The initial motivation for this project came from a number of brewery tours and fascinating barstool conversations with individuals connected with the Pioneer Valley’s craft beer manufacturers, including Berkshire Brewing Company (BBC), Opa Opa, and High and Mighty Beer, as well as other brewers outside of that region. While no notes were taken in any of these interviews, most of which took place before any decision had been made to write a thesis and nearly all of which were conducted in noisy and distracting environments, a few observations about the industry, at least in New England, seemed to hold across the industry. The first is that craft beer manufacturing is not seen as a business particularly friendly towards businessmen. Due to high consumer standards and a very differentiated product, those hoping to succeed must be skilled brewers first and foremost, a craft that takes years of practice to hone. Few showed any interest at all in discussing economics, and it was difficult to get in-person interviews with the minds behind this growing industry. Finally, when they were willing to discuss economics, they seemed to agree on only two things: beer is very hard to distribute, especially for a small company, and no brewery can succeed without a local support base. The first point is really somewhat obvious; beer, like any liquid, is heavy. It is also perishable and various municipalities regulate it differently. So while there certainly are battles over various legislations affecting the ability of craft brewers to distribute, and while that may be an interesting paper on its own, the focus of this paper will be the second point; that a successful craft brewer requires a strong local support base.

Given the propensity of many craft brewers to associate their brand name with their region (Berkshire Brewing (MA), Bear Republic (CA), Motor City (MI)) it may seem obvious that many craft breweries hope to win over those looking for a locally made beer. The more important question is whether or not they need to. One thing that can be said is that this sort of behavior is not ubiquitous among beverage manufacturers. The wine industry, for instance, is located where it is because those are the best places to grow grapes. It may be the case that the residents of those areas, being so immersed in wine culture, may be particularly partial to wine in general or local wine in particular. However, it would be silly to claim that these regions would not be wine producing areas were all the locals to suddenly become sick of wine, so long as global demand continued. Likewise, when Anheuser-Busch decided in the 70s to open a brewery in Merrimack, New Hampshire (Anheuser-Busch), it was probably not because Merrimack, a town of about twenty-five thousand residents, had a uniquely high demand for beer, relative to the larger metropolitan areas south. Large beer manufacturers and liquor distillers are assumed to make their choices of where to locate their manufacturing operations based on the local prices of inputs, in this case water, electricity, barley, yeast, hops, labor, etc.

Craft breweries, however, are smaller, younger and have considerably less capital than large manufacturers like AnheuserBusch. When the twenty-first amendment was passed and breweries began opening their doors again, there were notably fewer breweries in the United States than before Prohibition (Brewers Association). Presumably, some did not have the capital to start back up, had sold off their assets, repurposed their facilities, or simply retired. This began a trend of increasing industry concentration that saw the market go from almost 1000 breweries immediately following prohibition to less than 100 in 1970. The reversal of this trend, beginning with the revival of Anchor Brewing in San Francisco (Elzinga, 132) and continues into the present day with the over 1700 breweries currently in operation (Brewers Association), has been well documented elsewhere and is a very interesting read for anyone interested. The overwhelming majority of breweries currently operating in the United States are less than twenty years old. In those last two decades, certain metropolitan areas have become known as “brewing hot spots”, while others have not. While every area would love to boast about how great their brewing culture is, it wouldn’t be prudent to simply take their word for it. A good place to get a look at what the actual climate for craft beer in American cities is like is a group of publications sent out by an organization called Brewing News. Each of one of these publications (Great Lakes Brewing News, Southwest Brewing News, Mid-Atlantic Brewing News, Yankee Brew News, Northwest Brewing News, Rocky Mountain Brewing News, and Southern Brew News) covers everything related to craft beer and the culture surrounding it in a total of 43 States. Each one also features a map of the locations of breweries and beer-related businesses in each of those states. With an edition issued every two months, these journals, when taken as a whole, form a rather remarkable picture of where craft breweries are located, which are far from homogeneous. Well known beer meccas such as Portland, Seattle and Denver are hard to see under the mass of markers, while Mississippi features only one solitary brewery. Moreover, it was clear that population was not the sole driver of brewery location. Some major metropolitan areas, such as Dallas or San Jose, had only a few breweries, while smaller areas like Austin and Boulder, CO had many more. It was these maps which inspired the hypothesis that this paper will explore: that craft breweries, despite being manufacturers whose product markets often extend far beyond their locality, are clustered in a manner that would reflect a strong interest in local demand. In one terminology, their behavior is more consistent with “firm behavior” than the “industry behavior” of their larger competitors.² This terminology, as it is central to the hypothesis, requires a certain amount of explanation.

For these purposes, “firm behavior” should be defined as behavior in which a local firm is competing for local demand with other local firms. Examples of this could be a restaurant, a pharmacy, or a hotel. There are more pharmacies in Boston than there are in Amherst because there are more people demanding pharmacy services in Boston than there are in Amherst. Thus, for a firm producing a good or service for which the demand is about the same for any given individual, the output of firms in that sector should be about proportional to the amount of people in that region. However, demand can vary across similarly sized populations. An example of this would be theaters. While theaters certainly display firm type behavior, competing with each other for the patronage of the nearby residents and tourists, demand for the theater performances is much stronger in certain areas than others. This shows in the fact that certain large cities (like New York and Boston) have many theaters while others do not.

Industry behavior, on the other hand, refers for our purposes to businesses that, while based locally, compete for market share in a much larger geographical area, and thus are less concerned with what is occurring locally that a firm type business might be. Perhaps the best example of industry behavior for many people would be the Detroit area in the 20th century. Here, America’s auto manufacturing giants based huge operations that sent cars all around the globe. They were (and still are) no doubt fierce competitors in many ways, but their competition was not limited to the auto market of the Detroit area. If GM decided to move all of their operations to Texas, assuming no difference in the cost of production, Chrysler and Ford would not be particularly bothered or delighted over this news. Likewise, if MillerCoors, Anheuser-Busch’s main competitor today, were to open up a factory right down the road from the AB plant in Merrimack, New Hampshire, it’s unlikely that there would be much of a reaction. Anheuser-Busch already competes with MillerCoors in New England, as well as presumably every other part of the country, so where the beer is being made makes little difference to them unless it brings with it a significant cost difference. So while “clusters” of businesses - that is to say, a surprisingly dense grouping of businesses in a certain sector - mean an especially high demand for that good or service when discussing firm level behavior (theaters in New York), they can signify notable cost advantages to producing in this area over others in the case of industry-behavior firms (automakers in Detroit).

