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Putting GABF 2015 in Context

By now, you’ve heard about how the DMV fared at the Great American Beer Festival. The big story was Alexandria’s own Port City Brewing Company being named the best small brewery in the country, thanks to its two silvers and one bronze. It’s no small feat, especially considering that the small brewery category was by far the most competitive. On top of that, Virginia took home another six medals, with Maryland netting one of its own. For details about the hardware brought home by DMV breweries, check our earlier post. Now, a little context on the competition, provided in part by the BA.

THE COMPETITION

This was the biggest GABF to date by a long shot. The number of entries (6,647) was up by 20% from last year. For the first time in years, every brewery that wanted to compete and/or pour at the festival was able to do so (provided they met the requirements). A total of 1,552 breweries competed across 92 beer categories. In the end, 242 breweries, including 38 first-time entrants, took home medals.

Over a whirlwind two hours, the Brewers Association awarded 275 medals. Astute readers will notice that this falls one short of a gold, silver, and bronze in each of the 92 categories; this year, the judges decided that no pumpkin beer deserved gold. So be it.

The American-style IPA category, with its 336 entries, dwarfed all others yet again, as it has since 2002. Four of the top five most popular categories were IPA-adjacent (Imperial IPA, 208 entries; Session IPA, 161 entries; Pale Ale, 160 entries). Wood- and Barrel-aged Strong Beer (179 entries) was the only non-hop-forward category in the same league.

All of this said, this GABF marked the maturing of several other categories, including lagers (100 German-style pilsner entries), Brett beer (85 entries), and coffee beers (a whopping 149 entries). As others have noted, this may be the year that people look back on as a turning point in the eventual diversification of beer style consumption. The Boston Beer Company, for instance, is normally thought of as a somewhat staid purveyor of classic styles, despite small batch projects like the Longshot homebrew contest and the KMF series. However, this year, they unveiled their new nitro series, which will see an IPA, a witbier, and a coffee stout sold in Guinness-style widget cans. When America’s largest craft brewery makes a bet that customers’ tastes are shifting, you can bet a lot of research went into it. Whether or not IPA’s grip on the American psyche is loosening, this year definitely felt like an inflection point.

TRENDS AND MILESTONES

The first sign that 2015 might be an important year came during the media luncheon. This year, the BA decided to have board members speak about the work of their respective committees, rather than convene a panel of BA-affiliated breweries. The change seemed to signal both the BA’s improved organization and their desire to provide more detailed information to a captive and receptive audience.

A lot of numbers were thrown around – especially by Bart Watson, the BA’s extremely capable statistician – so it was difficult to catch everything, but together the presenters made a strong case for craft beer’s ongoing success. Americans spent $101 billion on beer of all stripes in 2014, as much as wine and spirits combined. The message was that beer is this country’s drink of choice. Of those sales, the craft segment represented 11% of the volume and 19.3% of the dollars spent, both represent growth over previous years. Based on midyear numbers, the BA expects craft to climb to 12-13% of the total volume of beer sold in the US, with a goal of 20% market share by 2020.

The growth in sales goes beyond the major expansions from large regional players. New breweries are opening at the astonishing net rate of 1.9 per day in 2015. That type of growth has brought us to a new milestone: as of Saturday morning at GABF, the US was home to 4,011 breweries, the first time in over a century that we’ve been over 4,000. Assuming the opening rate continues unabated, we should eclipse the all-time record of 4,131 breweries, recorded in 1873, before the year is through. Many of those new breweries will be brewpubs, a model that’s returning to favor. Cyrena Nouzille, co-founder of Ladyface Ale Companie and chair of the BA’s brewpub committee, puts the number of American brewpubs over 1,500. Expect that number to continue creeping up over the next few years.

The BA believe that craft’s upward trend could be amplified if Congress accepts its proposal to reduce excise taxes. Previous attempts like the SMALL BREW Act met opposition from the National Beer Wholesalers Association (NBWA) and the Beer Institute (BI), which represents the country’s largest brewers, but the climate for excise reform has never been better. The NBWA and the BI back the BA’s most recent proposal, which would cut the excise tax in half for breweries producing less than 60,000 barrels annually and provide smaller excise reductions for brewers exceeding that output. The initiative has been incorporated into a paperwork reduction bill helmed by Oregon’s Ron Wyden. According to Rob Tod, Allagash founder and BA Government Affairs lead, the bill has 18 co-sponsors in the Senate and 90 in the House. Excise reform could allow breweries to reinvest those savings into their production side, spelling more beer and more growth in the craft sector.

One countervailing force in the rise of craft is the increase in mergers and acquisitions. Lagunitas, Cisco, Firestone Walker, Dogfish Head, heck, even SABMiller and AB InBev. Not all M&A’s automatically disqualify the acquired brewery from craft status – and it certainly doesn’t mean that the brewery is suddenly bad, see Good Beer Hunting’s recent stories for smart takes – but it does happen. In the media luncheon’s Q&A session, BA Director Paul Gatza, when asked about M&As, gave a frank and heartfelt response about Elysian’s stockholders voting to sell to AB InBev, which occurred against founder Dick Cantwell’s objection. “When a brewery does sell, I feel differently about it,” said Gatza. “It’s more than just what’s in the glass.”

In this climate, then, it’s no surprise that breweries that have found ways to remain “craft” were eager to advocate for alternatives. Deschutes and Harpoon, for instance, hosted an event to unveil EHOP, a new collaboration beer that celebrates the breweries’ choosing to go the Employee Stock Option Plan (ESOP) route. (The beer, it should be said, is quite tasty: a rich amber beer with marmalade sweetness, more floral/herbal aroma than bitterness, detectable additions of thyme and sage, and an imperceptible 8% ABV. Look for it on shelves this month.). As these longstanding breweries grow and their founders age and seek exit strategies, we should expect to see more transitions of all sorts.

As the year rolls on, craft beer will continue to progress. Breweries will open and close, tastes and trends will come and go, new generations will take the lead in shaping what it means to be an American brewery. It’s very rare that we can point to any one moment as marking a true sea change in the industry. But this GABF, more than any other I’ve experienced, represented a moment of introspection and a grasping at the shape of the coming years.

 

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