New Study Finds Friendly Business Climate Is Fueling Explosive Growth
Impact on New York Economy Is $3.5 Billion
Governor Andrew M. Cuomo today announced the craft beer industry in New York State grew 59% from 2013 to 2014, with a total economic impact estimated at $3.5 billion. These results, according to a research report prepared for the New York State Brewers Association and the New York Wine and Grape Foundation, are another example of the incredible growth the industry has been seeing. The report can be viewed here.
"We have said time and time again that New York produces some of the best craft beverages anywhere, and this report backs up exactly why we are focusing on growing these breweries," Governor Cuomo said. "By cutting the costs of doing business, rolling back red tape, and promoting products through Taste NY, we are seeing monumental success across the state. When these craft beverage producers do well, it creates jobs, puts more money in local economies and sets the stage for future growth."
The report, prepared by Stonebridge Research Group, finds significant growth in the craft beer industry since the 2012 passage of New York Farm Brewery legislation and with continued support from the Governor. The number of craft breweries has more than doubled from 2012 to 2015, from 95 breweries in 2012 and 207 in January, 2015. Craft beer production is up 54% from 2011 to 2013, to 859,535 barrels.
The craft beer industry is creating large ripples in the state’s economy. Craft beer accounts for 6,552 direct industry jobs, according to the report, while supporting another 4,814 jobs in related industries. It is responsible for more than $2.9 billion in direct and indirect revenue within the state, and another $554 million in direct and indirect wages, making up the nearly $3.5 billion in total economic impact on the state.
Tourists and New Yorkers alike are flocking to craft breweries and brewpubs. Their visits support more than 3,000 jobs that pay more than $77 million in annual wages and generate more than $450 million in revenue, the report says.
Governor Cuomo has hosted several summits for the beer, wine, spirits, and cider industry. Those summits resulted in a significant effort to eliminate regulatory red tape and create incentives for the strong growth of the industry. Among the efforts:
- The recently adopted 2015-16 state budget included Governor Cuomo’s proposal to expand tax exemptions for tastings conducted by New York breweries, lowering costs for hundreds of craft producers and allowing them to better market their products and reinvest in their businesses. The tax credit goes into effect on June 1, 2015.
- In November 2014, the Governor signed the Craft New York Act, further stimulating the development of small breweries by reducing costs and increasing the annual production cap for farm breweries and micro-breweries from 60,000 barrels to 75,000. Also in November 2014, the Governor launched the Craft Beverage Grant programs—a $2 million Craft Beverage Marketing and Promotion Grant Program and a $1 million Craft Beverage Industry Tourism Promotion Grant.
- The second Wine, Beer, Spirits, and Cider Summit, in 2014, resulted in the elimination of paperwork for beverage manufacturers while reducing costs and regulations on farm wineries.
- The creation in 2013 of a One-Stop Shop to provide beverage producers with a single point of contact on state regulations, licensing, incentives, and other issues.
- The Farm Cidery law, in 2013, which fostered the speedy development of the hard cider segment of the beverage industry, leading to 480% growth in the number of cideries from 2011 to 2014.
- Legislation signed by the Governor in 2012 that allowed farm distilleries for the first time to sell their products at the Great New York State Fair, at recognized county fairs, and not-for-profit farmers markets.
- The first Wine, Beer, and Spirits Summit, in 2012, gave manufacturers the ability to sell bottles when they are conducting tastings, eliminated duplicative licenses and reduced licensing fees.
- Successful efforts by the New York State Liquor Authority to speed up the process of reviewing new manufacturing licenses. The review time was cut in half, from 83 days in 2010 to 38 days in 2014.
- The promotional efforts of the Governor’s Taste NY program, which has brought the consumer sampling of New York beverages and other products to major events across the state and which makes those products available at special stores in Thruway rest stops and New York City-area airports.
- The creation of a $350,000 fund to support research into hops and malting barley, crops that are essential to the growth of the craft beer industry. Disease and Prohibition wiped out New York’s hops farms decades ago, but the recent Farm Brewery legislation signed by the Governor mandates that New York craft breweries get 20% of their ingredients from within the state, a percentage that will rise over time to 60% and then 90%. The state’s support has caused a swift rise in hops acreage, from just 15 acres in 2010 to 250 acres in 2014 with more on the way.
Richard A. Ball, New York State Commissioner of Agriculture, said, "These statistics tell a story that New Yorkers can plainly see in nearly any community these days – the state’s beverage industry is vital, growing, and an important part of the state’s economy. We are committed to continually looking for ways to further the growth of the state’s beverage industry."
David Katleski, President and Co-Founder of the New York State Brewers Association, said, "When the Brewers Association was founded in 2003 there were only 38 breweries in the state. Today, there are over 200. Through years of relationship building in Albany, we were able to help craft legislation that laid the foundation for the growth we are seeing today. New York State is certainly on the national radar as a brewing powerhouse, and these numbers show the results of a craft beer friendly New York State."
Paul Leone, Executive Director of the New York State Brewers Association, said, "That craft beer's overall economic impact grew by $1.3 billion from 2012 to 2013 is a testament to the support we are receiving from Governor Cuomo and his administration. The receptive environment in New York State to craft beer has created an economic climate that is designed to put money back into breweries and their employees. We see growth year after year, and there’s never been a more exciting time to be in this industry."