2015 Craft Brewery Report

US Research
SPOTLIGHT REPORT
October 2015
Craft Beer Pours Into

Commercial Real Estate
Executive Summary
Craft Brewers Defined
The growing popularity of craft beer in the United States presents

opportunities for owners of both warehouses and retail spaces to
purpose their buildings to enable brewers to produce and/or sell their
output. In the leading markets we surveyed, Colliers International
identified more than 400 breweries being planned, potentially
representing 3 million SF of new craft beer inventory. The vast
majority will be located in industrial space whether in a multi-tenant
industrial complex or a larger single-tenant industrial building while
the remaining breweries will operate in a retail restaurant location,
more commonly known as a brewpub. Each brewery will typically
include dedicated space that acts as a retail component that is
used to sell directly to consumers in the form of carry out or an
on-site taproom within the same operational space their product is
manufactured.
U.S. Craft Beer Market Share Continues to Grow

Fueled by consumer demand, the number of U.S. craft breweries has
skyrocketed, with new craft breweries opening across the country.
These new breweries are producing a more diverse, higher-quality
beer than the traditional mass-produced lagers. Overall, beer market
sales last year were $101.5 billion nationally. Craft brewers now
account for almost one-fifth of the total beer market sales, produced
Life Cycle
of Colliers
Craft BeertoMarkets
in someBusiness
3,400 small
breweries,
according
the Brewers Association,
(a trade group representing craft brewers). The large national brewers
21%
Mature
account for over
80%
of that total despite operating out of fewer than
Growth Phase
50 plants nationwide.
76%
Growth
The craft
beer industry is segmented into three
categories:
3% Stabilization/
Phase
microbreweries,
brewpubs and regional craft breweries. From 2013
Maturity Phase
to 2014, the number of craft breweries in the United States increased
by 19.4% compared to a decline of 14.8% in non-craft breweries. The
number of breweries is projected to increase by an annualized rate of
Colliers International
7.1% between 2015 and Source:
2020 according
to the IBIS World: 2015 Craft
Beer Production Industry Report, which would bring the total number of
U.S. breweries to more than 5,300.
The proliferation of craft brewing, at the expense of traditional large

breweries, suggests a much more local, grass roots movement,
which, in contrast to a highly-consolidated non-craft beer industry,
is now much more geographically diverse and reflects an evolving
Historical U.S. Craft Brewery Count by Category
Trend in Craft Breweries by Category

4,000
3,500
3,000
Independent - Less than 25% of the craft brewery is

owned or controlled (or equivalent economic interest) by an
alcoholic beverage industry member that is not itself a craft
brewer.
Traditional - A brewer with a majority of its total beverage
alcohol volume in beers whose flavor derives from
traditional or innovative brewing ingredients and their
fermentation. Flavored malt beverages (FMBs) are not
considered beers.
Source: Brewers Association
Craft Beer Industry Market Segments

Microbrewery - A brewery that produces fewer than
15,000 barrels (17,600 hectoliters) of beer per year with
75% or more of its beer sold off-site. Microbreweries sell
to the public by one or more of the following methods:
the traditional three-tier system (brewer to wholesaler to
retailer to consumer); the two-tier system (brewer acting
as wholesaler to retailer to consumer); and, directly to the
consumer through carry-outs and/or on-site tap-room or
restaurant sales.
Brewpub - A restaurant-brewery that sells 25% or more
of its beer on site. The beer is brewed primarily for sale
in the restaurant and bar. The beer is often dispensed
directly from the brewerys storage tanks. Where allowed
by law, brewpubs often sell beer to go and/or distribute
to off-site accounts. Note: The Brewers Association recategorizes a company as a microbrewery if its off-site
(distributed) beer sales exceed 75%.
Contract Brewing Company - A business that hires another
brewery to produce its beer. It can also be a brewery that
hires another brewery to produce additional beer. The
contract brewing company handles marketing, sales and
distribution of its beer, while generally leaving the brewing
and packaging to its producer-brewery (which, confusingly,
is also sometimes referred to as a contract brewery).
Regional Craft Brewery - An independent regional brewery
with a majority of volume in traditional or innovative
beers.
2,500
2,000
1,500
1,000
500
-
94
19
96
19
Brewpubs
98 000 002 004 006 008 010 012 014

