Last week there was a spate of social media posts and articles in the national media about the state of craft beer in America. I’m just now getting caught up on my reading because I was brewing a bunch.
“Bubble” was a term that was quoted in a couple of these pieces. That word will certainly have a strong connotation for any current beer aficionados who also took a beating in the housing crash, and it’ll probably sound familiar to anyone who was drinking craft beer (back then we called it “microbrew”) in the 1990s.
My recollection of that time, as a young dude just learning about the world of beer and starting to homebrew, is of a number of first generation craft brewers, who started out in the 80s or early 90s, blowing minds with totally novel “pale ales” and “porters” for a number of years, subsequently enjoying a period of exposure in the national consciousness and rising sales and trendiness and increased market share, followed by a flood of new entrants into the market, and ending with a downswing of closures and consolidations that lasted until the second generation of craft brewers picked up the torch in the early 00’s.
In the comment sections on these posts and articles, a reason I saw cited more than once for the decline in popularity of 1990s microbrew was a decrease in quality. Although I don’t think I have ever returned as many infected six packs as I did in the last few years of that decade, I have to believe that, as evidence, the “decrease in quality” argument is pretty much entirely anecdotal.
The more interesting – and perhaps indicative – nugget that was tossed around was folks getting into the brewing business (and I’m paraphrasing) “for the wrong reasons.” Certainly there were folks in the 1990s tossing a hat in the ring for whom their burning passion for beer was not chief among their reasons to strike out and brew – just like today (and as an example of that, I’ll cite Chick Beer – Google it). Did that lead to a decrease in beer quality too? Is it inherently wrong to want to cash in on a trend?
Seems subjective and situational, but I don’t remember the blackberry something wheat something-something with the dog on the label that I drank through gritted teeth at parties as having the flavor of chasing a lifelong and dearly-held dream.
But, returning to the present day, here’s some data: according to the Brewers Association, there are about 1300 new breweries in planning, on top of 2000-odd craft brewers already in operation. By volume, less than 1 out of every 10 beers sold is a craft beer (according to the BA’s definition of that term). Even if we discount the naysayers and assume craft brewing’s market share will continue to grow, it seems impossible for the market share to keep pace with the number of new players hungry for tap lines, shelf space, and drinkers.
Given that, it’s hard not to look ahead and expect a shakeout. But at the same time, it’s also hard not to look at the current situation as a definite point in a cycle: the boom-and-bust of the 90s strengthened and grew a number of the first-generation breweries and also gave us the brewers and brands of the second wave.
Another theme from last week was the looming specter of AB-InBev and SABMillerCoors. Let me digress (it’s my blog … I’m gonna digress) and talk about olive oil:
About a year ago, I was listening to MPR and heard an interesting piece on olive oil production in Spain. The reporter interviewed a number of tiny, family-owned artisanal olive growers producing expressive, interesting local oil, and contrasted them with a big corporate concern industrially glugging out indifferent product for the bottom shelves of warehouse stores all over the world. One of the artisanal growers commented that the big company was fully capable of crafting amazing and inspired olive oil, but there was just way more money to be had making and marketing an inexpensive, lowest-common-denominator commodity.
Not to cast any allegorical aspersions on the technically impressive feat of brewing a pale, light lager with precise consistency at multiple facilities around the world, but – doesn’t that sound familiar?
The many plants owned by those megacompanies have process control and resources and infrastructure beyond the wildest-eyed dreams of any craft brewer, but – and I’m not trying to be cavalier here – I’m still waiting to be blown away by anything they’ve put out on general release. Big Beer will muscle into the craft sector, that is going to happen, and it could be an awesome exercise in high-paid executives misunderstanding entirely the forces that drive a niche market segment. Anybody remember Budweiser American Ale?
Whatever the AB-InBevs and Diageos and SABMillerCoors and Fosters of the world end up doing or not doing, the most important thing in the immediate future of craft beer, to me at least, is the opportunity to support – through patronage, through spreading the word – the folks who are brewing “for the right reasons,” whatever that may mean to you personally. Drink local, buy independent, support your local brewery and family-owned businesses. That’s my plan for Black Friday.
Cheers, as always.
the beer engine 
Close to every beer made by large breweries to crack into the craft beer drinker market is absolute shite. Haven’t drunk one that would make me drink that over a standard ‘craft’ beer. Another funny observation is that those ‘craft’ styled beers brewed by the big breweries are often on the shelf cheaper than their boutique counterparts but more expensive than their mainstream beers. Just shows you how they think, drive the price down and you will win. Be interesting to see how good a beer they could make at the same price point with their bulk volumes.
I am pleased to see the small microbrew setups opening with a unique approach – they brew on premises, but not enough to exclusively serve only their own stuff. That way they can sell other crafts and even macros, like any other bar, but offer their own beers in a “get it while you can” setting! Not a lot are doing it, but it kinda offers the whole tamale to a group of revelers. And it would seem to be a great business model that might be “bubble proof” to an extent.
