Economic Perspectives on Craft Beer (eBook)

Christian Garavaglia is Assistant Professor at the Department of Economics Management and Statistics, University of Milano-Bicocca, and Research Affiliate at the ICRIOS (The Invernizzi Center for Research on Innovation, Organization, Strategy and Entrepreneurship), Bocconi University, Italy. His research interests include industrial organization, industrial dynamics, industry evolution, the economics of beer and consumer preferences for food.Johan Swinnen is Professor of Economics and Director of the LICOS Centre for Institutions and Economic Performance at the University of Leuven (KUL), Belgium. He is also Senior Research Fellow at the Centre for European Policy Studies (CEPS), Brussels, where he directs the programme on EU agricultural and rural policy. He was previously Lead Economist at the World Bank and Economic Advisor at the European Commission. He consults for the OECD, FAO, EBRD, UNDP, IFAD and to several Governments, and was coordinator of several international research networks on food policy, institutional reforms, and economic development. He was President-elect of the International Association of Agricultural Economists, a Fellow of the European Association of Agricultural Economists and President of the Beeronomics Society. He has published widely on political economy, institutional reform, trade, agricultural and food policy.

Chapter 1. IntroductionChristian Garavaglia and Johan Swinnen                1.1. Introduction                1.2. Defining Craft Breweries and Craft Beer                                1.2.1. “Gypsy brewers”: are contract breweries real craft?                1.3. Concentration and Homogenization in the Global Beer Industry 1900–1980                1.4. When did the Craft Beer Revolution Start?                1.5. A Growing Demand for “Different” Beers                                1.5.1. Demand for Variety: A Reaction to Homogenization in Beer Market                                1.5.2. Increasing income                                1.5.3. Peer Effects in Beer Consumption and Consumer Associations                1.6. Pioneers and Entrepreneurs in Craft Brewing                1.7. The Re-emergence of Small Firms in a Concentrated Market: Generalists and Specialists                1.8. Legitimization, Information and Networks                1.9. Developing Technology and Capital Markets for Small Brewers                1.10. The Geography of Craft Beer                           1.11. Regulations                1.12. The Macro Brewers’ Responses to Craft Brewing                                1.12.1. Craft-Style Beer Production by Macro-Brewers                                1.12.2. Take-Over of Craft Brewers                                1.12.3. Infrastructure Investment, Free Riding and Consumer Access                1.13. Conclusion Chapter 2. Craft Beer in the United States: Strategic Connections to Macro and European BrewersKenneth G. Elzinga, Carol Horton Tremblay and Victor J. Tremblay2.1. Evolution of US Craft Brewing2.2. The Early Brewers, Promoters, and Brewmeisters2.2.1. The Early Brewers2.2.2. The Early Promoters2.2.3. The Brewmeister2.3. Marketing and Strategic Interactions between US Craft and Macrobrewers2.3.1. Marketing Differences between Craft Brewers and Macrobrewers2.3.2. Macrobrewer Responses and Other Strategic Issues2.4. The European Connection and Back2.5. ConclusionChapter 3. The Canadian Craft Beer SectorAlfons Weersink, Kevin Probyn-Smith and Mike Von Massow                3.1. Introduction3.2. Structure of the Canadian Beer Sector3.2.1. Consumption3.2.2. Production3.2.3 History of Canadian Alcohol Regulations3.3. Drivers of the Rise in Craft Brewing in Canada3.3.1 Regulations3.3.2. Demographics3.2.3. Culinary Tourism/Demand for Local3.4. Constraints to Growth of the Craft Breweries3.4.1. Regulations3.4.2. Production CostsChapter 4. Craft Brew Industry in Latin America: The case of ColombiaDaniel Toro-Gonzalez4.1. Introduction4.2. Beer Industry in Latin America4.3. Brewing Industry in Colombia4.4. Drivers and Barriers of Craft Brewing in ColombiaChapter 5. Belgium: Craft Beer Nation? Eline Poelmans and Johan Swinnen5.1. Introduction5.2. Consolidation of the Belgian Beer Industry in the Twentieth Century5.3. Defining Belgian Craft Beer5.4. Changes in Belgian Beer Consumption5.5. The Growth of Craft5.6. Brewers of Craft Beers5.7. Trade of Craft Beers5.8. Drivers and Champions of Belgian Craft Beers: ConclusionsChapter 6. Entry, Survival and Profits: the Emergence of Microbreweries in DenmarkJan Bentzen and Valdemar Smith6.1. Introduction6.2. The Analytical Framework for Market Entry of Microbreweries6.3. Empirical Data and Results from the Survey on Market Entry6.3.1. Motivation and Goals6.3.2. Social Factors and Human Capital6.3.3. Entry Barriers6.3.4. Environment6.4. Survival of Microbreweries and Profits6.5. Future Perspectives and Strategies of Microbreweries6.6. ConclusionChapter 7. Craft Beer in Germany: New Entries in a Challenging Beer MarketLutz Depenbusch, Malte Ehrich