Collaboration and Competition among Craft Brewers

by Paul-Brian McInerney

Half Acre Brewing is a craft brewer in Chicago. Among the many beers they produce are several dozen that have been “Brewed with Friends.” Describing this selection of beers, Half Acre explains on their website, “Many of these will probably never be brewed again, some of them might be.” In one such instance, Half Acre Brewing collaborated with Tired Hands Brewing, from Ardmore, Pennsylvania to produce “American Youth,” an American Pale Ale style beer that combined the breweries’ signature beers. Consumers rated the beer 88 out of 100 on the popular beer rating site RateBeer. Even with such consumer approval, once “American Youth” sold out, it was never brewed again. Half Acre Brewing is not unique in their collaborative brewing practices. Many craft brewers collaborate doing single production runs to market co-branded beers. Once these co-branded products sell out, they are rarely brewed again. On its face, this makes little sense. The costs of collaborating are relatively high, once recipe creation, ingredient procurement, and equipment usage are taken into account. Even when craft brewers collaborate more than once with the same partner, they produce an entirely new, single-run product. Why do craft brewers collaborate for a single production run to make co-branded beer? How do they choose craft brewers with whom to collaborate? How do craft brewers differ in their collaboration strategies? What role does consumer rating play in how craft brewers choose collaborators? How do the net effects of collaboration structure the brewing industry over time?

I currently have a project underway that seeks to understand these dynamics. In early fieldwork, brewers tell me they collaborate as a way of solidifying friendships, experimenting with ingredients and styles, and just having fun. A handful of field observations suggest that working in the craft brewing industry is indeed fun. However, it is also hard work. And while the craft brewing sector is growing, it is also becoming crowded. The fun of collaboration may soon yield to the realities of competition. So what does this mean for collaborations among craft brewing? Will brewers collaborate more frequently as a way of gaining reputation or accessing new markets? Will they be more selective in their brewing strategies? I don’t yet have enough data to answer these questions, or those I posed above. As I collect and analyze data, I’ll post preliminary analysis and interpretations. Check back for those.

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