This paper investigates the growth and clustering of craft breweries in New Jersey. We compiled a historical dataset from 1995 to 2020 that allows us to measure the degree of geographic clustering among craft breweries in New Jersey. The number of craft breweries in New Jersey grew 491% from 2012 to 2020 (from 22 to 130 craft breweries). An impetus for this growth was that New Jersey enacted legislation in 2012 that made opening and operating a craft brewery in the state more economically viable. Our analysis finds that craft breweries in New Jersey are clustering in specific parts of the state and that this is likely due to co-location benefits such as building a culture of craft beer that drives innovation, knowledge sharing, customer sharing, and a thicker labor market. While distinct craft beer clusters have formed in New Jersey, we find there is still significant opportunity for growth. Our analysis confirms this using data on planned craft brewery openings to measure changes in the size and density of clusters and where, in New Jersey, new clusters are likely to form.

Using newly released public data on beer prices in the state of California, we construct a large dataset (approximately 2 million observations) that includes beer prices and packaging configurations. We merge this dataset with brewery attributes and county demographics to explore pricing differentials across California, the U.S.’s largest brewing state. We provide evidence of potential pricing-to-market conducted by macro breweries across the three-tier distribution system where craft breweries do not. In addition, we describe package attributes that exhibit price differentials across brewery types. We make the cleaned data available to the public and provide avenues for future research that may be addressed with this new data.

This study tests the prevalence of choice overload (CO) in the U.S. beer market. We reveal that even if CO exists, sellers have mechanisms to reduce CO's negative consequences. The article describes the implementation of search cost-reducing private nudges (i.e., product quality scores and prominently listed specials) sellers commonly utilize to minimize CO's negative consequences. Our results suggest that, while CO exists for some buyers, it can be eliminated by market interactions on the part of the seller. (JEL Classifications: C93, D03, Q13)