In recent decades, the number of craft breweries in the United States has increased dramatically, increasing from around a thousand in 1996 to over six thousand today. In order to minimize start-up and initial operating costs, many craft breweries have located in older buildings in economically distressed neighborhoods. Craft breweries are particularly adept at engaging in adaptive reuse, with the result that they occupy buildings that were previously once churches, cinemas, fire stations, etc. This investment by craft breweries, in conjunction with investment by other businesses (as well as the public sector), has resulted in the revitalization of many of these neighborhoods. Neighborhoods that were once full of abandoned buildings and suffered from social problems such as high crime rates have become destinations for residents and tourists alike. At the same time, however, there is a dark side to this neighborhood revitalization as rising real estate values has forced many established, often low-income, residents to leave these neighborhoods. In this paper, I examine the growth of the craft brewing in the United States and the preference of many craft breweries for inexpensive building space in economically distressed neighborhoods.
In recent decades, the American craft brewing industry has experienced significant growth. By the end of 2017, there were 6,266 craft breweries in the United States. Twenty years earlier, in 1996, there were only 1,087 (Brewers Association 2017a, Fig. 1). In 2016, craft breweries had a 12.7% share of the U.S. market by volume, and 23.3% when measured in terms of sales (Brewers Association 2017b). Craft beer is particularly popular among younger Americans, and it is the so-called Millennial cohort that are credited with being responsible for its growing market share. Craft beer also attracts beer drinkers who like to support small-scale, locally owned, businesses. Craft beer’s growing popularity is occurring at a time when per capita beer consumption in the United States is declining. In 2010, Americans of legal drinking-age consumed 29.1 gallons (110.1 liters) of beer per capita. By 2015, this had fallen to 27.4 gallons (103.7 liters) per capita (NBWA 2015). Not only has per capita beer consumption declined, so has the total volume of beer consumed. Between 2013 and 2016, the total volume of beer sold in the United States fell from 1.52 million cases (12.92 million liters) to 1.515 million cases (12.87 million liters) (Nielsen 2017). These data suggest that craft breweries are capturing market share from the two large multinational brewers, AB InBev and Molson Coors, who dominate the U.S. beer market (Meyersohn 2017).
Craft breweries are predominantly an urban phenomenon; seventy-two percent are located in metropolitan areas with populations of at least 250,000 people, while 16.2% of America’s craft breweries are located in just ten metropolitan areas. The preference of craft breweries for urban areas means that 78.5% of legal drinking-age adults live within ten miles of a brewery (Herz 2016a). In many cities, driven by a desire for inexpensive space, many craft breweries have demonstrated a preference for renting or purchasing older buildings in neighborhoods that are economically distressed. Because of these locational preferences, craft breweries can be found in a wide variety of interesting buildings including old churches, fire stations, and warehouses. Craft breweries also tend to geographically cluster. Geographic clustering affords craft breweries a number of advantages, including the opportunity to collaborate and to market the neighborhood as craft beer destination within the city.
Following this introductory section, the remainder of this paper is divided into five sections. In the next section, the main factors driving demand for craft beer are described. The third section provides an overview of the current state of knowledge with respect to the urban geography of craft breweries. A discussion of distressed neighborhoods is provided in the fourth section. In the fifth section, the role of craft breweries in neighborhood revitalization is discussed. This discussion centers on two neighborhoods – Lower Downtown and River North, both of which are located in Denver, Colorado. The final section of the paper provides some concluding thoughts.