2
2
2
2
2
2
2
2
19
Microbreweries
Regional Breweries

Small - Annual production of 6 million barrels of beer

or fewer (approximately 3% of U.S. annual sales).
Beer production is attributed to the rules of alternating
proprietorships.
Craft Beer Commercial Real Estate Spotlight | Colliers International

Top 5 Metros by Craft Brewery Growth (% growth 13'-14')
consumer palate and provides more opportunities for property owners

to be part of the movement.
This evolving economic model is leading to broader growth and
benefiting a greater number of metro areas rather than just the small
number of markets where the large traditional major breweries
are based. The growth in craft beer sales, up 22% from 2013, has
garnered the attention of large non-craft breweries whose sales
continue to decline, dropping 2.4% year-over-year in 2014. As
a result, some large non-craft breweries have begun to position
themselves in the craft beer market through the acquisition of
successful craft breweries. And while craft beer is still far from
dominating non-craft breweries, the growth in the craft beer market
share indicates changing consumer tastes are altering the beer
industry landscape.
Total Number of U.S. Breweries

# OF
BREWERIES
2013
Craft Breweries
Non-Craft Breweries
Total Breweries
13-14
GROWTH
(%)
13-14
GROWTH
2,863
3,418
19.4%
556
54
46
-14.8%
-8
2,917
3,464
18.8%
548
Sources: Brewers Association, IBIS World
Total U.S. Beer Sales

BEER SALES 2014
(BILLIONS)
13-14
GROWTH
(%)
Craft Breweries
$16.1
$19.6
21.7%
Non-Craft Breweries
$83.9
$81.9
-2.4%
$100.0
$101.5
1.5%
Total Sales
The road to craft brewing typically begins as a venture in home

brewing, often in a garage, shed or on a back patio, offering an
avenue for novices to start brewing beer relatively quickly and
inexpensively. Once their skills have been honed, many of the more
avid home brewers seek to broaden their commercial market;
breweries in this planning phase face a gauntlet of challenges in
making their dream brewery a reality. From leasing space, space
planning, permitting, and capital requirements, the transition into the
commercial brewing arena does not come easy.
EMPLOYMENT
(FTE*)
# OF CRAFT
BREWERIES^
California
$4,693
13.8%
44,720
444
$2,316
6.8%
20,171
113
New York
$2,191
6.5%
20,818
154
Pennsylvania
$1,964
5.8%
20,867
139
Colorado
$1,634
4.8%
19,251
175
Illinois
$1,324
3.9%
13,982
114
Oregon
$1,295
3.8%
14,883
207
Ohio
$1,261
3.7%
10,731
103
Washington
$1,006
3.0%
13,148
246
$33,893
100.0%
363,703
3,418
Note: *FTE stands for Full Time Equivalent ^2014 totals

Source: Brewers Association, 2012 Economic Impact Study
A growing trend has begun to emerge to ease the transition from

home brewer to commercial brewer. Brewery incubators have
started popping up across the country in both large and small
markets providing serious brewers with the step-by-step guidance to
become a full-fledged commercial brewery. In our survey of 29
markets, a third indicated that their market had an incubator
presence while 14% indicated that brewery incubator space is in the
planning phase within their market.
% of Colliers Markets with Incubator Space

14% Not yet,
but in works
The Economic Impact of Craft Beer

A 2012 study by the Brewers Association estimated the total
economic impact of the craft beer industry contributed $33.9 billion
and 360,000 jobs to the U.S. economy. During that year, California
ranked first out of all 50 states in both the number of craft
breweries (381) and economic impact ($4.6 billion). Texas, New
York, Pennsylvania and Colorado round out the top five states,
accounting for 24% of total economic impact for U.S. craft beer.
% OF TOTAL
ECONOMIC
IMPACT
Texas
The Garage-to-Glass Movement
ECONOMIC
IMPACT
(MILLIONS)
REGION
U.S. TOTAL
# OF
BREWERIES
2014
BEER SALES 2013

(BLLIONS)
Top 10 Craft Beer States (Based on economic impact)
34% Yes
52% No
Source: Colliers International
With the continued

popularity
of craft beers and a desire from
Source: Colliers
International
consumers to brew their very own batch, brewery incubator
facilities will surely continue to expand into more markets across
the U.S., providing home brewers an easier path into the
commercial craft beer arena.
Craft Breweries Increased Footprint in Commercial

% of Occupied Space by Building Tenancy
Real Estate
In an effort to better gauge the impact the craft beer industry has
been having on commercial real estate in recent years, Colliers
International took a deeper look at craft breweries in 29 markets
MultiThe
Tenant
Multi-Tenant
across the country.
goal was Single-Tenant
to look at
the craft beer boom and
Single
Tenant
39.9%
the effect it has had
on commercial real
estate
60.1% by measuring the
industrys total footprint in the surveyed markets along with square
foot growth rates during the last couple of years.

