Craft Beer still booming....

[mongoose33]

...according to this article titled "Craft Beer Boom: The Numbers Behind the Industry's Explosive Growth."

https://www.visualcapitalist.com/numbers-craft-beer-industry-u-s/

It's an interesting counterpoint to this recent thread:

The Craft Beer Bubble is Bursting

The funniest part of the article? The author extolling the virtue of "weird and wonderful" innovations like "take home brewing kits."

 

[day_trippr]

I'd have thought the deer antler-infused beer would've caught your attention first
I have to say the growth numbers remain impressive. We haven't reached "Peak Craft" yet, apparently...

Cheers!

 

[Jag75]

Honestly I cant see it fading away. It was only about 5 years ago I tried craft beer. I was a Coors or bud kinda guy. Needless to say I haven't had a Coors or a Bud in years and I have no desire .

 

[CodeSection]

The statistics and data are evidence of the growth, while the posts in the thread appear to be local and based on perceptions that may or may not be reality. I'm not sure how local perspectives can outweigh real proven data....

 

[mongoose33]

The statistics and data are evidence of the growth, while the posts in the thread appear to be local and based on perceptions that may or may not be reality. I'm not sure how local perspectives can outweigh real proven data....

Well, they can't, of course.

But many/most/all new ideas and theories start with observing something that is an unexpected or different pattern. So if you see craft taking a dive where you are, it makes you wonder if that's a trend that is common across the country.

I started a thread a few months back asking if it seemed that a lot of home brewers were returning to home brewing after taking off time. It seemed, to me, that there was a significant increase in posts by such members here. I wondered if it looked the same to others here. My impressions were surely anecdotal, as I don't look in every forum and thread here on HBT, but in my limited orbits, I'd seen what appeared to be a significant pickup.

What I had for responses was a lot of individualistic and anecdotal information. Things like "I had kids, had to quit brewing for a while, now I'm back." Well, unless a lot of home brewers suddenly were having kids and bowing out, then returning, that's just an individual circumstance. Same with others who said things like "I moved overseas, then returned," or "I went back to school and had little time, but I graduated and...."

But not a lot of "yeah, I've noticed an increase" or "no, I haven't seen that."

*****

I think what you're pointing out more than anything is when people see local and anecdotal evidence and then extrapolate from that to grander trends, which isn't very defensible. At least, not without data.

****

One cool thing that came out of that thread, for me, was someone who said that home brewing increases in a recession, and since the great recession receded....less need to brew beer. I thought that made sense, and it might well be a related cause of the growth of the craft beer industry. As more people have jobs, they can eschew (God, I love that word) brewing their own beer and simply buy it from craft breweries.

As most of the economic indicators now suggest we're heading into another recession, if that happens it'll be interesting to see if the craft beer industry stalls, and home brewing increases.

 

[DVCNick]

Even if the overall market isn't plateauing yet, I think the innovation is to an extent, at least in the southeast region around me.

The number of breweries opening is still on the rise, but (I hate to say it) if you've seen one at this point, you've kinda seen them all.

Start with an old warehouse or garage usually in an industrial area. You've got a wood bar with equipment visible in the back. Some good beers on tap with the requisite chalkboard menu above the bar. Various decor on the wall. Small inside seating area. Dog park with cornhole out front with the garage doors open, and usually a food truck out there somewhere.

Don't get me wrong, I enjoy going and almost always enjoy the beer and atmosphere, but I do wonder when market saturation for virtually identical businesses will be reached. I'm not sure exactly how you'd change it up, but if one can figure it out I think they would stand to differentiate themselves at least where I'm at.

 

[kh54s10]

When the other thread suggesting craft brew is dying, I noted that in some areas craft breweries are closing, for many different reasons. In other areas none are closing and new ones are opening. I don't see a decline. There is some settling for lack of a better word. Areas saturated will lose some. Breweries not up to standards will suffer etc.

I have been searching out and trying beers from local small breweries, some are very good, some are so - so, and a very few are disappointing to the point of Yuck!

