Craft Brewing Industry Clusters: The Landscape Ahead

There’s no doubt that national growth in craft brewing has been strong. In 1990 there were 200 craft breweries in the United States, by 2011 there were more than 2,000, and by early 2017 there were over 7,000. While national growth has been impressive, industry clusters in locations like Maine, Vermont, and Oregon have proven to be even more aggressive in their expansion. In Maine alone from 2007 to mid-2018 the number of breweries has grown from 14 to over 120. This growth in Maine has created an industry that has put Maine on the map with the second highest number of breweries per capita among all U.S. states.

Industry clusters represent an enormous resource for businesses. The Economist identifies the main benefit of clustering as the ability for many small companies to enjoy shared economies of scale usually only available to large companies. While increased competition is certainly a concern when markets are too concentrated, geographic concentration can bring about many positives for a company including access to a knowledgeable workforce who can transfer their skills and experience in an industry between companies, easy access to suppliers who are more willing to build relationships with companies in areas with a high concentration of other customers, and more information channels like networking events and trade publications that improve both the quality of the product and the business practices behind it.

Michelle Rosas of the University of Minnesota found that craft breweries tend to be concentrated in just a handful of states, with new entrants flooding into states with high numbers of existing breweries, while eschewing states with only a few current breweries. This would reinforce the visual (at left) showing high concentrations of breweries in just 10 states, with Maine and Vermont leading the way. When exploring why breweries tend to concentrate, Rosas found that the benefits of industry clusters are enjoyed in the craft brewing industry where techniques and supplies are key determinates in tastes, recipes, and branding between products, making these clusters perfectly suited for the development and distribution of the various products.

In Maine, a study on food and beverage clusters by Harvard found that clustering has helped in the development of these industries in Maine, with growth in employment, higher wages, and more business starts and innovation all being associated with these clusters. Additionally, by having high concentrations of craft breweries and organic farms, Maine is now able to leverage a brand that draws in customers and tourists who are seeking out products specific to Maine.

In this competitive, exciting landscape, Opus brings new insights and challenges the status quo as a collaborator, coach and trusted partner to improve financial, operational and strategic performance.