Since 2007, the number of craft breweries in the United States has increased by more than 350 percent. The rise of craft beer’s popularity stems from a number of factors, including, a burgeoning craft beer culture, rise in distributors, and an overall wave of interest across the country.
Considering these stats, researchers at Bid-on-Equipment wanted to find out which communities in America have the best environment to open a craft brewery. The study looked at six key factors reflecting each city’s business environment to evaluate which ones are ripe for brewing. Those factors include: percentage of the population at or above the legal drinking age, the state’s tax per barrel of beer brewed, the number of breweries per capita, the annual brewery license fee charged in each state, the city’s median income, and whether breweries have the right to self-distribute.
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The Beer Institute, a national trade association for the brewing industry here in the United States reports that taxes are the “single most expensive ingredient in beer, costing more than labor and raw materials combined.” For that reason, researchers heavily weighted each state’s per barrel tax when evaluating each city’s business environment for up and coming breweries.
Researchers also factored in whether states allow breweries to self-distribute their own beers. States that allow distribution allow breweries to eliminate a potentially expensive middle man and allow them to connect directly with retailers across the country. The ability to self distribute was a positive factor in this ranking.
Beyond that, cities with more than 10 breweries per 50,000 people were deemed outliers and given a negative weighting in the ranking to account for potential oversaturation in the marketplace.
Based on these factors, Bid-on-Equipment was able to identify the 25 best cities to open a brewery in 2019. The ranking revealed clusters in Wisconsin, Colorado, Massachusetts, and Michigan among the top 25 cities.
The analysis yielded few large metropolitan cities in the top ranking. In fact, only five cities have populations greater than 500,000 people. Several smaller communities, including Royal Oak, Michigan, Bend, Oregon, and Longmont, Colorado, have the highest positions in the ranking.
The city topping the ranking in the number one spot is Somerville, Massachusetts. Somerville has the largest population of those above the legal drinking age, it also has a very low state excise tax on barrels of beers brewed locally. Somerville also has one of the lowest annual brewery license fees in the nation.
Colorado is the best-represented state in the ranking with six Colorado cities making the top 25: Denver (#4), Longmont (#5), Loveland (#6), Fort Collins (#9), Boulder (#15), and Colorado Springs (#16). Followed closely by Oregon, which has four cities in the top 25. The Pacific Northwest has become known for its beer culture, specifically craft beer. Bend, Oregon has roughly 16 breweries for every 50,000 people, one of the densities communities for breweries per capita in the nation. Portland, Maine and Ashville, North Carolina, are the only other cities in the nation with more breweries per capita.