Obviously, a company does not need to perfectly fit into one definition or another. A company could rely primarily on a larger market for revenue, but gain some amount of business from a stronger-than-average local demand. Alternatively, there could be a sector for which there is strong demand in all parts of the country, but whose intermediate inputs only exist in certain areas. Craft beer absolutely falls between firm and industry behavior, and after a certain point, it may exhibit almost exclusively industry behavior, as in the case of Boston Beer Co. (Sam Adams),³ Sierra Nevada, Anchor Steam, or other hugely popular craft brands. For the purposes of this paper, the firm versus industry paradigm will be used only to look at a brewer’s choice of location.⁴ This requires a few assumptions that should be addressed now. 

The first assumption regarding brewery location is that the founders of the brewery were free to move where they pleased, and chose their location based on strategic behavior and not necessity. There may be some brewers to whom that does not apply to, who started brewing in one location because they wanted to brew beer and, for whatever personal or financial reason, did not have the ability to uproot and move to a different location, despite knowing that it would be a better place to have a brewery. Lacking a broad survey of brewery owners, it is difficult to test the truth of that assumption.

The second, perhaps more tenuous, assumption, is regarding brewer distribution. The assumption here is that brewers either learned their trade on the job at established breweries or traveled to strategic locations in order to start their own. If the craft beer industry were similar to, for example, the technology industry, this would be obviously untrue. Technology company clusters exist in places like California and Greater Boston in part because they are within close proximity to what are understood to be the most elite educational institutions in their fields, and they are the easiest places to find an abundant, skilled labor supply. While various vocational programs for brewers do exist, we will assume here that those programs are not so established that they draw all of the nation’s prospective craft brewers into certain areas where they will then be recruited to work. Therefore, anywhere where there is adequate demand for craft beer, people will either learn to brew or they will migrate into that area to meet the demand.

One final assumption must be made to adequately explain the hypothesis. While the other two assumptions address beer supply, this one must address beer demand. The assumption is that certain demographics demand craft beer more than others. That is to say, while all sorts of people may like craft beer, certain groups are more likely to enjoy it over other types of beer. The demographics in question, for these purposes, are not really important. All that matters is that there is a certain demographic makeup which would characterize an area as more demanding of craft beer than another.

With those assumptions in mind, the Brewing News maps of craft brewery locations can be given a possible narrative, as follows: As craft beer re-emerged in America as a product, certain demographics seem to have adopted it as a regularly consumed beverage with far more regularity than other demographics. Brewers, eager to ply their trade in this hip new market, started breweries all over the country. In certain areas, the breweries were supported by local demand, became profitable, and soon thereafter took off and began distributing to a larger market. In other areas, where there was less demand, the breweries did not succeed. Over time, more and more breweries began to take hold in those areas which had become “craft beer meccas” and industry clusters emerged as a result of this growth. Although the breweries in question may have been able to produce at a lower cost by locating their brewery elsewhere, they would not have been able to realize the immediate demand, and would have ultimately failed.

The historical side of this paper is very difficult to test. The main reason for this is that the key data source being used here to show craft brewery location, the Brewing News periodicals, only has online archives of their periodicals going back to 2009. There is not much clear data about exactly when each regional affiliate of the periodical was founded. If, in fact, archives do exist dating back to the late eighties or early nineties, it would be far easier to actually see how the market took off over time. This paper will instead focus on a specific point in time in the life of the craft beer industry and examine it for evidence in order to test the hypothesis.

² The “firm” vs “industry” terminology used in this paper was borrowed from the methodology of the REMI model, developed by Regional Economic Models, Inc. and should not be confused with more commonplace uses of the terms.

³ Boston Beer is notable for its early adoption of “contract brewing”, a practice shunned by many craft beer enthusiasts (Elzinga, 132). For the purpose of simplicity, this won’t be addressed in this paper, but may be an interesting topic for further research. We will assume that in the case of breweries like Sam Adams, all beer is brewed on location. The main reason for that is the lack of adequate resources to check if each of the over 200 breweries used in the sample have ever used contract brewing services.

⁴ This is to say that “firm” vs “industry” type companies behave differently on a number of other levels which are not being addressed here. The paper only addresses whether craft breweries display “firm-like” behavior when making their location decisions.

For any statistical analysis of the locations of craft breweries to be established, one must first develop a profile of what sort of person is likely to drink craft beer. If the hypothesis of the paper holds, areas containing an especially large number of breweries should also be full of the type of people who drink craft beer. Therefore it must be made clear what sorts of people are being identified as likely craft beer drinkers and why. There are a number of reasons why this is somewhat perilous territory, particularly because it assumes that craft beer is enjoyed by the same demographics over time. While this seems to be the opinion held by those in the marketing world (see below), it does not seem like something that should necessarily be taken for granted. For instance there’s nothing to say that India Pale Ales will not suddenly catch on and become the favored drink of middle-aged African American men. Certain people (those who worry heavily about a beer’s caloric composition and less about its taste, for instance) are very unlikely to ever catch on to this phenomenon. Others (those who really love the taste of beer, respect the work that goes into making it, and enjoy discovering new and interesting beers they had never tried before) will probably always hold a place in their heart for craft beer. However, while the craft beer market has seen a remarkable last few years, it is not entirely impossible to foresee a situation where many of its newest converts move toward some new beverage of choice, or stop drinking altogether due to a sudden change in cultural norms about health and alcohol consumption. Equally tenuous is the notion that different types of craft beer are enjoyed by the same sorts of people. Again, this is probably the case. A quick look around any bar specializing in craft beers will demonstrate a somewhat homogenous demographic enjoying a great variety of different beers. However, that says nothing about individuals who purchase their craft beer for home consumption. It could be that while Belgian Whites and Pale Ales are heavily consumed by young, hip, affluent individuals, the stouts and porters which are also lumped into that category are consumed by the sorts of older, wiser, hardier men who often adorn the bottles of those particular varieties.⁵ Whether or not this actually matters is another question that should be asked, since many, if not most, breweries have a diverse portfolio of brews that could cater to a wide variety of consumers. In this case, if the hypothesis in question did hold, the breweries would locate where there was the strongest demand and other demographics that may enjoy some of their other varieties would not be so lucky.

Most of the published works addressing craft beer demographics are from the marketing world, not the academic world. As such, it is somewhat difficult to tell just how robust the existing literature is. In lieu of that, a number of different studies reaching similar conclusions will have to suffice.

One study that received a good deal of attention within the craft beer community was conducted by Ad Age Magazine and Mindset Media, a company described as a “market researcher specializing in psychographics” (Snyder Bulik). They offered a profile of the lifestyle and attitudes of the consumers of Budweiser, Bud Light, Michelob Ultra, Corona, Heineken, Blue Moon, and a lump category for craft beer. They also point out that Blue Moon, while considered by some to be a craft beer, does not, in fact, meet the criteria given by the Brewer’s Association, a Boulder-based trade organization, to qualify as a craft brewery. Their main offense: being owned by the same international conglomerate that owns Miller, Coors, and Molson.

