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

  • Kenneth G. Elzinga (a1), Carol Horton Tremblay (a2) and Victor J. Tremblay (a3)

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)

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The authors thank Alexander McGlothlin and Christopher Brainerd for research assistance, John and Karen Gabriel for help with mapping, Anand Swaminathan for providing brewpub data, and Orley Ashenfelter for encouragement to take on this study. They also appreciate helpful comments from James Adams, Anita McGahan, Todd Pugatch, F.M. Scherer, and the participants at the American Association of Wine Economists 2014 conference. Financial assistance from the Marshall Jevons Fund is gratefully acknowledged.

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Journal of Wine Economics
  • ISSN: 1931-4361
  • EISSN: 1931-437X
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