I to would love to get into the commercial craft brewing but here in charlotte nc it is already starting to look a bit saturated. We have 5 breweries in town and 3 brew pubs I can’t help but think all of these breweries will not make it.
“Drink local, buy independent, support your local brewery and family-owned businesses.” I agree wholeheartedly with this sentiment. I love seeing small entrepreneurs go up against the big boys and do well. I’m hoping the market is still friendly to new entrants in about 10 years or so when I might actually be able to pursue the dream of opening a brewery.
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Well said Dawson. I love seeing all of the new craft breweries opening up, especially in MN. Not only do we have more and more choices of great “hand-crafted-with-care” style beers, it also opens people up (including myself) to try beers that are a little more exotic and maybe something we wouldn’t have thought about trying 5-10 years ago. Part of my love of craft beer is trying something new every time I go to the store, or a bar. To me, that is the fun of it. The craft beer scene seems to be a little competative, with brewers pushing the limits and putting out better and better beers. This is fantastic for us consumers! And the last point I would like to make is the fact that while the megabrewers are all out to make more than the other guy…. business and bottom line, I love how many craft brewers are now doing collaborations with other brewers, and putting out some great product. How awesome of an industry where two, three, or more competitors can get toghether and brew some awsome beer, all with their own little touch to it. Drink local!
One of the things that bugs me is that, I think, in an ideal world we could have it both ways. Imagine a future where the big boys decide to become partners and investors in craft breweries (not just buying them up and taking them over). More like a venture capitalist setup, where they seed some money to growing breweries, help with distribution and marketing, etc.,. They take a bit of a cut, but then leave the brewers alone to do what they do best. The big boys get some profit and name recognition in the craft brewing circles, and the craft brewers get some help with the big ticket items that are hard to do as a small businessperson.
I’d love a future where AB-InBev and SABMillerCoors are fighting with each other to fund the next big “small” brewery. Probably not realistic in our profit driven world, but a random pre-Thanksgiving daydream.
A pet peeve of mine that really sticks in my craw are the ubiquitous “I don’t really have experience in X, Y or Z, but I’ll offer my advice anyways” comments found in the various homebrewing forums on the interwebs. That said, I don’t really have experience regarding brewing beer professionally, but my feeling is that healthy competition is ultimately a good thing for the industry. For instance, after the microbrewing bust of the 90’s we were left with venerable giants like Sierra Nevada, Sam Adams, Brooklyn Brewery, etc. Currently, the market in my neck of the woods is saturated with local “craft beers,” in the truest definition of the phrase, that, quite frankly, are underwhelming in quality. Buy local, yes, but if I’m shelling out $12-20 per bottle I expect something truly exceptionally. I’ve found, and this comes from personal experience regarding getting a foot-in-the-door with this industry, that successful breweries are operated by very shrewd business people. Part of the gimmick of craft brewing is that it’s a hand-crafted artisanal product, something easily marketed to an emerging generation of people that are passionate about, for instance, “green initiatives.” In my opinion, some craft breweries are successful because they pander to, for a lack of a better term, a hipster culture. So, am I a beer snob? Yes. Am I an insufferable know-it-all that trashes larger, successful breweries because they’re not making Pliny the Imperial something that fetches >99 points on BeerAdovcate? No.
To me, there’s a direct correlation to coffee shops and the challenge faced within that industry — both the larger chains (Starbucks, Caribou) and the small, independently owned ones. It’s one thing to buy into the ideology of “buy local”, and it’s a whole different story to “enjoy local.” Having spent a couple years in the coffee scene as a supervisor within Caribou Coffee’s network, I had been trained to not only appreciate quality coffee, but to make it, too — and consistently — and know what made it so.
The larger chains make a good product an there’s typical consistency that we can expect out of their product, and by contrast the small, independent shops have spotty quality and plagued with inconsistency from cup to cup. Even local chains (and I’m thinking of Dunn Brothers here) that strive for quality and even control much of the process (roasting their own beans on premise), a mocha at one place will not taste the same at another — even though they’re supposed to be all one brand.
I’ve been to scads of ma ‘n pa coffee shops that sucked ass — I mean, we’re talking about excessively roasted coffee, scalded milk, crap Hersey’s chocolate syrup in your mocha, Ready Whip falling over the rim of your cup, and inconsistent quality and character from day to day. You can support that all you want to stay true to the mantra “buy local” — but you’re also encouraging crap. Sure, you’re helping feed a family’s dreams to own a coffee shop and helping them to pay the bills, but you’re also feeding their incompetency in buying crap without telling them to step up their game.
Translate that to the beer world, we vote with our wallet — and the law of economics dictates that if you create a good product and market it well, people will generally buy it and you may fare well. If you make crap (and don’t have the kind of marketing budget that the big boys has) then your days are numbered — you may have an extended grace period because of the Minnesota “nice” factor and that people are generally forgiving here, but your days are still numbered.
