ºÙºÙÊÓƵ

Owners of successful microbreweries and brewpubs should be cautious about plans for expansion, according to an assistant professor at ºÙºÙÊÓƵ. Anand Swaminathan of the Graduate School of Management says that the burgeoning industry still has room for more microbreweries and brewpubs, but an authentic identity with local consumers is one of the key ingredients of success. He and Professor Glenn Carroll of UC Berkeley have studied the evolution of the American brewing industry and the recent phenomenon of microbreweries and brewpubs in examining theories of industry evolution in organizational sociology. The professors' research has shown that industries evolve into three distinct segments: large generalist firms catering to mass markets and benefiting from economies of scale, specialists appealing to narrow niche markets and others that are positioned perilously between. According to the Institute for Brewing Studies in Boulder, Colo., the United States had 417 microbreweries, 928 brewpubs and 38 regional specialty breweries in 1999; there were fewer than 50 breweries -- including mass-production breweries -- in the early 1980s. "Most entrepreneurs want to grow and expand," Swaminathan says. "But if the basis of the success is identity, it's a self-defeating exercise." He says consumers buying specialty beers prefer a beverage brewed in a small, craftlike firm according to traditional methods and using natural ingredients. And, he adds, they choose to drink specialty beers not only for their taste, but also for fashion's sake. The solution, says Swaminathan, is for owners of microbreweries and brewpubs to launch new companies in different regions where they can develop their own followings. Or, he says, they could follow the example of Anchor Brewing in San Francisco, which is expanding at a controlled rate without compromising its identity as a small, specialty brewer.