Though consumers have warmed to craft beer in the region, breweries face difficulties in continuing to expand. Many states in the region levy greater excise, or "sin," taxes on beer than the national average, said Nick Petrillo, an industry analyst at market research firm IBISWorld.
The U.S. average is about 28 cents per gallon of beer this year, according to the Federation of Tax Administrators. That number doesn't include the federal beer excise tax or other fees.
Additionally, the Brewers Association's Watson and Diamond Bear's Melton contend that brewers in the region generally have to deal with a tougher regulatory environment than thriving craft beer regions such as the West Coast.
For instance, Mississippi and Georgia are two of the five U.S. states that don't allow some form of retail or on-site sales for craft brewers, said Matthew McLaughlin, general counsel for the Mississippi Brewers Guild. The "direct" sales laws in some states are an exception to the U.S. alcohol industry's three-tier distribution system of producers, distributors and retailers.
Proponents say that a direct retail aspect can drive higher profit margins for brewers.
"The folks here in Mississippi have to be very creative in order to survive," McLaughlin said.
North Carolina is the production leader among Southern states. It currently boasts 125 microbreweries and brewpubs, said Margo Knight Metzger, executive director of the North Carolina Craft Brewers Guild.
Prominent craft brewers Sierra Nevada, Oskar Blues and New Belgium have planted East Coast locations in the state, as well.
Metzger partly attributes North Carolina's growth to "relatively progressive" laws. Still, she noted that "we have work to do."