by Paul-Brian McInerney & Ann Tünde Cserpes
We analyzed country-level representative data provided by the Brewers Association to find three classes of microbrewers that best describe the current state of the industry. We identify them as established, up and coming, and innovator classes. Both the established and innovator classes exhibit a social movement logic (high prevalence on the spatial clustering, while low prevalence on the density indicator). The up-and-coming class is more likely to follow a market logic (low prevalence on the spatial clustering, while high prevalence on the density indicator). Up and coming breweries tend to seek out new markets away from established microbreweries, setting up business in states like Georgia or Tennessee. These brewers are likely to be members of the Brewers Association, but are less likely to join state guilds (this is in part because guilds might not exist in the states where they set up shop). Breweries in the innovator class tend to locate where there is an established brewery presence, in states such as California, Illinois, Minnesota, and Pennsylvania. Innovators are likely to start up in places with liberal self distribution laws and are likely to join state guilds, but not the Brewers Association. The established class of microbrewers are likely to join both the Brewers Association as well as the state guilds. The table below summarizes our findings about the three classes of microbrewers.
The map below compares the proportion of state guild memberships and the percentage change in beer production. The overall quantity of beer produced has stalled in states where guild membership rates are highest. However, this might also signal the maturity of the industry in those locations. At the same time, in mature but not leading states – such as Illinois or California – microbreweries are in a much more flexible position: a good balance exists between having neighbors who are like them (and have access to the same resources), and who are not.
State guilds facilitate knowledge-sharing, access to resources, and act on legislative issues. As the graph below shows, breweries seem better off when located in states where most, but not all breweries, belong to the guild. If every brewery belongs to the state guild, everyone has access to the same resources. Studies have found that these conditions tend to stall innovation and industry growth.The relationship between average state guild membership and percentage change in production
We summarize successful strategies in the microbrewery industry as:
- Be where the winners are, but have your own identity
- Create new markets far from the center
Our results show that there is no single or dominant organizational identity in the craft brewing industry. Craft brewers succeed because they combine the art and business of brewing in compelling and economically sustainable ways.