Craft Beer and Breweries Defined On this episode of IW, we take a look at the actual term Craft Beer, or more importantly how one defines themselves to be a Craft Brewer. Join us as we take a trip down the rabbit hole of US history and go in search of the beginnings of the term Craft Beer… So how does one define Craft Beer?More Importantly…Why is there a need to define Craft Beer? Is it not enough that whichever beer tastes good to you is good enough? Would you really choose to buy something labeled a “craft beer” that may not be? Can any one person accurately define who a craft brewer really is? The definition is easy, it’s the understanding of the individual terms involved that makes an interesting conundrum of sorts. We like all humans out there need a certain means of segregation, if you will, when we speak or even read about something in order to categorize it in our minds. That might not be a popular thing to say, but psychologically it is a true statement. We, as humans can’t handle general terms. “It is BEER, it is WINE, it is (you fill in the blank).” He is, She is, they are… the list goes on and on. So of course that has to transfer over to every aspect of our lives, even into our precious beer. Maybe one day we can just define ourselves as humans and this mixture of water, malt, hops and yeast simply beer but until then we will need to define it much further than that. I have discovered the wonderful world of craft beer and will never be the same after. My favorite thing is to walk into a small micro or nano sized brewery with a tasting room and sample all the things the brewers have poured, literally, their hearts and souls into. I applaud and salute all those involved in this true craft of making beer and sharing your gifts with the mere mortals that are consumers. So back to the issue at hand… what is a craft brewer ? To understand who this person is we must first see the scale at which we are playing. • 1 barrel of beer is 31 US gallons1 barrel of beer produces 248 average 16 oz. pints Ok, with done, we can proceed to the good old research… The history of the term craft brewer begins, I believe, in the late 1970’s. With the passing of a piece of legislation that cut the excise tax from $9 to $7 per barrel on the first 60,000 barrels produced from brewers producing less than 2 million barrels per year, the field was set to begin the growth of America’s Beer Empire. This was in 1976, but the real magic happens for home brewers a little later in 1978. Let’s review this article, by Tom Acitelli from 2013 found on The Wall Street Journal .com, links below. Today there are more than 2,300 breweries in the United States—where beer production is second only to China's—but it wasn't long ago that American beer was an international punch line. Embodied by yellowy lagers in aluminum cans, nearly all domestic beer was made by a handful of breweries like Miller and Anheuser-Busch. As recently as 35 years ago, there were fewer than 50 breweries in the whole country, and the fastest-growing type of American beer was light, which Miller introduced in 1975. The story of the U.S. ascent to the top tier of world beer began in the late 1970s, when brewing was liberated from government taxation and regulation that had held it back since Prohibition. In 1976, Henry King, a gregarious World War II hero whose favorite drink was a whiskey-based Rob Roy, trained the attention of his U.S. Brewers Association, the industry's biggest trade group, on Congress. The brewing industry had been trying unsuccessfully for years to get Washington to lower excise taxes on beer produced by smaller brewers. King was determined to change things. In an impressive feat of bridge-building, he lined up support from the industry's labor unions as well as its owners. Steelworker and glassworker unions called in favors; the big brewery owners wrote personal checks. These owners, whose excise taxes would remain the same, figured that by helping their smaller brethren, they would ultimately help themselves by inspiring more beer consumption in an American alcohol market suddenly awash with California wines. Brewer Peter Stroh—whose family name was a mainstay of Midwestern beer—lobbied a fellow Michigander, President Gerald Ford, to sign the bill that King's efforts finally steered through Congress. H.R. 3605 cut the federal excise tax on beer to $7 from $9 per barrel on the first 60,000 barrels produced, so long as a brewery produced no more than two million barrels annually. (There were few breweries that did, which was another reason King's association went to bat for the tax cut.) The tax cut unleashed a revolution in American brewing. Hundreds of smaller breweries began to open across the country selling what came to be called craft beer. But as significant as the numbers was the rise of American brewers and consumers as the industry's tastemakers. Nowadays, craft-beer startups in places like France, Italy and Japan are less likely to look for inspiration in the traditional pilsners and heavy ales of Northern Europe than in the hopped-up India pale ales of California and the smooth bitters of New England. Some of the stars of American craft beer, such as Ken Grossman of Sierra Nevada and Sam Calagione at Dogfish Head, got their start with home brewing—an activity that until the late 1970s was illegal in the U.S. The repeal of Prohibition in 1933 legalized home winemaking, but, because of an oversight, did not legalize home-brewing of beer. Stores that sold supplies for winemaking also sold supplies for making beer at home, and the government did little to enforce the anti-home-brewing law. Still, the air of illegality discouraged many who might have taken up home-brewing, and importers were reluctant to bring home-brewing supplies from Europe. Enthusiasts in the U.S. kept their interests underground, usually sharing information only with a small circle of other home brewers. Who knew when the