and Uwe Pfizenmaier7.1. Introduction7.2. Characteristics of the German Beer Market7.3. Drivers and Constraints of Craft Beer Production in Germany7.4. Market Concentration in German States and the Effect on Microbreweries7.4.1. Data7.4.2. Empirical Model7.5. Discussion7.6. ConclusionChapter 8. The Emergence and Survival of Microbreweries in HungaryImre Fertő, József Fogarasi, Anita Major and Szilárd Podruzsik8.2. The Structural Evolution of the Hungarian Beer Industry8.2.1 Historical and Communist Period8.2.2. Liberalization Period – 1990s8.2.3. Consolidation in the 2000s8.2.4. The Growth of the Microbreweries8.3. Trends of Beer Production and Consumption in Hungary After 20008.4. Determinants of Firm Survival8.5. Survival of Microbreweries8.6. ConclusionsChapter 9. Birth and Diffusion of Craft Breweries in ItalyChristian Garavaglia9.1. Introduction9.2. Trends in the Italian Brewing Industry9.2.1. Industry Consolidation: the Emergence of National Leaders9.2.2. The Advent of Craft Breweries9.3. Theories About Small Firms Entry into Mature Industries9.4. Explaining the Entry of Craft Breweries in the Italian Beer Industry9.4.1. Broad Social Dynamics, Changes in Demand and the Entry of the Pioneering Firms9.4.2. Legitimization, Emulation and the Growth of Craft Brewing9.5. ConclusionsChapter 10. From Pilsner Desert to Craft Beer Oasis: the Rise of Craft Brewing in the NetherlandsMichiel van Dijk, Jochem Kroezen and Bart Slob10.1. Introduction10.2. Theoretical Perspectives on the Renewal of Mature Industries10.3. Methodology and Data10.4. Evolution of the Beer Sector in the Netherlands10.4.1.   Prehistory (1450–1970)10.4.2.   Foundations for Renewal (1970–1981)10.4.3. Emergence of Craft Breweries (1981–2003)10.4.4. 2003–present: Rapid Expansion of Craft Breweries10.5. What Explains the Emergence and Proliferation of Craft Breweries in the Netherlands?10.5.1. Increasing Demand for Alternative Beers10.5.2. Increasing Supply of Brewery Entrepreneurs and Resources10.6. Discussion and ConclusionsChapter 11. From Macro to Micro: the Change of Trendsetters on the Polish Beer MarketAleksandra Chlebicka, Jan Fałkowski and Jan Lichota11.1. Introduction11.2. Key Trends on the Polish Beer Market Since 198911.3. Market Structure and Distribution11.4. The Emergence of Micros in the Polish Brewing Sector11.4.1. Global Trends11.4.2. Definitional Issues11.4.3. Microbreweries in Numbers11.4.4. Situation Change11.4.5. Strategies Adopted by Microbreweries11.4.6. Contracting Hops11.4.7. Consumers11.5. ConclusionsChapter 12. Craft beer In SlovakiaJán Pokrivčák, Drahoslav Lančarič, Radovan Savov and Marián Tóth12.1. Introduction12.2. Literature Review12.3. Beer Consumption, Production and Trade in Slovakia12.4. Structural Changes in the Brewing Industry12.5. Drivers and Constraints on Craft Breweries12.6. ConclusionsChapter 13. The Recent Advent of Micro Producers in the Spanish Brewing IndustryChristian Garavaglia and David Castro13.1. Introduction13.2. Some Historical Facts About Beer in Spain13.2.1. The Modern Spanish Beer Industry13.3. The “Revolution” of the Craft Brewers13.3.1. The Pioneers13.3.2. The Diffusion of Craft Brewers in Catalonia and the Role of Consumers’ Associations13.4. The Future of Craft Beer in Spain13.5. ConclusionsChapter 14. Beer On! The Evolution of Micro and Craft Brewing in the UKIgnazio Cabras14.1. Introduction14.2. The Brewing Industry in UK: 1900–198014.3. The Rise of Micro-Breweries in UK: 1980–201014.4. Stabilisation and Diversification: 2010–201514.5. Discussion14.6. ConclusionsChapter 15. Craft Brewing in Australia, 1979–2015André Sammartino15.1. Introduction15.2. The Broader Australian Beer Industry15.3. The Micro Upstarts15.4. The First Wave of Australian Craft Brewing: 1984–199015.5. The Slow Build: 1991–200415.6. The Second Tidal Wave: 2005–201515.7. ConclusionChapter 16. Government Regulations and Microbreweries in JapanMari Ninomiya and Makiko Omura16.1. Introduction16.2. A Brief History of the Japanese Beer Industry and Taxation16.3. Becoming a Beer-Drinking Nation16.4. Deregulation of Distribution Licenses for Alcoholic Beverages in Japan: 1989–200316.5. The Appearance of Microbreweries in Japan after the Deregulation of Beer production Licenses in 1994 (H6)16.6. Evolution of Beer-Like Beverages: 1994–present)16.7. Struggles of Microbreweries16.7.1. Case Study 1: Ginga Kogen Beer16.8. Transformation from Ji-Biiru Brewer to Craft Brewery16.8.1 Case Study 2: Kyodoshoji (COEDO Brewery)16.9. Craft Beer Boom Since 201416.10. ConclusionChapter 17. Craft Beer in ChinaFan Li, Yaojiang Shi, Matthew Boswell and Scott Rozelle17.1. Introduction17.2. The Growing Trend of Craft Brewing in China17.3. The Driving Forces Behind China’s Craft Brewing Trend17.3.1 Growing Purchasing Power and Urbanization17.3.2 Adventurous Chinese Beer Drinkers and Craft Brewers17.3.3 Entrepreneurs and Increasing Investments17.3.4 Food Safety Concerns17.4. Hurdles to Develop Craft Brewing in China17.4.1. Regulations17.4.2. Sourcing Domestically or Internationally17.4.3. Response from the Incumbents17.5. Conclusion