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Craft Beer in the United States: History, Numbers, and Geography

Author

Listed:
  • Elzinga, Kenneth G.
  • Tremblay, Carol Horton
  • Tremblay, Victor J.

Abstract

We provide a mini-history of the craft beer segment of the U.S. brewing industry with particular emphasis on producer-entrepreneurs but also other pioneers involved in the promotion and marketing of craft beer who made contributions to brewing it. In contrast to the more commodity-like lager beer produced by the macrobrewers in the United States, the output of the craft segment more closely resembles the product differentiation and fragmentation in the wine industry. We develop a database that tracks the rise of craft brewing using various statistical measures of output, number of producers, concentration within the segment, and compares output with that of the macro and import segment of the industry. Integrating our database into Geographic Information Systems software enables us to map the spread of the craft beer segment from its taproot in San Francisco across the United States. Finally, we use regression analysis to explore variables influencing the entrants and craft beer production at the state level from 1980 to 2012. We use Tobit estimation for production and negative binomial estimation for the number of brewers. We also analyze whether strategic effects (e.g., locating near competing beer producers) explain the location choices of craft beer producers. (JEL Classifications: L26, L66, N82, R12)

Suggested Citation

  • Elzinga, Kenneth G. & Tremblay, Carol Horton & Tremblay, Victor J., 2015. "Craft Beer in the United States: History, Numbers, and Geography," Journal of Wine Economics, Cambridge University Press, vol. 10(3), pages 242-274, December.
    • Handle: RePEc:cup:jwecon:v:10:y:2015:i:03:p:242-274_00
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    Citations

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    Cited by:

    1. Trey Malone & Jayson L. Lusk, 2019. "Releasing The Trap: A Method To Reduce Inattention Bias In Survey Data With Application To U.S. Beer Taxes," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 584-599, January.
    2. Trey Malone & Jayson L. Lusk, 2018. "If you brew it, who will come? Market segments in the U.S. beer market," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 204-221, March.
    3. Kenneth G. Elzinga & Alexander J. McGlothlin, 2022. "Has Anheuser-Busch Let the Steam Out of Craft Beer? The Economics of Acquiring Craft Brewers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(2), pages 147-173, March.
    4. Burgdorf, Jacob, 2019. "Impact of mandated exclusive territories in the US brewing industry: Evidence from scanner level data," International Journal of Industrial Organization, Elsevier, vol. 63(C), pages 376-416.
    5. Ryan M. Hynes & Bernardo S. Buarque & Ronald B. Davies & Dieter F. Kogler, 2020. "Hops, Skip & a Jump: The Regional Uniqueness of Beer Styles," Papers in Evolutionary Economic Geography (PEEG) 2058, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2020.
    6. Belmartino, Andrea & Liseras, Natacha, 2020. "The craft beer market in Argentina: An exploratory study of local brewers' and consumers' perceptions in Mar del Plata," Nülan. Deposited Documents 3919, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    7. Trey Malone & Dustin Chambers, 2017. "Quantifying Federal Regulatory Burdens in the Beer Value Chain," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 466-471, June.
    8. Mitch Kunce, 2021. "Quality Signal Impacts on Firm Level Production: Evidence from the Beer Industry," Business & Entrepreneurship Journal, SCIENPRESS Ltd, vol. 10(1), pages 1-2.
    9. Hu, Xiaoxue & Li, Dongxu, 2022. "Do horizontal mergers affect rivals’ cash holdings?," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 275-298.
    10. Cole, Matthew T. & McCullough, Michael, 2023. "California beer price posting: An exploratory analysis of pricing along the supply chain," Journal of Wine Economics, Cambridge University Press, vol. 18(3), pages 205-225, August.
    11. Jeff Luckstead & Stephen Devadoss, 2021. "Taste renaissance, tax reform, and industrial organization of the beer industry," Economic Inquiry, Western Economic Association International, vol. 59(4), pages 1702-1722, October.
    12. Mitch Kunce, 2023. "Age Cohort Affects on U.S. State-Level Alcohol Consumption Shares: Insights Using Attraction CODA," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 12(3), pages 1-1.
    13. Amador Durán-Sánchez & María de la Cruz del Río-Rama & José à lvarez-García & Cristiana Oliveira, 2022. "Analysis of Worldwide Research on Craft Beer," SAGE Open, , vol. 12(2), pages 21582440221, June.
    14. Trey Malone & Josh Hall, 2017. "Can liberalization of local food marketing channels influence local economies? A case study of West Virginia’s craft beer distribution laws," Economics and Business Letters, Oviedo University Press, vol. 6(2), pages 54-58.
    15. Rosa Maria Fanelli, 2018. "Have beer markets in European Union countries converged?," Economia agro-alimentare, FrancoAngeli Editore, vol. 20(3), pages 445-477.
    16. Bart Bronnenberg & Jean-Pierre Dubé & Joonhwi Joo, 2022. "Millennials and the Takeoff of Craft Brands: Preference Formation in the U.S. Beer Industry," Marketing Science, INFORMS, vol. 41(4), pages 710-732, July.
    17. Trey Malone & Jayson L. Lusk, 2016. "Brewing up entrepreneurship: government intervention in beer," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(3), pages 325-342, November.
    18. Malone, Trey & Lusk, Jayson L., 2017. "The excessive choice effect meets the market: A field experiment on craft beer choice," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 67(C), pages 8-13.
    19. Michael McCullough & Joshua Berning & Jason L. Hanson, 2019. "Learning By Brewing: Homebrewing Legalization And The Brewing Industry," Contemporary Economic Policy, Western Economic Association International, vol. 37(1), pages 25-39, January.
    20. Witham, Adam & Leite, Brian, 2023. "Business is Hopping: The Effects of Deregulation on Southern Craft Beer," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 53(1), January.
    21. Ambarish Chandra & Matthew Weinberg, 2018. "How Does Advertising Depend on Competition? Evidence from U.S. Brewing," Management Science, INFORMS, vol. 64(11), pages 5132-5148, November.
    22. Markus Merz & Jan Riepe, 2021. "SMEs with legally restricted banking access: evidence from the US marijuana industry," Journal of Business Economics, Springer, vol. 91(6), pages 797-849, August.
    23. Luckstead,, Jeff & Devadoss, Stephen, 2022. "Taste Renaissance, Tax Reform, and Industrial Organization of the Beer Industry," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322138, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • N82 - Economic History - - Micro-Business History - - - U.S.; Canada: 1913-
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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