A Recipe for Success: Exploring Cluster Formation in the American Craft Brewing Industry

Abstract

The U.S. craft brewing industry was born in the 1970s and has since seen rapid growth. While every state has experienced the emergence of craft brewing to some extent, growth has occurred remarkably unevenly. In 2011, for example, Vermont had one craft brewery for every 26,073 people. Mississippi, meanwhile, had one craft brewery for every 1,483,649 people. Several researchers have described and explained the high growth rate of U.S. craft breweries. There has also been significant research on the subject of cluster theory, focusing on why clusters emerge and how they function. There is a lack of research, however, regarding industry clusters in the craft brewing industry specifically. My thesis aims to address this gap by addressing why craft brewery clusters develop in certain regions and not in others. To identify possible conditions associated with high levels of craft brewery concentration, I propose that three key factors were—and continue to be—important for cluster formation: sense of community, openness to experience, and well-being among a region’s residents. I evaluate the effect of each of these factors through secondary data collection and personal interviews with professionals in the craft brewing industry. My results may be useful to policymakers in other regions who wish to establish a similar market and to craft brewery entrepreneurs across the country making key startup decisions.

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