A few weeks ago a colleague from Bowling Green State University sent me an e-mail. He was interested in getting together to explore the possibility of engaging in some collaborative research around the beer industry. Russ told me that his interest was in beer-oriented development (BOD). It was not a term with which I was familiar. But that’s why we have Google, right? The term appears to have been coined by Chris Hawley, an ‘urbanist, cyclist, and history buff who loves all things Buffalo’. Chris defines BOD as ‘the ability of local craft brewing and distilling to attract people, dollars, and development to a community’.

Understanding the drivers of local and regional economic development has been a professional research interest of mine for a couple of decades, so the idea that the craft beer industry can be a contributor to that process is an intriguing one. Indeed myself and a colleague, Jay Gatrell of Bellarmine University in Louisville, KY recently finished a paper on the economic development opportunities associated with regional craft breweries. These are the big boys of the craft beer industry; breweries that produce between 15,000 and 6,000,000 barrels of beer a year. Of the 3,418 craft breweries in the United States only 135 are large enough to be classified as regional craft breweries. According to The Brewers Association the five largest are (in rank order) D.G. Yuengling & Son, The Boston Beer Company, Sierra Nevada Brewing Company, New Belgium Brewing Company, and Gambrinus. All of these breweries started out small and over the years, as their beers became more popular, grew. In almost all cases (New Glarus Brewery in New Glarus, WI is the notable exception) growth has been accompanied by a geographic expansion in the number of states in which their beer is sold. For example Detroit’s Atwater Brewery sell their beer in 20 states plus D.C., Bell’s Brewery (Comstock, Michigan) distributes its beer to 22 states plus D.C., while beer from Rogue Ales (Newport, Oregon) is sold in 36 states. As a brewery’s geographic reach expands so does its transportation costs as it distributes increasing amounts of beer to more distant markets. At some point it makes economic sense to build a second brewery in order to cut down on transportation costs. A number of breweries have followed this path. For example, in 2014 Lagunitas Brewing Company, whose west coast brewery is located in Petaluma, CA, opened a second brewery in Chicago, IL. Oskar Blues Brewery whose original brewery is in Longmont, CO opened a second brewing facility in Brevard, NC in 2012. In total 11 American craft breweries have opened, or have committed to opening in the near future, additional breweries in a state different from that in which their original brewery is located.

When a large regional craft brewer announces plans to open a new brewery it is inundated with requests from communities across the country asking them to consider locating in their town or city. Over two hundred communities from twenty states wooed California’s Stone Brewing Company when it was seeking a location for its second brewery. After an extensive search process Stone chose Richmond, VA for its second brewery. A new brewery, especially a large regional one, means jobs and and an enhanced tax base. In addition to the construction jobs to build the brewery, once it reaches full production capacity, Stone will employ around 375 people in Richmond with wages ranging between $12 and $48 per hour. The brewery’s total annual payroll will be nearly $15 million.

Regional craft breweries can also contribute to the tourism industry of the community/state in which they are located, especially when it is a ‘destination’ brewery with a restaurant, gift shop, and beer garden. In 2013 the Stone Brewing World Bistro & Gardens in Escondido, California attracted more than 600,000 visitors. Of course, while it is the largest, Stone is not the only craft brewery in San Diego. The San Diego metropolitan area is home to over 75 craft breweries. Speaking at the San Diego Craft Beer Tourism and Hospitality Economic Summit in San Diego in 2013 Greg Koch, CEO and Founder of Stone, suggested that San Diego can be as synonymous with beer as Napa is with wine.

Craft beer trails (similar to wine trails) are becoming increasingly common and help tourists navigate their way through the craft breweries within a single city or a larger geographic region. Examples include the Maine Beer Trail, the Finger Lakes Beer Trail, and the Grand Rapids, MI Ale Trail. More and more communities are also hosting single- and multi-day be

er festivals that are targeted towards both locals and visitors alike.  These include the Brewgrass Festival (Asheville, NC), the Fresh Hop Ale Festival (Yakima, WA), and the Vermont Brewers Festival  (Burlington, VT). And these beer festivals can be big business. For example, it has been estimated that the economic benefit to the local economy of the the five-day 2013 Oregon Brewers Festival exceeded $30 million, with out-of state visitors accounted for over half of the attendees. Of course the grand daddy of all beer festivals is the Great American Beer Festival that is held every September in Denver, CO and is attended by close to 49,000 beer lovers.