 

[bob1852]

Even if the overall market isn't plateauing yet, I think the innovation is to an extent, at least in the southeast region around me.

The number of breweries opening is still on the rise, but (I hate to say it) if you've seen one at this point, you've kinda seen them all.

Start with an old warehouse or garage usually in an industrial area. You've got a wood bar with equipment visible in the back. Some good beers on tap with the requisite chalkboard menu above the bar. Various decor on the wall. Small inside seating area. Dog park with cornhole out front with the garage doors open, and usually a food truck out there somewhere.

Don't get me wrong, I enjoy going and almost always enjoy the beer and atmosphere, but I do wonder when market saturation for virtually identical businesses will be reached. I'm not sure exactly how you'd change it up, but if one can figure it out I think they would stand to differentiate themselves at least where I'm at.

Well said...

Many folks try to compare the brewery market with the restaurant market to show that there's room for one on every corner.

The problem is that (as you stated) the vast majority of the breweries are the same in their decor, styles, food options, etc. There just isn't the brewery diversity that there is in the restaurant market (or even the bar market).

Couple that with a declining brand loyalty by consumers (who now want to try the new and next best thing rather than the comfortable old thing) and some economic indicators (as pointed out by mongoose), and it has to be a challenging time to try to maintain (i.e., grow...if you're not growing, you're dying) a brewery business.

My prediction is that when the credit markings tighten a bit, it'll be the last straw for a big chunk of breweries. When debt is no longer cheap, but the bills still gotta get paid and investors want returns...

 

[beersk]

Honestly I cant see it fading away. It was only about 5 years ago I tried craft beer. I was a Coors or bud kinda guy. Needless to say I haven't had a Coors or a Bud in years and I have no desire .

You'll come back. They always come back...

 

[betarhoalphadelta]

Well, the problem is that that article conflates a bunch of different metrics:

1. Revenue. Obviously revenue is continuing to grow, as craft increases market share on macro. Of course, that craft revenue tends to be clustered in a certain number of breweries that are large regional, or even national, in scope. Guys like Sierra Nevada, or Ballast, or Boston Beer, or New Belgium, etc.
2. # of breweries. The country can easily support far more than the current 7K+ breweries, if most of those breweries are small neighborhood breweries or brewpubs. It can't support 7K+ Stone Brewing Co. style breweries.

The problem is when breweries try to decide what they want to be...

If they want to be Stone? Well, better have some deep pockets. You need to be absurdly capitalized to break into such a developed market for "large craft" breweries. And then you need to fight the supermarket shelf space wars, and the distribution wars, and fight to get yourselves tap handles, etc.

If they want to be like, say, Laguna Beach Beer Company that is near me? A little brewery tasting room with a light food menu where people like to hang out and have a few pints? A place that will be a "lifestyle business", never making enough money to be absurdly rich but allowing a comfortable living and being your own boss? Yeah, we can have a lot of those. Every town can have one. Some can have several.

And much like the little guys, brewpubs are a great option. Serving food keeps people coming in to drink your beer. Having [in-house brewed] beer has great profit margins relative to 3rd party beer that helps sustain the invariable difficulties of the restaurant industry. Brewpubs can be very resilient compared to either non-brewing restaurants or breweries without a menu due to that natural synergy, as Sam Calagione stated back in his "Brewing up a Business" book.

The question of whether it's a boom or a bubble depends heavily on what you're looking at. The big craft will continue to grow, and take market share from macro. The small neighborhood "lifestyle business" craft will be fine. As long as you brew quality beer, and don't get financially in over your head, you're all good.

But those in-between breweries... The ones who aspire to be big and take on investors and/or debt in order to try to fight their way from small to big craft? That's where the danger zone lies. That's where what was a "boom" 5 years ago is now a "bubble", because as your average hipster moves on from beer to hard seltzer, they won't be capitalized to grow into the obligations their investors/creditors have put on them.

So yes, craft beer is booming, and will continue to take market share away from macro. But the market is mature enough that it's not "easy money" any more, and you're going to see a lot of disillusioned people walking away because they couldn't become big and they never thought they'd settle for small.

