On Tap at the Local Microbrewery: Economic Opportunity

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.

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.

Creating Big-City Jobs in Small-Town America

New Mexico is well known for its long stretches of fiery deserts, rich Native American culture and spicy food that can make people tough-as-nails drop to their knees and cry. What it isn’t known for: its startup scene, at least not in the same way as tech-heavy metropolises like San Francisco and New York.
That doesn’t mean, though, that people who live there don’t want to be a part of it.
“This is the kind of place where I want to raise my child, and with my wife finishing [school], it became more apparent that I needed to stay in Albuquerque. But there weren’t really that many options for tech work,” says Jackson Stakeman, 36, who left the California coast five years ago to be close to his parents, both of whom retired in Albuquerque. “I was getting pulled back to California, and it’s just not what I wanted.”
Stakeman eventually found work locally as a programming analyst and is now a senior consultant at Rural Sourcing Inc. (RSI), which provides IT resources in second- and third-tier cities around the country. But his plight to find a tech gig in a tech desert — no pun intended — is not anecdotal.  
In 2015, close to 60,000 computer science degree-holders graduated from American colleges. Many of them live in what’s derisively called “flyover country” and have had to choose between leaving their cities or finding different work. With the concentration of tech companies located on the coasts, hiring managers have historically been forced to either recruit workers to relocate to these tech hubs or hire abroad.
All that has started to change, though, as both uncertain immigration policies and an increasingly expensive offshore workforce have pushed companies to seek talent in less-known U.S. cities.
Though some major companies, such as IBM, have pushed for hiring Americans in the wake of the current administration’s call for keeping jobs at home, others, like General Electric and Walmart, caught on years ago and began refocusing on “reshoring,” also known as domestic outsourcing, well before the modern rallying cry from the White House.
Between 2009 and 2011, 26 percent of American companies were looking to use offshore services. Two years later, that number dropped three points while interest in reshoring increased by 10 percentage points, according to a report by The Economist.
Much of the shift has to do with the costs associated with offshore work, which has increased in the past decade.
The internet initially made India and China prosperous for their ability to provide cheap labor to help design and build websites. But companies have become frustrated with the offshoring model, particularly as technology has advanced well beyond simple click-and-scroll websites to more interactive and complex ones — all of which require increased communication and response times from programmers.
“It takes so much overhead to manage a team offshore so that you can get over all the societal differences and language barriers. The reality is you can do it a lot better and faster if you just pick up a phone and talk with someone,” says Heather Terenzio, CEO of Techtonic Group, an outsourcing software development company in Boulder, Colo. “Everybody has a horror story about offshore outsourcing.”
That frustration isn’t uncommon, according to Monty Hamilton, CEO of RSI, where Stakeman works. With headquarters in Atlanta and four development centers elsewhere, including Albuquerque, RSI provides domestic outsourcing for larger companies by hiring programmers to work remotely from wherever they happen to live, whether that be the Midwest or the Mountain West.  
“Offshoring was very good when it was a prescriptive solution,” Hamilton tells NationSwell. “But when it’s a more creative idea, now you have to add some people who can ask critical questions.”
Those critical questions often go unanswered when outsourcing to foreign workers who are more rote in their objectives, says Hamilton. He adds that the costs that come with hiring American aren’t significant enough to merit continuing an offshore practice.
“What used to be a 5-to-1 pay gap [between domestic and offshore workers] for professional development is now a 2-to-1 gap,” he says. “The gap is not worth the inconvenience factor.”
Indeed, the costs of offshore outsourcing have risen, with wages increasing nearly 72 percent each year between 2000 and 2008 in emerging countries, according to a 2013 report by the International Labour Organization (though that trend has reversed in some Asian countries).
Anecdotally, Terenzio agrees, telling NationSwell that while Techtonic hired offshore workers in Eastern Europe for 10 years, it experienced its own set of difficulties.  
“We were finding that we had to write up every instruction with so much level of detail that we realized we could just train a junior developer in the U.S. with much more ease,” she says. “We’ve seen firsthand our productivity and efficiency go up, and our headaches go down.”
By hiring domestically for their IT and other tech needs, U.S. companies seem to be catching on.
“What we’ve seen is that people in tertiary cities would really like to make $50,000 to $60,000 as a programmer,” Terenzio says. Though that stands in stark contrast to the high six-figure incomes that developers in Silicon Valley can command, the cost of living in the Bay Area dwarfs most other places. Hiring workers in small towns is a win-win, she adds: “Wages there are lower, and people there are dying for those jobs. If you can outsource to India, you can outsource to somewhere in the U.S.”
And there’s a community benefit, as more people in smaller cities want to get in on the higher salaries that tech offers and keep those dollars in the local economy.
“Denver is my home, and I felt like I could navigate myself here in any path that I took,” says Barry Maldonado, a project manager at Techtonic, speaking of his time figuring out a career move from the nonprofit world to tech. “There were guys I knew who were younger than me and really succeeding not only in their positions but also in the financial side of life, which was one thing I still needed to work on.”
Maldonado enrolled in a coding bootcamp and was hired by Techtonic as a junior developer. His financial situation has “changed drastically,” he says.
Stakeman, the Albuquerque analyst, says that even though he no longer commands a West Coast salary, what he pays in New Mexico for his two-story home with a three-car garage is about the same as he did when living in a studio apartment in Southern California.
When asked if he was living comfortably, despite forgoing a six-figure salary, Stakeman was succinct: “Oh yeah. Oh yeah.”
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