” However, I’m not only talking about banks offering their services to breweries by putting ads in trade magazines. I’m talking about a place like, Brewery Finance. This is a place that specializes in financing breweries, from the brick and mortar to the amount of kegs in one’s place.

There’s also regular banks, too, that take out full page ads explaining how they are a lending partner for craft breweries.

That also means, possibly, that some guy or girl is walking around with a business card that reads, “Brewing Financial Expert.” Can you imagine that?

Oh, by the way, you can buy brewery insurance. I just assumed brewers used regular insurance, but they have their own insurance. Although, I was a little bummed to discover it wasn’t called Affordable Care Beer or ABomberCare.

Water Treatment:

Breweries use a lot of water. Most breweries are adamant about being good conservationists. That’s a tough combination, but an entire business exists ready to help a brewery handle their water needs.

If you are an engineer, you may find yourself working for a place with a name that includes “solution” or “tech,” Engineering companies always seem to have names like that. I have discovered that many of these places are looking to help breweries. I can’t name them all, so I’ll just combine them into one company — Proven Quality Mechanical Logistical Wastewater Technical Equipment and Solutions Systems Industries.

If you are an engineer at PQMLWTESSI, LLC and you happen to like beer, you might find  yourself designing sustainable wastewater equipment. It’s not just to help the environment, though. It’s an effective way to brew beer and stay “up to code,” because brewers need to to pass government inspections.

And here I thought brewers were worrying about yeast, malt, or wheat.

(insert joke about macro brewing and wastewater — go ahead. I did, too.)

William Murphy, Flickr.com: Cork's Beamish and Crawford brewery
William Murphy, Flickr.com: Cork’s Beamish and Crawford brewery

Leak detectors:

When I first read this, I thought, “Why would they want to know when I ‘broke the seal’?” I was wrong, which means I shouldn’t read these magazines while drinking beer in the bathroom (insert macro beer joke here).  

Obviously, the product involves monitoring brewing equipment to determine if any leaks have emerged.  This was a new one on me. I mean, I know brewers don’t want to have any leaks, but who knew that people were out there designing equipment to find leaks in brewing equipment?

I would love to know the guy that first thought about going into the brewing gas leak business. I wonder how you explain that during your child’s career day at school. “My job is to limit the amount of gas caused by beer.”

Wireless Thermostats:

Are you spending time in a brewery making sure your tanks are operating at the right temperature? That is so 2005! C’mon man! A new brewer can — I swear this is true — sit at home and monitor his or her tanks from home via a smart-phone.

Basically, “there’s an app for that.”

This worries me. Can ISIS hack into breweries’ thermostat networks and screw with the beer? That’s a little unnerving. Beerorism is scary.

Beer Vats, Sommbeer.com
Credit: Daniel R. Blume, Flickr.com

Etc., etc., etc.

I could go on and on. There is a plethora of businesses that provide malt mills, keg washers, canners, craters, water testers, chillers, tap handler makers, oxygen purgers (for bottling), tanks, gauges, and my personal favorite — brewer’s clothing.

I’m having a little fun here, but there is a point to this. (See, I told you I’d make a point.)

I understood that many of these places existed. But, I had no idea how many companies were out there looking to get a brewer’s business.

Much like the car industry of the early 20th century that spurred industries such as glass makers, rubber factories, steel mills, and eventually business like motels and drive-in theaters; craft beer is at the center of a specialized economical solar system with services galore orbiting it.

My point, finally, is that craft brewing, as an industry, has turned into big business. It may not be the biggest business, but if banks are looking to finance you, and secondary industries rely on you, you are a big business.   What is fascinating is that it is a big business ostensibly run by 3700+ individual operators who simultaneously collaborate and compete with each other on a daily basis. 

Pretty cool, huh?  Cheers!

 

We are always looking for new contributors.  Send me a note to start your journey on the Sommbeer team.  email:  sommbeer@gmail.com   – David

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Mathew Powers

Mathew Powers

Forever part of the Sommbeer family, Matt's journey from beer geek to beer writer has included regular contributions to Chilled Magazine, Thrillist.com, and his blog, "A Pint of Chicago," for the Chicago Tribune Media Group. He's also published non-beer-related items on various magazines, "webzines," and Ebooks. But, Sommbeer was, is, and always will be his home.
Mathew Powers

2 thoughts on “Craft Beer is Big Business”

  1. You are absolutely correct. Everyone is trying to get a piece of the Craft Beer pie. The only problem is that some of these services/items cut into a brewery’s profit margin driving the price of craft beer up or making it harder for breweries to make any money. Just hope it doesn’t lead to a decline in craft beer similar to what wine saw in the early part of the century.

     
    1. Wow, that is a very good point. I never considered that aspect of it. I supposed, if some of these products increase efficiency — either through production of the beer or production leading to sales (faster canning, etc), then it could balance the scales a bit, but that’s probably not the case.

      Good point, fine sir.

       

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