Definition, history, and market of craft beer

This research contributes to providing a definition of craft breweries, which can be identified by the advent of small, independent, and young producers in the beer market that have been founded in recent decades and differentiate themselves with the production of novel beers in opposition to the mass-produced homogeneous beer made by old, large-scale incumbent breweries. The knowledge of the genesis of craft beer is crucial to interpret the current competitive dynamics in the beer market. Therefore, we identify the genesis and history of craft producers in a five-step taxonomy, identifying the brewing traditions of the United Kingdom, Belgium, and Germany as the inspiring forces for the early brewers in the US; the global connections did the rest of the job and the pioneering entrepreneurs became a source of inspiration and information that fostered the diffusion of craft beer around the world. Then, we discuss the main relevant competition issues in the market, describing how the contemporary market is partitioned into co-existing large multinationals and small craft firms. The degree of competition between large and craft breweries has amplified in the past few years as multinationals have stepped into the craft beer market competing through product differentiation, M&A strategies, and distribution tactics. These aspects establish vivid dynamics in the industry that should be considered in industry evolution studies, explicitly delineating renewed competition in a “David and Goliath” fashion.