1 Kagashicage

Beer Thesis Statement

In the past, I’ve written Thesis Corners on the biological importance of water and coffee’s link to national health, but today’s blog will focus on the industry changes happening to another beverage: beer. From a brewer’s standpoint, the beer business is a precious trade that stimulates one’s business savvy, scientific know-how, and an artistic expression to some degree. This week I had an email exchange with senior Eric Hopfenbeck, who tackled the entire craft brewing industry for his thesis. Read on to understand what classifies a craft brew, how this beer category is capturing market share from the Goliath beer companies, and a potential snapshot of the industry’s future. Next time you crack open a beer (if you’re over 21!), be sure to spit out these factoids to your drinking buddies.

HR:How is a craft brewer distinct from a macrobrewer? Who are the largest players in the craft brewing industry?

EH: Craft brewers are small and independent brewers who produce less than 6 million barrels of beer per year. Craft brewers typically focus on serving local communities and use innovation to create exciting new beers rather than relying on one or two flagship beers to drive their business. The top three largest players in the craft brewing industry are Boston Brewing Co., Sierra Nevada Brewing Co. and New Belgium Brewing Co., which are known for Samuel Adams, Sierra Nevada Pale Ale and Fat Tire respectively. On the other hand, macrobrewers such as MillerCoors and Anheuser-Busch produce over 6 million barrels per year and sell their product across the country with huge marketing campaigns.

HR:Why are craft brews making a comeback in the US?

EH: Consumer demand coupled with passionate brewers are the driving forces behind the return of craft beer. Consumers are loyal to their favorite local brewery and increasingly receptive to new beers altogether. Evidence shows they are willing to pay a little more money for a six pack of a new craft brew rather than the universal macrobrew.  On the production side, brewers are interested in experimenting with unconventional and exciting flavors of beers like Oatmeal Raisin Stouts or Double IPA’s.

HR:Can you give us an idea about the US’s total beer production? Who are the major players and how much are they undercut by craft brews?

EH: In terms of total market share there are two major players, Anheuser-Busch and MillerCoors, that represent 75% of the US beer industry. Craft brews are slowly expanding, earning 14% of market share in 2013, up from just 5% of the total market in 2012. I think it’s remarkable that there are thousands of craft brewers comprising a little over 10% while two giant corporations comprise over 50% of the industry. Average beer production in the United States has been steadily decreasing since the early 1990s. In 2012, the total beer production in the U.S. was about 196 million barrels.

HR: Let’s talk about beer consumption now. How has this changed in light of substitute alcohol categories like wine and ciders?

EH: According to a Gallup Poll in 2013, the US’s demand for beer has been decreasing since the early 1990s, while the demand for both wine and hard cider has increased. Though overall beer consumption has been declining, the craft beer category has continued to grow. Hard cider is perceived as a substitute product that is anticipated to have a large impact on the craft brewing industry in five to ten years.

HR:Your thesis mentions suspicion about the craft brewing industry becoming an “asset bubble”. Can you explain what this means?

EH: Essentially an asset bubble is when the price of something is higher than its true value due to overly optimistic expectations about the future. With regards to the craft brewing industry, the asset bubble does not quite fit what might be happening. Instead, I examined if a quantity bubble was forming. In other words, I investigated whether the market is becoming over-saturated with brewers and would cause exit from the market.

HR: So is a bubble forming?

EH: I concluded there isn’t a bubble forming in the market, as the growth in the industry has been steady but not unusually excessive. Since craft breweries are very locally focused, there are many places around the country where only a few breweries have opened up, such as in Mississippi and North Dakota. Some regions, such as the Seattle-Tacoma and Boulder-Denver area in Colorado, have many breweries and therefore, those markets may not be able to accommodate for more entry.

HR: What’s your favorite craft brew?

EH: As a beginner in the consumption of craft brews, I like trying new beers each time I purchase beer. Recently, I enjoyed the Quilter’s Irish Death from Iron Horse Brewery from Eastern Washington.

This entry was posted in Economics and tagged beer, brewing, craft, industry, macrobrew, microbrew by Holly Ross. Bookmark the permalink.

A thesis statement or controlling idea is the overriding point that your essay seeks to explain and/or defend.

Thesis statements can be clearly stated or implied, but in either case the reader must feel as if he/she understands clearly what that controlling idea is and how each word, phrase, sentence, and paragraph serves to support that idea. In addition, the reader needs to feel as if the idea being explained or defended is worth reading about--that is, the idea must have substance and not be something obvious or trivial. There's no point in writing an essay that says "Exercise is good for your heart." It's been said too many times to warrant another essay. Nor does a reader want to be dragged through three to five pages of text only to find out that the point was "Playing pool can be fun."

A thesis is a substantial, precise topic with a definite attitude or opinion attached to it. Here are some examples:

  • The Chisos Mountains are terrifyingly beautiful. (Precise subject: Chisos Mountains. Opinion: Terrifyingly beautiful.)
  • Wine is a more healthful drink than beer.
  • The U.S. government should draft women.
  • The abortion issue in our time has been likened to the slavery issue in the 1800s: emotions run high, and the citizenry is deeply divided over what is universally acknowledged to be more than a superficial issue. In fact, there is a more fundamental similarity: in both cases an important underlying issue is, "What is a human being?" (Robert Bissel, "A Calm Look at Abortion Arguments")
  • Nothing is more detrimental to the health of the American mind than television. This medium, unlike all others, encourages conformity, mindlessness, and sloth.
  • Television is a vast, phosphorescent Mississippi of the senses, on the banks of which one can soon lose one's judgement and eventually lose one's mind. The medium itself is depressing. The shuddering flouresent jelly of which it's made seems to corrode the eye of the spectator and soften his brain.
    (J. Miller, "Medium")
  • To accept passively an unjust system is to cooperate with that system; thereby the oppressed become as evil as the oppressor.
    (Dr. Martin Luther King, Jr.)

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