The Independent Craft Seal from Brewers Association – Does it Matter To You?

The Independent Craft Seal from Brewers Association – Does it Matter To You?

by Mark E. Lasbury for Indiana On Tap

It’s been just about a year since the Brewers Association unveiled the independent craft seal (you know, the upside down bottle design which took a lot of heat when it was introduced). BA developed the insignia as a response to mega-beer’s purchasing of craft breweries and to the investment of controlling money into breweries from non-brewing entities.

The seal is basically a notification that the beer you are drinking is made by people who are in control of their own destiny and are not beholden to powers outside “craft” beer. And here in lies the rub. The BA’s definition of craft, which by the way, is the definition of a craft brewer, not craft beer – small (less than six million barrels/yr.), independent (less than 25% owned by an entity that is not a brewery), and traditional (don’t use adjuncts except where traditional) – has some ambiguity in its name and perception, if not it’s terminology.

The big beer corporations (primarily AB InBev) have purchased a dozen or so breweries over the past few years. While the smaller breweries they have taken over (Devil’s Backbone, Elysian, Karbach, Wicked Weed, and others) still make beer that conforms to the common perception of craft, they no longer represent the idea that the makers are the masters of their own destiny or that they have the best interests of craft beer at heart.

image credit: Brewers Association

AB InBev (and others) uses the money it makes, some from craft beer itself, to stifle craft beer. The ways they do this are several, from buying distributorships and then limiting what brands can be carried, to producing commercials that ridicule craft beer, to engaging in pay for play – wherein they essentially bribe distributors and retailers to suppress craft beer’s access to the market. They also buy up parts of the supply chain so that craft beer does not have access to hops, etc.

In the other direction, some breweries are owned or partially owned (more than 25%) by companies that do not make beer. This creates other problems, like a profit motive that perhaps doesn’t allow for beer to be made at its highest level. Related to this is the idea that breweries that buy breweries and then exceed the six million barrels limit will also have advantages and processes that limit the “craft” part of making beer.

For these reasons, the “craft” definition of craft beer had lost some of its meaning, while the “independent” part of the idea of craft has moved forward in importance. To highlight the idea that breweries who were holding to the philosophy of making good beer for the sake of making good beer, and having a profit motive that was not overwhelmed by outside influences that might be bad for craft beer over all, BA introduced the “independent craft” seal.

So how has the seal gone over in its first year? Not bad I guess, from the point of view of BA. Brewbound had a graphic representation (link is here) that shows that over 3500 breweries in the US (and US territories) had adopted the seal by June 6, 2018. That’s more than half of the “craft” breweries in the US.

Click for a larger image. image credit: Brewbound via Brewers Association

True, it doesn’t cost anything to sign the agreement and be allowed to use the seal, but there can be costs in redesigning packaging to advertise that your brewery meets the independent craft definition. Some breweries just don’t like the design and choose not to use it for that reason; they have a (legitimate or otherwise) concern that adding the seal to their packaging will make it less appealing and end up costing them sales. Others are opposed on a philosophical basis; they don’t like shunning some good beer makers.

At the Craft Brewers Conference, hosted by BA in Nashville in May, Bob Pease stated that (at that time) the number of breweries that had adopted the seal accounted for more than 75% of the craft beer volume in the country (from the Brewbound article). This indicates that the larger independent craft breweries feel it is in their best interest to make this distinction know – especially since they do most of the distribution but have been willing to do the work vis a vis incorporating the seal into their packaging. But what about other issues regarding the seal adoption, like geography?

BA indicates that there is a great deal of disparity in which breweries adopt the seal based on where they are located. Puerto Rico and North Dakota have 100% and 92% adoption rates, respectively, while Rhode Island has a 35% adoption rate. Location might be a bit of a factor, as the states with the highest adoption rates seem to be west of the Mississippi or in the south, while many of the East Coast states have lower adoption rates. The vast majority of states have more than 50% adoption, but those that don’t are almost all located in the Northeast. What that signifies, I have no idea.

As far as number of breweries is concerned, there seems to be no positive relationship between a states number of breweries and their adoption rate, although many areas with lower number of breweries seem to have a higher adoption rate (North Dakota, Hawaii, Delaware, South Dakota). This is offset by Colorado (74%), but they happen to be the home of Brewers Association, so perhaps it makes sense.

Indiana falls about middle of the road when it comes to seal adoption. image credit: Indiana On Tap

Closer to home, Indiana has a 61% adoption rate (I’m at The Tap in Indianapolis today and don’t see a sticker on the door – not judging, just observing). This is close to Illinois’ 64% and Kentucky’s (63%) rates, and above Ohio’s (56%) and Michigan’s (45%). In fact, Indiana comes in at just about the 50th percentile, indicating that being known as independent is either not a strong issue here – or is just naturally assumed. I tend toward the later explanation; Indiana is known for many nano- and microbreweries, advertising that you are independent is probably not necessary.

In some states with low adoption rates, the brewers’ guilds are actively trying to raise the issue with their members, while in other states it seems hardly an issue. Michigan, for one, seems to be a state of mixed feelings. For a state that contains the self-proclaimed “Beer City, USA” it’s hard to believe that only 45% of the breweries have adopted the seal of independent craft.

It may be that many brewers in the state are still very fond of Founders despite their 30% ownership by Mahou San Miguel, which produced over 11 million US barrels of beer in 2017. On the other hand, Bell’s Brewery is fiercely independent, so perhaps Michigan just has a live and let live policy.

BA does stress the need for breweries to use the seal on the marketing materials, on their packaging, and in their taprooms, but is not tracking what strategies work best to convince breweries that adoption is in their best interest. Maybe they should be tracking what works; they’re heavily invested in making sure this program lasts and differentiates between mega-beer and “craft” beer.

image credit: Draft Therapy

Personally, I’m not that conflicted about the independent craft seal. I want brewers to be in control of their own product, and I want everything they do to lift up craft beer, not work to suppress the brethren who are only secondarily their competition. The rising tide lifts all boats, so good growth by some independent craft is really good for all independent craft breweries. Therefore, I would like to see 100% adoption, as long as it’s not costing breweries a bunch of money to retrofit or change packaging.

The margins on craft beer are low enough already that asking breweries to foot the bill for joining the movement is something I wouldn’t ask them to do. If Walter and I visit a craft brewery and they don’t have the seal on their door – that’s no problem for me and even less of one for Walter (although we would never visit an AB InBev-owned brewery). I wouldn’t say she’s a, “as long as the beer is good, I don’t care who owns them” kind of drinker, she’s just less likely to use that as her ultimate criterion. I know for a fact that she is opposed to AB InBev’s tactics for suppressing craft beer, but she just can’t remember who all AB InBev or Mahou San Miguel (or others) own, and it’s not important that she remember – she has me for that.

Educate yourself about what the seal means and as to the ebbs and flows of craft beer as it matures from fad to established industry. Then decide for yourself if it’s important enough for you to look for the seal, talk about the seal to the owners, or avoid breweries that shun the seal or don’t qualify for it.

I know who Walter and I will drink and who we won’t, but we won’t protest your choice to drink whoever you choose. Craft beer is mature enough to maintain civility amongst people with different opinions. There are more than two sides to every argument, and the inability to see the possible merits of the other side is a you problem or at least be willing to have a civil conversation about it is a you problem, not a them problem.


No Comments

Post A Comment