Sources: CoStar, Colliers International
Multi-Tenant
% of Occupied Space by Building Tenancy & Type
Single-Tenant
Regional 19.1%
Average Occupied SF by Year Established
Total Occupied SF by Type, Year Established
Millions
Average Occupied SF by Type and Year Established

8.0
YEAR ESTABLISHED
7.0
BREWPUBS
MICRO
REGIONAL
8,543
9,442
47,454
20,682
1990-1999
7,946
13,664
45,813
15,179
2000-2009
7,119
9,270
22,197
9,673
2010+
7,732
6,702
57,164
7,717
7,733
7,569
42,088
9,758
5.0
4.0
3.0
Grand Total

25,000
ALL
1980-1989
6.0
80.9%
Micro
48.2%
20,682
% of Colliers
Markets
with Incubator 51.8%
Space
20,000
14% Not yet,

but in works
15,179
15,000
Brewpub
51.0%
49.0%
9,673
10,000
2.0
5,0000%

1.0
50%
Multi-tenant
0.0
7,717
52% No
34% Yes
100%
Single Tenant
Millions
9
+
1980-1989
1990-1999
2000-2009
2010+
9 observes
As reported in their
August
IBIS
that
9report,
89 2015
80
10
00
-19
19
-19
20
-2
0
r
0
9
0parallel
o
8
i beer production
9
regional craft
tends
to
the
nearby
0
r
9
1
1
0
2
tP
Es (areas of higher population tend to have a higher
population
Brewpub
Micro
Regional
share of establishments). Additionally, relative to their large beer
manufacturing
counterparts,
the smaller size of craft beer
Sources:
CoStar, Colliers International
Total
Occupied SF by Type, Year Established
establishments means that craft beer operations tend to prefer to
8.0
be near major metro areas. Our survey findings confirm this.
Colliers surveyed the space of 1,457 craft breweries across 29
7.0
markets, which together account for an estimated 14.9 million SF
6.0
of commercial space where beer manufacturing occurs.Real Estate Formats Used by Craft
Breweries
5.0
Flex
0.10
Our findings are as follows:

0
0.5
1
1.5
2
2.5
3
Overall growth of the craft beer footprint was 20.7%
from 2013 to 2014
Growth in the craft beer industry is expected to continue
across most markets in our survey, with another 418
breweries identified in the planning phases.
Across the 29 markets, close to half the total square
footage (45.6%) is occupied by microbreweries. Regional
breweries follow with more than a quarter (30.2%), with
brewpubs close behind at 24.2%.
Moreover, the microbrewery share is growing. They
accounted for less than 10% of the craft brewery space
from 1980 to 1989, but now account for two-thirds of the
craft brewery space of businesses established after
2010.
The average total area of operation for brewpubs is 7,733
SF, microbreweries 7,569 SF. Regional breweries are
much larger, with an average area of 42,088 SF. The
overall average is 9,758 SF when the three categories
are combined. We used these numbers to develop
market-wide averages with the following results:
4.0
Multi Tenant
3.5 Multi-Tenant
3.0 39.9%
3
Single Tenant
Single-Tenant
60.1%
2.52.0
21.0
1.50.0
99
89
09
80
-19
19
20
-19 International
1
0
r
0
Sources:
CoStar,
Colliers
9
0o
8
i
9
0
r
9
1
1
20
tP
0.5Es
Brewpub
Growth Phase
Micro
Mature Growth
Phase
Regional
Stabilization /
Maturity Phase
1.7
Real Estate Formats Used b
1.6
1.5
Retail-industrial
2.38
1.4
Retail-restaurant
1.3
1.2
Retail-bar
1.1
Retail-store
1.38
1.29
0.57
1
Industrial-Warehouse
CA
PA 0.38 , OR
, IL
o,
go
d
ia ,
ieg
ic a
ph
lan
l
t
h
D
r
e
C
n
Po
ilad
Sa
0.10
Office
Ph
n
De
ver
,C