The somewhat humorous but probably not incorrect assessment of the study on craft beer drinkers is as follows:

These specialty made beers get lumped into one category both because there are fewer fans (and thus less statistically significant data) of them, but also because the personalities of one type fairly well describe another. This group is more likely to spend time thinking about beer rather than work. They are more open-minded than most people, seek out interesting and varied experiences and are intellectually curious. Craft-beer drinkers also skew as having a lower sense of responsibility—they don’t stress about missed deadlines and tend to be happy-go-lucky about life.

Craft-beer lovers are 153% more likely to always buy organic, 52% more likely to be fans of the show “The Office” and 36% more likely to be the ones to choose the movie they are going to see at the theater. (Snyder Bulik)

Elsewhere in the article, when describing craft beer drinkers in relation to other beer drinkers (different) and to Blue Moon drinkers (similar), some interesting comments are made. For instance, the assertion is made that

people who prefer domestic beers over craft beers or imports are generally middle of the road in their politics. They’re not nearly as conservative as people who don’t drink beer at all, but not as liberal as people who prefer more exotic beer. (Snyder Bulik)

After noting that Blue Moon drinkers tend largely to follow craft beer drinkers, it is said that “Blue Moonies are socially liberal and usually quite willing to go against convention,” and that they are “105% more likely than the average person to drive hybrid cars, 77% more likely to own Apple Mac laptops, 65% more likely to purchase five pairs or more of sneakers every year, and 32% more likely to not be registered voters” (Snyder Bulik).

This establishes one prevailing perception about craft beer consumers; they tend to be liberal and, for lack of a better word, hip. While this will be included in the final regression, political liberalism can take many forms, and some of the demographics that form the bulwark of support for the Democratic Party (for instance, African Americans and blue collar union workers) are not typically seen as the primary customer base for craft beer, so more insights are required. While many statistics are available, they tend to be from sources not extremely well known for citing their work (newspapers and marketing documents). For instance, Steve Adams, writing for The Patriot Ledger, says “People aged 25 to 34 make up the biggest segment of craft beer drinkers, at 26 percent, and 38 percent of craft beer customers have incomes of $ 100,000 or more. More than 40 percent are college graduates.” (Adams). Paul Gatza, director of the Brewer’s Association tends to agree. Being quoted in an article for Nightclub and Bar Magazine, he states that “The new beer drinker, at least those that are providing growth for beer, include 25- to 34-year-olds, women and those with household incomes [either] below $ 45,000 or over $ 100,000” (Gosselin).

This view is not universally held. One of the more thorough reports available is a statistical table of consumer characteristics on beer consumption generated by Simmons Market Research Bureau, Fall 2006 Study of Media and Markets. According to this survey 9.1% of craft beer consumers are between 21 and 24, 24.7% between 25 and 34, 22.8% between 35 and 44, and 24.6% between 45 and 54 years old. For comparison, the percentage of Americans above 21 in those age bracket is 7.7%, 18.6%, 18.6%, and 20.4% respectively (2010 Census). Another dissenting opinion when it comes to what demographics drive beer consumption comes from another undergraduate economics paper on craft beer. Steve Spurry of Mary Washington College, writing in Issues in Political Economy, concurs with an earlier study by Craig Levitt in Discount Merchandiser showing that the growth in craft beer has been fueled by the baby boomers aging, accumulating wealth and becoming more selective in their choices of beverage. Before giving too much weight to this apparent disagreement about whether it is the hip millennials or the refined baby boomers that are fueling growth in craft beer, it should be noted that the Spurry and Levitt articles were published nearly ten years before the others, and may reflect a different economic reality at that time. However, the same cannot be said for the Simmons research. All the same, both ideas will be tested later in this paper.

So far, political affiliation, age, and income have been suggested as good variables to capture the typical craft beer consumer. Although it is considerably more controversial, one more variable should probably be added here, that being race. According to the Simmons research, 90% of craft beer drinkers are white, compared to 79.1% of beer drinkers in general. As for the other 10%, it breaks down as 2.7% African-American (as opposed to 10.4% of all beer drinkers), 2.8% Asian (as opposed to 4% of all beer drinkers), and 6.4% Hispanic (as opposed to 12.6% of all beer drinkers).⁶ This discrepancy in who enjoys beer has received some attention on craft-beer related forums and blogs, but little industry attention.⁷ Most of the musings as to why that is the case range from somewhat inane to completely ludicrous,⁸ but one concept that some people have suggested may hold some merit. Since craft beer is more expensive than most beers, and since a disproportionately large share of the national wealth is known to be held by whites, it makes some amount of sense that whites would purchase a larger share of craft beer than they would beer as a whole. This is another concept that will be tested later in the paper.

This generates the demographic profile of the craft beer drinker that the remainder of this paper will use. If the hypothesis holds, then breweries would chose to locate themselves in areas with high median income, strong liberal political affiliation, a large number of 25-34 year olds or, alternatively, a high median age, and where there are a large number of White Non-Hispanics.

⁵ A casual observation would be that the darker and heavier a beer is, the more likely it is to feature a lumberjack-type gentleman on the label. However, this will not be tested in this paper.

⁶ The overlap here is noted, while Simmons does not explain itself it is assumed for these purposes to be due to overlap in racial identification.

⁷ The reason for this is somewhat obvious. There’s nothing inherently wrong with white people enjoying your product, but it’s hardly hip and cutting edge to be the producer of something that only white people drink.

⁸ For example, that since there are more white people, they will drink more beer, not taking into account the somewhat significant difference between the percentage of Americans who are White Non-Hispanics and the percent who are white craft beer drinkers, never mind the difference between craft beer and other beers... or that, since the styles of beer are often based on traditional European styles, perhaps it’s in the genes of white people to love craft beer?

The data collection for this project varied in its difficulty. All of the county-level data on, age, ethnicity, and population comes from 2010 Census data. In addition, county level median income data was found from the American Community Survey’s 5-year averages, 2006-2010.

