CRAFT BREWER DEFINITION OFFICIALLY UPDATED . . . AGAIN
For the fourth time since 2OO7, the US Brewer’s Association has officially updated its definition of craft beer, removing the outdated requirement that the majority of beers be “traditional”, allowing brewers to innovate in new areas without sacrificing their “craft” status. Under the previous definition, a craft brewer was defined as small (producing fewer than 6 million barrels), independent (less than 25 percent owned by a non-craft brewer), and traditional (a majority of its total volume must be derived from traditional or innovative brewing ingredients). Moving forward, BA-defined craft brewers will no longer need to derive a majority of their volumes from beer. In addition, a BA-defined craft brewer must possess a Brewer’s Notice from the Alcohol and Tobacco Tax and Trade Bureau (TTB) and “make beer”. Additionally, the new definition enables companies that primarily engage in the act of cider-making, wine-making and hard seltzer production, but also hold TTB Brewer’s Notices and brew small amounts of beer, to be counted in the BA’s annual craft brewer data set.
BA president and CEO Bob Pease stated that had changes not been made, the organization would have been forced to exclude an increasing number of members that have chosen to diversify their beverage portfolios beyond beer from its annual report on craft beer production volumes. The updated definition also allows the BA to continue calling Boston Beer Company a “craft brewer” and thus, count nearly 8 percent of total BA-defined craft beer volumes in its annual industry report. Boston Beer was at risk of falling outside of the organization’s craft brewer definition at the conclusion of 2O18, as sales of its “traditional” beer offerings had declined while production of its hard seltzer, cider, and alcoholic tea products increased. By stripping away the “traditional” requirement from the definition, the BA will no longer need to estimate production volumes in order to determine whether a company can be included in its craft beer data set.
The BA board began its review of the definition back in October after discovering that an increasing number of craft brewers were experimenting with non-beer offerings such as FMBs, hard seltzers, cider, mead, sake, and alcoholic kombucha. A survey of BA members found that about 4O percent of companies were making non-traditional offerings. In a blog post, BA chief economist Bart Watson said the changes to the craft brewer definition would cause only “minor adjustments to the craft data set”. That data set will only tally volume coming from “all-malt and adjunct beers,” and will not include FMBs, hard seltzers, sake or kombucha. Nonetheless, the revised definition will enable the BA to count beer volumes coming from approximately 1OO small brewers who would have otherwise been excluded as a result of their wine and mead production. Last year, 6O small brewers were left out of the data set.
Additionally, the board has amended its bylaws to create a new voting member class for taproom breweries. Those beer companies are defined as breweries that sell more than 25 percent of their beer on site, do not offer “significant food service” and make less than six million barrels of beer annually.