Sources: CoStar,
Flex Colliers
0.10 International
0
0.5
1.5
10
20
5 Metros by Craft Brewery Inventory

Top 5Top
Metros
by Craft Brewery Inventory
Millions
These breweries were categorized into 3 groups:

Retail-industrial
1. Brewpubs
- typically located in a retail restaurant
2.38
location that allows for a limited amount of beer
Retail-restaurant
1.38
manufacturing on-site
2. Microbreweries
- typically located
within a small single
Retail-bar
1.29
-tenant industrial building or multi-tenant industrial
Retail-store
0.57
complex
3. Industrial-Warehouse
Regional breweries0.38
- tend to locate in larger
single-tenant industrial warehouse buildings due to the
Office 0.10
increased size requirement for their operation
% of Occupied Space by Building Tenancy & Type
Regional
2.5

4,000
3,500
3,000
Our survey
shows that Chicago, IL is the countrys craft beer capital,
2,500
with an estimated
footprint of 1.6 million SF of craft brewery space.
2,000
Philadelphia,
PA (1.5 million SF); Portland, OR (1.4 million SF); San
1,500
Diego, CA (1.1 million SF); and Denver, CO (1.0 million SF) round out
1,000
the top 5 in
terms of craft brewery space. Charlotte, NC, had the
500
largest year-over-year
growth rate from 2013 to 2014 at 77.0% with
94 996 998 000 002 004 006 008 010 012 014
1
1 Columbia,
19 65.9%,
Chicago, IL at
2 San
2 Diego, CA at
2
2 at2 47.9%,
2
2 SC
2
45.9% and theBrewpubs
state of Vermont
treated
as
its
own
market with a
Microbreweries
Regional Breweries
41.5% growth rate.
Top 5 Metros
Craft
Brewery
SF Growth
Top 5 Metrosby
by Craft
Brewery
Growth (% growth
13'-14')
(% growth 13-14)
90%
80%
70%
60%
Craft Beer and the Repurposing of Commercial Real

Estate Space
50%
40%
30%
20%
10%
0%
,N
tte
lo
ar
Ch
The addition of new microbreweries and brewpubs will add modest

amounts of square footage to each market, but the real impact on
commercial real estate will be felt through expansion plans of
existing microbreweries as they begin to make the transition into
regional brewery operations. Breweries eventually reach a point
where they outgrow their original space and start to gain market
share through expanding their distribution channels, thereby driving
them to take up larger swaths of space to accommodate their
growing operation. A number of breweries have recently expanded
their operations by opening large facilities, which will enable them
to get their product quickly to an increased number of markets
across the country. Most notably, Californias Sierra Nevada
Brewing Company recently opened a 300,000 SF facility in Mills
River, NC and Lagunitas Brewing Company1 opened a new 300,000
SF facility in Chicago, IL. Additionally, Colorados New Belgium
Brewing Company completed a 133,000 SF facility in Asheville, NC.
o,
ag
ic
Ch
IL
ia,
b
lum
SC
Co
o,
eg
i
nD
Sa
CA
on
rm
Ve
The overall consensus through the survey of these 29 markets is

that craft%beer
and the breweries within each market have resonated
of Space Single vs. Multi-Tenant by Yr Established: Regional Breweries
with the consumers as demand has picked up over the years and
remained100%
constant. This held true for all types of markets, big and
small, urban,
suburban and rural. An overwhelming three-quarters
80%
of markets indicated that their local craft beer industry
is still well
59.4%
60%
81.1%
within the growth89.5%phase of 88.7%
the business
cycle, portending an
optimistic40%
view on the future growth of the industry. Optimism in the
markets is
further strengthened by the 418 breweries
in the planning
20%
40.6%
18.9% which will lead to more
stages throughout
the
surveyed
markets,
11.3%
10.5%
0%
1980-1989
1990-1999
2000-2009
increases in the
total brewery
inventory.
The top2010+
5 markets for
breweries in planning
are
led
by
Denver,
CO
with
62; Portland, OR,
Multi-tenant
Single Tenant
San Diego, CA and Seattle, WA with 41 each; and Chicago, IL
with 39.
Business Life Cycle of Colliers Craft Beer Markets
Business Life Cycle of Craft Beer Markets