 

[Cyclman]

4% growth across each of several years is hardly booming. In a more competitive market, the strong only can survive.

 

[kh54s10]

4% growth across each of several years is hardly booming. In a more competitive market, the strong only can survive.

The point is that the Craft Beer Market is not in decline or even stalled. I agree that 4% is not booming but it is still increasing.

What was pointed out in the other thread was that there are areas that have reached a saturation point and it is very competitive there, other areas not so bad. Still any brewery has to produce a product that people will buy, if they don't, or something better is easily available then they will struggle/close.

 

[shoreman]

I didn't see anything in the article mentioning if this included spiked seltzer, hard tea/lemonade, alternative drinks in their calculations. That part of sales or craft should be present in any article these days - it is a huge part of the conversation.

I see alot of small craft beer especially IPAs rotting on the shelves these days at my local packy's - that's the only observation I've had on the market. Nothing local shutting down.

 

[kh54s10]

I didn't see anything in the article mentioning if this included spiked seltzer, hard tea/lemonade, alternative drinks in their calculations. That part of sales or craft should be present in any article these days - it is a huge part of the conversation.

I see alot of small craft beer especially IPAs rotting on the shelves these days at my local packy's - that's the only observation I've had on the market. Nothing local shutting down.

This hasn't been my observation. The IPAs are the ones most likely to show an empty slot on the shelf.

 

[shoreman]

This hasn't been my observation. The IPAs are the ones most likely to show an empty slot on the shelf.

Is Hazy/NE IPA new to your region? I'm in New England and alot of people I talk to are over it.

 

[kh54s10]

Is Hazy/NE IPA new to your region? I'm in New England and alot of people I talk to are over it.

I don't really know. I have never seen many to choose from on the shelves maybe one or two. Often there are none available. I have only found and tried a few. I have yet to find one I even come close to liking... Maybe I missed that fad.. It would not concern me if I did..

 

[breweer]

I don't really know. I have never seen many to choose from on the shelves maybe one or two. Often there are none available. I have only found and tried a few. I have yet to find one I even come close to liking... Maybe I missed that fad.. It would not concern me if I did..

Everyone tried catching that fad and unfortunately a lot of bad beer has been distributed. If you've been lucky enough to enjoy great NEIPA (TH, Trillium, Other Half, Hill Farmstead, etc.) you can understand why it got popular so quickly, truly delicious style when done right.

 

[kh54s10]

Everyone tried catching that fad and unfortunately a lot of bad beer has been distributed. If you've been lucky enough to enjoy great NEIPA (TH, Trillium, Other Half, Hill Farmstead, etc.) you can understand why it got popular so quickly, truly delicious style when done right.

I haven't tried any of those. I haven't even seen any of those available here. I will have to be on the lookout. None of the ones I have tried were to my liking at all.

 

[deeve007]

I've seen figures somewhere... in the 1850s in the US there were something like 2,000 brewers, mostly local/regional as you would expect (and as had been the situation through much of European history)... then by the 1950s it was down to around 200 brewers, with the big multi-nationals buying up the independants, and over time reducing beer options and styles available... and now we're back to, what is it, 8,000 brewers or more?

The "trend" would appear to have been the reduction in local/regional brewers, and with the buying/eating local thing probably increasing in popularity the more we appreciate & seek to address climate change issues, I don't see this changing personally, even if the lower quality brewers don't survive.

 

[kh54s10]

I've seen figures somewhere... in the 1850s in the US there were something like 2,000 brewers, mostly local/regional as you would expect (and as had been the situation through much of European history)... then by the 1950s it was down to around 200 brewers, with the big multi-nationals buying up the independants, and over time reducing beer options and styles available... and now we're back to, what is it, 8,000 brewers or more?

The "trend" would appear to have been the reduction in local/regional brewers, and with the buying/eating local thing probably increasing in popularity the more we appreciate & seek to address climate change issues, I don't see this changing personally, even if the lower quality brewers don't survive.

I do believe that Prohibition had more to do with the decline in the number of breweries than did multi-nationals buying up independents.

