Wednesday, June 12, 2013

Texas beer: Inside the New Yorker's numbers

Image credit:  The New Yorker (left graphic)

Late last week, the New Yorker published an article as part of their regular "Idea of the Week" series entitled "Mapping the Rise of Craft Beer".  Accompanying the story is an interactive map which provides a statistical look into how states compare to the rest of the nation in the categories of total breweries, annual production, production growth and breweries per capita.

Judging by comments associated with shares on my social media feed, many are focusing on the fact that Texas now ranks 8th in the country when it comes to total breweries.  I have to wonder, though, what this number really means.  Texas is a big state with a large population, so doesn't it stand to reason that we would have a lot of breweries?  Consider the following:  nine of the ten most populous states in America are among the top thirteen when it comes to the total number of breweries.  That's a pretty strong correlation.  I imagine these states have a lot of gas stations and grocery stores, too.

This raises an interesting question.  When gauging the health of the craft beer industry which is a better indicator, more breweries or more beer?  I would argue the latter.  Just because a new brewery opens, it doesn't mean that Texans are drinking more beer.  All it means is someone thinks they can build a better mousetrap.  Even if they can, it won't amount to much if there isn't anybody beating a path to their door.

So, what about more beer?  Things get a little trickier here, since the graphic shows that Texas ranks seventh in annual production.  That's all well and good, but nine of the top ten states with the most breweries are also among the top twelve in terms of total production.   Having more breweries translates into producing more beer, which isn't terribly surprising.  You may open a brewery, thereby increasing production in the state, but demand can't be factored in until someone has actually tried your product to know if they want to drink it again.

Is this a case of more doesn't always mean better?  A high ranking in the number of breweries and total production certainly looks good on paper, but take into account population density and I'm not sure it isn't just the natural order of things.

What now?  Well, I still think more beer is the right answer, albeit with a qualifier.  This brings us to production growth.  Out of the four metrics showcased above, change in production would seem to be the most telling when it comes to deciding whether or not consumers are drinking more beer.  Generally, higher demand for an established product tends to drive increased production.  It's more beer, just in a different context, and it may provide a clearer insight into how things are going in your local market.  In this category Texas ranks 34th, with a year-to-year increase of 14.21%.  On the surface this growth rate actually looks pretty good, but lofty numbers in other states suggest it could be better.  Here again, though, I'm not sure how much the ranking matters.  Personally, I'd be happy seeing long-term sustainable growth regardless of where it puts Texas on the national stage.

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