Bloomberg‘s Scarlet Fu explains how a small tax break has led to the soaring growth of breweries in the United States. The tax break she’s talking about is the “Small Brewer Tax Credit” passed by congress in 1977, which led to extreme growth bringing the number of “active permitted breweries” operating today in the U.S. to 3699.

The U.S. added 948 new brewing permits in 2013, which further explains the surge of operating breweries, as does the fact that homebrewing was federally legalized in 1978.

What does all this mean for beer lovers? More choices, more local craft brews, and better beer.

The chart below, which Fu explains in detail, comes from the Beer Institute and shows the number of active breweries in the U.S. since 1887 leading up until today.

Here’s a few other key moments displayed on the chart above:

  • The number of breweries fell to zero in 1920, when Prohibition began.
  • Breweries came back legally in 1933, but there was a steady decline from the 1930’s until the 1980s.
  • The number of operating breweries began to increase drastically in the ’90s.

Fu also points out that there’s been a big consolidation amongst the big players in the last few years, which her host wittily calls “The Brooklyn Effect.”

[via Bloomberg]