Economic Notes: Craft brewing remains high-growth industry
November 28 2017By Daily Republic From page B8 | November 26, 2017
In this column, we would like to discuss beer.
Why beer, of all of the economic topics dominating the news? Well, for one thing, beer remains a big business in Fairfield, as every person driving along Interstate 80 (or flying over the city) can see. But also, because the $24 billion craft beer industry has basically come out of nowhere, completely transforming a once staid, heavily consolidated industry into one roiled by new flavors, new players and an entire culture of “beer connoisseurship” that would have been completely foreign to our parents and older siblings.
According to the Brewer’s Association, in 2009 there were 1,596 craft breweries operating in the U.S. By the end of 2016, that number grew to 5,234 breweries. That is an average growth rate of 33 percent in the number of businesses.
While most craft breweries would be considered small businesses, even micro-businesses, they now make up 99 percent of the number of breweries in the U.S. During the same period the volume of beer produced grew by 15 to 20 percent per year. While the pace has slowed since 2016, the recent growth rate of 5 to 8 percent remains impressive.
New craft breweries have created jobs and entrepreneurial opportunities. The craft beer industry supported nearly 130,000 jobs by the end of 2016 – 7,000 new jobs since 2015 alone.
The growth in Northern California has been particularly remarkable. The larger Sacramento region alone now has 65 craft breweries as reported by Sacbeerweek.com, most created in the past five years. And in Fairfield, our own Heretic Brewing Company expanded its brewery and associated brew pub since last year. Heretic’s owners must see great opportunities in Solano County.
Of course, Fairfield is not new to the craft brew world. Even before Heretic arrived with its “evil” concoctions, Blue Frog Brewery, located off Gateway Court near the Solano Town Center mall, was an early pioneer in both brewing beer and serving cold brew in a casual restaurant environment.
Just like the technology industries, innovation creates opportunities for rapid growth, mergers and acquisitions.
One company in particular we should be familiar with, Anheuser-Busch/InBev, has acquired well over a dozen successful craft brews including but not limited to Goose Island, Elysian, Karbach, Devil’s Backbone and Breckenridge. We are also lucky that the Fairfield brewery is one of the two Anheuser-Busch breweries in the U.S. producing these unique beers. The new brewery tanks have certainly increased the visual impact of the brewery – and brought new jobs to Fairfield.
The numbers state the obvious, that the beer industry continues to be a fast-paced, innovative and high-growth industry. There are other values and opportunities that are unique as well. Similar to how the wine industry creates its own culture in Napa, Sonoma, Amador, Paso Robles and other wine regions in the state, beer puts its stamp on an urban, hip and millennial demographic.
Similar to the movement to get to the “roots” of innovative food production, there is a desire to be close to where beer is created, quality real or perceived. This attractive market space is a major driver for revitalizing downtowns, rehabbing unused and antiquated industrial buildings and creating a buzz in small rural towns.
The big news, of course, is that some of this buzz is coming to the Heart of Fairfield. Rustwater Taproom and Kitchen, located in the classic Spanish-style building at the corner of Webster and Texas streets in downtown Fairfield, is soon to open. Rustwater also shows the unique allure of the craft beer culture, with owner/partner, David Costanzo, leaving a career as an engineer to enter the entrepreneurial beer world.
Rustwater will join Luigi’s Deli and its creative range of beer and food to expand the options for good food and good beer in downtown Fairfield. And that is certainly a topic worthy of celebration and a newspaper column!
Economic Notes is an update from Fairfield City Hall written by Brian Miller and Robert Burris of the Fairfield Planning and Development Department. They can be contacted at 428-7461 or by email at rburris@fairfield.ca.gov or bkmiller@fairfield.ca.gov.