The Beer War on American Soil

Disclosure: I love beer. Particularly certain kinds of what the industry calls craft beer. I’m a sucker for a good IPA, or an amber, or a pale ale. For special occasions, there is the expensive stuff. If I’m traveling, I try to discover local brews. And the first swig is one of the simplest great pleasures in life. But for now, I’ll stick to the numbers. And they’re morose for the US beer industry. Yet there is an astonishing exception: craft brewers.

There are a lot of them in the US: 1,989 last year, up 11% from prior year, and up from one in 1976, according to the Brewer’s Almanac. They employed 103,500 workers. 250 new breweries opened, 37 closed—it’s still dog-eat-dog out there; just because you know how to brew a good beer doesn’t mean you get to stick around. The phenomenal re-birth of an ancient industry:


“These numbers are poised to rise even more in 2012,” said Paul Gatza, director of the Brewers Association, which represents small and independent brewers. “In February 2012, we already topped 2,000 operating breweries—a truly remarkable milestone.”

But before we get too tangled up in false euphoria about the American beer market, and the idea that it had somehow escaped the great recession, or has even emerged from it, let’s contemplate its possibly permanent misery.

Beer’s tragic fate: it used to be by far the favorite American alcoholic beverage. Even in 1992, long after wine had started climbing the popularity ladder, 47% of alcohol-consuming adults preferred beer; only 27% preferred wine, and 21% liquor. We know because Gallup began sorting out our alcohol preferences that year. Since them, beer zigzagged down and in 2005 plummeted to 36%, the lowest level of recorded Gallup history. Wine spiked to 39% to become America’s favorite drink. Then beer recovered but soon fell again, and in 2011, it was back at its record low of 35%, neck and neck with wine at 36%.

Preferences expressed in a survey don’t always translate well into gallons, barrels, and dollars. So here is a good swig of American reality: annual per-capita beer consumption. It makes mass-market brewers want to cry. There is no light at the end of the tunnel, no flattening out of the curve. America has been turning away from their product for over two decades:


In the good old days, US brewers fretted about imports, but over the last few years, imports have actually lost market share and are now down to 12.8%. These days, what gives US brewers conniptions is the sheer terror of collapsing per capita consumption, an enemy they can’t shake. So far, they’ve had a powerful ally that helped obscure it on their income statements: population growth. A whopping 24% since 1990. But that is slowing down, and US beer production is getting slammed.


Three multinational corporations own most of the 20 gigantic, highly industrialized breweries that produce the vast majority of American beer. It’s been a great Wall Street bonanza, but the results are sobering. The largest brewer in the US, Anheuser-Busch, belongs to Brazilian multinational InBev, the largest brewer in the world. American number two, Miller, is part of SABMiller, headquartered in London, the second largest brewer in the world. Coors was acquired by Canadian brewer Molson, now the Molson Coors Brewing Company, fifth largest in the world. As if that weren’t enough deal-making, SABMiller and Molson Coors Brewing Company formed the joint venture MillerCoors. However, Pabst Brewing Company is still independent.

But craft beer brewers operate in their own micro climate. In 2011, production jumped 13% to 11,468,152 barrels, for a 5.7% share of the US beer market in volume, according to the Brewers Association. With craft beers being more expensive, retail sales jumped 14.5% to a record $8.7 billion—for a 9.1% share of the $95.5 billion US beer market.


Despite the fundamental moroseness of the beer industry, it’s been an awesome year for craft brewers. What it shows is just how successful American entrepreneurs can be with their scrappy outfits in an industry of giants.

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  14 comments for “The Beer War on American Soil

  1. Gollem says:

    I love a good beer but the prices and the taxes are going up. To make up lost revenue many states raised the alcohol tax. Most bang for the buck is cheap liquor good to forget one worries the first day and hung over for the second day. Also, demographics plays a role as USA shift to older retirees the drink less versus 30-50workers who go to happy hour after work.

  2. Pitchman says:

    Thank you for the great news. I have taken the liberty to repost it, with proper credit and links back to your site, here:

    And here:

    I added the following comment: "File this under – THE DECENTRALIZATION REVOLUTION. It is only appropriate that local “Patriot Beer” leads the way! – IP"

    If this is against your policy/wishes please let me know and I will remove them.

    Keep up the good work!

  3. Wolf Richter says:

    Gollem – you're certainly right about prices. Beer inflation has been significant.

  4. Wolf Richter says:

    Pitchman – thanks! I checked out both sites. Nice!

  5. Retired Guy says:

    We love going out for fish & chips and BBQ… and really enjoy a pint or two of a good microbrew to go with it… and Oregon has some of the best with Widmer, Full Sail, Bridgeport, Lucky Lab, McMenamins and others…. BUT at $4.50 – 5.00 a pint in the pubs, we'll settle for Pepsi or water. We can buy a 6-pack at the grocery store for the price of two pints out and have change left over. Better yet, we'll fix the whole meal at home and have lots of change left over.

  6. Wolf Richter says:

    Retired Guy: Yeah, it's getting expensive out there. I know some of the beers you mentioned, and they rock!

  7. Arnold says:

    Among other factors, the negative curve of beer sales probably had an inverse relationship with MADD influence and /or other recreational drugs.

  8. Nothing beats Saranac or Shocktop in the legal brewing wars

  9. Wolf Richter says:

    Never had a Saranac or Shocktop, but someday I will! They're on my list. Thanks for reminding me.

  10. Kenny says:

    Watch out for the home-brewers too.

  11. kegman says:

    Thank your stars you aren't in Utah. You have to search to find a tavern and then are lucky to find anything but the 'BudLights' of the world.

  12. Brewski says:

    One of the best (cleanest, with floral overtones) is OBOLON ( I like Heineken, but I Obolon lager "is everything Heineken tries to be." Having a hard time getting it in middle Tennessee.

  13. Roger Drew Williams says:


  14. Craft Beer Fan says:

    Yuengling is now reportedly the largest American owned and operated brewer. Their Black and Tan (a porter and ale mix) is simply lovely. Widely available on the East Coast, but I am not so sure about west of the Mississippi. Concur with the general trend – as good craft beer becomes more expensive, folks drink more discerningly – and a bit less. Also agree about home brew craft beers beginning to eat into the over all market. I don;t think I have ever seen sales growth figures from Brewers Best (one of the main sellers of quality ingredient kits and basic equipment kits to get home brewers started), but I imagine they have only grown steadily over time.

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