For the political data in question, the paper relies on the research conducted by Dr. Mark Newman of the University of Michigan’s Center for the Study of Complex Systems.⁹ It is from his work that the statistics on the number of people who voted for President Barack Obama, Senator John McCain, and “other” are derived. In order to test the possibility that how many people total voted Democrat in a given county matters less than the overall political climate, a variable for the percent of people who voted for President Obama has also been added.¹⁰ The idea of using statistics from the 2010 election, which occurred at precisely the time that the other data in question was being collected was briefly considered again. Ultimately the decision was made to use the 2008 data instead. While the 2010 election may in certain ways be a more accurate predictor of the political affiliations at that moment in time, a problem arose in that the 2010 election did not see any national candidates, and therefore had no single standard with which to judge the political affiliation of a given population. That is to say, New Hampshire and Mississippi may both elect a Republican to the Senate, but that does not mean that they voted with equal degrees of conservatism, since New Hampshire tends to be considerably more moderate. This is evident in New Hampshire’s selection of Obama in 2008, while Mississippi, a far more conservative state, went strongly for McCain. It is also true that there are better indicators of political affiliation than the somewhat binary “did you vote for Obama or not?” test being used in this paper, such as the Cook Partisan Voting Index (PVI). The choice to use the number of Obama voters, rather than the PVI, is based upon the fact that the Census data used for this study is organized on a county basis, while the PVI is organized along congressional district lines. Although the PVI would provide a better indicator of political affiliation, assembling data based around congressional district lines would be an arduous task for the purposes of this paper.

By far the most challenging data collection process was that of assembling a list of craft breweries. One key distinction needs to be made here, because of the unique nature of this paper relative to others on the subject. That distinction is the breweries being counted in this study. The world of beer is full of classifications, and the production side of it is no different. The Brewers Association often acts as the ultimate authority on craft beer classification, and provides a helpful set of classifications (reproduced below):

• Microbrewery: A brewery that produces less than 15,000 barrels (17,600 hectoliters) of beer per year with 75% or more of its beer sold off-site. Microbreweries sell to the public by one or more of the following methods: the traditional three-tier system (brewer to wholesaler to retailer to consumer); the two-tier system (brewer acting as wholesaler to retailer to consumer); and directly to the consumer through carryouts and/or on-site tap-room or restaurant sales.
• Brewpub: A restaurant-brewery that sells 25% or more of its beer on site. The beer is brewed primarily for sale in the restaurant and bar. The beer is often dispensed directly from the brewery’s storage tanks. Where allowed by law, brewpubs often sell beer “to go” and /or distribute to off site accounts. Note: BA re-categorizes a company as a microbrewery if its off-site (distributed) beer sales exceed 75%.
• Contract Brewing Company: A business that hires another brewery to produce its beer. It can also be a brewery that hires another brewery to produce additional beer. The contract brewing company handles marketing, sales, and distribution of its beer, while generally leaving the brewing and packaging to its producer-brewery (which, confusingly, is also sometimes referred to as a contract brewery).
• Regional Brewery: A brewery with an annual beer production of between 15,000 and 6,000,000 barrels.
• Regional Craft Brewery: An independent regional brewery who has either an all malt flagship or has at least 50% of it’s [sic] volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.
• Large Brewery: A brewery with an annual beer production over 6,000,000 barrels (Brewers Association).

These standards roughly correlate with those that the Brewing News Publications use to classify the breweries on their list, with a couple clarifications. A company that brews beer for a Contract Brewing Company (Pabst being the most prominent of its kind) is referred to as a Contract Brewery. While some of these breweries may, in fact, brew beer for craft breweries, the decision was made to prevent double counting breweries. Furthermore, the narrative of a contract brewery, whose sole purpose is to make beer because somebody else’s recipe has a demand for it, does not seem to provide much insight into the questions being explored here. As such, contract breweries have been omitted from the analysis.

Unfortunately, the Brewing News publications do not distinguish between a Regional Brewery that produces craft beer and one that does not. In the initial round of data entry, a number of Regional Breweries were added to the list which, upon further inspection were discovered to not be craft breweries and were therefore removed. A more complicated problem arose when investigating these breweries, in that a number of them, in addition to producing their own, well respected craft beer, have, in fact, done good deal of contract brewing. This was particularly true for Regional Breweries in the Great Lakes/Rust Belt region. Presumably the cause of at least some of this was old, large brewing companies with huge facilities that over time lost market share to multinational conglomerates and began brewing some beer for said conglomerates in order to cover some of their fixed costs. For the purposes of this paper, however, the decision was made that if the main beer brewed at that facility was, in fact, a craft beer, then they would be included. It seems important to make that fact very clear, because a closer inspection by regional beer experts could find that some breweries within the sample should not be considered Regional Craft Breweries.

Another major omission from the dataset was Brewpubs. This is in some ways unfortunate, because Brewpubs are very much a part of brewing culture. In fact, as of 2011, they make up 1,063 of the total 1,938 breweries in the United States (Brewers Association), and their omission means that the dataset being used for this paper is considerably different than that being used in most other works on this subject. There are three reasons for this. The first reason is that Brewpubs do not just offer beer. They are often interesting, enjoyable restaurants or clubs in their own right. A restaurant may brew their own beer, but that is in fact a somewhat small part of their overall business plan. With a sample size of this magnitude, it is difficult to tell which ones are legitimately breweries in their own right versus restaurants that happen to brew a keg or two of ale for customers who happen to be interested. Second, many brewpubs are franchises, and there was some uneasiness about whether or not counting the same brewery two or three different times in the same area was fair. The most important reason, however, is that the focus of this paper is on whether the behavior exhibited by craft breweries should be described as industry behavior, like in the case of their larger competitors, or as firm behavior, like in the case of a restaurant. Many brewpubs are, in fact, restaurants, and none sell any more than 25% of their beer off premise. It stands to reason that all brewpubs display almost entirely firm-like behavior. The concern is that the inclusion of one thousand or so of them in the sample would mean that even if the behavior of the microbreweries and regional craft breweries in the sample displayed entirely industry-like behavior, the findings of this paper would be more or less in line with the hypothesis.¹¹

Although new editions of the Brewing News magazine are published every two months, this study uses their respective October and November 2010 editions in order to better fit the demographic information given by the 2010 census.

Other than individual breweries, the most serious omissions of data in the sample of this paper comes in the form of geographical regions. Due to the fact that Puerto Rico did not vote for presidential electors in the 2008 election, and given that Dr. Newman’s data on Alaska was somewhat difficult to work with,¹² the decision was made to constrain the sample to the continental United States. In retrospect, this may have been somewhat unfair to Hawaii, which suffered neither of these problems; however, it, as well as several other states ran into trouble when it came to the Brewery Publications. While the Brewing News does cover the majority of the United States, several states are omitted. In some cases, it is difficult to tell whether this is because the authors of the publication are truly unaware of any brewing activity in these states or whether they simply do not have any staff interested in writing about those regions. In addition to Hawaii, there is no information in the publications about brewery activity in Iowa, Kansas, Kentucky, Missouri, Nebraska, North Dakota, or South Dakota. Some of these states may truly have no craft beer presence, but others, such as Missouri, are known to have had multiple craft breweries at the time the maps were published (Kressman). For this reason, any state not featured in the map is simply removed from the Sample, with no assumption made about how many breweries are in those locations. There is another somewhat drastic and noteworthy discrepancy between the data and the figures from the Brewers Association when it comes to the number of breweries active during that period. Provided that no mistakes were made in the manual entry of the data, the Brewing News publications list 457 microbreweries and regional craft breweries in the sample in the period preceding their October-November edition. This is substantially less than the 615 microbreweries and 81 regional craft breweries said to be open during this period by Brewers Association Statistics (Brewers Association), which totals to 696 craft breweries. It is probably worthwhile to consider the nature of these 239 missing breweries.

