Brewery, Microbrewery, Brewpub. What’s the Difference?

As a bar or restaurant owner, knowing what’s in your craft beer and where it comes from are two essentials to being an expert on your product. We all know a brewery is the place where a beer is brewed, but there are a few different types of breweries that yield many diverse styles of beer and experiences.

From Brewpub to Microbrewery: Craft Beer Market Segments

State laws are a big reason for the different market segments within the craft beer industry. Most breweries go through a three-tiered selling process (brewer to wholesaler, wholesaler to retailer, retailer to consumer). That’s because most states don’t allow breweries to sell directly to the consumer.

Some more lenient states have allowed some breweries to act as a wholesaler, and in some cases to even sell directly to the consumer (the retailer role). This has created different types of breweries:

  • Nanobrewery
  • Microbrewery
  • Brewpub
  • Regional Craft Brewery
  • Regional Brewery
  • Large Brewery

Although some of these are delineated by state laws, they are also categorized by the amount of annual beer production, and percentage of beer sold on-site.

What is a Microbrewery or Nanobrewery?

Officially, a microbrewery is any facility that produces fewer than 15,000 barrels of beer annually, with 75% or more of its beer served off-site. Unofficially, it’s the word most people use when they’re referring to a business that brews craft beer. Since they are much smaller than a regular brewery, microbreweries have ample time to “craft” different flavors of beer. This is in contrast to a larger facility, which might prioritize production value over perfection.

A nanobrewery is an even smaller version of a microbrewery. There is no accepted production volume for a nanobrewery, but it’s typically quite small, as most are run by one brewer. Depending on the state, nano and microbreweries can sell in a traditional three-tier system, two-tier system (wholesaler to retailer), or directly to the customer through on-site taprooms, carry-outs, or brewpubs.

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What is a Brewpub?

If a brewery is located in a state that allows them to sell directly to consumers (including California, New York and Texas), then they can open what is known as a “brewpub.” A brewpub is a bar that is owned by a brewery and serves their beer directly to consumers. By law, an establishment can only be called a brewpub if it sells 25% or more of its beer on-site.

Brewpubs have a unique appeal for many consumer because they often dispense their beer directly from the brewery’s storage tanks. Not only do the storage tanks look cool, but they also lend authenticity and legitimacy. Customers can see exactly where their beer is coming from and can appreciate the impressive technical skill that goes into crafting a good brew.

Depending on state law, some brewpubs can even sell their products “to-go,” and/or distribute to smaller off-site locations. There are several brewpubs throughout the country, and you can easily check to see which ones are closest to you.

What is a Brewery?

There are many ways to classify what most of us know as a “brewery.” A regional brewery (or a regional craft brewery) is defined as a beer producer that produces 15,000 – 6,000,000 barrels per year. Any brewery producing more than six million barrels (think Budweiser) is considered a “large” brewery.

What is a Contract Brewing Company?

As if the beer industry wasn’t confusing enough, you could also be dealing with a contract brewing company. When a brewer has a recipe or excessive volume they need help with, they may hire a different brewery to craft their beer. Under this arrangement, the contract brewery handles all of the marketing and sales for the original recipe but leaves the brewing and packaging to the producer.

Once you feel you’ve grasped this knowledge, and are ready to start serving some new brews, Evergreen is a great application to help you get the word out. Through their easy-to-use dashboard, you can set up a beautiful digital beer menu or print menu. You can even get listed on the TapHunter app!

Understanding the type of facility your craft beer was produced in is important for sales. Today’s consumers (especially the younger ones) love craft beer and understanding how the industry works helps you sell more. Remember, craft beer is not only about selling the taste, it’s about selling the story.

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