Revised Foundational Documents Clarify Craft Brewer/Small Brewer Relationship

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The Brewers Association Board of Directors updated the organization’s purpose, mission, core values & beliefs and the craft brewer definition. The former purpose of the BA was spelled out as “To promote and protect small and independent American brewers, their craft beers and the community of brewing enthusiasts.” That purpose defended “craft beers” but the association does not define craft beers. So we promoted and protected all small brewers, but only the beers that generally fell in the traditional part of the craft brewer definition. The new purpose addresses the small breweries in the U.S. and all of their beers. The revised purpose reads “To promote and protect American craft brewers, their beers and the community of brewing enthusiasts.”

The next part of the updates that impacts the difference between small brewers and craft brewers is the craft brewer definition. The traditional pillar of the pre-2014 definition divided small brewers as craft or not based on the types of beers that made up the majority of sales or served as sales flagship. Companies that relied on standard lager and/or light lager as the majority of sales could be small but not craft. While this division made sense in earlier days of the craft brewing revolution, we see evolution leading many craft brewers to consider the use of adjunct grains in their recipes. Some craft brewers do use adjuncts to bring greater palatability by lightening some of their stronger beers. Other brewers are deliberately going for lighter bodied beers in sessionable offerings. When one looks at the millennia of brewing practice, one common thread for the vast majority of time is that brewers employed ingredients that are readily available to them. Different local spices were used to cut the bitterness of malt before widespread use of hops. Where there was millet but little barley, brewers used millet.

A further concern with the previous definition was that the descriptor for traditional left out brewers who had been around for generations. For example, some members communicated that a brewer that has been around for over 100 or 150 years not being considered a traditional brewer didn’t make a whole lot of sense. The changes to the BA purpose and craft brewer definition, in essence, now clarify that  the association supports all independent small brewers as craft brewers and promotes all of their beers. While the Board did not discuss individual companies in the review of the purpose and definition, the result is a more inclusive Brewers Association.

After the decision, staff review of the data set show that craft will gain more than a share point just from brewers in the new data set. Craft may or may not hit 10 share in 2014. It could be close. Craft brewer stats for 2013 to be presented in 2014 in press releases starting March 17, at the Craft Brewers Conference general session, and in the May/June issue of The New Brewer will adhere to the former definition. The 2014 stats presented in 2015 will use the new definition. BA Staff Economist Bart Watson will present both apples to oranges and apples to apples comparisons in 2015, so that the business planning resources of the data set can accurately depict the numbers.

The “small’ pillar of the craft brewer definition included a minor parenthetical addition to contextualize 6 million barrels in terms of market share, which is about 3 percent of the just under 200-million-barrel annual U.S. beer market. The Board did not amend the 6-million-barrel qualifying number, as the reasons for this number remain valid—companies that share more in common as small brewers than small brewers share with the large global brewers should not be punished for growing successfully, and all packaging craft brewers benefit from inclusion of small companies that add to craft market share. Also, to change horses in the middle of the Congressional session could have burned the association’s ability to get Congressional co-sponsors for any legislation, perhaps for a couple of decades.

One change to the Brewers Association mission sets the ambitious goal of 20 market share by the year 2020. Another change is a part of the mission specifically aimed to “foster a commitment to quality.” For craft brewers to approach 20 market share we’ll be in the neighborhood of 40 million barrels in beer sales per year. It is going to take quality brewing, packaging, handling and serving from all brewers and those up and down the three-tier system—regional, nano, brewpub, micro, established and new, wholesalers, on-premise retailers and off-premise retailers alike to achieve this mission.

The new core values & beliefs include the concept of “innovative” to recognize the boundary-pushing nature of many craft brewers. “Fostering transparency” moves up the list, and is a commitment from the Board to be accessible to voting members and gather input whenever important decisions are to be considered. For example, the process leading up to these changes involved a commitment to include member input during the review of the foundational association documents. Voting members responded to a survey in Fall 2013 on their views of the purpose, mission, core values & beliefs, and craft brewer definition. The Board reviewed survey comments during conference calls.

Earlier this year, the Board asked members for comments on proposed bylaws changes to the size of the board. The updated bylaws allowed for two additional at-large positions to the Board. Two at-large spots are now filled by a brewpub voting member and a microbrewery-sized packaging brewery voting member.

Feel free to send me your thoughts, or bring them to the Board in the April 10 Voting Members Meeting in Denver.

Cheers to evolution of the revolution!

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