One of the more obvious solutions is that there are actually a number of breweries located in the omitted states. If those breweries were located in those omitted states, then the sample that excludes those states should still give satisfactory results for that area. It would be concerning however if it is assumed that there were no craft breweries in all the counties within the omitted states. This is particularly true because, excluding Hawaii, the states omitted are all Midwestern states whose many counties share a lot of demographic traits such as being overwhelmingly white, politically conservative, etc. So if, unbeknownst to the people publishing Brewing News, there was a craft beer hot spot in rural Kansas, that could have serious implications for the study.

An alternative theory regarding the missing data concerns the methods of data collection employed by Brewing News, who never explicitly state precisely how they get their information. No data source is explicitly stated, but each map does list contact information for business owners interested in having their businesses listed on the map.¹³ This leads to the possibility that the periodical’s sample of breweries is less than perfect, so much so that 239 breweries across the United States were not included. Whether or not this would be an issue from a methodological point of view is dependent upon whether or not there is a trend among brewers who did not choose to be listed in the publication, or whether those who wanted to be listed were a random sampling. Obviously, a sample of over half of the breweries in the nation, if randomly selected, should be sufficient to test. However, it could be the case that the Brewing News was not widely distributed or well known in certain areas that had a great deal of breweries in them. Denver County, CO, for instance, has a surprisingly small number of breweries given its reputation as somewhat of a hub of craft beer (Frosch), although the low number could also be easily explained by the omitted Brewpubs, as described above.

Finally, it is possible that the Brewers Association’s figure is somehow inflated. It should be noted that, like most of their publications, their statistics on the number of breweries does not include any data source (Brewers Association).¹⁴ Given the small nature of many of these breweries, it may be difficult for a centrally located trade organization such as the Brewers Association to adequately capture certain important facts about breweries, such as whether or not they are actually up and running or whether, while defining themselves as a microbrewery, they are in fact just a brewpub. The same could be said for self-described regional craft breweries that are, in fact, only microbreweries, as the list collected for this paper lists 20 of them, short of the 81 listed by the Brewers Association. These problems merit further research. However, it should be noted that the Brewing News maps were used as a data source only after the Brewers Association did not respond to a request for their data. Were those data made available in the future, it would certainly merit a follow-up study.

⁹ Dr. Newman has produced an excel sheet (as part of his working on a larger, more interesting project about maps of election results) that details the election results in every county in every US state.

¹⁰ Calculated as (Obama/(McCain+Obama+Other)x100.

¹¹ A suggestion made by Professor Gerald Friedman during the defense of this thesis is that brewpubs, while not included as breweries for the sake of the analysis, could be a useful variable in a regression model, as they demonstrate a clear local demand for craft beer. While, as noted above, many brewpubs are much more functionally similar to restaurants than to pubs, or make most of their alcohol sales on beverages other than their own, and thus would not necessarily demonstrate a high demand for craft beer, the point is taken. This would be a very interesting variable to include in future studies on this topic.

¹² The data were organized along metropolitan and micropolitan statistical areas, not by county.

¹³ The magazine does not just cover breweries, but also craft beer stores, bars, and home brew supply shops.

¹⁴ In the time since this paper was written, the Brewers Association’s website has added more data on craft breweries which may have been helpful.

Most of the problems that should be tested for the purposes of this study have been addressed previously, but for the sake of clarity they will be repeated here. The first problem is that there is a controversy regarding whether the best age-related variable to test would be number of 25-34 year olds or median age, so this paper elects to test both. There is a perception that craft beer, more so than other types of beer, is a commodity enjoyed mostly by white people. However it has been suggested that it is the higher cost of craft beer, and the concentration of wealth in the hands of whites, that causes this to be the case. Thus, the effect of the number of white non-Hispanics in a county on the presence of craft breweries will be tested with and without controlling for wealth. Regressions will be run without the Midwestern states not covered by the Brewing News publication as it is not clear whether or not it is fair to assume that, because they are not included in the Brewing News maps, there are no craft breweries in those states.

One concern that deserves addressing is that breweries are not uniform in output. An area with a very high demand for craft beer could be just as easily supplied by one regional craft brewery supplying 150,000 barrels of beer annually as twenty microbreweries each supplying 7,500 barrels. One reason that some may not view this as a concern is that craft beer consumers are considered to be nowhere near as loyal to a particular brand as drinkers of more conventional American beers. The classical argument between the “Bud man” and a “Coors man” has no real craft beer parallel, since that sort of branding has yet to really catch hold in the craft beer community. Tom McCormick, writing for Probrewer.com, a beer industry resource site, states that “Most craft beer consumers have a range of 5-10 beer brands that they buy on a consistent and repetitive basis. Two or three of these brands are favorites, which typically capture about 50- 60% of their beer purchases.” The assumption, then, is that if a community had a large demand for beer and only one, very large craft brewery, it would probably be getting a good deal of the beer it consumes from other areas, and exporting a good deal of the beer it produces to other counties, and there would be incentive for other breweries to move in. A possible counterargument to this would be that large breweries may be able to diversify the number of different beers produced, thus keeping consumers from losing interest too quickly. Whether or not that is the case remains to be seen. However, in order to capture the possibility that large breweries could crowd out smaller ones in certain areas, another set of regressions will be run, with every regional brewery inflated to count for more than one brewery. Specifically, every one regional (larger) brewery will be assigned the weight of 4 microbreweries. The number 4 was based on the ratio between the output of Dogfish Head Brewery, as reported in a Senate press release (U.S. Senator Chris Coons of Delaware), estimated at 125,000 barrels, divided by 15,000, the minimum amount of beer that a craft brewery can produce while still retaining the “microbrewery” label (8.3) and then rounding down and dividing by two, assuming that less than half of most beer produced by a regional craft brewery is consumed in that county. Dogfish Head was chosen because of the availability of the data and their size, which falls somewhere between the very largest Regional Breweries, such as Sam Adams, and the smaller ones like Smuttynose, which up until recently was classified as a Microbrewery. This weighting system is obviously far from perfect, but it serves to test the possibility that results will appear different if larger craft breweries are weighted for their additional output. If the data were available, an ideal way to test this would be to actually weight every individual brewery by its output. Since those data were not available, this weaker method will be used instead.