21% Mature
Growth
Phase
76% Growth
Phase
25000
3% Stabilization/
20000
Maturity Phase
20,682
Typically, craft breweries operate in industrial space that has the

infrastructure in a place with access to water, a sewer system
and the power capacity necessary to run a full-scale brewery
manufacturing operation. Through the repurposing of space, it is
not uncommon for a brewery to set up operations in an antiquated
industrial building. These opportunities are often sought out
because they are usually cheap to acquire or lease, bring a sense
of character to the brewery, and have the potential to offer tax
incentives through revitalization efforts depending on programs
in local jurisdictions. A brewery can bring new life to a vacant
industrial building or retail shopping center and can help boost
leasing demand. Locate a brewery in a walkable neighborhood, and
it can become an instant draw for existing and potential residents.
Landlords are taking note of craft beer as a growth industry, which
will create an increased demand for their properties.
Craft beer is as much about getting creative with the space the
brewery is located in as it is about creating unique beer recipes.
Go into any real estate market, and youre sure to find a craft
brewery in a repurposed location that other commercial real estate
users surely passed on. Chicagos Argus Brewery makes its home
in a building built in the early 1900s that was a former stable for
the Schlitz Brewing horse teams and carriages. Other examples
of breweries using repurposed space for their operations include
Station 26 Brewing, which operates in an abandoned firehouse
in Denver, CO, and Jailhouse Brewing Company in Hampton,
GA, outside of Atlanta, which has their brewery and taproom in
a former 1920s-era jail. Properties that are often overlooked by
others have the potential to offer the perfect solution for craft
brewers looking for commercial space.
15,179
15000
9,673
10000
7,717
5000
As of September 10, 2015 Heineken has a 50% stake in Lagunitas in an effort to expand operations globally. Lagunitas will no longer be considered a craft
brewery since
0 Heineken has a stake greater than 25%.
1980-1989
1990-1999
2000-2009
2010+
Millions
Top 5 Metros by Craft Brewery Inventory

1.7
Top 5 Metros by Craft Brewery Growth (% growth 13'-14')
Business Life Cycle of Colliers Craft Beer Markets
90%
1.6
In our survey, an estimated 40% of all establishments are located

14% Not yet,
within multi-tenant space with the remaining 60% in singlebut in works
tenant buildings. The size of the operation influences the space
1.4
considered. For example, 80% of regional breweries operate in
1.3
a single-tenant buildings, while only 52% of microbreweries and
49% of brewpubs do the same.52%
Our survey
No also revealed that the
1.2
34% Yes
more mature the local industry, the more likely top craft breweries
1.1
will make use of retail-industrial space. The more mature the craft
beer market, the more likely the top brands in that market will
1
O
IL
CA
PA
OR space. ,About
,occupy
retail-industrial
three-quarters
of the best,C
o
o
g
d,
ia ,
ver
ieg
ic a
ph
lan
n
l
t
h
D
e
r
e
C
known
craft
brewers
in
the
earliest
growth
phase
markets
are
o
d
D
n
a
P
il
Sa
Ph
located
in retail-industrial space, rising to 83% for the mature
growthSource:
stage Colliers
marketsInternational
and all breweries that are in the stabilization/
Sources: CoStar,
maturity markets.
1.5
Occupied Space by Building Tenancy & Type

