Craft brewers and their customers have transformed global beer markets over the past two decades. They ended a century of consolidation of breweries, resulting in the domination of a few global multinationals and the homogenization of beer. They started small and isolated, but ultimately transformed a global industry. Their counter-revolution against the domination of the macrobrewers and their uniform beer styles has totally transformed the global beer scene. Elzinga et al. (Chap. 2) write that “the dramatic consolidation that took place in the macro sector of the industry … and the equally dramatic increase in the number of craft brewers … combined illustrate one of the most radical structural transformations to take place in any American industry.”

This book documents and explains this transformation. In this first chapter we summarize key insights that derive from a comparative analysis of craft beer developments and beer industry transformation in the various countries. The chapter starts with a discussion of the definition of craft beer (and microbreweries). We then first document and explain the consolidation in the traditional brewing industry which preceded the craft revolution, and afterwards document and compare when the craft beer movements started in the various countries, and how they have evolved. In the next chapters we discuss the role of changes in demand, the role of pioneers in craft brewing, what factors determined the re-emergence of small brewers in a market dominated by large companies, and how they grew from small to larger. Some of the factors we discuss refer to the role of information, networks, capital, and technology markets. The last part of the chapter concentrates on the role of governments, which have influenced the craft beer market through regulations, and on the reaction of the macrobrewers to the growth of the craft beer market.

Craft: an activity involving skill in making things by hand. (Oxford Dictionary)

The terms “craft brewery,” “artisanal brewery,” “microbrewery,” “independent brewery,” “specialty brewery,” and “local brewery” are sometimes used to identify breweries which “recently” started on a “small” scale to brew “different” types of beer, which distinguishes them from the mass-produced beer from larger breweries that often have been in business for more than a century and have survived the consolidation process of the twentieth century. In this book, most authors either use the term “craft beer” (emphasizing the type of beer and nature of the brewing process) or “microbrewery” (emphasizing the scale of the brewery). Given the diversities among countries and their different historical traditions in beer brewing, there is not a generally accepted definition for the term “craft brewery” or “microbrewery.”

Attempts at defining craft brewing have used criteria referring to ownership, production process, scale, age, and tradition. The American Brewers Association (ABA) defines a craft brewery as being “small,” “independent,” and “traditional.” Small refers to size (annual production of fewer than 6 million barrels). Independent refers to ownership (less than 25% owned or controlled by an alcohol industry member that is not itself a craft brewer). Traditional refers to the beer it produces (more than 50% of its beer derives its flavor from “traditional” or “innovative” brewing ingredients and their fermentation). Many brewery associations have similar definitions. In some countries the government has defined what craft beer is. For example, the Italian parliament has defined birra artigianale by the size of the brewery (less than 200,000 hl), the production process (“does not undergo pasteurization and micro-filtration”),¹ its ownership (independent of any other brewery), and its operating practice (not brewing under license) (Garavaglia in Chap. 9).

These differences in definition reflect differences in perspectives and local circumstances, and also difficulties in defining “craft beer.” In a way, it is easy to recognize a craft brewery when you see one, but it is more difficult to agree on whether some beers are “craft” or not, and thus how to define what a “craft brewery” or a “craft beer” is. In fact, any definition has its problems. One problem is that the craft beer market is changing rapidly and another the heterogeneity across countries.

For example, the concept of “tradition” and “innovation” is highly context specific. Many of the mass-produced beers, such as Budweiser or Stella Artois, have a centuries-old history (tradition) and are much older than many of the craft beers. What is “innovative” in some environments can be a standard (“traditional”) beer in other places. For example, the production of stout beer may have been innovative in a small Californian brewery in the 1990s, but probably not in Ireland, where Guinness dominates the beer market.

Also, the definitions of the scale of a “craft” or “micro”-brewery are related to the size of the country (beer market) in which they operate. For example, according to the definitions above, in Italy the maximum size is 200,000 hl (170,502 barrels), while in the USA it is 6 million barrels (7,038,000 hl). It is interesting to note that if the US size limit is considered, in many countries most mass brewers would satisfy this criterion.

A related issue has to do with the growth in craft brewing. Growth has come from an increase in the number of craft breweries, from the growth of individual craft breweries, and from the takeover of craft breweries by larger brewers. There are several examples that make classification difficult. For example, in the USA and Belgium (two countries where craft beers have boomed), there are several cases of breweries and beers that (a) started small with “traditional” or “innovative” beers (and thus satisfied all craft criteria); (b) then grew in size “beyond small” as demand grew with success; and (c) later were taken over by multinational mass brewers. ...