U.S. Beer and Wine-Making Growth Spikes

Forget Miller and Gallo--small breweries and wineries are proliferating across the U.S..

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Americans have long enjoyed reaching for a cold one, and a growing number want to first make it themselves.

The Brewers Association reported this week that the number of breweries in the U.S. is at a 125-year high. There are now 2,126 breweries in the U.S., the most since 1887.

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"There is nearly a new brewery opening for every day of the year," says Paul Gatza, director of the Brewers Association, a rate of growth that he says is faster than at any time since the end of Prohibition.

Along with making more beer, Americans have spent more on craft beers this year. Dollar sales at craft breweries were up 14 percent in the first half of 2012, and the volume of craft beer sold was up 12 percent. The breweries included in that tally don't include behemoths like Miller or Budweiser; it includes only breweries that are small, independent, and use "traditional" brewing methods—that is, that meet certain ingredient standards. However, "small" is a relative term: It includes breweries that make up to 6 million barrels, or 186 million gallons, per year. Thus, that includes tiny microbrewers but also well-known companies like Sierra Nevada and Samuel Adams. Altogether, craft breweries make up 97 percent of all U.S. breweries.

The growth trend extends to wine as well. As of 2010, there were 6,672 wineries in the U.S., up by nearly 2,000 from 2007 and way up from 579 in 1975, according to figures compiled by WineAmerica, a national winery association based in Washington, D.C. That's the most wineries ever in the U.S., according to Cary Greene, chief operating officer of WineAmerica.

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Though DIY drinking may look like a broad trend, brewers and vintners aren't entirely driven by the same factors. While breweries flourish, Americans are actually drinking less beer than they used to—around 8 million barrels less than in 2008, according to Gatza. Meanwhile, wine consumption has grown steadily since the early 1990s, from 1.74 gallons per person in 1993 to 2.54 gallons in 2010, according to the Wine Institute, a California-based advocacy group.

More wine-drinking is naturally helping to drive wine-making, says Greene. But he also points to the growth in the locavore movement and agritourism as key factors in winery growth.

"There was a model that was developed: come out to wine country, taste wine in the tasting room, bring back a piece of the vineyard to your house. That was also a pretty important factor of how it's developed to date," he says.

Meanwhile, brewery numbers may be growing because Americans' tastes are changing. Gatza compares it to other foods like coffee, bread, and cheese, where "artisanal" varieties have proliferated.

"Even a beer style like India pale ale, there are so many hop varieties out there that one person's IPA doesn't taste at all like another brewery's IPA," he says, adding that drinkers are increasingly interested in trying new kinds of beer.

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This may be one reason why Americans are drinking less beer but more types, he says.

"Instead of drinking maybe three domestic lagers or light lagers, they're drinking maybe two craft beers instead," says Gatza.

He thinks that even during an economic downturn, people are willing to spend more than usual on their drinks—sometimes significantly more so—as they cut back on other areas.

"It looks like wine, like beer, is showing a lot of growth at the high end—the wines that cost over $20 a bottle, the beers that cost more than $26 a case." While people may not go out to restaurants or vacation as they cut their budgets, he says, "people can treat themselves to that."

Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at dkurtzleben@usnews.com.