Finally, it is fair to note that county level data may not be the most ideal geographic estimator for this purpose, particularly in certain areas of the Northeast, where there are many small, densely populated counties whose residents may move between counties on a regular basis. In Massachusetts, for instance, Greater Boston and the Pioneer Valley would probably be much more useful geographies than Suffolk and Hampshire counties, respectively. The use of Metropolitan Statistical Areas was ruled out on the basis that it would specifically exclude from the sample any brewery located in a rural area.

Many of the findings from the data collection were fairly unsurprising. There was a good deal of concentration in the industry across the Northeast and the West Coast and less concentration in the Midwest and South. There were, however, substantially more brewers in the Southwest and the Great Lakes region than was initially expected. The map above shows the lack of even distribution across the states, but it also highlights the validity of the many weaknesses of the study. It seems prevalent that counties containing several breweries tend to be adjacent to at least one other county also containing at least one brewery. Whatever the reason for the clustering effect observed in the map, this is somewhat concerning evidence that a county is, in fact, not an ideal unit for analyzing an area’s economic and demographic makeup. The map also demonstrates to the previously unaware the disparity in the size of American counties. The list of breweries, attached as Appendix 2, specifically indicates the city or town in which each of these breweries is located. In certain cases, such as the massive Coconino County, Arizona, it is difficult to tell if the breweries are within close proximity of one another in a single area (in the case of Coconino County, perhaps Flagstaff) or are evenly distributed across an area larger than all of Massachusetts. All the statistical regressions in this study do not distinguish between these possibilities, which could be a problem.

Four US counties have over five craft breweries in them. They are, in order, Boulder County, Colorado¹⁵ with 6, Cumberland County, Maine (the Portland area) with 8, San Diego County, California, with 12, and at the top with 14, probably not to many people’s surprise, is King County, Washington (Seattle). Notably missing are places like Denver County, Colorado, Suffolk County, Massachusetts, and Cook County, Illinois. While a review of the Brewing News maps being used would suggest that those areas contain clusters of breweries, a further examination reveals that almost all of those breweries are in fact Brewpubs, and thus not relevant for this study.

The West Coast, Northeast, and Rocky Mountain regions showed little surprising data, with most of the nation’s breweries clustered close to one of the oceans. The patterns of breweries appearing especially in these regions points to the idea that if metro areas were used instead of counties, more informative statistics may emerge. Around most counties with a high concentration of breweries, there are a handful of other counties with less. It is probably not unreasonable to assume that in these counties, which are often largely suburbs surrounding a dense urban core, the demand for beer produced in that county includes the populous areas not far away, not just the county in which they reside. For now, this is a problem with which we must contend.

One area which yielded more breweries than expected is the Great Lakes region, especially Michigan, Indiana and Wisconsin. While the area is well known for having a culture of beer drinking, it is generally associated with the larger brewers such as Miller in Milwaukee and there are a limited number of craft beers from the upper Midwest featured in a typical Northeastern liquor store. There could be several explanations for this. This is probably just a matter of output, with many of these breweries being smaller and relying on local brand loyalty to support itself. This would explain one trend, which is that these breweries seem to be far less concentrated in urban areas than elsewhere in the country. It should also be said that, as noted above, there were many breweries on the map listed as “microbreweries” or “regional craft breweries” and with a few exceptions, they are treated as such the purposes of this study. It is worth considering that some of these breweries may be regional producers of certain types of non-craft beer whose distribution does not extend beyond the Upper Midwest.

The South is by far the most sparse area covered here when it comes to breweries but a few counties do stand out, particularly Buncombe County, North Carolina (Asheville) with 5 breweries and Travis County, Texas (Austin) with 4. Travis County is no surprise using the hypothesis examined here; it is widely considered to be a young, hip city. Buncombe County, while not too far off from the demographic projection (it is overwhelmingly white, voted strongly for Obama, and has a population big enough to support a couple of breweries), comes as a bit of a surprise, as Asheville doesn’t come up much in discussion about great places for craft beer. Other than those, most counties in the South have at most one brewery. A few exceptions to this are Wake County, North Carolina (Raleigh), with 3, and Fulton County, Georgia (Atlanta), St. Tammany Parish, Louisiana (Covington, in the New Orleans Metro Area), and Pulaski County, Arkansas (Little Rock), each with 2. Mississippi ranks as the least brewery-intensive state covered, with only one microbrewery in Hancock County.

Overall, the Southwest does far better than the Southeast. This is curious from a traditional, input-oriented view on regional economics as, were access to inputs the most important thing for breweries, the availability of water would likely be a hindrance. In that region, the county containing the most breweries is Maricopa County, Arizona (the Phoenix metro area). While Phoenix has not attracted the sort of attention that San Diego or Seattle does when it comes to brewing beer, it is a large metropolitan area with a good deal of young professionals. It is therefore not shocking that the area has a craft beer presence. Maricopa County also stands out in being tied with Orange County, California for the most brewery-intensive county to be won by McCain in 2008.¹⁶ Liberalism seems to be a strong trend among brewery intensive counties with some caveats. Overall, 107 of the 288 counties which at least one microbrewery makes a home, voted for McCain. However, out of the counties containing three or more breweries, only 7 of the 37 went for McCain.

As far as income goes, it is certainly true that none of the most prominent craft beer areas is suffering particularly badly. However, it is also true that very few of them are huge outliers when it comes to wealth. For counties with three or more breweries, the range of median income is between $40,089.00 In Humboldt County, California, and $74,344.00 in Orange County, California. Most of the results in between fall somewhere between the high 40 and low 60 thousands, far from impoverished, but also curious considering the claim made earlier in the paper that craft beer is driven in large part by individuals earning over $100,000. Part of this may be explained by the weaknesses of median income as a statistic. For example, there are plenty of people in Orange County, California making considerably more than $74,344. Perhaps it is they that are supporting the craft beer industry.¹⁷

¹⁵ Boulder is the base of operations for the Brewers Association.

¹⁶ That McCain had an advantage in being Arizona’s Senator is worth noting, but with Obama winning only 44% of the vote in this very large area, it seems fair to assume that the results would have been similar had Obama run against an otherwise similar non-Arizonan.

¹⁷ It’s worth mentioning that prices also vary from region to region. A more complete analysis would incorporate a regional price index in order to capture real income.

Even reviewing the map, there are many different ways that the data could be interpreted. To shed some light on this, a multiple regressions model was used. While the information was initially compiled to use percentages a review of the findings leads to the belief that it was wiser to deal with values. The reason for this is that the study intended to test the idea that local demand was driving the location choices of craft breweries. For that purpose the number of people with a certain characteristic made more sense as an estimator of local demand than the percent. For instance, in the case of liberalism as an indicator, an area with only a few thousand people, all of whom voted for Obama, would probably still have less demand for craft beer than an area where several hundred thousand voted for Obama, even if those several hundred thousand are a minority of the population. However, given the huge swings of variation in all of these demographics, the natural logs of these variables are used instead of the numbers themselves. The intuition here is that a brewery, when considering location, would very much prefer a county of 100,000 over a county of 50,000, but be fairly indifferent between a county of 1,050,000 and a county of 1,000,000. Whether or not this assumption is true could be an interesting subject for further research.

