The Secret Ingredient to Craft Beer Growth

The market for craft beer has been growing steadily since the late 1990’s. As of 2015 craft brews dominated 12% of the beer market by consumption and 21% by spending. In comparison with other high end beverage markets, craft beers potentially have plenty of room for growth as specialty coffee and spirits typically control 40% of market share.

While the US now has over 4,600 craft breweries, some industry experts have noticed a tendency for brewers to focus on production, leaving brand improvement activities to the side. The 0.2% drop in total U.S. beer market in 2015 spoke to the consumer desire for fuller flavor. This drop occurred as spirits and wine absorbed the market share of wavering beer drinkers. As consumers move away from cheaper, less flavorful beverages craft brewers are able to charge for quality. We see this as a hopportunity!

Experts recommend for craft brewers to perfect brews and production while simultaneously developing brand strength through R&D to remain competitive in a growing market. Many companies immediately consider their operations ineligible of claiming R&D, however, activities such as production line redesign and brew recipe innovation can be considered eligible. 

In the first few years of development many SMEs (small to medium enterprises) are in crucial need of cash flow in order to solidify their position in the market.  During this time receiving returns on R&D through the Research and Development tax incentive support the growth of an entrepreneur.

If  you would like to discuss the R&D Tax Incentive further, please do not hesitate to contact one of Swanson Reed’s offices today.

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