 

[Northern_Brewer]

None of the above - if Prohibition was reponsible, why did the UK experience an even bigger decline?

1) Transport technology - mostly the railways
2) Brewing technology - pasteurisation, industrial bottling etc
3) Financial technology

Before the railways, brewing was essentially a local thing, every town would have lots of little alehouses serving a local market because it was difficult (but not impossible) to ship beer long distances other than by sea. Better transport changes all that.

At the same time, it became easier to package beer for transport and long-term storage.

That all meant that some companies were able to exploit the huge economies of scale available in brewing - if they could have access to suitable finance, which also became more available as the 19th century progressed, a lot of the big UK family brewers went public at the end of the 19th century, sparking a landgrab of (rare) pub licences with the proceeds.

 

[lump42]

None of the above - if Prohibition was reponsible, why did the UK experience an even bigger decline?

1) Transport technology - mostly the railways
2) Brewing technology - pasteurisation, industrial bottling etc
3) Financial technology

Before the railways, brewing was essentially a local thing, every town would have lots of little alehouses serving a local market because it was difficult (but not impossible) to ship beer long distances other than by sea. Better transport changes all that.

At the same time, it became easier to package beer for transport and long-term storage.

That all meant that some companies were able to exploit the huge economies of scale available in brewing - if they could have access to suitable finance, which also became more available as the 19th century progressed, a lot of the big UK family brewers went public at the end of the 19th century, sparking a landgrab of (rare) pub licences with the proceeds.

I wouldn't say that US Prohibition had nothing to do with the decline. UK and US are very different in both economics, social structure, and politically.

The US prohibition was followed by a massive economic depression being bookended by global war. The depression not only hit financial markets,but also overlapped with a large environmental/ agricultural disaster that decimated the major grain production regions of the country. That put massive restrictions on brewery licenses, access to grain and equipment.

UK obviously faced many of their own challenges with closer proximity and longer involvement in both wars, their own effects to the global financial crisis, plus the other socio-economic reasons you stated. But the US temperance movement that led to the prohibition is still have lasting effects on our beer and liquor industry today.

 

[kh54s10]

None of the above - if Prohibition was reponsible, why did the UK experience an even bigger decline?

1) Transport technology - mostly the railways
2) Brewing technology - pasteurisation, industrial bottling etc
3) Financial technology

Before the railways, brewing was essentially a local thing, every town would have lots of little alehouses serving a local market because it was difficult (but not impossible) to ship beer long distances other than by sea. Better transport changes all that.

At the same time, it became easier to package beer for transport and long-term storage.

That all meant that some companies were able to exploit the huge economies of scale available in brewing - if they could have access to suitable finance, which also became more available as the 19th century progressed, a lot of the big UK family brewers went public at the end of the 19th century, sparking a landgrab of (rare) pub licences with the proceeds.

I searched and see that there was a steady decline. Then Prohibition took the number from 1179 to 0. After Prohibition the number rose to 703. But that where the number would have been if there was no Prohibition, the decline continued until about 1978 with a low of 89 breweries then the numbers started to rise dramatically.

Sorry for the tiny picture, I don't want to take time to figure out how to change the size.

 

[Northern_Brewer]

Of course - and it's confused by the fact that the US was still in the early stages of economic development as a country in the early stages of the period we're talking about. But the big decline in the UK happened in the mid-late 19th century as part of this shift from local brewing to national-scale brewing - and we had our own Prohibition/temperance movement to contend with. I'd certainly agree that Prohibition thinking still has a legacy on US brewing today, but it's easy to overstate its role in closing breweries in the 19th/early 20th century.

 

[deeve007]

I searched and see that there was a steady decline. Then Prohibition took the number from 1179 to 0. After Prohibition the number rose to 703. But that where the number would have been if there was no Prohibition, the decline continued until about 1978 with a low of 89 breweries then the numbers started to rise dramatically.

View attachment 644061 Sorry for the tiny picture, I don't want to take time to figure out how to change the size.

Wow, 89, even fewer than I'd heard?!!