Despite a million moving parts, it looks like the craft industry continues to be pretty saavy about capacity. That’s not a bad thing–you’d expect capacity to vary by size and growth rates–but it does create particular challenges for many small, but growing breweries. What’s the wait time for stainless right now? You can see why breweries continue to investigate partner brewing models.Įven if there is 12 million+ barrels of capacity out there, it’s not evenly distributed. No wonder we’re hearing so many stories about microbreweries being capacity constrained. In addition, more than 1 out of 4 breweries in this range is running production at 80% of capacity or higher. For this bullet, I’ve picked out the 5,001 to 15,000 barrel grouping, breweries that have clearly shifted into production and distribution mode.īelow is a histogram (frequency graph) of breweries in this category by their production to capacity ratio.Īlthough the average was only 0.6, 56% of breweries have a ratio that is higher than that. Next, let’s look at one of the categories in more depth. If we use the 0.4 ratio, at 29% growth you’d use up all your excess capacity in 3.6 years.īullet 2: Just because there is excess capacity doesn’t mean everyone has excess capacity. Weighted for the size of the categories, that’s 29% (and it’s probably faster than that since 0-5,000 excludes larger micros). The data points mix together brewpubs and micros, but those categories grew at 20% and 33% collectively last year. Secondly, these breweries are growing at a pretty tremendous rate. So collectively, ~90% of the breweries in the country, more than 3,000 breweries put together, have less than half the capacity of a single MillerCoors facility in Golden, CO. I think the answers here are yes and yes.įor the first part–is that ratio worrisome for the industry–it’s worth noting that breweries between 0-5,000 barrels only make up about 10-11% of total craft production, so even with a low production to capacity ratio, we’re talking about less than 6 million bbls of total capacity if you add them all up. However, it does beg a question: the ratio for 0-5000 bbl group is pretty low – is that healthy for the industry and those breweries? As breweries increase in size, their growth rates slow and the capital outlays required to increase capacity go up, so you’d expect that ratio to drop. Brewery SizeĪll of this makes logical sense. These don’t include capacity from contracting and alt-props, which are included in that total 34.6 million bbls. The second based on a linear regression model I created that tries to control for the fact that the breweries that reported their capacity might not be a representative sample. The first is simply what was reported via BIPS. Here are two takes on production to capacity by size. Together, this means breweries appear to be managing their capacity very well.Even if there is a lot of capacity available, many breweries don’t have much of a capacity buffer.Production to capacity ratios change a lot as brewery size increases (as brewers get bigger, their average production to capacity ratio goes up – see the table below).I think you can sum my findings into three basic bullet points: These points were meant to illustrate that the gap between production and capacity is perfectly appropriate and healthy in an industry that is growing year over year.Īfter the presentation, several brewers and breweries in planning asked some interesting questions about how that capacity is distributed and why if there is so much capacity people keep complaining about capacity constraints so I decided to investigate further. 16% growth on 22.2 million barrels = 34.6 million barrels A 16% compound growth rate uses up all that capacity in three years – i.e. That’s pretty much exactly the same ratio we’ve seen for the last few yearsģ. Production is now greater than total craft brewer capacity in 2012Ģ. That may seem like a big gap, but as I pointed out in my presentation:ġ. That’s roughly 56% higher than production (22.2 million bbls) or flipped around, production is at 64% of capacity. As NBWA Chief Economist Lester Jones once quipped, “give me a light beer recipe and a canning line, and I’ll show you some capacity”. Note that this based on self-reported capacity, and so the total number is a bit subjective based not only on different interpretations of “full” capacity, but also alternating proprietorships/contracts, infrastructure (packaging speed), style of beer, number of shifts, etc. Right now we estimate that there are roughly 34.6 million barrels of craft brewer capacity. During the State of the Industry presentation at CBC, I presented some numbers on the general state of capacity in the craft brewing industry.
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