The economic impact of Craft Brewing in Montana.

• Author: Sorenson, Colin B.

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Craft brewing has been around in Montana since 1859--17 years before Custer's Last Stand, according to Steve Losar, who knows a lot of good stories about the history of beer in Montana.

Having a brewery meant you had a stable town, Losar says. It was part of the economic fabric and was tied to industries like mining and logging that produced "thirsty kinfolk."

Losar has spent more than 40 years sorting through old newspapers and publications and gathering memorabilia for his beer museum in Poison.

It appears that Montanans are still pretty thirsty today. Montana's 33 craft breweries (as of 2011) represent one of the fastest growing manufacturing sectors in the state. From 2010 to 2011, production increased by 18 percent, employment was up by 39 percent, and sales rose by 20 percent.

According to the Montana Brewers Association, Montana is second in the nation in the number of breweries per capita. With 30,919 people per brewery, Montana is only slightly behind Vermont. With the opening of a handful of new breweries in recent months, Montana is well on the way to being No. 1, with a total of 38 breweries.

To determine the economic contribution of craft brewing, BBER surveyed Montana brewers, collecting data on production, sales, employment, compensation, expenditures, and benefits. The response rate was 97 percent. Using a well-respected economic model, Regional Economic Models, Inc. (REMI), BBER was able to compare two scenarios --a Montana economy where the brewing industry never existed versus an economy with brewing--to find the economic impact.

Survey Findings

From 2010 to 2011, production at Montana breweries increased from just over 87,000 barrels to nearly 103,000 barrels. Beer sales increased from just under $22 million to more than $26 million. Employment, including both full- and part-time jobs, increased from 231 to 320 from 2010 to 2011--a 39 percent increase. Compensation (wages and salaries plus the value of benefits packages) increased from $5.2 million to $6.4 million from 2010 to 2011--a 23 percent increase. Expenditures (excluding labor) increased from $15.6 million to $18.8 million from 2010 to 2011--a 21 percent overall increase (Table 1).

As shown in Figure 1, brewers were asked what portion of their expenditures, other than employee compensation, occurred in Montana. Overall, expenditures rose by 21 percent, from $15.6 million to $18.8 million. The Montana portion of expenditures rose from $6...