% %80%
ofofOccupied
Space by Building Tenancy & Type
21% Mature
Growth Phase
70%
60%
Regional
19.1%
3% Stabilization/
Maturity Phase
40%
30%Micro
48.2%
51.8%
20%
10%
Charlotte, NC
Chicago, IL
Brewpub
51.0%
49.0%
50%
MULTI-TENANT VS. SINGLE-TENANT
Multi-Tenant
Source:
Colliers
International
San
Diego, CA
Vermont
Columbia, SC
0%
% of Occupied
Space
by Building
Tenancy
Type
% of
Occupied
Space
by&Building
76% Growth
Phase
80.9%
50%
100%
Single-Tenant
%%ofofSingle
vs. Multi-Tenant
by Year Established:
Space Single
vs. Multi-TenantSpace
by Yr Established:
Regional Breweries
Regional Breweries
Tenancy
4,000
100%
Regional 19.1%
Micro
80.9%
Multi Tenant
Multi-Tenant
Single Tenant
Single-Tenant
39.9%
60.1%
48.2%
Millions
51.8%
51.0%
3,000
3.0
49.0%
2,000
1,500
100%
18.9%
11.3%
500
1990-1999
10.5%
1980-1989
2.0
50%
40.6%
1,000
Multi-Tenant
2000-2009
96
94
19
19
1.0
0%
81.1%
88.7%
89.5%
20%5.0
0%4.0
59.4%
2,500
40%
6.0
Sources:Sources:
CoStar, Colliers
International
CoStar,
Brewpub
3,500
80%
8.0
60%
7.0
98 000
19
2010+
Brewpubs
00
2
2
Single-Tenant
06
04
20
20
Microbreweries
08
20
10
20
12
20
Regional Breweries
0.0
9
Real Estate Formats Used by
Craft Breweries
+
89
Source:
09 Association
80
99 Brewers
10
Real Estate Formats Used by Craft Breweries

Real Estate Formats Used by Craft
Breweries
or
19
19
-1
0-
90
20
0-
20
8
Multi-Tenant
Single-Tenant
9
0
ri
19 formats 1were
Colliers
markets were asked
for the top 3 craft beer brands in their market and to identify
which
used
20 by those brands:
tP
Es
Top
5 Metros
by
Craft
Brewery
Inventory
Share
of Top
Craft
Breweries
inofEach
Market by Tye of Facilty
Share of Top%
Craft
Breweries
inBreweries
Each
Market
Tye
Facilty
of Top
Craft
inbyEach
Market
by Type of
Millions
Facility
1.7
Total Occupied SF by
Type, Year Established
Retail-Industrial
Retail-Industrial
1.6
Millions
etail-Restaurant
8.0
Retail-Bar
7.0
6.0
Retail-Store
79.3%
79.3%
46.0%
1.5
Retail-Restaurant
1.4
1.3
46.0%
43.0%
Retail-Bar
43.0%
19.0%
Retail-Store
19.0%
ior
Es
r
tP
0
98
Sources: CoStar,
9 Colliers International
9
98
-1
80
19Craft
Brewpub
9
-19
99
0-
9
00
Sources: CoStar,
International
2.31 Colliers
Facility by
Maturity
of Market
80%
25,000
80%
20,682
20,000
0
01
15,000
40%Retail-industrial
Retail-restaurant
10,000
20%
Retail-bar
0%
5,000
Regional
Growth
Retail-store
Industrial-Warehouse
0
1980-1989
0
1 Commercial
Beer
Real Estate Spotlight | Colliers International
20
Micro
90%

100%
100%
60%
1.2
5.0
12.7%
trial-Warehouse Industrial-Warehouse
12.7%
1.1
4.0
Flex 3.3%
Flex 3.3%
1
3.0
L
R
A
I
PA
CO
,
,C
,O
Office 3.3%
ia ,
er,
ago Office ph3.3%
go
nd
v
e
c
a
2.0
i
i
l
n
l
t
r
e
Ch
De
nD
Po
ilad
Sa
Ph 0%60% 20%
0%
20%
40%
80% 40%
100%
60%
80% 100%
1.0
0.0
3.00
Share of
Top Craft
Breweries
Using a Retail-Industrial
Share of Top Craft
Breweries
Using
a Retail-Industrial
Brewpub
Micro
Regional
% Facility
of TopbyCraft
Breweries
Using
a
Retail-Industrial
5 Metros
by
Craft
Brewery
Growth
(% growth 13'-14')
Facility
by Maturity
of
Market
Maturity
ofTop
Market
2.50
Office
80%
70%
2.38
40%
40%
30%
20%
20%
1.38
9,673
1.29
7,717
0% Mature Growth
Stabilization/
10% 0.57
Growth
Mature Growth
Stabiliz
Charlotte, NC
Chicago, IL Maturity
Columbia, SC San Diego, CA
V
Matu
0.38
1990-1999
2000-2009
2010+
Sources: CoStar,
0.10
Flex
Real Estate Formats Used
60%
60%
50% 15,179
0.10
Findings
Ranking Craft Beer in Commercial Real Estate
RANK:
ESTIMATED SF
RANK: SF
GROWTH
RATE
13-14
Chicago, IL
18
Philadelphia, PA
26
10
Portland, OR
14
San Diego, CA
MARKET
RANK: PERCAPITA
FOOTPRINT
RANK: TOTAL
BREWERIES
RANK: TOTAL
BREWERIES
IN PLANNING
RANK: AVG HH
EXPENDITURE
ON BEER &
ALE (MSA)
27
16
17
28
Denver, CO
19
14
Seattle, WA
28
11
21
8
Cincinnati, OH
20
13
14
Asheville, NC
15
17
24
Minneapolis-St.Paul, MN
22
14
19
26
Vermont
10
12
22
Boston, MA
11
22
17
24
Houston, TX
12
25
15
26
23
Milwaukee, WI
13
18
18
25
Cleveland, OH
14
25
15
16
St. Louis, MO
15
17
20
20
18
10
Atlanta, GA
16
16
24
14
11
20
19
NYC/Long Island, NY
17
23
29
11
Madison, WI
18
24
16
23
13
Maine
19
12
13
10
10
22
Nashville, TN
20
10
19
19
Charlotte, NC
21
23
25
21
11
Kansas City, MO
22
21
21
22
20
15
South Florida
23
13
28
21
12
18
San Francisco, CA
24
12
24
13
29
Grand Rapids, MI
25
27
16
23
25
Charleston, SC
26
17
27
28
6
4
Columbus, OH
27
11
26
26
27
Greenville, SC
28
29
29
15
Columbia, SC
29
27
28
29
12
Grand Total
14,921,662
20.7%
0.15
1,457
418
$164.47
There is an estimated total of 14.9

