With a reported one million empty homes built in the US on speculation with another million sub-prime mortgages timed to fail this year, there is a lot of discussion this Yule on the economic prospects for 2008. I once advised small firms and in my planning advice I always included the need to be recession proof. For the most part these were weird words to young IT entrepreneurs in the late 90's as they had really never experienced the sorts of cycles that last hit around 1992. It is still pretty much the same in Canada given how much better we weathered the post-9/11 slump and how now our oil is worth so much more than it costs to get out of the ground.
But there is a good chance this long economic run is going to fade and fade rather fast giving even more reason to plan. And plan you can as I learned once from a undergrad classmate telling us how the family got rich in a recession - bubble gum sales. The ancient head of that family saw the early 1930's coming and realized that people would still be buying something, it was just that they would be buying something less expensive. Sure there were the necessities in life but plenty of folk still bought the affordable luxuries and so many bought their gum that, half a century later, a third generation was still living off the rewards of that one decision.
So what does this mean for beer? Brewers may have to make some decisions in 2008 and one they may want to make is to ensure they have let their customers know what great values for great tasting beers are out there amongst their brands. This may mean, for example, that Samuel Adams needs to play down Utopia in favour of their simpler but solid Scotch Ale or that Stone focuses more on their IPA rather than their next experimental Double Diablo IIPA (smoked style, macerated on olives) Bastardly Brew. But it also means that they can keep their machines operating as other parts of the economy go idle.
The time may be ripe for other reasons, too, given the price hikes for hops and barley as well as the fatigue around the extreme that is starting to pop up on the radar. Firms with long-term cost-saving green infrastructures, too, may do well. Forecasting is often a mug's game but those brewers who put their fingers on the right price point for a lighter flavourful craft ale may be able to ride out what may hammer those who parked too much capital or, worse, dipped into debt to create that perfect thirty dollar art beer. Affordable luxury may be the message we want to hear in 2008.