Tag Archives: beer industry

One Beer Article You Need To Read And Why, 4/17/17

This feels good.  I’ve spent the last two weeks moving across town.  It is never the physical aspect of moving that upsets my balance.  I am a creature of habit and when you move all your habits get disrupted.  From the direction you drive to and from work, to where you shop and eat, to the sounds you hear as you try to sleep, moving is a disruption.  However, disruption is good.  It changes what you do, how you do it, and it shifts your perspective on many aspects of your life.

American craft beer has spent the last 20 years disrupting the whole beer industry.  As craft beer has expanded almost exponentially the last 5 years, many of us who have been around since the last “great expansion” have been fretting over another bubble bursting.  However, we may have had it wrong.  This article from The Motley Fool has a better term for what is coming: shakeout.

The difference between now and the bursting bubble of the late 90s is that the beer industry has matured and changed.  As the article points out, the coming shakeout will be a continuation of the consolidation we’ve seen begin with the mega-brewers buying up regional breweries and those same regional breweries consolidating themselves to protect against outside purchase.

With such explosive growth over the last few years, we have seen a lot of breweries enter the market who have no business being there.  Those breweries will be the leading edge of the coming contraction.  Of the ones I’ve seen shudder in the last 18 months or so, the most common reason is poor planning.

We all know the apocryphal story of many breweries that started as a home brewing enthusiasm that leads to good beer and friends deciding to pool their money and resources to start a brewery.  That is a dream that dances around the back of almost every home brewer’s mind.  That is a great story, that can go one of two ways that are mostly dependent upon having a good plan.

From my vantage point on the bar/retail side of craft beer, I encounter a lot of small breweries who either self-distribute or are starting to work with a distributor.  Some of the things I’ve noticed about the breweries have come and gone in just the 2.5 years we’ve been open

  1. Inconsistent beer. It is either, they have one good beer and the rest are mediocre at best or they have a few good beers, but they taste different with each batch.
  2. No plan for their beer. What is your brewery’s aesthetic as far as beer and personality? What is your plan for your core/year around beers?  What is your plan for your seasonal beers? What is your process for creating new beers?  Then, how will you market them?  That is why you need to know how your beer and your brewery’s personality are tied together as your business front face.
  3. No distribution/unrealistic distribution plan in your business plan. I’ve seen many breweries come into the Charlotte market with unrealistic expectations.  This market is immature in two ways. One, the craft beer drinking community is very young and new to craft beer.  Two, most the breweries in the market are less than 10 years old.  The market is also very locally focused (meaning Mecklenburg County) and very IPA and lighter craft beer focused.

I want to spend the rest of the week exploring these three points and how they may affect the next couple of years of craft beer.  Also, now with the move over, I have a new part of The Beer Counselor colony that will start in May.

One Beer Article You Need To Read And Why, 2/16/17

I am often asked by thoughts on the future growth of craft beer.  I have answered this questions pretty much the same over the last year: Growth will come from newer breweries opening in more suburban, exurban, and rural areas with attrition coming in the urban breweries.  Growth will come from the bottom of craft beer from 10-barrel or smaller breweries and not the top national/regional breweries.

This All About Beer article points to one of the reasons I believe this is going to happen.  People crave freshness.  The idea of buying local has saturated all parts of the lives of the people who can afford it.  People love the idea of going to a brewery on can release day and getting fresh cans of whatever hazy, dry-hopped IPA they can find.  Bigger national and regional breweries who ship beer across the country can’t compete with that sentiment in many markets.

Stone tries to with their Enjoy By series and it is a great thing for Stone.  For retailers, especially retailers on the other side of the country, these beers are a pain in the ass.  Why?  Once the Enjoy By date is past, no one will buy them.

For so long, the Brewers Association and its members preached, “Drink local. Drink local.” We are finally at a point where everyone in the country who can afford it, can drink local.  What does that mean if you are Stone, Sierra Nevada, New Belgium and you have to ship all away across the country?  Best case scenario is a beer is shipped from California and gets to our distributor 7-10 days later.  Then, if the rep doesn’t come in that very day and place the order you are looking at another 2-3 days before they deliver it to us.  A local brewery can get me a beer 2 days after its packaged. How do you solve that problem if you are a national brewery?  You build an East Coast brewery to brew your beer closer to your eastern and southern markets.  This helps with the freshness of the beer and with the perception of being local to a lot of craft beer drinkers.

How those breweries navigate the next few years is something I’m eager to watch.  Why?  On one hand, they are fighting this growing cultural movement that goes beyond beer centering around local and fresh products.  So, on a certain level, they are competing against all the small 10-barrel breweries popping up in neighborhoods and small towns around the country.  On another level, they are competing with each other to be the “national” craft beer brand.  Finally, they are also competing against the behemoth that is AB-InBev and other global beer companies.  That is a lot of fronts to be fighting battles on at the same time.  Deciding which battle is most dire and in need of being fought at any given moment is going to be the key to their growth and survival.