Brewers Association Updates Craft Brewer Definition

Discussion in 'Beer News & Releases' started by Todd, Dec 18, 2018.

  1. Todd

    Todd Founder (5,621) Aug 23, 1996 California
    Staff

    (December 18, 2018 - Boulder, Colorado) The Brewers Association board of directors completed the next step in the evolution of the craft brewer definition at its fourth quarter meeting in Scottsdale, Ariz. The process to review and update the definition started in summer 2018 with a survey to determine what products members are brewing or may brew in the future, followed by a request for input on a proposed change.

    The updated craft brewer definition incorporated member input and is approved as follows:

    ----------
    Craft Brewer Definition
    An American craft brewer is a small and independent brewer.

    Small: Annual production of 6 million barrels of beer or less (approximately 3 percent of U.S. annual sales). Beer production is attributed to a brewer according to rules of alternating proprietorships.

    Independent: Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by a beverage alcohol industry member that is not itself a craft brewer.

    Brewer: Has a TTB Brewer’s Notice and makes beer.
    ----------

    As with previous updates of the craft brewer definition, this fourth evolution is more inclusive and adds more breweries to the craft data set.

    The original craft brewer definition was created in 2006, after the creation of the Brewers Association. Since 2006, the craft brewing industry has more than tripled in size and market share. As the industry evolves, so should the definition. The definition has now been amended four times (2007, 2010, 2014, and 2018) to keep up with innovation and brewing trends.

    The “traditional” pillar became outdated because craft brewers, seeking new sources of revenue to keep their breweries at capacity and address market conditions, have created new products that do not fit the traditional definition of beer.

    The craft beer data set will continue to include products that meet the trade understanding of beer—all- malt and adjunct beers as well as gluten-free beers. Read this Insights and Analysis post for more details on how this change impacts the craft brewing data set and view answers to frequently asked questions.

    In other news, the board of directors amended the association bylaws to add a new Taproom Brewery voting member class, which will go into effect in 2019. Also approved was an annual plan that includes the development of a political action committee (PAC) in 2019.

    ###

    Source: https://www.brewersassociation.org/industry-updates/brewers-association-board-updates-2018/
     
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  2. FarmerTed

    FarmerTed Aspirant (239) May 31, 2011 Colorado

    They should add: Does not put Kraft-Nabisco snack foods in their beer.
     
  3. MNAle

    MNAle Meyvn (1,056) Sep 6, 2011 Minnesota

    Whew!!! That was close!!!

    Boston Beer is still a Craft Brewer!
     
  4. JackHorzempa

    JackHorzempa Poo-Bah (3,760) Dec 15, 2005 Pennsylvania
    Premium

    From the link (with emphasis in bold by me):

    “Replacing “Traditional” with “Brewer”

    The change in the definition involves the removal of the “traditional” pillar, which required a craft brewer to have “a majority of its total beverage alcohol volume in beers whose flavors derive from traditional or innovative brewing ingredients and their fermentation.” This has been replaced with a simpler “brewer” pillar that requires a craft brewer to 1) be in possession of a TTB Brewer’s Notice and 2) make beer. The primary implication of this change is that a brewer is no longer required to have a majority of its total beverage alcohol volume in beer. That means that companies that produce across beverage alcohol categories can be considered craft brewers if they meet the other requirements: produce less than six million barrels (of beer globally) and remain independent.”

    So, when Boston Beer Company starts to produce more non-beer beverages (e.g., Hard Ciders, Twisted Tea, Truly, etc.) than is does beer it can still be considered a craft brewery.

    Cheers!
     
    #4 JackHorzempa, Dec 18, 2018
    Last edited: Dec 18, 2018
  5. IPAExpert69

    IPAExpert69 Initiate (170) Aug 2, 2017 New Jersey

    Twisted Independent Artisan Craft Shit Tea commercials are about to be flooding our tvs!
     
  6. Squire

    Squire Poo-Bah (2,073) Jul 16, 2015 Mississippi
    Premium Trader

    I appreciate their efforts though I can't help but think they're trying to hit a moving target.
     
  7. jesskidden

    jesskidden Meyvn (1,362) Aug 10, 2005 New Jersey

    Adolphus Busch, Adolph Coors, Frederick Miller, August Schell, "Capt." Frederick Pabst, Bernhard Stroh, Gottlieb Heileman, Jacob Ruppert, Christian Feigenspan, Peter Ballantine & Sons, Theodore Hamm, all the Griesediecks and the many Schmidt's... (and too many more to mention...) said:
     
  8. Oktoberfiesta

    Oktoberfiesta Aspirant (251) Nov 16, 2013 New Mexico

    6 million for small? I realize that's 3% of sales but isn't that also 99% of all craft breweries?
     
