Beer / Business

“What are the lessons of craft beer’s triumph for the rest of the economy?”

…what are the lessons of craft beer’s triumph for the rest of the economy? First, just as research shows that gargantuan companies are bad for innovation and job creation, the craft-beer boom shows that the burgeoning of small firms stimulates both product variety and employment. Second, sometimes consumers have their own reasons to turn against monopolies—particularly in taste-driven industries—just as they are moving away from Budweiser and popular light beers toward more flavorful IPAs and stouts produced by smaller breweries.

Third, even in an economy obsessed with efficiency, sometimes it is just as wise to design for inefficiency. Alcohol regulations have long discouraged vertical consolidation, encouraged retailers to leave room for new brands, and more recently made it easier for individuals to introduce their own batch of beer to the market. Those are the aims the country should adopt at the national level, both to make it easier for small firms to grow and to make it harder for large firms to relax.

A phalanx of small businesses doesn’t automatically constitute a perfect economy. There are benefits to size. Larger companies can support greater production, and as a result they often pay the highest wages and attract the best talent. But what the U.S. economy seems to suffer from now isn’t a fetish for smallness, but a complacency with enormity. The craft-beer movement is an exception to that rule. It ought to be a model for the country.

Derek Thompson, “Craft Beer Is the Strangest, Happiest Economic Story in America”, The Atlantic (19 January 2018) [https://www.theatlantic.com/business/archive/2018/01/craft-beer-industry/550850].