Thursday, April 18, 2013

Beer Today....Gone Tomorrow?

Though there are few left who may remember, the United States was home to over 1,200 Breweries just before Prohibition reared its' beastly demon head.

As of March 2013 there are 2,416 total breweries in the U.S. of which 2,360 are Craft! So we can breath easy, right?

Well, this would be a short post if I said yes, wouldn't it be? I am of course referring to the ominous Craft Beer Bubble, caused by market over saturation of course. So let's visit both sides of the argument shall we?

The bubble is coming the bubble is coming!

Lets start with Brewer & Founder of Boston Beer Company's Jim Koch's opinion on the matter. Late last year, Koch, in an article titled "Drinking With Jim Koch" said that the "craft beer bubble [is] near a popping point. The market share could grow to 10 percent by the end of the decade, but most stores have reached their limit for all the new breweries."

Are we nearing this pop? The shelves in the bottle shops near me are ever changing. When a brewery comes in and doesn't sell well, it goes right back out. Can a store stock all the beer there is to be had? Yes of course, but is it viable, these stores are in it for profit. Don't get me wrong, many are craft friendly and appreciate quality product and quality service, but they are still in it for a profit (Yay Capitalism!). With an ever expanding selection from an ever expanding amount of breweries, how can the market keep up?

Imitation is the sincerest form of flattery - Charles Caleb Colton
But is it? When you fall short of quality ingredients and compromise on taste just to join the bandwagon, how can the growth survive? I must say, the best thing about Beer, is the people who you enjoy drinking it with. And boy do I know some amazing beer geeks! People who aren't easily fooled by these imitators, these jokers of the hop, these green eyed entrepreneurs who get caught up in the money game behind beer. No, they are not! 

Bubble, What Bubble?

As described in Harry Schumacher's article titled "The Second Craft Beer Revolution: Will It Stick This Time", from 1987 to 1996 beer was a flourishing business. Through those years volume was up 40 to 60 percent, and in 1987 it was up more than 100 percent. These were the days of such legendary brands as Pete's Wicked and Celis, along with some not so legendary brands as Spring Street and Rhino Chasers. But in 1997 all came crashing down, Pop Went the Beer Bubble! 

Now you may say it is looking very familiar in today's market, it's all just going to crash. But I am going to give you some of my reasons why I just can't believe that. The first being the consumer, yes I am talking about you, and I am talking about me. Add in open information and beer rating websites like and and you have got the Sherman Tank to blast the hell out that bubble and keep on keepin' on!

Why? Well that is something the last century didn't have. Beer people, especially beer geeks, stay very well informed and in a world where there are new breweries opening up everyday, they are the first line of consumer defense. If brewery is in it for the money, and the quality just isn't there, that brewery won't last long. Hell, the minute one of the big breweries releases a "Crafty" brand and tries to sneak it into the market, the beer geeks know about it. This is the very reason why this is not a bubble. If you can't cut it as a quality product you will eventually be feeling it in your pocket book. Evolution at its' finest, only the strong survive!!

The second reason I see no need to fear is the focus on the local. I have said this before in posts and I am saying it again. Local Breweries servicing local areas first is the best indicator of a strong industry that will survive (with a good business plan). 

So if you believe there is a Craft Beer bubble and want to run screaming for the hills to build your bunker, by all means do so. But you will find me at my local Brewery and bottle shop, raising a glass to the industry with class!


1 comment:

  1. Nice take on it. I doubt there is a bubble, but there will be a saturation point in each market. Dayton is slated to open 10 new breweries. I hope all are awesome and stay in business forever, but likely there will be a few with bad beer and a few with good beer and bad business plans. Seems like we are more likely to see a pruning than a bubble bursting.