The set of regressions run here is done four times. In doing so, it tests the same coefficients when counting number of breweries, with and without weighting for output. It also considers one sample with the entire continental US, assuming that any state not covered by the Brewing News did not have any Craft Breweries at that point, and another that only features the states that the Brewing News covers. From now on, for the sake of simplicity, the set using the unweighted breweries and only the counties from the Brewing News will be considered the main regression model, the set with the same counties but with breweries weighted for output the weighted main regression model, the unweighted set with all counties included the secondary regression model, and the weighted sample of the same to be the weighted secondary regression model.

For each of these sets of data, the basic model being used tests either breweries or weighted breweries against the natural log of the number of 25 to 34 year olds in the county, the natural log of the number of white people living in the county, the natural log of the county’s median income, and the natural log of the number of votes for Obama in 2008. From here, a second regression is done, without controlling for median income. The point of interest here is what demographic trends, particularly with regards to race, can actually be explained by trends in median income. A third test replaces the log of the white population with the log of total population. This is another attempt to gain some insight into just how much the craft beer market is driven by the local white population. Finally, a fourth regression replaces the log of the number of 25 to 34 year olds with the median age, to consider the theory that it is not hip culture-creators, but baby boomers with increasingly fine tastes, that drives the craft beer sector. The results are displayed and described below.

The most important thing to note about this table is the relative strengths of the coefficients. The number of 25-34 year olds, which probably received the most amount of attention from the marketing literature, proves to be insignificant at even a 5% level in two of the three models in which it was featured. The one where it is significant is when the white population coefficient is swapped out for the total population coefficient, at which point it becomes significant at a 5% level. This seems to suggest that the young people in highly populated (urban) areas are somewhat relevant, regardless of the racial makeup of the areas they inhabit. The use of median age as an alternative coefficient does not yield any more meaningful results.

The white population seems to do even more poorly, being statistically insignificant in all three of the results where it is run. Its alternative, total population, is significant at a 5% level, but actually shows a negative coefficient once income, age, and liberalism have been controlled for. While not particularly immense or significant, there is a change in the sign of the white population coefficient when income is not controlled for.

Overall, the two coefficients that seem to be strong in the models are median income and number of Obama voters. In all the models that feature both, median income tends to be slightly stronger as a coefficient, while Obama voters are consistently the most statistically significant coefficient.

Table 1.1: Main Regression Results

When weight is added for output, nothing really changes in the results. The coefficients become slightly more substantial and the R squared value for the regression falls slightly. No overall trends shifted too much.

As for the secondary regressions, the inclusion of all the Midwestern counties seems to weaken the strength of the coefficients, as well as the strength of the R squared terms. This is somewhat intuitive, since their inclusion enters several counties into the regression that should, by the model’s predictions, have breweries in them, but are said to have none. One interesting trend to note is that, including these counties, the median age coefficient, when tested, is seen as statistically significant at some level. The relation between the unweighted and weighted secondary regression is very similar to the relationship between the unweighted and weighted main regressions.

Table 1.2: Weighted Main Regression Results

Table 1.3: Unweighted Secondary Regression Results

Table 1.4: Weighted Secondary Regression Results

The R squared values of any of these models is between .13 and .16. This suggests that, despite the robust nature of some of the coefficients, there is definitely more going on here than what is captured in the regressions. Some explanations for this are offered in the following pages, but it seems relevant to comment on what it is that the results do show. First of all, controlling for other factors, the two most important factors in every scenario are median income and liberalism. Age and race, controlling for these factors, are negligible in the main regression, and only slightly more important in the secondary regression. If these demographics are in fact the groups driving craft beer growth, then it suggests that those covering the craft beer market may be focused on the wrong factors. Most importantly, it seems that the characterization of craft beer as a hip, young trend may be in fact spurious. If liberalism is controlled for, the 25-34 year old population does not seem to matter much more than any other population. This could be an easy trend to miss, since this demographic is perceived as being more liberal, but it implies that the characterization of craft beer market as a trend may be unfair. Much of the interest in craft beer may come from a respect for small, artisan businessmen competing with enormous multinational conglomerates and carving out a market share through careful craftsmanship and quality ingredients.

So while the demographic makeup of the area may have some effect on the location of craft breweries, it only describes some small part of that trend. The question, then, that must conclude this paper, is what other factors are at play here? Or, alternatively, what went wrong in the study that wasn’t accounted for? For that, a few possible suggestions are suggested below.

It stands to reason that craft breweries, or at least many of them, do act like industries. Perhaps many breweries start out attempting to capture a national market rather than the local one and are comfortable taking a short term loss to eventually reach that point. If they assume that their product will be competitive on a national level, then they are going to locate in the place that makes the most sense from a business perspective. It is worth noting that places known for having a substantial amount of fresh water at their disposal, such as Maine, Washington, and Oregon, do also feature a great deal of craft breweries. Other factors to consider would be the local availability of hops and barley or the price of the necessary capital (particularly commercial real estate). A study of cost factors would be difficult and would require a thorough survey of brewers to be accurate. After all, even if a brewer lives next to a hops farm in Washington, that does not mean that they use local hops. They may brew with hops shipped from Germany of the Czech Republic. While many brewers may like the idea of buying local inputs, they probably will not do so if said inputs are not going to produce a beer that they can stand behind.

One possible explanation for at least some of the variation between areas may come from the fact that laws on beer manufacturing vary heavily between areas. This means that certain areas could have a conducive environment for starting a brewery, and indeed some breweries may open in these areas. However, they may ultimately have a great deal of trouble growing under the burden of various state and local ordinances and may ultimately close. This has some weight to it at least as far as that there are still dry counties in many parts of the Midwest and Southeast, where beer would obviously not be brewed. While the dry counties example may not be 100% relevant since many of those counties also do not have the population to sustain many breweries, other legal barriers, such as franchise and licensing laws, could be relevant. This is something that could lead to some interesting future research, but efforts would have to be made to control for pre-existing cultural views on alcohol. While cultural views would serve to shape legislation, they would also affect consumption patterns even in the absence of legal barriers.