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  9. jesskidden

    jesskidden Meyvn (1,362) Aug 10, 2005 New Jersey

    Well, the only two US breweries that are "large" brew around 90 million (AB) and 50 million (MC) barrels a year, so...

    Also, no previously recognized US "Craft" brewer has ever brewed more than 3 million barrels of beer (BBC's reached a bit over 4M bbl., but only by adding their FMB and Cider totals to the barrelage).
     
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  10. considerbeer

    considerbeer Initiate (43) Dec 15, 2016 Colorado

    I would’ve liked to see them revisit the “less than 25%” demarcation. I’ve always wondered why that’s the cutoff point. It seems like a much more intuitive line would be a ‘controlling stake,’ so no more than 49% can be owned by non-craft brewers.

    It’s a little hard to swallow that Brooklyn Brewery (24.5% owner by Kirin) is a craft brewer but Avery Brewing (30% owned by Mahou San Miguel) is not.
     
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  11. DISKORD

    DISKORD Aspirant (246) Feb 28, 2017 North Carolina

    Founders isn't craft either, according to their guidelines.
     
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  12. JackHorzempa

    JackHorzempa Poo-Bah (3,760) Dec 15, 2005 Pennsylvania
    Premium

    “The definition has now been amended four times (2007, 2010, 2014, and 2018)…”

    Maybe in another 3-4 years (for the fifth amendment) they will make this change?
    Because a quarter = 25 cents?:confused:

    Cheers!
     
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  13. considerbeer

    considerbeer Initiate (43) Dec 15, 2016 Colorado

    Yep. Mahou San Miguel with the exact same 30% stake as in Avery. I wonder why 30% is a sticking point for Mahou San Miguel. It must be for some important reason because I’m betting both Avery and Founders brought up the idea of keeping it just under 25%.
     
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  14. drtth

    drtth Poo-Bah (3,680) Nov 25, 2007 Pennsylvania

    As the world changes, definitions change with them or those definitions become anchors around the necks of those navigating rough seas.
     
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  15. MNAle

    MNAle Meyvn (1,056) Sep 6, 2011 Minnesota

    I'd like to see the whole "independent" definition revisited. Why is it bad for a large brewer to own 30%, but OK for a private equity fund to own 100%? In many ways, being owned by a typical private equity fund would be worse for the integrity of the beer than being minority owned by a large brewer. And, how is having a private equity fund own a majority share "independent"?
     
  16. considerbeer

    considerbeer Initiate (43) Dec 15, 2016 Colorado

    Well, I sort of agree with the pass for private equity firms but not macro breweries. It’s not really about the integrity of the liquid itself (despite the “That’s Independence You’re Tasting” marketing). The Brewers Association is a trade group that represents ‘craft’ breweries, and no matter the sliding definitions, they are representing a set of brewers working *against* macrobreweries for market share. They do not defend against private equity firms which, contemporarily, are only helping breweries smaller than ~1,000,000 barrels work against the mega brewers.

    Of course that could all change the moment a firm sells to AB-InBev, but it sounds like they are mostly done buying for now.
     
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  17. drtth

    drtth Poo-Bah (3,680) Nov 25, 2007 Pennsylvania

    So are some other breweries helping to keep the lights in the changing alcoholic beverage market.
     
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  18. drtth

    drtth Poo-Bah (3,680) Nov 25, 2007 Pennsylvania

    Yes, they are the most noticeable example, and there are other smaller Brewers engaging in diversification of product who will be affected.
     
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  19. drtth

    drtth Poo-Bah (3,680) Nov 25, 2007 Pennsylvania

    Yes. They are dealing with a moving target. It has moved on them before and with the changes on the horizon ther may already be another change brewing ( pun intended :wink:).
     
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  20. drtth

    drtth Poo-Bah (3,680) Nov 25, 2007 Pennsylvania

    Jack, that is probably a good guess since the alcoholic beverage market landscape is still showing several signs of change.

    Remember the day when Rice was a no-no for Craft beers. Then things like the Flying Fish Exit 16 came along. Once upon a time the Exit series was promoted as a series of one-off special release beers. Now some of those beers, including a beer with rice in the grain bill, are available in 12 Oz format and are still findable fresh.

