THE GIST
The Pennsylvania Liquor Control Board (PLCB) announced last week that 13 different projects would receive nearly $705,000 in total grant funding to increase and promote its in-state beer industry. It was the first allotment of funds allowed under a law passed in 2016 that provides the PLCB with the ability to hand out up to $1 million annually for the development and marketing of the Pennsylvania beer industry.
“With 300 licensed breweries and a 300 percent increase in breweries in the past six years alone, brewing beer is a $5.8 billion industry in Pennsylvania,” Agriculture Secretary Russell Redding said in a statement. “The grants PLCB awarded today pave the way for continued growth in Pennsylvania’s malt and brewed beverage industry.”
Those grants range from $7,147 to create two "matchmaking events" to connect farmers and brewers in Montgomery County, to $49,214 for an expansion of Deer Creek Malthouse, up to $127,500 to promote tourism through the identification and creation of 12 beer trails across the state. The latter will also provide funds to create a single brand identity for Pennsylvania’s malt and brewed beverage industry, a step that sounds similar to one being pushed by Ohio's state government.
“These grants build on the bipartisan efforts to modernize our beer laws and support the industry to create job opportunities from the farm to the brewery, pub and grocery store," Governor Tom Wolf said while announcing the awards.
WHY IT MATTERS
These kinds of actions are becoming increasingly common as states view the beer industry as a viable economic driver, especially for small and growing communities. Unless you’re Maryland, that is.
And efforts like these shouldn’t come as a surprise, either. Officials aren’t always forthright in prepared remarks, but funneling state money toward projects like these is partially due to a need for increased migration of young people. Who wouldn't want an influx of Millennials, a demographic most connected to craft beer, as they get to an age where they may be looking to settle down?
That issue has continually been addressed in New York, a state famous for its "brain drain" of college graduates. Since passing a farm brewery license in 2013, the state has seen the number of beer makers explode while providing millions in tax incentives to upstart breweries. Middletown, New York’s Equilibrium Brewery, now a beer geek favorite for its hazy IPAs, has received $204,000 in state grants. According to the New York Times, the business’ facility was bought for $260,000, with 86.5% of that amount forgivable if still in business come 2021. The size of lines regularly forming during Thursday through Sunday’s taproom hours suggests that won’t be a problem.
By its own analysis, New York estimates the beer industry has a $4 billion economic impact for the state. Just two weeks before Pennsylvania's grant announcement, the Empire State celebrated a record number of breweries, crossing the 400 mark. That’s the most it’s had since the Civil War.
In recent years, one state that’s acted as a role model in building its beer industry has been Virginia, which passed a law in 2012 that allowed breweries own-premise sales at their taprooms. In the last five years, the number of Virginia breweries grew from 61 to just more than 200, including national players Stone Brewing, Ballast Point, Green Flash, and Deschutes. Those four big players have spent around $230 million to build their East Coast facilities in the state. Overall, beer-related taxes related are bringing in around $300 million annually.
It all comes at an opportune time: Virginia Beach-Norfolk-Newport News and Richmond are tops in the country for urban areas attracting Millennials. They also happen to be the homes of Stone, Green Flash, and Deschutes. News site Vinepair even named Richmond the best beer travel destination in the world.
Over the North Carolina border, small towns are vying for breweries and state grants for these reasons. Todd Tucker, president of North Carolina’s Surry County Economic Development Partnership, told BeerAdvocate last year that beer could be central to rebirth for his portion of the state, where four towns combine for about 73,000 residents in Surry County.
“Like a lot of other rural communities, we’re losing our young people to bigger cities because they have more things to do and places to go,” Tucker said. “We need things like restaurants, shopping, and breweries to attract and retain our young people, because that’s the stuff they like. This is what’s going to get people to come visit, but also consider moving here.”
The irony (and perhaps need) of Pennsylvania’s grants to spur its craft beer industry is that they come at a time when PA Millennials are actually leaving the Keystone State for places like New York, Virginia, and North Carolina in large numbers. According to the state's Independent Fiscal Office, Pennsylvania lost a net total of 13,000 Millennials with at least an associate's degree in 2015, the most recent year of tracking such data. Those three states mentioned above represent the number 2 (NY), 3 (NC) and 6 (VA) locations for PA 20- and 30-somethings fleeing their home state.
According to the U.S. Census Bureau, at least one area may be benefiting from an influx of youth. Allegheny County, which includes Pittsburgh, had its median age of residents drop from 41.3 years old in 2010 to an estimate of 40.7 in 2016. Again, it's impossible to connect correlation and causation, but three grants were allocated to specific projects for that city, including the creation of an urban hop farm, online and print guides for local breweries, and a professional development program for brewers in western Pennsylvania. If a successful beer industry could be seen as a way to make a city or county more exciting for younger residents, this is at least a step in that direction. Each dollar handed out promotes new additions to a quality of life barely known by previous generations. It’s looking like Millennials will drink to that.
—Bryan Roth