million SF of space occupied by craft
breweries in the surveyed markets.
Chicago, IL ranked first with 1.6 million
SF while Columbia, SC ranked last with
a total of 33,000 SF.
From 2013 to 2014 craft beer
experienced a 20.7% growth rate in
occupied space across the surveyed
markets. Charlotte, NC ranked first with
77.0% growth rate while Greenville, SC
ranked last with a 2.7% growth rate
from 2013 to 2014.
The average per-capita footprint for all
markets is 0.15 SF. Asheville, NC
ranked highest with a per-capita
footprint of 1.58 followed by Vermont at
0.86.
A total of 1,457 breweries were
surveyed across the 29 markets.
Portland, OR had the most at 196 total
breweries followed by Chicago, IL (144);
Seattle, WA (119); Philadelphia, PA (116);
and Denver, CO (114).
The average total household
expenditure on beer and ale per year
out of all the markets was $164.47.
Greenville, SC ranked highest with an
average household expenditure of
$175.78 while San Francisco, CA
ranked the lowest at $153.48.
Sources: CoStar, Brewers Association, Colliers International, Investopedia, BLS Consumer Expenditure Survey, American Community Survey
Note: Estimated SF only includes brewpubs, micro & regional breweries. We took averages of brewpubs and microbreweries based on year established (1980-1989, 1990-1999,
2000-2009, 2010-present) to develop estimates of space where data was not readily available.
Conclusion
The rise of craft beer in recent years is attributable to changing
tastes, which have led consumers to seek out a more localized diverse
selection of beer. Craft brewing continues to take market share
away from traditional non-craft brewers. If the recent trends are any
indication of the future of the craft brewery market for the US, then
the forecast is indeed bright for craft beer. In the markets surveyed by
Colliers International there are more than 400 breweries in the planning
stages. Should all those planned breweries ultimately open their doors,
we can estimate an additional 3.1 million SF of craft brewery inventory
to be occupied in the near future based on typical brewery sizes, which
will boost the already-burgeoning craft beer industry. The vast majority
of these new breweries will continue to follow the existing model
of primarily occupying industrial space, while also including a retail
component within their operational space.
Of the 29 markets surveyed, the top 5 markets represent 45% of the
total space occupied by craft breweries and 50% of breweries in the
planning phase. The larger markets will continue to see the bulk of
growth in commercial real estate space occupied by breweries, but
smaller craft beer markets present growth opportunities as well. Lesssaturated craft beer markets like Milwaukee, New York City/Long Island,
and Nashville only represent 9% of the total craft beer inventory, but
Jeff Simonson
Senior Research Analyst | USA
+1 760 930 7941
jeff.simonson@colliers.com
Copyright 2015 Colliers International.

