Size and Craft Breweries – An Interesting Relationship

When you think of craft beers, what do you immediately imagine?  Do you think of a small brewery, tucked away in a brick building somewhere, quietly creating delightful brews?  You might be one of those that equates craft beer with anything that doesn't come from a major, well-known brewery – Heineken, Coors and Bud are examples of those.  However, the most accurate indicator of a whether or not a brewery can be considered a "craft brewery" is size.  How does this play out?

The Brewer's Association, located fittingly in Boulder, Colorado, sets the size limit for craft breweries.  Previously, for a brewery to be able to lay claim to this cherished title, they could not brew more than 2 million barrels of beer per year.  This is the point at which breweries receive their first tax break.  However, things have changed recently.  The Brewer's Association raised their barrel cap for breweries seeking the "craft" label.  Today, breweries can brew up to 6 million barrels and still be considered craft beers.  Why the change?

It seems that the limit was raised because one of the most famous craft breweries in the US was in danger of going over.  That would be Boston Beer Company – the company responsible for giving us all those delightful Sam Adams beers.  According to a spokeswoman for the Brewer's Association, raising the limit on how many barrels a craft brewery can produce per year gives breweries a little "breathing space."  It also helps to highlight the achievements of companies like Boston Beer Co., rather than forcing them to join the ranks of mass-producers like MillerCoors. 

While this might seem like little more than rearranging to keep Sam Adams firmly in the craft beer fold, it might actually be a wise move.  After all, when Jim Koch first started selling beer, his goal was to sell 5,000 barrels per year.  The growth of the company is a testament to the entire craft brew industry, and how important it has become to the American people.  By raising the barrel cap, it gives small brewers room to grow and expand, without forcing them out of the craft beer world.  It celebrates success, rather than casting out those who do well. 

In the end, the raising of the barrel cap might not mean much to consumers who prefer to drink by taste.  However, it does offer some relief to brewers worried about hitting that wall.

Posted on January 27, 2011 and filed under The Business of Beer.