With the annual release of craft brewery growth figures, I thought it would be helpful to lay out as clearly as possible what the numbers represent and how our various key stats are calculated. If you are interested in the broader methodology of the beer industry production survey, I suggest you read one of the articles I have written about our methodology over the past few years (2014 data /2015 data). Not much has changed except that the number of breweries has increased and the process takes much longer.
Where does the data come from?
In 2018…
- 71.7% of volume was reported as part of the beer industry production survey
- 8.8% of volume was populated using state excise duty data
- Of the remaining 19.5% volume:
- Nearly 40% comes from our estimate of boston beervolume of beer from (which, as a public company, cannot respond to our survey). Considering the number of analysts who follow their volume, this estimate is based on a lot of data.
- The rest, about 12% of the total occupational data set, comes from personnel estimates drawn from digitized data, press reports and other sources.
Reported volume growth was 5.4%. Breweries whose numbers were taken from state reports or estimated by staff rose 0.6%, so these estimates are based on the expectation that breweries that did not report might have increased more slowly than those that did.
Who is included?
The first thing to point out is that our numbers are based on the Brewers Association (BA) Craft Dataset, which uses the craft brewer definition of small independent brewers. As I get questions about this every year, BA membership is do not required, and our dataset attempts to cover all small independent brewers, including non-members (and a fair number of non-members still report their numbers).
We will publish volume figures for fuller-flavoured non-craft brands/companies owned by major brewers in the May/June issue of The new brewerand make them available to BA members.
That said, the intent of this version is not to measure the health of “craft beer”, which the BA does not define. We try to measure the health of small independent brewers, using guidelines established by our board of directors.
Compare year to year
Because the craft data set changes every year, it requires us to compile two numbers for 2017. The first is simply our revised 2017 number, which is about 200,000 barrels lower than the number we reported. Last year. Similar to last year, I think a lot of that drop is due to us increasingly eliminating some of the double counting that we’ve had in recent years. This either happens when multiple locations report, or when brewers report contract volume numbers for other brewers who also list them. We’ve gotten better at spotting these duplicates and I think we’ve made the forms clearer as brewers fill them out. I also notice them sometimes when we line up the 2017 numbers with state excise tax reports. This year we also had a few brewer revisions that delivered gallons, not barrels, in 2017. That was about 40,000 barrels of “shrink”.
Other revisions come from members updating their 2017 numbers when completing the 2018 survey; state reports that were not available until after the 2017 issue was created (for example, we don’t yet have annual data on California filers); or updated estimates based on the availability of new data. These updates also result in positive adjustments (we added around 200,000 barrels on various records), but the downward adjustments were much larger than the positive adjustments for the second year in a row. I also factored that into this year’s estimates and tried to be a bit more stingy than in previous years.
The second number is our “comparable basis”. This number only takes brewers included in the 2017 dataset and looks at their 2016 volume. It removes brewers that will not be included in the crafting set going forward unless their status changes. changes, and adds the new brewers drawn into the dataset by changing the definition of craft brewer. This year, the comparable basis ended up being around 160,000 barrels lower than the updated 2017 figure, giving a benchmark for 2018 growth of between 24.9 and 25.0 million barrels. That’s why we’re reporting growth of 4% for small independent brewers instead of 3% – that’s the growth rate for brewers who remained in the dataset. The non-comparable growth of artisanal production was 3%.
(VISIT: US Brewery Directory)
We create the same comparable figure for our retail dollar sales growth figure. These numbers are also updated based on newly available data. In this case, we have updated the 2017 estimates based on the updated volumes described above, revising 2017 down slightly.
Other changes this year affected market share by volume. Our market share figures differ slightly from other sources as we strive to only count the beer market (excluding other products taxed as beer such as flavored malt beverages and other unrelated products to beer like cider that some analysts include). As always, we derived our estimate of Flavored Malt Beverages (FMB) from the estimated total number of taxable beer (Tax and Trade Bureau [TTB] + imports [from the Commerce Department]). TTB+imports represents a market size of 204.2 million barrels. We use 194.3 million for beer only. We have also slightly revised the 2017 market share based on the updates the TTB has released for their 2017 final taxable number.
Dollar Sales Calculation
Finally, I thought it might be useful to remind everyone that the changing makeup of trades data is changing some of the other numbers, such as dollar sales and jobs. Again, the vast majority of volume that left the dataset was from regions, and the vast majority of growth was from micro and breweries, so the whole craft was once again “smaller” this year, i.e. the middle/median brewery. in the data set was smaller than the previous year. This is one of the reasons why dollar sales gains ended up being higher than expected based on volume. Volume has shifted to smaller production, which generally means higher retail value breweries. The other reason why dollar growth is more important is simply price inflation.
The full dataset, including control group numbers for breweries (excluding “do not publish”), state totals, regional companies owned by major brewers, and a few new additions will be released. for members in about a month.