government might start enforcing the home-brewing prohibition? Gradually, though, the secretive home brewers grew bolder. In the 1970s—about when Henry King was lobbying Congress to cut the beer tax—home-brewing clubs in California, where America's craft-beer revolution began, joined with trade groups representing the winemaking shops that sold home-brewing supplies. They lobbied California Sen. Alan Cranston to introduce legislation legalizing home-brewing at the federal level. Cranston introduced legislation that was reconciled with a House bill in August 1978. President Carter signed the law that October, and it took effect the following February. Home-brewing of up to 200 gallons a year per household was suddenly permitted. Following the federal example, state legislatures also began rewriting their bans on home-brewing, and it is legal now in every state except Alabama. The result: Home-brewing took off, helping to spur the movement toward craft beer that had been touched off by the beer tax reduction. The beer industry swelled in the 1980s and 1990s, producing thousands of jobs and tens of millions of dollars in annual tax revenue. The rise of American beer wasn't an accident. It was spurred by efforts to cut taxes and regulation that unleashed entrepreneurship. Too bad Washington doesn't raise a toast to that idea more often. Mr. Acitelli is the author of "The Audacity of Hops: The History of America's Craft Beer Revolution," just out from Chicago Review Press.So without the tax cut and the passing of legislature to legalize home brewing, America would not have been able to enjoy the things to come, and home brewers might not have had the push behind them to expand and try their luck on a professional level. These men and women that were ‘crafting’ their personal styles of beer would help in coining the term. As we know, a literal explosion occurred shortly after this, with hundreds of micro-breweries opening their doors. Some didn't last long and others have become the giants of Craft Beer. I pulled this information from the Brewers Association website that adds a few more milestones to the craft beer movement in this period.Several notable events took place during this period that helped inspire a change in American beer culture. Anchor Brewing Company was purchased by Fritz Maytag in 1965. Maytag maintained some of the original beer traditions of that brewery, brewing unique beers during a time when all of America’s unique beers and breweries were disappearing. Increased homebrewing activity inspired beer enthusiasts to start their own small brewing companies. Their intent was always to reintroduce the public to more flavor and to the traditions of beer. In 1976, what some call the true renaissance of American craft brewing emerged with the founding of The New Albion Brewery in Sonoma, Calif., by a homebrew enthusiast. While this brewery went out of business after about six years, there were hundreds of homebrewers that were inspired and followed in their footsteps and started breweries in the early-1980s. Without these moments as the catalysts for the next generation of brewers, the American Craft Beer Revolution may have just faded away. But our story isn't over quite just yet. We have that general idea of who a craft brewer is, now to further define that takes a little bit of searching. From Craft beer.com comes the following definition: An American craft brewer is small, independent and traditional. Small in this context means…Annual production of 6 million barrels of beer or less (approximately 3 percent of U.S. annual sales). Beer production is attributed to the rules of alternating proprietorships. Independent as pertaining to brewers…Less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by an alcoholic beverage industry member that is not itself a craft brewer. Traditional can be a bit tricky with the wording…A brewer that has a majority of its total beverage alcohol volume in beers whose flavor derives from traditional or innovative brewing ingredients and their fermentation. Flavored malt beverages (FMBs) are not considered beers. With that last “traditional” came a big change in the definition in 2014. As described by an article from VinePair.com. That last change is pretty huge, because it means not only malt but adjuncts (like rice, corn, etc., generally associated with cheap filler used by big bad macro beer companies) can be included in the ingredients of the malt bill that influence the flavor of a craft beer. This is why Yuengling now qualifies as a craft brewery—it also gives the BA access to Yuengling’s bigger budget, which it may use to fight the good fight against macro beers as fights over market shares continue. Of course, the BA has its own non-financial rationalization for allowing adjunct grains into the new definition of craft brewing: “The idea that brewers who had been in business for generations did not qualify as ‘traditional’ simply did not cohere for many members [of the Brewers Association]. Brewers have long brewed with what has been available to them.” Craft Beer.com uses the following concepts that further help to define the term Craft Brewer. The hallmark of craft beer and craft brewers is innovation. Craft brewers interpret historic styles with unique twists and develop new styles that have no precedent. Craft beer is generally made with traditional ingredients like malted barley; interesting and sometimes non-traditional ingredients are often added for distinctiveness. Craft brewers tend to be very involved in their communities through philanthropy, product donations, volunteerism and sponsorship of events. Craft brewers maintain integrity by what they brew and their general independence, free from a substantial interest by a non-craft brewer. The majority of Americans live within 10 miles of a craft brewer. The definition from a few minutes ago said 6 million barrels, but those in the know remember a 2 million