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The Rise of the Craft Beer Franchise in America

by | Jun 26, 2023 | General

The craft beer franchise. It’s a darling industry that, in America, hits all the right notes, both in the taste buds and in the warm fuzzies. It has all the hallmarks of an underdog story, including the satisfying win for the little guy.

The small, entrepreneurial brewer goes up against Goliath corporations that produce light beers, pilsners, and stouts, in the end, the craft beer wins.

That’s a bit simplified, so let’s look at how the craft beer franchise has risen in popularity, and how it’s the perfect match to the beer garden franchise in the US.

A Brief History of Beer Industry Regulation at the Artisanal Beer Franchise Business

To understand how craft beer franchises have been such a win, we must first have some background on regulations throughout the 20th century that primed the industry for the craft beer revolution.

The Independent Beer business Early 1900s

Before Prohibition, the producers of alcohol subsidized or outright owned “tied houses,” bars and saloons “tied” to the distillers and brewers. As the storefront for the final product sold directly by the producers, the prices were advertised as the best available because they were basically “factory direct.”

This drove out the competition, and the tied houses made their profits on patrons imbibing too much and making poor decisions while gambling—the house always wins—or partaking in other vices. Tied houses were, essentially, vertical monopolies for the distillers and brewers.

After Prohibition ended, lawmakers were intent on preventing the reformation of these monopolies while promoting safe drinking at the same time. As a result, tied houses were abolished and regulations were introduced to separate producers, wholesalers, and retailers in the three-tier system we have today.

These are mainly state-by-state rules, but they’re common throughout the US, and make the alcohol industry deliberately inefficient to prevent monopolies.

The Specialty Beer Business at the Late 1900s

The modern day alcohol sector adds “thing of value” laws, which prevent beer producers from offering gifts or other enticements to procure favorable shelf space. Alcohol companies cannot guarantee prime real estate on shelves, thus leveling the playing field between giant corporations and small breweries. Small producers have room to flourish in grocery and liquor stores.

In the Reagan administration, some of the antitrust regulations and the enforcement thereof were relaxed, which is what led to the mergers that resulted in Anheuser-Busch InBev and MillerCoors in the latter half of the century.

The Birth of Craft Brewers and Independent Beer Franchises

But the legalization of home-brewing in 1978 unleashed a generation of beer makers who sought complex flavors that have outshone the likes of Budweiser, Miller, and Coors.

More recently, states have allowed small craft breweries to sell directly to consumers in taprooms and stores, cutting out the wholesalers—a move detractors shout about weakening the three-tier system. However, these allowances have given small brewers access to a fanbase they would otherwise have never made. The market does tend to regulate itself when these craft beer franchises get big.

Craft Beer Franchises are Unlikely Happy Stories

As recently as 2012, 90% of beer production in the US was attributed to two major conglomerates, MillerCoors and Anheuser-Busch InBev.

Now, we know from history that economists are not fans of the growth of conglomerates such as these; they truncate innovation and reduce the workforce.

Then, something unique and unforeseen happened: craft beer franchises.

Between 2008 and 2016, during the Great Recession, shipments from the big brewers fell while small brewery establishments expanded six times over. Americans were drinking less due to the economy, but they were paying more for a superior product.

Brewers were also coming out of the woodwork because these entrepreneurs were lacking jobs and other opportunities, so they embraced their craft beer business ideas.

Craft brewers also focused on underrepresented tastes, like hoppy India Pale Ales (IPAs), a highly prized segment of the craft beer franchise industry.

Craft beer became one of the happy stories in the US economy during the Great Recession.

5 Reasons the Craft Beer Franchise is Growing in Popularity

The craft beer franchise world has captured the American imagination, and it shows in sales growth. While the overall beer market in 2021 clocked a 1% growth marker, craft brews sales volume grew 8%, according to the Brewer’s Association, which is the industry’s primary trade association.

The reasons people give for why craft beer franchises are so popular are as varied as the opinions of the beers themselves. Several of the more popular reasons are as follows:

Better Ingredients – When you create any consumable with top notch ingredients, it’s going to taste better. It’s just a fact. And when you’re a small producer, you can be a little pickier.

More Alcohol-by-Volume – The more taste the beer has, the more alcohol content it can contain without upsetting the flavor balance. Craft brewing is a delicate process, but it also comes with more control, and that means the end result is more potent. Few craft beers fall below 7% ABV, and some can go as high as 30%.
Variety – Sour and tart, smoky, roasty and dark, sweet and malty, hoppy and bitter, fruity and spicy, or crisp and clean…. With a craft brew franchise, the beer world is the creator’s oyster, and there’s a bigger variety out there beer drinkers love.
Innovation – With all those varieties comes innovative ways to brew them, and Americans love a good how-to story. If at the end of it, we get a fine beer, so much the better!

Supporting Local – Many of these craft brew franchises stick to their regions, never venturing farther than a couple hundred miles. With the concern about carbon footprints, supporting local vendors, and infusing the local economies with cash, consumers are pleased to give local brewers their business. It makes us all feel good.

Craft Brews and Beer Gardens: The Franchise Match Made in Heaven

How is it that craft beer franchises match so well with beer gardens such as Dacha Beer Garden?

First, let’s look at what makes a beer garden a beer garden.

There’s an expectation of quality food, and Dacha Beer Garden franchises have that in spades. In fact, the sentiment that the food is out of control, it’s so good is one our guests often repeat to us. We offer a German-inspired selection that pairs nicely with craft beer, such as bratwurst, monster pretzels, and ribeye skewers.

Next, beer gardens have an unspoken expectation for higher alcohol-by-volume, which the craft beer selection delivers nicely. For patrons looking for something beyond beer, Dacha Beer Garden has a carefully curated selection of hard ciders, seltzers, wines, and cocktails that are just as flavorful as the craft beers.

Finally, beer gardens are relaxing places where people can mingle and be social, with their group and others. The long tables with picnic-style seating encourage groups to mix and meet, but without pressure, while smaller cocktail-height tables accommodate intimacy between couples looking for a cozy place to hang out.

Beer gardens are a breath of fresh air, given they’re outdoor spaces. Dacha Beer Garden is perfect all year long thanks to portable heaters in the winter and misters in the summer to keep guests comfortable no matter the time of year.

For astute entrepreneurs looking for craft beer franchise opportunities, a Dacha Beer Garden franchise is a perfect match, with our extensive craft beer selection that honors everything craft beers stand for and captures the essence of the beer garden.