For years, the largest amount of beer that any company in America could produce in a year and still market as “craft” beer was 2 million barrels.
Then, in the last days of 2010, the Brewers Association, an industry group based in Boulder, Colo., officially tripled that limit to allow breweries to generate as many as 6 million barrels of beer annually and still be considered “craft,” a term which may connote a down-home, mom-and-pop, hands-in-the-hop-kiln image that brewers know can generate sales.
Not all in the beer industry are happy with the decision, which appears to be a move custom-tailored to accommodate one brewery, the Boston Beer Company, a growing giant behind the Sam Adams brand, which reported itself on a trajectory to surpass the 2 million barrel mark sometime in 2012.
“The last thing Sam Adams wanted was not to be seen as ‘craft’ anymore,” says Tony Magee, president and founder of Lagunitas Brewing Company, whose facility in Petaluma brewed 165,000 barrels of beer in 2011. “But at some point, they need to cherish their growth and their breakaway from the craft category, and accept that they’re a big regional brewery.”
But size doesn’t matter to Jim Koch, president of Boston Beer. In 2010, he told the New York Times, “If we’re not a craft brewer, what else are we? We’re certainly not Budweiser.”
That’s true, though much of Boston Beer’s product has been contract-brewed by Miller, and for Magee, that’s enough to significantly differentiate Sam Adams from the little people.
“Boston Beer is depending on the authenticity of all the little breweries, so that people can visit brewpubs and see the beer being made, then buy Sam Adams later when they’re thinking about craft beer,” Magee says.
Brendan Moylan, a managing owner of Moylan’s and Marin brewing companies, recognizes the value of the word “craft,” an exploding category that now includes about 1,700 pint-sized beer companies across the nation.
“If you’re successful, you grow, and at some point you can’t claim to be ‘small’ anymore, and the next best word is ‘craft,'” says Moylan, whose two brewpubs produce almost 7,000 barrels of beer per year.
Maintaining craft status was important enough to Koch that he pleaded with politicians in 2010 to adjust federal law, but while Sen. John Kerry began drafting language that would bump the ceiling to 6 million barrels, the Brewers Association independently conceded to raise its own roof.
Moylan thinks that Sam Adams has “manipulated the system to look small.”
“The Brewers Association just changed the rules,” he says, “so the big guys could stay in the club.”
The pending Senate bill that would give a tax break to all breweries of less than a 6-million-barrel production now includes proposed tax breaks for many smaller craft breweries as well, and Magee feels that the Boston Beer Company, in requesting an easement on its own financial dues, has dragged hundreds of smaller companies into its own unsavory fiscal business.
“I’m horrified to be painted with the same brush as them,” Magee says. “There are people out there who can’t find any jobs, and now I’m one of these guys asking for a federal tax break. I don’t need a tax break.”