Ohio Reaches 400 Brewery Milestone

When Guernsey Brewhouse in Cambridge received its brewery permit on May 10, 2022, it became the 400th licensed craft brewery in the state of Ohio. Located in rural southeast Ohio and slated to open to the public in mid-July, the brewery is emblematic of the recent growth of craft beer: there is now at least one brewery in 72 of Ohio’s 88 counties, and nearly 40% of the state’s 400 breweries have opened in the past three years. The overwhelming majority of those breweries sell their beer primarily in their own on-premise taprooms, serving as cultural hubs and gathering spaces for their communities.

The taproom brewery business model relies on personal interaction and congregation, two things that have been a challenge since the onset of the Covid-19 pandemic. However, despite adverse public health and economic conditions, Ohio has averaged 48 new brewery openings per year since 2020, against just 11 average annual closings over the same span. While the number of yearly new openings has decreased slightly from pre-pandemic levels, there are still more than 70 known breweries-in-planning that will soon be making beer in Ohio.

Let’s take a few moments to reflect on this impressive milestone: as we pass the 400 brewery threshold, what is the state of Ohio’s craft brewing industry and what does the future hold?

 

Ohio still *loves* craft beer.
Ohioans of legal drinking age consume about 4.6 gallons of craft beer per person every year, which ranks our state #13 in the country. Despite an above average consumption rate, Ohio ranks just 24th in breweries per capita, suggesting that there’s still room for growth in the market, especially for breweries that sell mostly by the pint in their own taprooms. With the proliferation of breweries in smaller communities, it’s not impossible to envision a future scenario where every resident of Ohio lives within 30 minutes of a brewery.

It certainly doesn’t hurt Ohioans collective thirst for craft beer that our state’s reputation for producing world-class beer is growing. Ohio breweries set a new state record this month at the World Beer Cup competition: against 10,542 entries from 2,493 breweries from 57 countries, Ohio brewers brought home a total of 15 awards in “The Olympics of Beer Competitions.” Couple that with the 36 medals earned by Ohio breweries at the past three Great American Beer Festival competitions, and it all adds up to a state that knows how to make great beer.

With so much fantastic beer available, it’s no wonder that Ohio’s beer tourism industry is rebounding after the pandemic-induced slowdown. Visitors bureaus and breweries in Columbus, Cleveland, Akron, Canton, Dayton and Toledo all offer brewery passport programs, encouraging people to visit all the participating craft breweries in their regions. Smaller passports are commonly available at the county level in other destinations outside the big cities. The Ohio Craft Brewers Association also offers a free statewide brewery passport app – Ohio On Tap – that counts more than 60,000 users drinking craft beer and earning rewards while visiting the nearly 300 association member brewery taprooms.

 

Confronting challenges through collaboration and cooperation.
Industry production and sales numbers took a pretty sharp hit after the onset of the pandemic: limits on public gathering caused massive declines in on-premise craft beer consumption at brewery taprooms, bars, restaurants. Competition among independent breweries was already tough pre-Covid, and the sudden shift from on-premise draft sales to can and bottle packaging caused a ripple effect in beer’s supply chain.

Rather than adopting a Darwinian “survival of the fittest” mentality to competition, craft brewers leaned on their cooperative and collaborative roots to help each other weather the storm. When taprooms closed, larger breweries offered to package beer for smaller breweries so they’d still be able to offer carryout sales. When the demand for aluminum cans skyrocketed, breweries sold their unused, discontinued cans to competing breweries who could relabel them for their own beer. When prices of raw materials increased, breweries banded together to increase their purchasing power and get better rates.

Brewers continued to collaborate with each other throughout the pandemic as well, experimenting with new ingredients and processes, developing new products and sharing best practices on everything from technical brewing to creating authentic experiences for customers. Some of those collaborations even benefited others that were affected by the pandemic, from charities whose fundraising avenues were closed by Covid to industry workers whose jobs were lost during the shutdown.

 

A mature industry looks forward.
Data from the past five years shows a growth curve indicative of an industry that has reached maturity. The explosive growth of the mid-to-late 2010s is unlikely to repeat, so craft beer’s future is dependent on three major variables: innovation, regulation and community involvement.

For decades, craft beer has been marketed as an alternative to the mass-produced macro lagers that had come to define American beer post-Prohibition. By embracing classic, full-flavored styles from around the world, craft breweries could offer a wide range of options to the beer drinker. As the American beer drinker’s palate broadened, craft brewers looked to new malts and hops, new production techniques and out-of-the-box adjunct ingredients to create new flavors that would meet public demand. However, today’s craft brewer isn’t just competing with Big Beer and with fellow craft brewers: the recent growth of hard seltzers, flavored malt beverages and ready-to-drink cocktails – often produced by large alcoholic beverage conglomerates with seemingly limitless resources – are a direct challenge to craft beer’s innovation-driven market share.

Craft breweries as a whole produce more jobs and economic impact per barrel of product than their larger competitors. In 2020, even with the effects of the pandemic, Ohio craft breweries were responsible for more than $880 million dollars in economic activity in the state, as well as nearly 8,300 local jobs. While a single macrobrewery can produce 10-15 times the combined barrelage of all 400 of the state’s breweries in a single year, they employ a small fraction of Ohioans compared to those working at our independent breweries. That profound and outsized impact on our communities must be protected, which is why the Ohio Craft Brewers Association works tirelessly to preserve a legal and regulatory environment that will encourage further craft beer growth. Ensuring fair access to market and healthy competition, free from restrictive, antiquated regulation, is ultimately good not only for breweries but for their local communities and craft beer drinkers at-large.

Building and sustaining connections to local communities is imperative in order for craft beer to continue to grow. These connections take many forms, including community leadership and charitable giving. In 2020, despite revenue losses caused by the pandemic, craft breweries donated close to $2 million and more than 8,000 volunteer hours to local non-profits. Craft breweries have also worked to reach out to segments of their communities that have historically been underrepresented in the industry. By diversifying their workforces and building cultures of inclusion that apply to employees and customers alike, craft breweries reinforce the community-centered nature of their missions and strengthen their local roots.

 

The landscape of craft brewing in Ohio has changed quite a bit since we hit the 300 brewery milestone just three years ago. The pandemic brought some unforeseen challenges, but the qualities that got breweries through the lowest points of the past two years – determination, resilience, cooperation, unity – will be what fuels the growth that we hope to see ahead. Cheers to all of our 400 Ohio breweries, the businesses that supply and support them, the advocates and champions for the brewing industry, and the craft beer drinkers whose unwavering support of their local breweries have carried us to this momentous milestone.