The Demand for Craft Beer
Two, overlapping, consumer segments drive demand for craft beer. First, there are Millennials. These are individuals born between 1981 and 1996 (Dimock 2018). Described as ‘confident, self-expressive, liberal, upbeat and open to change’ (Pew Research Center 2010: 1), Millennials are the primary consumer of craft beer. Market research indicates that Millennials, despite only comprising 29% of the drinking-age population, account for 57% of individuals who drink craft beer on a weekly basis (Herz 2016b). Millennials are attracted to craft beer because it offers them a wide variety of beer styles and flavors. The Brewers Association in the United States recognizes over 150 different styles of beer (Brewers Association 2017c), many of which are brewed by craft breweries. The beer mass-produced for the American market, by large multinational brewers is, in contrast, predominantly Lager-style and is generally highly carbonated and bland tasting (Strang and England 2015). In contrast to consumers of mass-produced beer, ‘Millennial consumers frequently seek new tastes and are willing to pay a premium for alcoholic beverages’ (WebWire 2007). The second factor driving the popularity of craft beer in the United States is the growing neolocalism movement. Neolocalism refers to the ‘deliberate seeking out of regional lore and local attachment by residents (new and old) as a delayed reaction to the destruction in modern America of traditional bonds to community and family’ (Shortridge 1996: 10). Some have argued that craft beer’s growing market share is driven, partly by the desire of increasing numbers of consumers to drink beer that is produced by small-scale, locally owned, breweries. In W. Flack’s (1997: 49) opinion, craft breweries represent a ‘rejection of national, or even regional culture, in favor of something more local’. Using similar language, S. M. Schnell and J. E. Reese (2003: 46) argue that that craft breweries are partly a response to the ‘smothering homogeneity of popular, national culture’ and the desire on the part of increasing numbers of people to ‘reestablish connections with local communities, settings, and economies’. Research indicates that many Millennials place a high value on beer that is locally produced (Brewers Association 2015). The majority of commercial craft brewers in the United States began as home brewers (Murray & O’Neill 2012). Inevitably, home brewers who open commercial breweries do so in the communities in which they live. This means that they have a strong personal connection to the communities in which their brewery is located.
The Urban Geography of Craft Beer
While craft breweries exist in cities across the entire United States, the metropolitan areas with the largest number tend to be in the western United States. Seattle, San Diego, Portland, Los Angeles, and San Francisco are all in states that border the Pacific Ocean. Denver and Boulder are both in Colorado, in a region of country known as the Great Plains. Chicago and Minneapolis are Midwestern cities, while New York is located in the northeast. Three metropolitan areas (Seattle, San Diego, and Portland) each have more than one hundred craft breweries. In total, the ten metropolitan areas in Table 1, in 2016, had 871 craft breweries (16.6% of all craft breweries in the United States).
Top Ten Metropolitan Areas for Craft Breweries, 2016
Source: compiled by author using data made available by The Brewers Association
|Rank||Metropolitan Area||Number of Craft Breweries|
|2||San Diego, California||115|
|4||Los Angeles, California||96|
|9||San Francisco, California||60|
|10||New York, New York||52|
There is a small, but growing, body of research examining the urban geography of craft beer. J. Baginski and T. L. Bell (2011) attempted to explain inter-metropolitan variations in the number of craft breweries per 100,000 population. In many respects, their independent variable is a measure of how successfully craft breweries have penetrated different metropolitan markets. Their findings showed craft brewery penetration to be greatest, where quality of life, healthcare, cost of living, wage inequality, and education are higher, where residents are more socially tolerant, high technology sectors are less developed, and the arts and culture scene is weaker. A later study by R. M. McLaughlin, N. Reid and M. S. Moore (2016) used the number of craft breweries in a metropolitan area as the dependent variable. They found the number of craft breweries in a metropolitan area to be positively correlated with total population size, the presence of highly creative and innovative residents, the number of farmers markets (a proxy for the strength of neolocalism), and the percentages of college educated adults, non-Hispanic White people, and people between the ages of 25–44. The number of craft breweries was negatively related to median income. The variable with the strongest explanatory power in R. M. McLaughlin et al.’s (2016) model was the- percentage of the population between the ages of 25 and 44. This lends support to market research, which suggests that a younger age cohort drives craft beer’s popularity.
