One Article You Need To Read And Why, 10/3/16

Today begins a week when I will talk a lot about the Great American Beer Festival.  My vacation usually centers around me going to Denver and attending the GABF and this year is no different.  The 500 words will be terribly late on Wednesday because I will be on an airplane heading out for the festivities.

To start here is an article that gives a 10000-foot view of the state of the craft beer industry leading up to the festival.

First of all, who in 1981 thought the craft beer business, which it wasn’t called then, would be this big and the GABF would be this massive of an event?  There is also the fact that the industry is maturing and the older, regional breweries are starting to band together in private equity relationships that allow them to share resources without giving up their independence.

Besides all that, the article gets at two things I have been saying to people who ask for the last year.  One, the explosive growth of the industry is going to stop.  There won’t be a retreat or shrinkage in the number of breweries but it will stay relatively the same through the next couple of years.  Why, I think the growth will come to smaller towns and less populated areas while the concentration of breweries in large cities will start to decline.

Second, large breweries and really small breweries are the way to go.  As I said, I have felt for a year or two that the growth of the industry will take place at the local level with breweries that concentrate on serving their immediate area only and breweries opening up in smaller towns outside of urban or even suburban footprints.  I believe this because I saw it start to happen in North Carolina a couple of years ago.  The large breweries will also be fine because they have the size to weather most fluctuations and storms in the industry.

The breweries I see having a hard time are those in that middle tier that I have trouble defining.  Is it the brewery that only distributes in its own state or neighboring states?  Is it regional distribution?  I have been trying to figure out how to define the line between the different levels for a year now and still can’t quite figure it out fully.

I think it is that level of size of the Oskar Blues, Victory, Southern Tier, Cigar City breweries that need and want the help that a partnership with other similar sized breweries to help take care of some the overhead costs that can sap a brewer that isn’t big enough or small enough.

Anyway, besides the 500 Words articles for the rest of the week, there will be the occasional dispatch from Denver of interesting things I’ve drunk or eaten or seen.  It is the kind of vacation I like, one where I get to see good friends, eat good food, and most importantly drink good beer.