The Innovation That Fuels The Craft Brew Revolution

By: Noah Rue

Beer is one of the oldest alcoholic beverages. It was brewed around the ancient world at various times, in Mesopotamia (known today as Iraq), ancient Iran, ancient China, Egypt, and Armenia, ranging from 3,500 to 10,000 years ago. Beer was one of the first fermentation processes undertaken by humans.

The science of beer brewing has survived all this time, becoming a major part of monk and monastery culture in European countries and arriving in the Americas with settlers in later centuries. Today, a number of countries take national pride in their beer production, and in the U.S beer is still gaining momentum as a national passion.

For such an ancient process, beer brewers have remained culturally and scientifically adaptable through the ages. With the recent technology boom in the U.S, beer has once again proved its resilience. The craft beer industry is shrouding itself with innovation and tapping into a cultural shift that is allowing small breweries across the country to compete ferociously with powerful corporate interests.

Here is a rundown of some of the technological and cultural innovations that craft breweries use to not just remain relevant, but re-create what relevance means in the brewing industry.

Brewing Technology

Much of the innovation surrounding the brewing process has to do with efficiency, refinement, and waste reduction. The wheel isn’t being re-invented, craft brewers are instead tapping into very complex data technology to gather precise information about their processes.

The nature of beer production lends itself well to technological innovation, which craft breweries are embracing to their benefit. Beer recipes can be refined using mathematical formulas, and the nature of bulk batch production lends itself well to technological refinement and experimentation.

By using IoT technology to gather data about every step of the process — including weight, the volume of ingredients, gas, waste products, motion, light levels, and other data points — then applying machine learning programming, companies like IntelligentX are making “beer brewed by AI” possible. Other companies such as Sierra Nevada use technology to focus on waste reduction. Some innovative folks at Berkeley have even managed to create hoppy beer without hops.

Facilities, Waste, Environment

Craft breweries going green is the product of both environmental necessity and cultural flexibility. Water is a big deal to brewers. Beer has a very large water footprint, every gallon of beer requires five to six gallons of water. Added to that is the additional burden of the India Pale Ale (IPA), Craft Beer’s darling brew. IPAs require more farmland, more energy, and more water than other types of beer, and craft brewers are having to go all in on green technology to handle the resource drain of IPAs.

Sustainability is becoming a hot button topic in many traditionally high-footprint industries such as tourism, farming, and, of course, brewing. A number of industries issue their own certifications and practices, which especially recently, encourage them to outperform government regulations and guidelines. Craft brewers are ahead of this curve and seem to be embracing more quickly than other industries that a balance between profits, the environment, and the people living in it is vital to doing business.

Renewable energy is one area that craft breweries often embrace, some going so far as to outfit their buildings with solar panels in order to reduce their drain on local utilities. Solar technology is in a process of constant innovation which marries well with the spirit of American craft brewers.

A focus on water isn’t a coincidence. Many successful brewers are based in California, along with all-star wineries. So it makes sense that the water crisis and drought is of particular concern to the industry at large. A number of breweries are experimenting with ways to reduce and even reuse wastewater in their brewing process.

Is Tech the Secret to Success?

Craft breweries are a strange flashfire of prosperity in uncertain economic times and in an industry dominated by corporate juggernauts. By traditional economic trends, their success is quite unexpected and serendipitous.

There are large entry barriers to entrepreneurs looking to start a brewing business. These barriers include; expense of the equipment to make batches at scale, the competition from large breweries in a saturated market, and the general downtrend of beer consumption in the U.S. That’s before we get into the marathon of regulatory requirements at all three levels (federal, state, municipal) of government.

So what can account for the success of craft beers? It’s probably not one single element. Markets are often mysterious. It’s likely that the interest in local and artisanal products, in green and socially responsible businesses has reached a kind of peak that allows for newcomers to upset traditional, older industry practices. The beer aficionados among us are certainly thankful for the changes!

Marketing

Messaging is one key to success that it’s easy to point to. Craft brewers have proven very effective at delivering their message, and the local focus of their products is allowing them to cut through a lot of powerful industry marketing efforts to reach audiences that genuinely care about their communities.

One of the biggest keys to independent brewer success is differentiation, which is the deceptively simple act of distancing themselves and their products from big industry players, of standing out and providing new experiences. Popularizing the IPA has been one big step that craft brewers have taken to differentiate themselves from generic brands. With increasing saturation in the market, however, this is no longer enough.

Breweries have taken to relying on visual cues when customers enter a store and often go all in on innovative bottle and label designs, using artistic, unique, and unconventional labels that also provide some indication of their status as independent and environmentally friendly. Many are also turning their breweries into beer halls and independent stores in order to attract customers to the venue itself, to learn about the company, and take part in the cultural renaissance of beer.

The combination of technology, innovative spirit, and culturally responsive marketing have created an abundance of small business and entrepreneur operations in an industry that shouldn’t, by traditional economic logic, have room for them. The power of flexibility and technology adoption is perhaps demonstrated at its best with the craft beer industry.