At the intra-urban scale, I. Nilsson, N. Reid, and M. Lehnert (2018) examined the geographic patterns of craft breweries in ten U.S. cities. Using Ripley’s K, they detected evidence of geographic clustering in nine cities (Austin, Texas was the exception). In another study, M. F. Barajas, G. Boeing, and J. Wartell (2017) found the existence of an older brewery in a neighborhood to be a significant predictor as to whether a new brewery opened in that neighborhood. For craft breweries, there are advantages of clustering geographically inside of cities. These include, the opportunity to access what A. Dennet and S. Page (2017: 450) refer to as ‘economies of cooperation’. Collaboration and cooperation are common in the craft brewing industry and clustering together in space facilitates the exchange and sharing of information (such as recipes), ingredients, and equipment. It also makes it easier for two or more brewers to collaborate on the production of a new beer (Dennet & Page 2017; Nilsson et al. 2018). Clustering of breweries also facilitates ‘brewery hopping’ on the part of craft beer drinkers – i.e. they can move from brewery to brewery, and easily visit a number of breweries in the space of an afternoon, evening, or weekend. The clustering of craft breweries in American cities has resulted in the emergence of recognizable brewery districts. Examples include the Pearl District in Portland, Oregon, the Ballard District in Seattle, Washington, and the River North Art and Lower Downtown Districts in Denver, Colorado (Nilsson et al. 2018).
As the number of craft breweries increased and clustered together in space, many communities recognized the potential role that they may play in fostering local neighborhood development (City of Louisville 2014; Reid & Gatrell 2015; Lubin 2016; Sisson 2017). M. F. Barajas et al. (2017) examined the relationship between craft breweries and neighborhood change. Unfortunately, due to the nature of their data they were unable to ‘assign a direction of causality to the relationship between craft brewery locations and neighborhood change’ (Barajas et al. 2017: 160). They did find, however, some interesting relationships. For example, breweries were more likely to locate in neighborhoods where racial and ethnic diversity was decreasing, the number of 25–34 year olds was increasing, and the number of highly educated residents was increasing. In addition, as noted above, craft breweries tend to be attracted to neighborhoods where other craft breweries are already present. S. Weiler (2000: 167–168) argues that the ‘unique characteristics’ of craft breweries seem to offer ‘a propitious match with the circumstances of crumbling red brick neighborhoods.’ Such neighborhoods provide relatively inexpensive and underutilized sites in parts of the city that have good accessibility (Weiler 2000). The influx of craft breweries into economically distressed neighborhoods has prompted the well-known urban theorist, Richard Florida, to ask, ‘can craft breweries transform America’s post-industrial neighborhoods?’ (Florida 2017).
In the post-WW2 period, American cities have experienced significant economic and demographic change. At the broad regional scale, this has manifest itself in the decentralization of manufacturing and population from the traditional manufacturing cities of the Northeast and the Midwest to the Southern and Western United States (Norton & Rees 1979; Beauregard 2009). At the intra-urban scale, central cities were also losing jobs and people, as they migrated to nearby suburban municipalities (Jackson 1985; Mieszowski & Mills 1993). This led to the emergence of what are termed ‘shrinking cities’ (Schilling & Logan 2008; Shetty & Reid 2013). While there is no universally agreed-upon definition of what constitutes a shrinking city, the consensus seems to converge upon cities that have experienced systemic employment and population loss, over a sustained period of several decades (Olsen 2013). Table 2 shows ten shrinking cities. All are located in the Midwest or Northeastern United States. While the year that they reached their peak population varies, the most common peak population year was 1950. For the sample of cities in Table 2, the severity of population decline varies from city to city, ranging from 62.7% (St. Louis, Missouri) to 25.2% (Toledo, Ohio).
