The annual economic impact of the San Diego craft beer industry increased to a record-high of $1.17 billion in 2018, according to a study published last week by California State University, San Marcos and the San Diego Brewers Guild. This figure is an increase of about 5.5% over 2017.
Local brewers are optimistic about future growth, too: A survey conducted by California State University, San Marcos found a confidence index of 91 among San Diego craft breweries (above 50 indicates a positive outlook). The vast majority of respondents indicated that in 2019 they intend to increase their overall production (91%), invest in capital equipment (82%), and hire more staff (76%).
The economic impact study includes the 152 independently owned craft breweries operating in San Diego County at the end of 2018 and excludes breweries that are owned by large multinational corporations and therefore do not count as craft brewers according to the Brewers Association, the national craft beer trade organization. (This means that Ballast Point, one of San Diego’s largest breweries by volume of production, is excluded from the economic impact study: it was purchased in 2015 by Constellation Brands, producers of Corona and other mass market beer brands. Similarly, Saint Archer, a Miller-Coors asset since 2015, is not included.)
According to Brewers Association national data, California’s 900 breweries are the most of any state (Colorado is second with less than half that number). California has the second highest craft beer production volume of any state (Pennsylvania edges out California by about 300,000 barrels, or roughly 10% of California’s total production). Unsurprisingly, then, California’s craft brewing industry has the highest economic impact of any state at about $7.35 billion in 2017, the latest year for which the Brewers Association has published the national data.
This means that San Diego’s craft breweries contribute about 15% of California’s total craft brewing economic impact.
If San Diego were its own state, it would rank 21st in terms of the economic impact of its craft breweries.
Given the large number of breweries in San Diego, do we have too many? It seems not. Only about 13% of all beer consumed in the U.S. is craft beer, so craft breweries have plenty of opportunities for growth if they can convert new customers from mass market light lagers. San Diego County currently has 156 craft breweries and a population of about 3.3 million for a brewery density of 4.7 breweries for every 100,000 people. California as a whole has a brewery density of just 2.9 breweries per 100,000 people of legal drinking age. Despite the fact that California has the largest number of craft breweries and the second largest craft beer production by volume, 27 states have higher brewery density.
Colorado, for comparison, has 9.2 breweries per 100,000, making it the state with the fourth highest brewery density. So, both nationally and locally, there is no reason to think that we are close to the craft beer ceiling.
The growth of San Diego craft beer seems destined to continue. So far in 2019, seven new breweries and 12 new satellite tasting rooms have opened in San Diego County (four breweries and three tasting rooms have closed). I am aware of 21 breweries that have announced plans to open by this time next year. Even if just two-thirds of those plans come to fruition, that would be almost a 10% increase in the number of breweries in the county over the next 12 months.