American brewery numbers

It’s Saturday night. I’m watching 21 Jump Street and thinking about mead.

This chart shows the number of breweries in America. I have always assumed that prohibition destroyed a local and flourishing brewing scene.

If I had to draw a chart of the number of breweries in operation from 1887-today I would have drawn something like this:

imagined

Except that’s completely wrong.

Here’s what it actually looks like:

Brewery count

Two things to note here.  The number of breweries today is at an all-time-high, much higher than prior to prohibition.  Additionally, the trend-line prior to prohibition was pretty obviously down and to the right.

Brewery count down

Why?  My guess is that three major factors contributed to this trend from 1887-1950:

  1. Logistics increased efficiency dramatically: Railroads grew dramatically, the truck came on the scene.  For the first time, companies could ship beyond their local region.
  2. American consumers didn’t have much disposable income.  As a result, consumers prioritized product affordability over quality, specialty, and their personal taste.
  3. Larger institutions could become, for the first time, dramatically more efficient than smaller to medium sized organizations. Bottling machines, lower cost purchases of bulk raw materials, and other stuff that big companies could do helped them lower the price of their products compared to their smaller competitors.

The way up:

Brewery count up

Why?

  1. Personal disposable income increased dramatically at the exact moment that the number of breweries increased.  As shown below, consumers certainly didn’t funnel this into personal savings.  Instead, they prioritized their personal tastes (or, you know, drinking local products) over cost.
  2. us-savings-to-income (1)A lot of the efficiencies that were obtained by large businesses were suddenly available to small breweries.  Golden Coast Mead built our bottling machine from plans we found on the internet for under $1,000.  This availability of information is worth millions of dollars in inflation-adjusted 1930 machinery.

I’m probably missing something and I’ll review this when I’m not watching 21 Jump Street.

 

 

 

  • Mickey J

    I was bored at work and started on a research tangent, 1873 was the year that held the record before now (brewersassociation.org), and that number was 4,131 breweries. The population based on census in 1873 was 43,006,000 which leads to 1 brewery for every 10,410 people. Today’s population roughly 318.9 mil and we have 4,144 breweries giving us 1 per every 76,955 people. Dividing 76,955 by the 1876 high of 1 brewery per 10,410 gives us roughly 7.4, meaning if we had the same brewery to people ratio as 1876 we would have 30,665 breweries. But I was thinking that we would want to avoid another prohibition or tightening of laws so I came up with a Factor of Safety of .7. Throwing that on today’s numbers brings them to 15,000 people per brewery and saturation point to 21,465 breweries. Needless to say, I think there is plenty of room for the growth of the industry.