Selected Shrinking Cities
|City||Peak Population (Year)||2010 Population||Decline Since Peak|
|St. Louis, Missouri||856,796 (1950)||319,294||62.7%|
|Detroit, Michigan||1,849,568 (1950)||713,777||61.4%|
|Cleveland, Ohio||914,808 (1950)||396,698||56.6%|
|Buffalo, New York||580,132 (1950)||261,310||54.9%|
|Flint, Michigan||196,941 (1960)||102,434||48.0%|
|Rochester, New York||332,488 (1950)||210,565||36.7%|
|Baltimore, Maryland||949,708 (1950)||620,961||34.6%|
|Syracuse, New York||220,583 (1950)||145,170||34.2%|
|Erie, Pennsylvania||138,440 (1960)||101,786||26.5%|
|Toledo, Ohio||383,818 (1970)||287,208||25.2%|
Shrinking cities present a number of challenges for those who govern them (Mallach 2010; Martinez-Fernandez et al. 2012; Shetty & Reid 2014). These impacts manifest themselves at a variety of scales, including at the level of the individual, the neighborhood, and the city. S. Annis and E. J. Brown (2016) identify five characteristics of neighborhoods that have experienced economic disinvestment – high poverty rates, high rates of residential, commercial, and industrial vacancy and abandonment, high levels of unemployment and underemployment, low educational attainment rates and low skills levels, and above average incidence of social problems such as crime and drug addiction, preventable diseases, and incarceration. The severity of these problems vary from neighborhood to neighborhood (Guerrieri, Hartley & Hurst 2012; Jennings 2012; Silverman, Yin & Patterson 2013). Revitalization of distressed neighborhoods is a complex issue that often brings with it a wide range of challenges and controversies; discussion of which is well beyond the scope of this paper. While the cities displayed in Table 2 are losing population, distressed neighborhoods are not restricted to shrinking cities. Cities experiencing population growth, and whose economies are performing relatively well, also have distressed neighborhoods. Examples of such cities include Denver, Colorado and Seattle, Washington (Weiler 2000; Kreager, Lyons & Hays 2014).
Part of the revitalization of a neighborhood involves ‘commercial revitalization’ (Sutton 2010). Commercial revitalization refers to the ‘resurgence of retail activity in neighborhoods previously considered moribund and perilous areas to avoid’ (Sutton 2010: 352). According to S. Annis and E. J. Brown (2016: 18), ‘retail development can be a key element in a revitalization strategy for a distressed area as it fills vacant spaces and provides jobs to local residents.’ In investing in such neighborhoods, investors signal to the broader market that the area is safe and worthy of investment. Distressed neighborhoods are often home to valuable physical assets, including vacant land, underutilized infrastructure, and attractive historic buildings (Annis and Brown 2016). In recent years, craft breweries have emerged as key investors in distressed neighborhoods in a number of American cities. The remainder of this paper explores the role of craft breweries in contributing to neighborhood revitalization.
Craft Breweries: Abandoned Buildings and Distressed Neighborhoods
As craft brewers search for space for their breweries, they are particularly attracted to older vacant buildings, which are often in a state of distress. Craft breweries are particularly adept at engaging in adaptive reuse. Adaptive reuse is as ‘a process of retrofitting old buildings for new uses, which allows structures to retain their historic integrity while providing for occupants’ modern needs’ (Clark 2008). The practice of adaptive reuse has a number of benefits both for the brewery owners and for the broader community at large. For the brewery owners, adaptive reuse is often less expensive than demolishing and rebuilding (Bonislawski 2017). For the community, adaptive reuse can contribute to neighborhood revitalization, preserve buildings that have cultural heritage value, and reduce urban sprawl by using already existing buildings (Shipley, Utz & Parsons 2006; Bullen 2007; Simons, DeWine & Ledbur 2017). According to one commercial real estate firm, ‘many breweries are located in unique spaces that may have been neglected or approaching obsolescence and are now getting a second or third life’ (CRBE 2016: 3). Craft breweries exist in a wide variety of old buildings, including churches, fire stations, and cinemas (Tab. 3).
