The Growing Craft Beer Industry

By: Rachel Trainer  
March 16th, 2019

The History of Beer

This Sunday, millions of Americans will celebrate St. Patrick’s Day. A holiday observed by Catholics in Ireland for over 1000 years, people around the world use it as an opportunity to embrace Irish culture. In the United States, the day is celebrated with parades, traditional Irish step dancing, food, and of course, beer.

As you reach for a pint this weekend, you may consider a Guinness, the inky black Dublin-brewed stout that has become synonymous with Ireland and St. Patrick’s Day. Or, perhaps, you prefer one of the many varieties of locally brewed beer available in stores, bars, and restaurants. No matter your taste preference, in today’s craft beer movement, there is no shortage of options. However, that was not always the case.

Brewing in America

Until the twentieth century, a wide variety of beers was available in the United States, as immigrants from many European beer-making countries brought their craft (and drafts) with them.  Although the history of American brewing pre-dates the country itself, Prohibition effectively put an end to the variety of beers available. During Prohibition, many breweries survived by turning to alternative beverage production, such as soda. New breweries were nonexistent and light lagers monopolized the industry.

By the 1970s, less than 100 breweries were active in the United States, and it was near impossible to find different styles of beer outside of imports. This all changed in 1978 when then President Jimmy Carter signed into law a bill legalizing homebrewing for personal enjoyment, effectively allowing beer enthusiasts to create their own home-brewed versions of the different styles of beer traditionally available in other parts of the world.

This homebrewing hobby quickly caught on and eventually led to the rise of the craft beer industry. By 1998, just twenty years after legalizing homebrewing, 1,514 craft breweries were in operation in the US. Today, there are more than 7,000.

The Costs of Opening a Craft Brewery

The entire beer industry continues to experience a bit of a transformation. Overall beer sales are slightly declining due to growing options in wine and spirits; however, the craft beer sector has continued to show significant growth in the past 5-10 years. According to the Brewer’s Association, craft brewing contributed $76.2 billion to the economy in 2017 and over 500,000 jobs.

In 2019, 1,000 new breweries are expected to open in the United States. It is neither cheap nor easy to open a brewery. Brewers face several state and federal regulations and specific equipment is required to brew, bottle, package, store, and ship the beer. While microbreweries – those described as brewing less than 15,000 barrels of beer annually, 75% of which is served offsite – require less equipment than larger breweries and brewpubs, they still need to make significant capital investments upfront.

Brewery Equipment Financing Options

When opening a new craft brewery, industry experts suggest initial minimum startup costs of $1 million. Brewing equipment alone can cost anywhere from $100,000 to $1 million dollars for new large production equipment. Add to that the cost of bottling and packaging equipment along with other necessary business equipment, and it becomes clear why the startup costs are rather high. Not all these costs, however, require immediate out-of-pocket capital expenditures. Financing or leasing your brewery equipment makes financial sense, as these options allow you to conserve your capital, which may be used for other business expenditures such as marketing and promotions.

If you are currently in the brewing industry and looking to expand, or just considering opening a brewery, Amur Equipment Finance can work with you to determine the best equipment financing options to meet your brewery’s needs.

About the Author

Rachel Trainer is the Digital Marketing Coordinator at Amur Equipment Finance. In this role, Rachel creates a compelling online customer experience through social media, emails, and website content. 

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