    “The times they are a changin.”
     
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  21. JoePasko

    JoePasko Initiate (84) Mar 10, 2018 New York

    Since I am paying for it and drinking it, I will decide for myself which is a craft beer and which isn't.
     
  22. EvenMoreJesus

    EvenMoreJesus Champion (886) Jun 8, 2017 Pennsylvania
    Premium Trader

    Indeed. Good beer is good beer. No meaningless definition from a useless trade organization is going to change my mind about that.
     
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  23. MNAle

    MNAle Meyvn (1,056) Sep 6, 2011 Minnesota

    Get off my lawn! I enjoy being a cynic! :wink:
     
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  24. MNAle

    MNAle Meyvn (1,056) Sep 6, 2011 Minnesota

    Here's the difference to me (and I'm not arguing FOR macro beer; I'm pointing out the fallacy of their ignoring private equity firms and call them "independent"):

    Macro beer buys craft brewers to brew beer;
    Classical private equity firms are the corporate flippers. They are not interested in beer, or in long term profits; they are interested in increasing the value of the company, and flipping it.
     
  25. jesskidden

    jesskidden Meyvn (1,362) Aug 10, 2005 New Jersey

    According to an email from the Association's president and CEO, quoted in the Brewbound article on the change:
    but it is doubt any of them are close to 50% "non-beer", as is BBC.

    Another interesting aspect of the change, according to a blog post by the BA's Watson, (quoted in the same Brewbound article):
     
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  26. drtth

    drtth Poo-Bah (3,680) Nov 25, 2007 Pennsylvania

    Thanks some of that numerical information that I didn't have. I also didn't know BBC was close to the 50% line, which may have triggered the review that led to the change, but as your sources note, there were others being excluded (probably unnecessarily) who will now be eligible for membership in the BA and there by have full access to the data they collect and a some of the other benefits of full membership.
     
    #26 drtth, Dec 19, 2018
    Last edited: Dec 19, 2018
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  27. jesskidden

    jesskidden Meyvn (1,362) Aug 10, 2005 New Jersey

    Yeah, according to the B.A.'s stats for Boston Beer's barrelage last year (2017):

    Total - 3,755,000 bbl.
    Beer - 2,000,000 bbl.

    The "Beer" figure is their estimate (altho' why they can't just ask Jim Koch, former B.A. board member :rolling_eyes:), the "Total" based on BMI's figures. Likely the 2018 BBC barrelage will reflect the same trend:
    FMB, cider, seltzer=UP
    Beer=DOWN.

    Speaking of Koch, a BMI article from August noted he gave a brief speech at a Brewers of PA meeting, in which he noted that:
     
  28. MNAle

    MNAle Meyvn (1,056) Sep 6, 2011 Minnesota

    Maybe they did but can't acknowledge it publicly, so the round it off and call it an estimate.
     
  29. JackHorzempa

    JackHorzempa Poo-Bah (3,760) Dec 15, 2005 Pennsylvania
    Premium

    Boston Beer Company is growing because of its non-beer products:

    “Boston Beer’s year-to-date depletions are up 11 percent due to increased demand for Truly, Twisted Tea and Angry Orchard products, the company said, and only partially offset by Samuel Adams’ declines.”

    It sounds like they have an initiative to reverse the decline of Sam Adams products:

    “Still, much of Boston Beer’s focus is on reversing negative Samuel Adams trends. Koch said the company will continue its attempt to improve the health of Boston Lager and Samuel Adams seasonal offerings. Asked what gives Boston Beer confidence that it can “move the dial” in the beer category moving forward, Koch responded by saying that “Sam Adams is the heart and soul of Boston Beer Company.”

    “Part of that plan includes replacing the Samuel Adams “Fill Your Glass” TV ads, developed by outgoing CMO Jon Potter, who departs on July 31. Burwick said the campaign “wasn’t delivering” what the company needed. Instead, the company will roll out a new campaign highlighting the differences between Boston Lager and other lagers.”

    https://www.brewbound.com/news/boston-beer-companys-double-digit-growth-continues-q2

    I suppose we will have to take a wait and see approach to see whether Boston Beer Company can reverse the downward trend for their beers. In the meantime they appear to be doing very well with their non-beer products.