Examples of Adaptive Reuse in the American Craft Brewing Industry
|Brewery Name||Location||Year Opened||Original Use||Year Building Built|
|Asheville Brewing Company||Asheville, North Carolina||1995||Cinema||1968|
|Taft Ale House||Cincinnati, Ohio||2015||Church||1850|
|Willimantic Brewing Company||Willimantic, Connecticut||1997||Post Office||1909|
|Phantom Canyon Brewing Company||Colorado Springs, Colorado||1993||Hotel||1901|
|Upstate Craft Beer Company||Greenville, South Carolina||2015||Bakery||1931|
|Hell ‘n Blazes Brewing Company||Melbourne, Florida||2016||Hardware Store||1898|
|Brewery Vivant||Grand Rapids, Michigan||2010||Funeral Home||1915|
|City Lights Brewing Company||Milwaukee, Wisconsin||2017||Coal Gasification Plant||1902|
|Firehouse Brewing Company||Rapid City, South Dakota||1991||Fire Station||1915|
Old buildings provide a unique ambience for the craft beer drinker. As has been observed, ‘craft beer is as much about getting creative with the space the brewery is located in as it is about creating unique beer recipes’ (Colliers International 2015: 5). As noted by another observer:
‘The craft beer consumer is looking for a unique atmosphere, taste, and overall experience and it is up to the breweries to meet those expectations. The physical space and its associated atmosphere play an important role in achieving the ‘experience’ consumers have come to expect’ (CBRE 2016: 4) and ‘an adaptive reuse location can deliver a unique experience to the consumer not found in other types of conventional real estate’ (CBRE 2016: 2).
A study by A. J. Carpenter et al. (2013) found that many craft beer drinkers enjoy visiting as many craft breweries as possible. Part of the attraction is that each craft brewery is unique, in terms of both its space and the beer brewed. With a small number of exceptions, no two craft breweries produce the same beer. Each beer reflects the creativity and unique knowledge, skill, and preferences of the brewer. J. F. Kraftchick et al.’s (2014) study of tourists, who visited breweries in North Carolina, support this finding. The primary factor motivating craft beer tourists is the unique beer and experience offered by craft breweries.
The buildings occupied by many craft breweries tend to be located in neighborhoods that have recently experienced, or are currently experiencing, economic distress. In many cases, the investment made by craft breweries have contributed to the revitalization and gentrification of these neighborhoods. In some cases, craft breweries are a pioneer investor, and are responsible for starting the virtuous cycle of investment that revives a neighborhood. In other cases, they arrive in a neighborhood after the revitalization process has started and become one piece of a larger revitalization jigsaw.
Denver, Colorado is one city where craft breweries have played a part in the revitalization of a number of the city’s neighborhoods. These include the city’s Lower Downtown (LoDo) and River North (RiNo) neighborhoods. LoDo is a former manufacturing and warehousing district, centered on the Union Pacific railyard. As transportation logistics evolved during the early 20th century, the neighborhood entered a period of decline. Warehouses and factories closed, and the number of liquor stores and crime rates increased. In 1988, two entrepreneurs, John Hickenlooper and Jerry Williams, opened a craft brewery in the neighborhood. The Wynkoop Brewery was the first major investment that the neighborhood had received in decades. Within a year, an antique store, a publishing company, and an apartment complex opened in LoDo. As the economy improved in the 1990s, other entrepreneurs invested in the neighborhood. As a place to live, LoDo proved attractive to younger professionals (the type of person driving the growing popularity of craft beer). In the same year in which the Wynkoop Brewery opened, Denver City Council designated LoDo as a historic district. This meant that development of the neighborhood would occur within the context of preserving historical buildings. LoDo’s designation as a historic district proved important, as today the neighborhood ‘contains one of the finest remaining collections of late nineteenth- and early twentieth-century commercial buildings in the American West.’ (Denver Public Library n.d.) and is a mixed-use hub of housing, retail, offices, and entertainment venues (Downtown Denver Partnership Inc. 2007). Today, LoDo is home to six craft breweries (Fig. 2).