The information contained herein has been obtained from sources deemed reliable. While
every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are encouraged to consult their
professional advisors
acting on any of the
material
contained
in this report.
Craft prior
Beerto Commercial
Real
Estate
Spotlight
| Colliers
88
Although the IBIS World: 2015 Craft Beer Production Industry Report
projects a somewhat flattening growth in the next few years relative to
the last few years, the real impact of craft beer in the commercial real
estate sector will be felt as existing craft breweries capture a larger
market share and begin to implement expansion plans to facilitate the
distribution of their product across markets more efficiently. As craft beer
gains market share, there will be increasing pressure by the major beer
companies to protect their profits, which will inevitably result in more
buyouts of craft brewers. Such buyouts would reduce growth in craft
brewery space due to consolidation of the industry. Nevertheless, the
craft beer industry will continue to be a growth industry both in market
share and within the commercial real estate arena as a result of its
engaged and growing consumer base.
FOR MORE INFORMATION

A.J. Paniagua
Research Analyst | USA
+1 760 930 7958
aj.paniagua@colliers.com
represent 19% of the total craft breweries in planning. Opportunities for

growth of craft breweries in commercial real estate exist in the markets
Colliers surveyed, which is indicated by both the number of breweries
in the planning phase and the three-quarters of craft beer markets that
determined that their market is well within the growth phase of the
business cycle.
Pete Culliney
Director of Research | Global
+1 212 716 3698

pete.culliney@colliers.com
666 Fifth Avenue
New York, NY 10103
+1 212 716 3500
colliers.com
International
North American Research & Forecast Report | Q4 2014
| Office Market Outlook | Colliers International

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US Research

Craft Beer Pours Into

Craft Brewers Defined

The growing popularity of craft beer in the United States presents

U.S. Craft Beer Market Share Continues to Grow

The proliferation of craft brewing, at the expense of traditional large

Trend in Craft Breweries by Category

Independent - Less than 25% of the craft brewery is

Craft Beer Industry Market Segments

Source: Brewers Association

98 000 002 004 006 008 010 012 014

Source: Brewers Association

Small - Annual production of 6 million barrels of beer

Craft Beer Commercial Real Estate Spotlight | Colliers International

consumer palate and provides more opportunities for property owners

Total Number of U.S. Breweries

Sources: Brewers Association, IBIS World

Total U.S. Beer Sales

The road to craft brewing typically begins as a venture in home

Note: *FTE stands for Full Time Equivalent ^2014 totals

A growing trend has begun to emerge to ease the transition from

% of Colliers Markets with Incubator Space

The Economic Impact of Craft Beer

Source: Brewers Association

The Garage-to-Glass Movement

BEER SALES 2013

Top 10 Craft Beer States (Based on economic impact)

Source: Colliers International

With the continued

Craft Breweries Increased Footprint in Commercial

Craft Beer Commercial Real Estate Spotlight | Colliers International

% of Occupied Space by Building Tenancy & Type

Average Occupied SF by Year Established

Total Occupied SF by Type, Year Established

Average Occupied SF by Type and Year Established

Average Occupied SF by Year Established

14% Not yet,

Sources: CoStar, Colliers International

Our findings are as follows:

Real Estate Formats Used b

Sources: CoStar, Colliers International

Source: Colliers International

5 Metros by Craft Brewery Inventory

These breweries were categorized into 3 groups:

% of Occupied Space by Building Tenancy & Type

Craft Beer Commercial Real Estate Spotlight | Colliers International

Historical U.S. Craft Brewery Count by Category

Craft Beer and the Repurposing of Commercial Real

The addition of new microbreweries and brewpubs will add modest

Sources: CoStar, Colliers International

Sources: CoStar, Colliers International

The overall consensus through the survey of these 29 markets is

Business Life Cycle of Craft Beer Markets

Typically, craft breweries operate in industrial space that has the

Source: Colliers International

Sources: CoStar, Colliers International

Craft Beer Commercial Real Estate Spotlight | Colliers International

Top 5 Metros by Craft Brewery Inventory

Top 5 Metros by Craft Brewery Growth (% growth 13'-14')

% of Colliers Markets with Incubator Space

Business Life Cycle of Colliers Craft Beer Markets

In our survey, an estimated 40% of all establishments are located

Occupied Space by Building Tenancy & Type