A Good Beer Blog

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Have you read The Unbearable Nonsense of Craft Beer - A Rant in Nine Acts by Alan and Max yet? It's out on Kindle as well as Lulu.

Maureen Ogle said this about the book: "... immensely readable, sometimes slightly surreal rumination on beer in general and craft beer in particular. Funny, witty, but most important: Smart. The beer geeks will likely get all cranky about it, but Alan and Max are the masters of cranky..."

Ron Pattinson said: "I'm in a rather odd situation. Because I appear in the book. A fictional version of me. It's a weird feeling."


Comments

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Jeff Alworth -

I sincerely doubt that there’s a brewery out there whose future business planning is not predicated upon the idea that they will grow and flourish.

I don't doubt it. Err, double negatives aside, I mean that I know of tons of breweries that don't expect to grow, or at least not much. Over the weekend I tweeted out a link to a Time article on the ubiquitous "are there too many breweries" topic, and pointed out that unless you distinguish between breweries and brewpubs, the question is meaningless. We could easily accommodate ten thousand 500-barrel brewpubs in the US. That would amount to 2.5% of the total market. There's a real ceiling on the number of production breweries we can have because, as the article rightly argued, there's only so many tap handles and grocery store shelves.

But I don't think it matters. I think lots of brewpubs will continue to open up with a business model that depends on a stable but modest volume of beer. They don't have to worry about distribution, grocery stores, or pub tap handles. They have to figure out how to sell about a keg and a half a day from their pub. I don't know how many of the 2500 breweries in the US are brewpubs, but it's a large number (and I'd be shocked if it wasn't a majority).

I don't think we're in a bubble. I think we may be approaching an equilibrium in the craft segment (at least in some locations) where the only way to grow is cannibalize other breweries--but that is the standard for all healthy, mature markets. In that case, crap beer will fail, which is probably a good thing. But a healthy, mature market isn't a bubble, even if flat sales feel that way to brewers.

Alan -

Well, with respect, I think that "we" aren't anything. Comparing Oregon with Ontario and coming up with a standard isn't very useful. There are loads of places that could easily take in more capacity. Lots of opportunity for infill. But 500 brewpubs reflects a blip on volume and, as is usually the case for brewing stats, isn't a net concept.

Flat sales and an increasing number of producers is a flag. An increasing focus on fringey, confusing and somewhat desperate styles of beer is a flag. Frankly, an increasing range of consultants and slightly certified experts and commentators is also a flag. There are only so many SKUs a market not only needs but can practically absorb. For me, this does not mean a bubble in the sense that a general collapse could follow but it is a marginal bubble in that the new entrants in more and more will face issues of diminishing demand for their novelty.

I live in a city with no production facility and one brewpub, Canada's oldest. We certainly could see growth. But another 50% added generally to the US market or another 25% to the Ontario market? Well, they better start making something that replaces orange juice and baby formula because for many newcomers at some point the reception for their beer is going to be pretty cool.

Stan Hieronymus -

Since Jeff brought up the matter of how many of the breweries are brewpubs . . . When the BA count reached 2,514 on May 31: 24 breweries coded as "large" in the BA database (like A-B, MillerCoors and breweries named for brands of Goose Island, Leinenkugel's and Blue Moon). There are 109 regional breweries, 1,214 microbreweries, and 1,167 brewpubs.

Only recently there were more brewpubs than everything else. In 1996, 65% of new breweries were brewpubs, in 2012 only 24%.

It would seem we'll reach this point of discussion in other countries - beyond Oregon and Ontario (are they countries?). Certainly every where some version of "craft" has crept into the conversation.

Professor Pie-Tin -

" I had a new IPA Frankenstein of a brew yesterday that need not be mentioned. By a very reputable brewer, it was a combination of dull and horrible. It was a one note blat from the shrill end of the brass section. No progression of flavours. Just the hops overwhelmed the putative waggishly juxtaposed style. A beer that will easily be forgotten or even rejected as a foolish example of the era. "

What a marvellous description that encapsulates much of the beer I drank on a recent roadtrip from Tampa around the Florida Panhandle.

I road-tested more than 30 beers, many IPAs, and I'd say 75% of them were eminently forgettable and virtually identical.

Hops are rapidly becoming the corn syrup of craft brewing.

Alan -

See, I have called this not the punk era but the disco era - overproduced easily consumed passing fare. But the corn syrup of brewing!?!? That is a very interesting point.

Jordan St.john -

Jeff Alworth has a decent point about the brewpub. A well maintained brewpub is no more threat to the market generally than a housefly. Take, for instance, The Granite in Toronto. They make nice beer, but only so much of it. Yes, they improved their production recently, but their wheelhouse is getting the beer to the front of the brewpub and serving it themselves. People like The Granite (incidentally, if you make it over there the dry hopped Best Bitter and a curry is the way to go) partially because it does not shed its form. The fact that it is a little limited in terms of growth makes it special.

If you discount brewpubs, the problem still exists. According to the BA, the number of microbreweries is up by 300 last year. That will likely be outpaced this year. They will have nearly doubled the market in two years.

Volumetrically, I don't know an I strongly suspect that those figures will lag by a year. Economically, it is likely the same. What I'll point out is that there is cultural currency as well and that the cultural currency helps determine the other two. This month Hanson got a beer, Tom Green got a beer, Mumford and Sons got a beer. In terms of cultural currency, I'm saying we are presently jumping the shark.

Jeff Alworth -

Stan, I'm shocked! (Thanks for the good info.)

Alan, I defer to your knowledge about Ontario. (Mine is literally nil.) Jordan's comments, however, refer to North America, so I can shoehorn my analysis in there based on what's happening south of the border.

In the US, craft sales aren't flat. They're not even flat in the country of Oregon (I like how Stan granted us independence and I'll take it) which has a 20% craft market share and over 50% of draft sales. It's probably the case that they're flattening out in some regions of the US, but I just haven't heard about it.

I'd also like to mention my first point again: there are lots of small breweries in the US that want to remain small. They have no intention of growing, wanting instead the small business lifestyle. These types of businesses will be the least threatened in a competitive market because they exist on the neighborhood level. On the other hand, breweries like Deschutes and Widmer are threatened because they've reached market saturation in places like Oregon; here, they're seeing volume declines. They grow by selling more beer outside the state.

Alan -

So now we need a map - or a hardcovered atlas - of the economic lands of beer. A Wirtschafts Bier Atlas setting out the tensions that arise as both nano and macro impose upon craft from both directions as played out in the autonomous regional collectives.

With plenty of bright colour and an thick index.

Maureen Ogle -

Oh! Atlas. Atlas. I vote for the atlas. Alan, that description of the Frankenstein beer is sublime. Would that I could write as well. And all of you are, as usual, making me feel dumb as the nearest rock.

Alan -

It was so great when you drew attention to it I had to fix the grammar!