What Do Craft Breweries Say About Your Community?

Craft-BrewingYou must know that I (and all of us at Fourth Economy) love local craft beer.  It is among the first things we seek out when visiting both new and familiar communities across the country. Beyond the beer, we also love the places in which they are brewed – the small-towns and big-cities. Those revamped car dealership buildings – home to some favorites such as Fargo Brewing, ND and Kalispell Brewing, MT. That former “mom-pop” auto repair place at the end of dead-end dirt lane – visit Helltown Brewing in Mt. Pleasant, PA. The funky food trucks, local farm to table options and impromptu bluegrass open mic nights that round out the ever-changing scene and texture that is the craft brew pub experience.  We love it all!

So it’s time to get serious about what it means to have a craft brewery (or several if you are lucky enough) in your town.  The economic impact of the craft brew industry is well documented.  The Brewers Association (BA) reports that the industry contributed $33.9 billion to the U.S. economy in 2012, and more than 360,000 jobs.  In 2014, BA reported approximately 3,418 craft breweries in operation throughout the U.S., up 19.4 percent since 2013.  Just over 450 new breweries came online in 2014 while less than 25 ceased operations.

But beyond the impact numbers, what does hosting a craft brewery say about your community’s overall economic development potential?  Can the existence of one or several serve as an indicator of economic progress?  Despite us wanting to put down our growler and exclaim YES beyond all doubt, the truth is that the existence of craft brewery is likely one good (and the tastiest for sure) indicator that your economy may be moving in the right direction.

Why?  Let’s break down the elements needed to launch a craft brewery.

1) Money

These are not cheap endeavors.  Like all manufacturing start-ups, breweries require capital-intensive equipment and facilities.  Whether you are making a go of it by purchasing gently used tanks and canners, it is still very pricey.  Some quick “Googling” suggests that a smaller scale brew only operation will set you back at least $250,000.  The middle tier with some pub-retail type options will require anywhere between $800,000 to upwards of $1 million in capital.  For the most adventurous, the skies the limit.  The point being – capital is needed. If you have a craft brewery in town, they were successful in raising those dollars, either through friends and family, crowdsourcing or traditional bank lending (or all of the above).  A craft brewery operation may suggest that money is available and investors have confidence in the market opportunities in your community.

2) Spirit

A no-brainer I know, but it takes a strong, gutsy “entrepreneurial spirit” to call yourself a craft brewery owner-operator.  You are putting a large amount of capital on the line and must be hugely confident in your product potential.  But it also takes some entrepreneurial thinking on the public side as well.  Most local zoning ordinances have a hard time handling a craft brewery.  Is it a manufacturer or a food and beverage operation?  We have heard stories that “crafts” often start off as dry-cleaners in the zoning and permit world only later to have their own classification established.  Point being, the presence of a brewery, especially the first one, is likely an indicator of a cooperative municipal body or one that is willing to learn and take the journey with the gusty private investor – all good signs for public-private partnership building and economic success.

3) Smarts

Let’s not think Moe’s Tavern or the Drunken Clam when we think of craft breweries.  While those great establishments have their place, the craft brew industry requires some high-level thinking.  Making and selling quality beer at a smaller scale requires a strong interdisciplinary skill-set that blends chemistry, biology, engineering, business management and marketing.   Not too shabby.  And the craft brew consumer also has a lot to offer as well. Again some quick Google scanning reveals that almost 1/3 of all beer buyers choose craft beer. And “Millennials” (that most talked about and highly sought after talent pool in their young 20s to early 30s) represent 47 percent of the craft beer market. Surveys suggest that more than 40 percent of craft brew drinkers are college educated with over 30 percent holding graduate degrees.  So if your town is lucky enough to host a craft brewery and local businesses are in search of talent, best to post some job openings near the tap serving area.

4) Vibe

Finally, if you’ve been to craft brew pub, you know that socially challenged wallflowers may find the scene a bit uncomfortable.  These places are about meeting and greeting new folks as well as potential new business partners and opportunities.  The programming, seating arrangements and of course the warming red cheek producing libation all lay a great foundation for sharing new ideas and maybe a business concept or two.  At the very least, the craft brew pub vibe is perfect for building new social and business networks if you choose to do so.

So there you have it – four key elements that are important to a successful craft brew operation and the modern economy alike.  Now, look around your neighborhood, town or region and starting counting brew pubs.  If one is in the works, help it along.  It could serve to both add a new food and beverage option while telling outside investors and new talent that your community is open for business. Prost!