I, for one, welcome a more saturated market — the economic laws will drive out the crap breweries and force the others to step up their game to stand out, to be different, and to brew quality beer. Hell yes it will make things tougher, more competitive and require a lot more ingenuity, but that (to me anyway) translates to better beer and a better atmosphere to enjoy it in. And when better beer is being produced, we all win….well, save for that home brewer gone “pro” who never took the time to learn the true art of craft brewing on a large scale beyond the swill he/she’s produced on the five-gallon scale. They’ll likely end up closing shop because they didn’t learn the hard lessons of business *before* going into business.
And what of the big boys and their attempts to replicate the craft beer but on their level? There will always be people who will buy crap because it’s what the TV told them to do. Evidence: Reality TV. It is generally the saddest form of entertainment, the bottom of the barrel in terms of quality content — yet people watch it and are flat-out addicted to it. The fact that Big Brother is *still* on the air is proof that the big breweries will be able to sell and market their swill — whether it’s their shitty .32 pilsner or something that resembles a neutered London Porter. People will buy it because the TV told them to.
And to your point about our role, it’s key. We have an active role in educating other beer drinkers — opening up their world to the lesser-traversed paths of craft beer and helping educate palettes and opening people up to near endless possibilities. Your post about BJCP standards as being a good guide for common language is relevant here, too. When we understand the “official” beer styles, we have a common base to start talking about variations.
OK, I’ve blabbed enough. I could write more on this, but I don’t want to hijack your post with my nonsense.
Love the blog, Michael. Nice name, too.
I respect big beer as a style, they made something unique to America and make it well as proven partially by the fact that they sell so much. Now their business department I don’t respect, they have no morals other then making money which is not cool to any beer scene. And I agree with you Dan Kennedy, it seem a craft beer bubble, if there is one, is fueled by hipsters with no respect for the product, only the fact that it is local organic free range ect…. and they will drop the beer scene when it is no longer fashionable, or because they realized that their local brewer brews only sub par local free range ect…
We (me and my friend, an old school brewer) hope to start a local nano brewery in my town, but we have accepted that it will pretty much be a charity, we don’t expect to make money off of it, and if we cant afford to run it any longer then me and my friends a will have a kick ass home brew setup!
Interesting topic, every time I watch ‘Beer wars’ I get angry and think about going to a supermarket and drawing less then respectable things on the macrobrew ads!
Very well put!!!
Very well put!!
Great post Michael. Couldn’t agree with you more.
The artisinal concept is apt. As our nation evolves toward the European model (Obamacare is a nice first step), more and more folks will be freed up to focus on things they have a passion for. Craft beer will benefit from that trend.
Follow any discussion of passionate homebrewers looking to go commercial, and the talk is always about the $500k needed to be ‘viable’ or the folly of starting on a system that will produce less that 2k barrels a year (turn back now – hope is dead). Success is framed in the current, corporate dominated environment.
Once people realize that they can brew to make a living without having to brew to make a killing – the quality of our beers (and the quality of our lives) will go through the roof.
Drink local!
Insightful stuff there MD. But more importantly, what bru goes best w/ venison?
I am personally offended by the pricing of craft beers. I just don’t buy into the beer is the new wine concept. If I am gonna splurge and drop 15 to 20 bucks on a single bottle of beer. It is going to be the exact opposite of local. It is going to be from Belgium. I do believe in buying local. Luckily I have Summit Brewing right down the street : ) I have also been over to Pour Decisions and picked up some beer from them.
The myriad of 10 dollar six packs on the shelf at MGM do not interest me at all. If I am gonna drop 20 bucks, it is better spent on buying grain, hops and yeast.
I was so turned off by the arrogance of Greg Koch in the Brewing TV episode that I would never drink one of his beers, no matter how good it was. Honestly let me just drop 18 bucks on a six pack so you can build a new rock garden and waterfall. Then you can go over to Europe and show them what brewing is all about.
I hate to pick on a local favorite Surly, but I don’t buy their beer either. Don’t get me wrong it is great beer, but 12 bucks for 4 beers, when I can get a 12 pack of Summit for the same price just does not add up for me.
The fact of the matter is that Craft brewing is at bubble stages. How many cranberry-coriander-pumpkin-bacon-maple-saison’s are too many. I say one.
For me its not about the money really. I have spent thousands on brewing equipment. It is about value. I just don’t see the value in most of the beers on the shelf.
They say a rising tide carries all ships, but all tides turn. Many of the brewers riding this tide are going to find themselves out of business when the tide turns.
Agreed, Sean M. And you too, MJDonnelly. Geesh, I love this blog!
The term “craft” itself is destined to fail for small brewers. MicroCraft might work. There needs to be an emphasis on small batch size to really differentiate from anything a macro brewer might create.
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