Apparently, last year’s House Bill 136 worked.
With that new state law allowing breweries to produce and sell more beer, news that Kentucky beer production growth leads the nation shouldn’t be a huge surprise, right?
A study by C+R Research (culled from numbers compiled by the Brewers Association, the national organization of craft brewers) shows Kentucky tied with New Jersey for first place in the U.S. in recent production growth, with 43 percent gains. Oklahoma is next at 39 percent growth, then North Carolina with 37, Virginia with 36 and New Hampshire with 33.
One must consider, however, that this growth covers just 2015 through 2018. Giving credit to the impressive growth in the Bluegrass runs deeper than just the effects of HB 136, which gave breweries the latitude to brew more beer and sell more beer at the source, without going through distribution channels. Concerted effort and momentum across the state seems to be more important than the raw numbers.
One consideration is that, prior to 2015, Kentucky was well behind other states, due in part to outdated laws, so the recorded growth may appear a bit deceiving — in other words, the Bluegrass has been playing catch-up for several years. It is nevertheless important in context, however, because it represents confidence in the state’s brewing industry, as evidenced by the presence of 64 breweries currently open. In mid-2016, that number stood at 31, said Derek Selznick, executive director of the Kentucky Guild of Brewers.
While Lexington and northern Kentucky were early leaders in Kentucky’s brewing surge, Louisville, Selznick said, is important to this overall growth, as well as continued growth going forward.
“Louisville itself has become kind of a beer and beverage destination across the country,” he said. “It’s something we’ve been gaining traction with and are known for. We’ve seen a number of breweries open in Louisville.”
Adam Watson, a co-owner of Against the Grain Brewery, has been instrumental in lobbying for improved laws pertaining to breweries. He agreed that the overall interest in craft beverages, such as bourbon, has contributed to brewing growth in Kentucky. For instance, he sees people coming into the downtown Against the Grain taproom carrying bags from Angel’s Envy distillery, which is across the street.
“I think what to me has defined growth of the craft beer industry in the state is kind of a holistic growth of all of the alcohol industry,” Watson said. “Drinkers have become more educated in what they want. We are simultaneously rising to meet that need and guiding them to what we think their next need will be.”
The confidence instilled, in part, by rise of the beverage industry as a whole – obviously including bourbon, the state beverage – has helped Kentucky see more and more breweries springing up around the state, from Alexandria to Paducah, and many more small-market breweries in the works, with Beaver Dam, London and Richmond, among others, soon getting breweries.
“It’s about really opening up the state,” Selznick said, adding that once people are exposed to the beer at their local brewery, they begin to expect it at local restaurants and package stores. That increases demand, which obviously drives production.
And, while HB 136 has been important to Kentucky’s growth, strides in less-publicized legislative changes over the past three years have been instrumental, including a change to allow breweries to represent themselves at festivals and other events. That puts a brewer or otherwise educated individual in charge of not just pouring but discussing the beer and brewery, and the resulting opportunity becomes an invaluable, face-to-face marketing tool.
Selznick also pointed out that camaraderie and collaboration among brewers around the state is an important and behind-the-scenes factor that shouldn’t be discounted in the state’s brewing growth.
“That sort of symbiosis in the industry is something that’s really, really special,” Selznick said.
Selznick said employment in Kentucky’s brewing industry has doubled over the last two-plus years to about 850 jobs, and he expected continued growth in all phases. He predicted that, by the end of 2019, Kentucky will have 75 to 80 total breweries and that overall production will have risen 20 to 30 percent over 2018.
And through all the growth, he maintained that, compared to national growth since craft beer began booming – the total number of breweries nationally in 2007 was 1,511, and that number is expected to top 8,000 by year’s end – Kentucky is still in catch-up mode – which only means more opportunity.
“Even Louisville is an undersaturated market when it comes to craft beer,” he said.
Drink up, folks. There’s more work to be done.
