One Beer Article You Need To Read And Why, 2/15/17

Portland is the canary in the coal mine for craft beer trends.  Whatever happens there eventually happens in other craft beer markets within 2 years.  So, the idea that older midsized breweries in Portland are starting to feel the pinch of the brewery explosion from the past five years should worry breweries across the country.

One of the things that annoys me about craft beer culture, and American culture writ large, is its constant need for “the new.” Craft beer drinkers constantly expect new limited releases, and they flock to the newest brewery in town expecting something…better?

This leads to two things.  One, over-experimentation by brewers not experienced or skilled enough to pull it off successfully.  Two, the older more established breweries getting pushed to the side.

The first issue eventually fixes itself.  The liquid in the glass never lies and if a brewery pumps out enough bad beer, people will stop drinking it.

“For years, it defied logic.”  In the article, when Josh Lehner says this, he is talking about Oregon beer growth, but that statement is applicable to craft beer growth around the country.  The double-digit growth of the last five years is insane and unsustainable.

Bart Watson, Brewers Association economist makes another great point that a lot of people inside craft beer often miss. Craft beer is a premium product and a subset of the overall beer market.  While it has driven the expansion of that overall market for the past few years, at some point everyone who can and is willing to pay for craft beer will be doing so.

It must be frustrating for a representative for a midsized established brewery to walk into a bar and see none of their beers are up on our tap wall.  That is probably why more and more over the last six months I’ve heard reps mention permanent taps, not requesting one, just mentioning it.

That is one thing breweries are trying, but I would suggest three others.  First, as the article points out breweries should concentrate on their local market.  Unless out of state is part of your home footprint, push it to second place.  This goes hand in hand with the second thing, which is capture people with a good taproom or brewpub. Basically, it is simple business. The people closest to you are more likely to purchase your product, and the lower the overhead, the greater the profit.

Third, if you are an established midsized brewery, you should have the capacity to have a small batch test system where you let your brewers have fun. Let them make something new and weird each month and then sell it.  Your name and reputation will get the beer into bars and you will satiate the culture’s constant need for something new and different.

As I said, Portland is the warning.  It should show that the bubble we’ve speculated about is coming and breweries must be prepared for it.