I’ve been thinking about this a lot lately. There’s a problem in the definition. That’s clear. After all, it’s been discussed in other venues prior to this ad infinitum (and those three are just a small example), and now I feel the new to add to the noise. The thing is, I think we’re all running up against the same problem.

The problem is the Brewers Association is right and wrong all at the same time. Lemme explain.

The Brewers Association has it right

See this Examiner post by Larry Johnson for a succinct re-hash of the definition without having to scroll through the BA‘s entire statistics and definitions page.

This definition of a craft brewery and craft beer here is based entirely on regulations set by the U.S. Government for taxation purposes. If breweries produce under 2 million barrels per year, they qualify for a small brewer tax break on their first 60,000 barrels. If you’re above that, you’re not a craft brewer. That’s it. The smaller breaks in between are built in for statistical purposes. Plain and simple, when you’re talking about market segments, you need to be able to compare apples to apples. New Belgium and their amazing expanding distribution network just doesn’t compare well vs. a startup brewpub (much less how Sam Adams compares with anybody else). They’re two entirely different segments in the same industry.

There’s only one part of their definition of a craft brewery that isn’t based on an economic restriction:

Traditional: A brewer who has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of it’s volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.

And it kinda reads like an economic restriction, doesn’t it?

I take this as their way of saying, in every way they possibly can, “NOT megabreweries.”

So, here’s the thing. The Brewers Association is, first and foremost, a trade organization. As a brewery owner, I want them focused on helping to keep the most rigorously regulated industry in the country (aside from probably tobacco) a sane enough environment for my small business to exist in. A startup brewpub can’t afford to hire a full time (team of) lobbyist(s) to look out for their interests in the same way that MillerCoors can, but they can get help from the BA when they’re looking at challenging a law that’s coming through the pipeline. What is beneficial to MillerCoors may not be beneficial to the startup brewpub, so you also need somebody to push back against the corporate behemoths who, let’s be frank, would probably rather not have any competitors, even minuscule ones.

The BA needs tools to be able to do this job, and accurate statistics is one of those tools, consistent standards is another. These definitions are what the BA needs in order to do what breweries need them to do, and the BA can be an invaluable ally to a small craft brewer.

They are really crappy definitions for the average consumer. The consumer cares about good beer.

The Brewers Association has it wrong

Here are a couple of breweries that I would guess that consumers think are considered craft breweries that are not, according to BA definitions:

• Widmer
• Goose Island
• Mendocino Brewing Co.
• Brewery Ommegang

Soon, Sam Adams will join that list. I would challenge anybody to tell me that any of those breweries don’t make great beer, regardless of percentages of ownership and/or how many barrels they manufacture per year.

The problem is that the BA also makes attempts at functioning as a consumer advocacy organization, most notably via the GABF. And why not? People who make great beer are fans of great beer. It makes sense to function as an organization that gets consumers in touch with great beer. But the definitions of what craft beer is for industrial purposes don’t necessarily work for consumers.

Consumers want to drink great beer, and while I’ve heard a lot of people say they don’t really care where something comes from, I think they do. Behind craft beer there are personalities, there is passion for the product that is being made. That translates down to the customer very easily in small businesses. It’s something that the megabreweries will never be able to harness because they’re too far removed from the consumer.

Here, the problem is: How do you define passion?

In this case it’s almost definitely via selection of ingredients and processes. But you can’t define it as “beer without corn” or “beer without rice.” There was a little bit of a kickback from a few brewers after the IAACB video who do use corn and rice in their beers, but do it in really interesting ways. A brewer in Kansas or Nebraska using a local good (corn – what else?), malted and roasted to make a corn stout? How is that not a craft beer?

It’s sticky when it gets to passion definition. More on this later.

Where the Disconnect Happens

Quick story: At the end of CBC09, I was blitzing through the Farewell Reception grabbing a quick bite to eat and a quick drink before I had to rush to board my plane and I ran into Charlie Papazian. He was strolling through the middle of the ballroom, tie off, collar undone. In his right hand he had a goblet full of beer. In his left hand, hanging casually at his side, he had an open bomber. He wasn’t talking to anybody, he was just walking around with this enormous grin on his face. I wish I could have gotten a picture of him. The only thing I could think was: “This must be what it’s like to have your dreams come true.”

Think about it – this guy, who happens to just love beer, put this all together. He’s not a stupendously successful brewery owner, he’s not a Wall Street investment guru, he’s not a real estate tycoon. He’s a writer, and a homebrewer, and he loves beer so much that he has spent his entire life facilitating this entire budding industry. He is the perfect beer evangelist. Every brewery owner and beer drinker should take the time to shake his hand and thank him for loving beer. (I did.)

But, this is the reason for the disconnect. What eventually became the BA was born out of a passion for beer, but it has become (and thank god) a business organization. When Charlie started everything in the 1970′s, the definition of craft beer was easy: “Not the megabreweries.” But you can’t use that as a definition to define your business organization. You need clear rules that define the segment(s), even if they backhandedly say, “Not the megabreweries.” The definition of a craft brewery as recognized by the BA is spot on. They need to be built around the tax restrictions.

However, governing the definition of product made with passion with a tax-based definition is sure to lead to resentment from the consumer when they’re favorite popular brewery makes a business decision and is no longer considered a craft beer. The consumer wants to support craft beer, but also wants to support their favorite brewery. How do they make that call? By ignoring the tax definitions.

Here’s what I’d like to see: Let the BA define a craft brewery, and let the drinker define a craft beer.

There are a number of different ways this can be done. There are already what amounts to enormous consumer organizations who are devoted to good beer. Use the existing communities to refine a decent definition and go. Maybe the BA creates a spinoff non-profit that handles the GABF and works on creating similar standardized festivals across the US promoting good beer, and they leave the government work and business side of things to the Brewers Association. Let the consumers be consumers. They don’t need to be complicit in business practices, you just want them educated about good beer, because then they’ll be much more likely to buy from craft breweries.

