Keeping the Craft Beer Industry ‘Sustainable’ as it Grows

I’m a big fan of the craft beer industry. This is especially true here in Maine (where we even have an official Beer Week which just took place last week) but wherever I travel as well. A large part of my enjoyment comes from exploring the different flavor profiles and learning about the many different styles of beer. Over time though, as I’ve learned more about the breweries, my appreciation and interests have expanded into the business side.

The craft beer world is exploding; the Brewers Association recently released data that shows craft brewers reached double-digit (11%) volume share of the marketplace for the very first time in 2014. Here in Maine, the craft beer industry is poised to grow by 200% over the next four years. Additionally, the demographics of craft beer consumers are changing and opening up new markets (e.g., more women, Millennials and a wider range of income brackets).

As these numbers indicate, it’s a very exciting time to be in the craft beer world and there are good things to come for the industry as it continues to grow. These numbers also show that the craft beer industry will get even more competitive, and it will be harder to sustain a business in a more developed marketplace. Ensuring that a brewery is maximizing resources, engaging employees and running at optimal efficiency will all be key to operating a profitable and ‘sustainably fit’ business. All these things will need to be managed while also ensuring a top-notch and delicious product reaches consumers.

As a whole, craft brewers tend to include eco-friendly practices into their operations, have engaged employees who love what they’re doing and often collaborate with their peers. If you’ve read other articles on our blog, you’ll recognize these strengths as key components of good environmental, social and governance practices (ESG); something small businesses should care about. If you need a refresher, Investopedia defines ESG as: “Environmental criteria looks at how a company performs as a steward of the natural environment. Social criteria examines how a company manages relationships with its employees, suppliers, customers and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits and internal controls, and shareholder rights.”

These are all factors that will enable well-run craft breweries to survive and grow as the industry continues to evolve. The challenges ahead for the craft beer industry are many: As several parts of the country face severe droughts and water shortages, will climate change ruin beer? What impacts will the proposed mega-merger between Anheuser-Busch InBev and SABMiller have on small and medium-sized craft brewers? How will mergers in the aluminum can industry affect brewers who use cans for packaging? How will breweries stay competitive in a resource-intensive industry? With rapid growth of the industry, can the production of hops keep up? How do established brewers secure market share when faced with an influx of new competitors?

Here at root360.org, we believe that ESG is another tool craft brewers can use to differentiate themselves from the international behemoths, as well as other craft breweries. Over the coming months, we’ll be exploring in-depth how attention to ESG can help craft brewers prepare for the industry-specific challenges mentioned above, as well as those facing all small and medium-sized businesses.

If there’s something you’d like us to explore, please share in the comments below. And if you’re a brewer who would like to share your story, please email me at dsarmir@manomet.org.

November 11, 2015 11:43 AM