barrel rule in place just a few years ago. Keep in mind this is not the government setting the size restrictions on the definition, at least not yet. We’’ll get to that in a minute. Let’s chat about in industry giant. Let’s talk about Sam Adams.or Boston Beer Company. A craft brewer is small? Well it turns out that small is a relative term. Enter the Sam Adams, Boston Beer Company lobbying of a few years ago. You see, Sam Adams was over the 2 million barrel limit and wanted desperately to keep the Craft Beer label in their arsenal. Even at 4 million barrels, they weren't anywhere near the big boys in the game, but they had distanced themselves from their fellow small brewers. It’s kind of similar to being the biggest fish in the pond, only the pond is filled with minnows. So in 2010, Sam Adams’ Jim Koch had a major influence in getting this definition changed. Now it is 6 million barrels per year, one only can wonder that when and if someone like Boston Beer Company in the next decade will enact another change and up the limit to say, 10 million barrels. Now would someone that size, still be considered a craft brewer by the average beer drinker’s view? When is a brewery penalized for growing? They started out as THE definition of Craft, and even through the scale might change, is it right to pull this label ? You can decide if you want, love or hate Sam Adams, I still love a good beer from them every so often. But you, the consumer, or even the powerful Brewers Association may not get to make that call. It may be in the hands of good old Uncle Sam to decide. Enter congress wanting to pass some more laws… https://www.congress.gov/bill/114th-congress/senate-bill/1562 The Craft Beer Modernization and Reform Act. An article from Fortune .com http://fortune.com/2015/06/25/congress-craft-beer-samuel-adams/ states that this Act would allow the government to define who is and who isn't a craft brewer. Effectively redefining the tax structure for small and mid sized brewers. Roughly it looks like this:The craft brewers, those producing under 2 million barrels per year would get the deepest tax cuts. The mid-size brewers, those producing 6 million barrels or less, get a slight tax break. The macro brewers, don’t get a tax break beyond their first 6 million barrels of production. Is this a bad thing? Well, more government involvement is a touchy subject these days, but only time will tell and as of this recording, the bill has not been passed YET… That covers the bulk of defining just who a craft brewer would be, but let’s examine the wide picture for a few minutes. For some comparison, we decided to look into the market segments defined by the Brewers Association .com.CRAFT BEER INDUSTRY MARKET SEGMENTS There are four distinct craft beer industry market segments: brewpubs, microbreweries, regional craft breweries and contract brewing companies. MicrobreweryA brewery that produces less than 15,000 barrels (17,600 hectoliters) of beer per year with 75 percent or more of its beer sold off-site. Microbreweries sell to the public by one or more of the following methods: the traditional three-tier system (brewer to wholesaler to retailer to consumer); the two-tier system (brewer acting as wholesaler to retailer to consumer); and, directly to the consumer through carry-outs and/or on-site tap-room or restaurant sales. BrewpubA restaurant-brewery that sells 25 percent or more of its beer on site. The beer is brewed primarily for sale in the restaurant and bar. The beer is often dispensed directly from the brewery’s storage tanks. Where allowed by law, brewpubs often sell beer “to go” and /or distribute to off site accounts. Note: BA re-categorizes a company as a microbrewery if its off-site (distributed) beer sales exceed 75 percent. Contract Brewing CompanyA business that hires another brewery to produce its beer. It can also be a brewery that hires another brewery to produce additional beer. The contract brewing company handles marketing, sales and distribution of its beer, while generally leaving the brewing and packaging to its producer-brewery (which, confusingly, is also sometimes referred to as a contract brewery). Regional Craft BreweryAn independent regional brewery with a majority of volume in “traditional” or “innovative” beer(s). What about smallest of the small?Micro and Nano differences…Micro versus NanoHow much beer does a brewery have to produce to be considered a Nano brewery? There is not an official number of beer output needed to be classified as a Nano brewery, but it is accepted across the beer industry that a Nano brewery is defined based upon the size of its brewery system. A Nano brewery produces beer on a 4 to 5 barrel brewing system or less. It seems a 3 barrel system may be the norm here in most cases. So by know you should be thoroughly familiar with the the Craft Brewer. The next time your buddy says he prefers a Craft Beer, you can pass on some knowledge at just how cloudy that definition really is. Let’s stop this adventure there for today. Is your head spinning yet? Is it time for another beer? I say yes, so with that I bid you farewell…from the Inebriated Wisdom Mobile Studio we ask you to skip the hassle and just find a local brewer with a tasting room. This way you are guaranteed a good time and some interesting conversation, especially if the brewer is around. Get your beer from the source and support #Drink Local, we do!!!Links from the Show: http://www.wsj.com/articles/SB10001424127887324482504578455131793135370https://www.brewersassociation.org/brewers-association/history/history-of-craft-brewing/http://www.craftbeer.com/the-beverage/what-is-craft-beerhttp://vinepair.com/beer-101/what-is-craft-beer/https://www.congress.gov/bill/114th-congress/senate-bill/1562http://fortune.com/2015/06/25/congress-craft-beer-samuel-adams/https://www.brewersassociation.org/statistics/market-segments/Audio is supplied by http://audionautix.com/ Visit them today!