Should You Add Craft Beer To Your Portfolio?

The craft beer industry in America is rapidly growing as consumer preferences shift toward smaller batch IPAs and Stouts.

Craft beer by definition is a beer with less than six million barrels sold per year, so its capacity to upset the beer market has been a surprising development.

With few small breweries listed on a major exchange, the choices for craft beer investment are limited, but for many, worthwhile.

American Beer Gains Popularity Abroad

The Brewers Association, America's trade group for independent craft brewers, released surprising data showing that a preference toward small batch brews was gaining momentum all over the world.

In 2014, craft beer exports were worth a total of $99.7 million, a 35.7 percent increase from 2013. At the moment, only about 2 percent of America's total craft beer makes it overseas, but that could change as demand grows in Brazil and parts of Asia.

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Investment Options

Though it's obvious that the industry is flourishing, investment choices are limited. Craft Brew Alliance Inc BREW is home to several popular brands like Kona and Redhook, but the company's share price has struggled due to poor profit margins over the past year.

The company's strategic partnership with Buffalo Wild Wings BWLD has been a draw for investors, as have rumors that the company will soon be acquired by a larger brewer.

Boston Beer Co Inc SAM is one of the most well known small batch providers; the company makes the increasingly popular Samuel Adams brand beer. The company's offerings are so popular that it sells almost enough beer to be kicked out of the "craft beer" category.

In fact, the Brewers Association raised its annual production cap for craft beer brewers from 2 million to 6 million in order to keep Sam Adams within the category when the company sold 2.7 million barrels in 2012.