    FWIW, there is no doubt in my mind that the Brewers Association made this recent change to what defines a craft brewery specifically to maintain Boston Beer Company as being a craft brewery. Some other small breweries may have benefited as well with this change but…

    In my opinion the changes that the Brewers Association make is for consistency reasons: they consistently want to keep counting Sam Adams beers as craft beers in their statistics. Even if the sale of Sam Adams beers are in decline, counting around 2 million barrels of their beer as being beer from a craft brewery is a ‘benefit’ to the BA.

    Cheers!
     
  30. MNAle

    MNAle Meyvn (1,056) Sep 6, 2011 Minnesota

    Part of the reason the Brewers Association keeps having to revise the definition of "craft brewer" (NB: They never have defined craft BEER) is because from the beginning, it was a definition of who is NOT a craft brewer re-worded and disguised to appear to be a definition of what IS a craft brewer.

    But, then, "A craft brewer is any company that brews beer that is not AB-InBev, Molson Coors, Constellation Brands, Heineken, China Resources Enterprise, Mahou San Miguel, Asahi, Kirin, or Sapporo and their subsidiaries, successors, and assigns..." is a bit long-winded, incomplete, and less than classy! :grin:
     
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  31. hopfenunmaltz

    hopfenunmaltz Meyvn (1,390) Jun 8, 2005 Michigan

    Koch is back on the Board. Steve Hindy is too

    https://www.brewersassociation.org/brewers-association/governance/board-of-directors/
     
  32. jesskidden

    jesskidden Meyvn (1,362) Aug 10, 2005 New Jersey

    Yes, that is also noted in the current Brewbound article:
    ...even if
    :rolling_eyes:

    But that "8%" figure is interesting, considering that in 2010 (the year before the B.A. upped the "2M bbl" definition of "Small" to 6 million) Boston Beer Co.'s share of the craft beer segment was 18.77% according to the B.A.
     
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  33. StoutAtTheDevil

    StoutAtTheDevil Zealot (537) Nov 17, 2013 Alabama
    Trader

    "the company will continue its attempt to improve the health of Boston Lager and Samuel Adams seasonal offerings"

    6/12 packs of Holiday Porter and Old Fezziwig wouldn't hurt.
     
  34. hopfenunmaltz

    hopfenunmaltz Meyvn (1,390) Jun 8, 2005 Michigan

    The long tail has gotten longer. 72% of the breweries are 1000 bbl or less
     
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  35. JackHorzempa

    JackHorzempa Poo-Bah (3,760) Dec 15, 2005 Pennsylvania
    Premium

    On more than one occasion I asked Boston Beer Co. Sales Reps: "Why don't you package Old Fezziwig as a stand-alone seasonal beer". Their basic reply is "abba dabba jabba wabba".

    I really wish I could go to my beer store today and buy a 6-pack of Old Fezziwig,

    Cheers!
     
  36. Loops

    Loops Initiate (54) Feb 13, 2014 Missouri

    6 Million Barrels????? WOW #Moving Target
     
  37. Loops

    Loops Initiate (54) Feb 13, 2014 Missouri

    Exactly
     
  38. StoutAtTheDevil

    StoutAtTheDevil Zealot (537) Nov 17, 2013 Alabama
    Trader

    Same here. Maybe things will change someday.
     
  39. JackHorzempa

    JackHorzempa Poo-Bah (3,760) Dec 15, 2005 Pennsylvania
    Premium

    Well, I am not holding my breath. I have discussed this issue with Boston Beer Co. Sales Reps over these many years and nothing seems to change.

    My 'conspiracy theory' is that they solely sell Old Fezziwig in their Winter Pack to 'incentivize' people to purchase this pack. I personally refuse to buy this pack since I do not want to reward this bad behavior.

    And the folks at Boston Beer Co. wonder why their beer sales are declining!?!:confused:

    Cheers!
     
  40. JackHorzempa

    JackHorzempa Poo-Bah (3,760) Dec 15, 2005 Pennsylvania
    Premium

    Since I opined about Old Fessiwig in the above post I will go further with my thoughts about Boston Beer Co. and their Marketing & Sales (non)prowess.

    For a very long time Jim Koch was resistant to:
    • Packaging his beers in cans
    • Producing IPAs
    • etc.
    He eventually 'changed his mind' on these things but using an old saying: he was a day late and a dollar short.

    If Boston Beer Co. is relying on the instincts of Jim Koch to 'turn around' the sales performance of Sam Adams beers then I do not have high hopes for them. Perhaps the recently appointed CEO Dave Burwick will be able to execute a beer sales turnaround here?

    Cheers
     
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