Bridging the Opportunity Divide

On Tap at the Local Microbrewery: Economic Opportunity

February 1, 2018
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On Tap at the Local Microbrewery: Economic Opportunity
Thanks to a rising demand for craft beer and liquor, jobs in alcohol manufacturing are booming. Photo by Adam Berry/Getty Images
While American manufacturing slows in many sectors, let’s raise a glass to these job creators.

Throwing one back may be the key to job growth in America.

Yes, really.

Between 2002 and 2013, the percentage of Americans who consumed alcoholic drinks grew by 8 percent to almost three-quarters of the population, according to a 2017 study in the journal JAMA. This increase has coincided with a surge of interest in craft beers and local liquors. To meet the demand, the number of jobs in the alcohol manufacturing sector have more than doubled in the past decade for breweries, alone.

Microbreweries, specifically, are something of a Cinderella story. Thirty years ago, less than 100 independently run breweries were in operation nationwide. By 2016, there were more than 5,000, according to the Brewers Association, a trade group that analyzes and represents independent U.S. breweries.

Likewise, production from independent brewers has increased — growing from 35,000 barrels in 1981 to more than 24 million barrels in 2016, according to the Brewers Association.

“I call the entire craft beer movement the 30-plus-year overnight success story,” says Julia Herz, craft beer program director for the Brewers Association. “But the reason is, first and foremost, we’re still a beer-loving nation.”

Actually, that’s just part of the (t)ale. Another prevailing theory is that Americans have become punch-drunk by fancy food and drink. Just like evolving tastes have fueled a surge of fast-casual eateries and pour over coffee places, our palates have become more refined when it comes to what we drink at our neighborhood watering hole as well.

In the last decade, U.S. brewery jobs have more than doubled.Photo by Mario Tama/Getty Images

Between 2006 and 2016, approximately 61,000 beverage manufacturing jobs (such as bottling, sales, etc) were created. Breweries accounted for almost 33,000 of those new positions. According to the Bureau of Labor Statistics, nearly a quarter of all beverage manufacturing jobs can be traced back to brewers.

In contrast, soft drink manufacturers — which hire a significant portion of beverage manufacturing workers — have reduced their workforce during the same time period by double digits.

Craft brewers use local, high quality ingredients and artisanal techniques to make their brews — meaning that manufacturing jobs must be created nearby and can’t be outsourced to a foreign manufacturer. In comparison, large-scale, commercial beermakers mass produce their lagers and IPAs in various manufacturing facilities using the most cost-effective methods and ingredients.

“Craft brew is very inefficient,” says Herz, explaining that the production of craft beer is more hands-on. “Because they’re so inefficient compared to big beer, they need more jobs to brew the beer.”

And it isn’t just beermakers that are getting fat off the proverbial hops. Small businesses are, too. Herz calls this the trickle-up effect, where, for example, craft-beer-only bars and retailers have opened near an existing microbrewery, creating even more jobs.

“The beer category over time has evolved. You have more beer towers at restaurants, more expanded beer menus at restaurants,” says Herz.

Cities are thirsty to be a part of the booming craft beer industry. In an effort to grow its local economy, one town in Oregon has even offered financial incentives to a craft brewer opening a new business in its community.

Craft distilleries have also experienced a boom — albeit on a much smaller scale.

For the past decade, the number of brick-and-mortar independent distilleries has grown by the double digits every year, according to a study financed by the American Craft Spirits Organization. The report also found that the amount of liquor distributed increased by 18.5 percent annually.

Interest in craft distilled liquors may have helped local business owners, says Celebration Distillation Founder James Michalopoulos. His distillery in New Orleans is the first craft distillery in the U.S. to bottle rum, supplied by the large amount of sugar cane that grows nearby.

“It piqued my interest that there was so much sugar cane, and not one distillery in Louisiana — or the even the U.S.,” Michalopoulos says.

His company has been able to grow its operations from two to 18 employees — an increase of 800 percent — with most of its hiring occurring during the past decade, a time period during which Louisiana experienced a doubling of its unemployment rate after Hurricane Katrina.

But anecdotally, Michalopoulos says, the market is more volatile than many make it seem. The barrier of entry for distilling includes steep prices and stiff competition against larger companies — all unfavorable conditions for small business owners.

“If you want to truly characterize the marketplace, it’s pretty skewed,” he says. “What there is are small businesses with people working very hard on a local level, and rightfully getting a certain interest in the product. And they’ve taken a very tiny sliver of the market and working it, but with limited success.”

Nonetheless, growth continues within the industry, primarily in states such as California, New York, Washington and Colorado, which house more than a quarter of all distilleries in the U.S.

If craft distilleries maintain this upward trend — much like craft breweries have — there’s tremendous potential for more jobs to be created within the sector. Cheers to that.

Homepage photo by Eddie Hernandez Photography/Getty Images.

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