Another Denver neighborhood that has benefitted from investment by craft breweries is the River North (RiNo) Art District (Fig. 3). RiNo was once an old industrial neighborhood that was home to manufacturing plants and warehouses. Starting the 1980s, it began to experience economic decline; industry moved out and the neighborhood was left with vacant abandoned factories and warehouses. As real estate prices fell, artists started to populate the neighborhood (RiNo Art District n.d.). Today, as a result of millions of dollars of investment by both the private and government sectors, it is a vibrant, mixed-use neighborhood that is home to a diverse mix of creative businesses that includes jazz bars, art galleries, small-batch coffee roasters, craft breweries, craft distilleries, and restaurants (Gose 2016). As already noted, craft breweries like to locate near other craft breweries. One of the reasons that the owners of Beryl’s Beer Company decided to open in the RiNo neighborhood in 2014 was the fact that there were other craft breweries there (Gorski 2015). The neighborhood is now home to eleven breweries, with more anticipated to open in the future (McGough 2016). The geographic clustering of breweries in the RiNo neighborhood attracts craft beer drinkers as it allows them to easily travel between breweries and sample the different beers that each brewery produces. It also ensures that the quality of the beer remains high; a brewery producing a sub-standard beer is likely to go out of business.
‘The emergence of Denver’s craft brewing district means drinkers can sample several tap rooms, including on foot or by bike. That is a great advantage for breweries hoping to lure new customers, but it also means there is no room to hide if the beer doesn’t measure up. Breweries need to be on their game because customers have options’ (Gorski 2015).
The geographic clustering of craft breweries in specific urban neighborhoods has important implications for the increasingly popular phenomenon of beer tourism (Kraftchick et al. 2014). Geographic clustering of breweries is beneficial to both the beer tourist and the city. From the tourist’s perspective, clustering makes it easier to visit more breweries in a short period. For the city, clustering facilitates marketing efforts, as they can promote a particular neighborhood or neighborhoods that have a critical mass of breweries. A number of cities promote their breweries on their official tourism websites. For example, the city of Denver’s tourism website (Denver. The Mile High City website) has neighborhood-based information on brewery tours, beer-focused walking tours, and Denver brewing history. While much of the discussion above focuses on a single city, there are numerous examples of cities across the United States where craft breweries have contributed the revitalization of a distressed neighborhood. These include Cleveland, Ohio, St. Louis, Missouri, Buffalo, New York, and Charleston, South Carolina (Alexander 2013; Baur 2013; Lubin 2016; Lee & Lee 2018).
The number of craft breweries in the United States has increased significantly since the mid-1980s and today, craft breweries exist in many American cities. With their growth came the recognition that craft breweries could play a role in efforts of cities to revitalize economically distressed neighborhoods. Many craft breweries prefer to locate in such neighborhoods because rents are relatively less expensive. These neighborhoods have an abundance of old buildings, which craft breweries have adaptively reused and occupied. This has resulted in the development of brewery clusters, and particular neighborhoods have developed a reputation as brewery districts. This benefits craft beer consumers who enjoy visiting numerous craft breweries within the space of an afternoon or evening, while cities can market such neighborhoods to the growing number of individual who participate in beer tourism.
While this paper has painted a generally positive picture of craft breweries and neighborhood revitalization, the process of gentrifying an economically distressed neighborhood is often controversial (Brown-Saracino 2010; Bates 2013). The dark side of neighborhood revitalization includes rising real estate rents that inevitably force existing residents and businesses to exit the neighborhood (Yee 2015; Woodard 2016). The individuals forced to exit are usually disadvantaged minority populations, while the business who leave are those, such as neighborhood grocery stores, that provide basic goods and services to neighborhood residents (Woodard 2016). Ironically, rising real estate prices in gentrified neighborhoods are also negatively affecting some craft breweries, particularly those seeking to expand their operations and discovering that real estate prices are prohibitive (Chung 2008).
While some commentators question whether the craft beer sector is approaching limits to growth, there appears to be a consensus that there is room in the market place for more craft breweries (Cleveland 2017; Murphy 2018). Many of these craft breweries are likely to be attracted to the same types of neighborhoods that attracted their predecessors. However, rising real estate values in gentrified neighborhoods may discourage new breweries from investing in such neighborhoods. This is good news for neighborhoods where revitalization is in its early stages, and real estate prices are still low; craft breweries may invest in such neighborhoods.
The author thanks Matthew Lehnert for his assistance in producing the maps for this paper.
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