What is craft beer and why is it so important to have a definition of what it is? Especially for the average consumer who just simply wants to drink the stuff?
Iconic Scottish brewery BrewDog, known for – among other things – their 55 per cent End of History brew, bottled and packaged inside genuine road kill (I’m not kidding, Google it), feels it is important to have a definition for craft beer so that “craft brewers can charge a fair and sustainable price for their masterpieces.”
Australia’s leading representative body in the craft beer industry is the Craft Beer Industry Association. On a recent Radio Brews News podcast, newly appointed CBIA chair Dave Bonighton stated the newly defined craft beer definition as:
“Craft beer is borne of a mindset, an idea between art and science that inherently requires the skill of a brewer.”
The world’s leader in craft beer is the United States. Their equivalent to the CBIA, the Brewer’s Association defines craft beer as:
Small; less than 6 million barrels of beer produced annually
Independent; Less than 25% of the craft brewery is owned or controlled by a beverage alcohol industry member that is not itself a craft brewer
Traditional; A brewer that has a majority a majority of its total beverage alcohol volume in beers whose flavour derives traditional or innovative brewing ingredients and their fermentation.
Clearly the two craft beer associations’ definitions are far different. CBIA chair Dave Bonighton recently told me that the purpose of the CBIA definition was to be used as a consumer facing tool and “not necessarily for excise purposes”. He claims that rather than push for excise tax relief, the CBIA sees “demand opportunity for craft beer from potential customers (as) a much more powerful tool.” This is obviously different to the US Brewer’s Association, whose definition creates definitive lines as to what is and what is not craft beer. The US system also advantages smaller members of the craft beer industry, who pay less taxes based on their size.
Brian Scott, president of the San Diego brewers guild in the US says in an interview that “having bigger breweries saying that what are making is craft” is a “real serious threat to the industry.” This threat is due to, among other things, the economies of scale that exist for larger breweries. It’s interesting to note that two members of the CBIA, Matilda Bay and James Squire, are both owned by Carlton United Brewery (CUB) and Lion Nathan respectively, Australia’s two largest beer producers and that under the US definition would be exempt from being recognised as craft beer.
Consumers inherently want choice, as everyone is different. Whilst beer consumption continues its dramatic decline, now at a 70 year low, the craft beer industry is bucking this trend and continues to grow. Big brewers see the value in craft beer, as evidenced by Lion Nathan’s recent purchase of Little Creatures for well over $350 million. The big brewers want in on the craft beer industry. My question to you is this, is the CBIA helping or hindering craft beer?