Micro Breweries, Macro Business
With many Octoberfest celebrations winding down right about now, it’s a good time to reflect on the beverage that took center stage; craft beer. Micro breweries are increasingly a key attraction people seek when visiting communities across the country. This summer our own Railroad City Brewing Company expanded operations in downtown Altoona. They are honing their product and bringing together people from all walks of life adding yet another destination experience to the center city.
So what does it mean to have a craft brewery in your town? The Brewers Association reports that the industry contributed $33.9 billion to the U.S. economy in 2012, and more than 360,000 jobs. In 2014, approximately 3,418 craft breweries in operation throughout the U.S., up 19.4 percent since 2013. Just over 450 new breweries came online in 2014 while less than 25 ceased operations.
The existence of craft brewery is a good indicator that your economy may be moving in the right direction. Why? Let’s break down the elements needed to launch one.
They are not cheap endeavors. Like any manufacturer, breweries require capital-intensive equipment. Whether you are making a go of it by purchasing gently used tanks and canners, it is very pricey. Initial investments can range from $250,000 to upwards of $1 million. The point being – capital is needed. If you have a craft brewery in town, they were successful in raising those dollars. A craft brewery operation may suggest that money is available and investors have confidence in the market opportunities in your community.
It takes a gutsy “entrepreneurial spirit” to call yourself a craft brew owner-operator. But it also takes some entrepreneurial thinking on the public side as well. Most local zoning ordinances have a hard time handling a craft brewery. Is it a manufacturer or a food and beverage operation? We have heard stories that “crafts” often start off as dry-cleaners in the zoning and permit world only later to have their own classification established. The presence of a brewery is a good indicator of a cooperative municipal body willing to learn and take the journey with the gusty private investor – good signs for public-private partnerships.
The craft brew industry requires and attracts high-level thinkers. Making and selling quality beer at a smaller scale requires a strong interdisciplinary skill-set that blends chemistry, biology, engineering, business management and marketing. Almost 1/3 of all beer buyers choose craft beer. “Millennials” (that most talked about and highly sought after talent pool in their young 20s to early 30s) represent 47 percent of the craft beer market. Surveys suggest that more than 40 percent of craft brew drinkers are college educated with over 30 percent holding graduate degrees. So if a town is lucky enough to host a craft brewery and local businesses are in search of talent, post some job openings near the tap serving area.
Socially challenged wallflowers may find the craft brewery scene a bit uncomfortable. These places are about meeting and greeting new folks as well as potential new business partners and opportunities. The programming and seating arrangements lay a great foundation for sharing new ideas and maybe a business concept or two. The craft brewery is perfect for building new social and business networks if you choose to do so.
So there you have it – four key elements that are important to a successful craft brew operation and the modern economy alike. Now, head on down to Railroad City and meet the team. While providing a new destination stop along the way, it also tells outside investors and new talent that your community is open for business. Prost!