Overall, I think these are growing pains. I think the reason that the craft beer community is hashing this out over and over again is because the segment has been so successful. After all, when the 2 million barrel cap used as the definition of a craft brewer, did anybody reasonably expect Sam Adams to get there so quickly? I doubt it. It’s fantastic that they’re pushing this boundary and allowing us to continue to go through this painful revision process.

In conclusion, I’d like to put out my definition of a craft beer, as a beer drinker: Any well-made beer that was obviously made with passion. You can see it in the labels, the names, in the bottles, cans, or glassware, and in the ingredient selection.

If the beer has a personality all its own, it’s a craft beer. I suspect that there are at least a few drinkers out there who would join me in that.

At the risk of beating a dead horse, I – along with probably 5,000 other blogs – am looking at this morning’s Washington Post article about Sam Adams, Super Craft Brewer. (Super. Like the prefix meaning “bigger” not the comic book guy. Word geek; see?)

Quick summary: In 2008, Sam Adams produced 1.992 million barrels of beer, 8,000 barrels short of the point where they no longer fall under the definition of a craft brewer by the Brewers Association.

I don’t want to get into a “What is Craft Beer” discussion (right now). That’s been covered amply elsewhere. Instead, I wonder at which is better for the other 1,500-ish craft brewers in the country: Having Sam Adams count as a craft brewer or not?

Sam Adams is, without a doubt, the elephant in the room. The closest regional-size brewery to Sam Adams (Sierra Nevada) makes less than half the amount of beer. I haven’t received my fancy New Brewer with 2008 barrelage numbers, yet, but using just some fancy pants math on the numbers from the BA Statistics page and the numbers we’ve been given by the Washington post, I’m going to make the following estimates/assumptions:

2008 Domestic Craft Beer Sales: 8,493,765 barrels.
Sam Adams alone: 1,992,000 barrels.
Sierra Nevada alone: 700,000 barrels.
Remaining for the other 1,543 breweries in the U.S.: 5,801,765 barrels.
Avg. # of barrels/craft brewery (excluding Sam Adams and Sierra Nevada): 3760 (5801765/1543)

So, to recap: In order for Sam Adams to reach the 2 million barrel cap that means that it no longer qualifies as a craft brewery it must produce a little over twice as much as the average American Craft Brewery does every year in addition to the 1.992 million barrels it already produces.

I have a hard time seeing these as the same animal.

It’s really great to have the sheer size and corporate power of Sam Adams on the same side as all of these other craft brewers. It’s great to incorporate the growth numbers of Sam Adams into the craft brewing world (according to the WaPo article, Sam Adams enjoyed larger growth than the entire craft beer segment last year – gotta wonder how much that skewed the numbers at the CBC) for PR purposes about how great the segment is doing. It’s wonderful to have Sam Adams do wonderful things like the hop raffle during the hop shortage last year, but would they stop doing that if the BA said they didn’t fit a definition?

Sam Adams is so far and away different from its craft brewer brethren that it’s almost unfair to all of the others to call it a craft brewer. How much are statistics inflated because Sam Adams is being included in them? How much does Sam Adams gain from the definition, even? Either they or Yuengling now stands as the largest American-owned brewery (not sure without actual barrel/sales numbers). It seems like that should be distinction enough. What does it mean for Jim Koch if he’s no longer considered a craft brewer by the BA? Is it a drop in sales? I doubt it. And if it is, and they dip back below 2 million barrels, do they get to re-join the club?

Finally, to what benefit is it for the smaller craft brewers to have Sam Adams count in the same definition? They are even more difficult to compete with than BMC because they’re actually producing well-made comparable styles of beer. Sam Adams Boston Lager feels almost as ubiquitous as Bud, even though, yes, Sam Adams only makes something like 1% of the amount of beer Bud does. The difference is that someone who is likely to drink an IPA will probably not have a Bud, but they might have that Sam Adams.

I’d love to hear thoughts from others on this: Is it a big deal for Sam Adams to not be a defined as a craft brewer by the BA? Might it actually be a good thing for other brewers?

Earlier this week, the Brewers Association released its list of Top 50 Breweries by Sales Volume for both Craft Breweries and otherwise. You’ll probably be a little surprised by some of the breweries that show up in the NON-Craft Brewer list. The BA definition of a Craft Brewer: “An American craft brewer is small, independent, and traditional.”

Well.. okay.. that’s a discussion for another time.

Today! We get a pretty chart.

I was interested to see what had changed over the past year, and the answer is: Not a lot. This is good news to me. It suggests a fairly stable market, especially in the face of a global economic crisis. There’s a belief, or at least repeated line in the media, that beer is recession proof and while I’m not necessarily convinced that that’s true, this would suggest that if there was a drop in barrels sold over the past year, at least consumers stopped buying beer everywhere at the same time. Not having total number of barrels available makes that kind of hard to tell right off the bat.

There are two lines highlighted up there that I think merit a little bit of attention.

The first is Kona Brewing Company, which was the single largest climber in the rankings. Again, since actual number of barrels is omitted from this information we don’t know just how much of an increase that is or if places 10 – 30 are within 1,000 barrels of each other or what. Given that I recently started seeing their Pipeline Porter on a regular basis here on the East Coast, my guess would be that they’re benefiting from a really good distribution agreement.

The second highlight is the only new entrant on the list, the St. Louis Brewing Company or what most of us know as Schlafly Beer. So kudos there.

It’d been even more interesting to see the changes over the past few years, especially in terms of geographic distribution, but I can’t seem to find these figures back past 2007. If anybody’s got info saved up to play with, let me know.