As mentioned before, data regarding just how many people the breweries in the sample employ was not available. Because of that, breweries as large as Sam Adams are considered to be just as important as the smallest microbreweries to a local economy. The rationale here was that once regional support has allowed the firm to grow large enough, it will no longer rely on local drinkers, and new entrants can enter the market without any cannibalization effect. Marketing literature seems to suggest that most craft beer drinkers are not loyal to only one brand, but rather enjoy a number of different beers, making this a somewhat safe assumption. However, perhaps it is not hard to identify some possible exceptions. To go back to the example of Sam Adams, when brewpubs are not included, Suffolk County, MA has a peculiarly low amount of craft breweries given the demographics of the county. Perhaps part of the reason for this is that its residents are really so enamored with Sam Adams and Harpoon that it would be unwise for a new brewer to expect any local support when opening up a new brewery in that town. Perhaps, in some cases, a single craft brewery can actually control the region’s craft beer market through brand loyalty. There are probably better explanations to the Suffolk County problem. Given the density of Boston and the adjacent cities, it stands to reason that locating a manufacturing operation in Suffolk County could be very expensive. Moreover, there are a number of considerably more inexpensive locations where one would still consider to be part of Greater Boston.¹⁸ It is not entirely unreasonable to believe that larger breweries may compete with new entrants for their local market, even long after they have established themselves as exporters.

¹⁸ Again, counties can be a pretty weak unit for measuring regional economies.

It is certainly worth mentioning that there are other factors that should be included in this model but were not because either they were difficult to quantify or because they were not available on a county-level breakdown. Many of these factors could have some part in making for a more significant regression. They include, but are not limited to, cultural and religious attitudes surrounding drinking, preferences in alcohol,¹⁹ attitudes towards luxury and inferior goods,²⁰ and specific ethnic makeup.²¹ In addition, components like race, age groups and political affiliation that were previously mentioned could be expanded to include the income levels within those categories. For instance, if the median income in an area is relatively high, and we assume income to be important, but we also assume liberalism to be important, and for whatever reason all the Obama supporters in a county were all very poor, then perhaps that would be a reason for less breweries occupying a certain area than would otherwise be expected.

¹⁹ Some areas may prefer cocktails or wine over beer, regardless of its quality.

²⁰ Some people in the “target demographic” clearly prefer cheaper macrobeer for its “hipster” credibility.

²¹ Some people may come from cultures with their own unique drinks or drinking habits that have little interest in what it is that American companies are brewing.

This study was a first step in looking at an industry that probably deserves more attention than it is getting. The industry has exploded in the last few years and there is a sentiment that in some ways it is an indicator of some major shifts that will affect not just the beer industry, but all of manufacturing. Globalization has rendered America’s long standing strategy of producing low quality, cheap goods somewhat toothless, and perhaps, as David Sirota suggests in his piece “Can Beer Save America?” in Salon, American brewers will have to move into high quality, higher cost, highly differentiated product markets to survive (Sirota).

To this end, it seems important to discuss what factors are driving growth in these new, high-quality sectors. The marketing literature on craft beer suggests that the growth is due to craft beer becoming a new fad among young, hip, affluent individuals. For the macroeconomy, this has certain connotations. If this is a trend or a fad, then the market is at the mercy of the volatile consumption patterns of the youth. It suggests that the sector should not be taken much more seriously than the developers of the latest social media app. They may be getting some attention today, but in the long run they will not be remembered and their growth will be meaningless to the economy as a whole.

The findings of this paper seem to suggest that this may not be the case, because the marketing literature up to this point may be looking at the craft beer phenomena in the wrong way. Craft beer does seem to be responsive, to some extent, to certain regional factors, but they are not quite the factors that the marketing material would have predicted. Breweries seem to pop up where there is a good deal of wealth and demand for quality. Once wealth is controlled for, the race factor loses all statistical significance. It is not that craft beer is necessarily a market driven entirely by the consumption of white people as much as it is a costly, high quality good. The perception that it is a commodity aimed at white people stems from a failure to account for the unequal distributions of income across racial lines. The same can be said of age and liberalism. The regressions in this paper seem to suggest that it is not the youth of an area that drives growth in the sector, but the overall liberalism of the area. The implications of this observation are that growth in the craft beer sector may not be a fad subject to the whims of the trendy. Instead, they are consequence in a rise in demand for high quality products among the affluent, as well as products made by creative, enterprising entrepreneurs rather than colossal multinationals among more progressive individuals. These are not fads, they are trends that are likely to hold, and, possibly, to grow. They are indicators that perhaps academics, businessmen, and policymakers should be paying more attention to what is happening in the craft beer sector and applying its lessons to other sectors. Hopefully, to that end, this paper can serve as a starting point upon which more sophisticated research can be carried out. There is lot of work that needs to be done on this subject, but there is also potentially a lot that could be gained from those efforts.

[1] Adams, Steve. 2009. “Craft beer sales on the rise.” The Patriot Ledger, accessed 4 Apr. 2012. www.patriotledger.com/business/x1899319866/Craftbeer-sales-on-the-rise.

[2] Frosch, Dan. 2012. “Craft Brewing Finds a Welcoming Atmosphere.” The New York Times, Accessed 5 Apr. 2012. http://www.nytimes.com/2012/03/03/us/craft-brewingfinds-a-welcoming-atmosphere.html.

[3] Gosselin, Maia Merrill. 2010. “The New Beer Consumer, Millennials: Hip to Sip.” Nightclub.com. Accessed 4 Apr. 2012. http://www.nightclub.com/beer/beertrends/hip-sip.

[4] “In visit to Dogfish Head Brewery, Senator Coons trumpets investments in Delaware’s small businesses.” Press release, Sen. Chris Coons. 8 Aug. 2011. Accessed 5 Apr. 2012. http://www.coons.senate.gov/newsroom/releases/release/in-visit-to-dogfish-head-brewery-senator-coons-trumpetsinvestments-in-delawares-small-businesses.

[5] Kressman, Jeremy. 2010. “St. Louis enjoys a craft beer revival.” Gadling. Accessed 11 Apr. 2012. http://www.gadling.com/2010/06/29/st-louis-enjoysa-craft-beer-revival.

[6] Levitt, Craig. 1997. “Another Round.” Discount Merchandiser 37.3. Accessed 4 Apr. 2012.

[7] McCormick, Tom. ND. “Seven steps of brand building.” ProBrewer.com. Accessed 5 Apr. 2012. http://www.probrewer.com/resources/library/ brand building.php.

[8] Sirota, David. 2012. “Can beer save America?” Salon.com. Accessed 10 May 2012. http://www.salon.com/2012/05/07/can_beer_save_america.

[9] Snyder Bulik, Beth. 2009. “What Your Taste in Beer Says About You.” Advertising Age. Accessed 4 Apr. 2012. http://adage.com/article/news/psychographics-tastebeer/140106.

[10] Spurry, Steve. 1999. “Demographic Influence on the U.S. Demand for Beer.” Issues In Political Economy 8 : Accessed 4 Apr. 2012.