Tag Archives: craft beer future

One Beer Article You Need To Read And Why, 2/18/17

Most articles you read about the future of craft beer are filled with quotes from Ken Grossman of Sierra Nevada, Jim Koch of Boston Beer Company, or Sam Caglione of Dogfish Head.  Rightfully so.  Those are three titans of craft beer after the great contraction of the 1990s.  However, craft beer has and is undergoing a dramatic transformation.  Today, there are over 5000 breweries in the US.  Most of them extremely small.  The insights of those three, while important and newsworthy are going to be different from the insights of the newer breweries.  That is why this is such a refreshing article to read.

Grossman, Koch, and Caglione are great at giving opinions on the 10,000-foot view of craft beer world, Andrew Leichthammer of Good Measure and Mark Babson of River Roost have more practical concerns. They worry about things like getting enough ingredients to brew and finding time to do everything that surrounds owning a business so that they can brew.

I’ve noticed the same differences in perspective between North Carolina breweries.  When talking to reps from the bigger breweries in the state, their concerns are not always the same as the ones I get from talking to brewers and owners of the smaller breweries in the state.  The distribution cap is the prime example.  While all brewers in the state (and almost all the craft beer people in the state) want the cap raised, it isn’t a front of mind subject for smaller brewers.  They are more concerned with excise taxes and just getting tap handle placements.

Just as a 42-year-old executive with a wife and kid doesn’t have the same concerns for a 22-year-old fresh out of college starting his first job at the same company do not have the same concerns, Dogfish Head does not have the same concerns as Good Measure.

As craft beer matures, it must come to terms with the fact that not every brewery wants the same thing nor are they always pulling in the same direction anymore.  Craft brewing is moving from a club of former homebrewers to an actual business sector with different size and economic strata.  That is not saying that these strata are in opposition to each other, but it is saying that each stratum has different wants and needs.

Craft beer’s story has always had two parts to it.  The first part is the idea of making better beer than the big beer companies.  The second part has been the bon homme of craft brewers towards each other.  Both are being tested as craft beer matures, but it is the second part that will suffer the most as more breweries come on line. There are over 5000 breweries and the number of available tap handles and placements is at best static.  That puts a lot of pressure on breweries and distributors to keep what they already have. That is when the all for one, one for all starts to fly out the window.

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

Last night on Twitter, Bryan Roth asked a question, does the beer matter for a brewery to be successful?  I quickly replied yes. Amid a few replies and forth Bryan recommended I read this article.  I did.  For my non-business type brain, I gathered what the article says is if you are planning on selling your craft beverage business (brewery, winery, distillery) this is probably the best time to do it.  The market is still in growth mode and hasn’t quite saturated yet.

It is a good article, especially if you know anything about business, but I don’t really want to talk about that.  I want to get back to the question Bryan asked, “Does a brewery actually have to make good beer to succeed?” He attached the screen grab below. I suggest you go to Bryan’s Twitter timeline right now because the question is still getting replies.

As I said, I immediately jumped in and said, yes, the beer in the glass matters.  Eventually, even if you have a great story, you are a local brewery and represent something greater than yourself, you must make good beer to be successful long-term.  One of my core beliefs about craft beer is the liquid in the glass is all that matters.  If craft beer gets to the point where the beer doesn’t matter more than the story, what is the difference between craft beer and big beer?  The altruistic reasons you get to a place are meaningless if you get to the same place as the bad guys.  All that matters is you are in the same place.

I understand a lot of people coming to craft beer right now aren’t coming because they believe the beer tastes better.  I serve beer to a lot of these people every day.  In Charlotte, it is the “it” thing to do.  Also, people believe local is always better.  They want to support local breweries and they will drink their beer and smile and tell me how good something is.  However, in a market as saturated as Charlotte is and will become, you must make good beer to survive.  In a smaller market where there are only one or two breweries nearby, you can get away with it, but you will never grow outside of that market.

What I hope and I think will happen is as Charlotte’s market becomes more mature and people drink more good beer, they will start to discern what is good and what isn’t.  Right now, most drinkers know what is good.  They haven’t learned what is bad yet.  In other words, when they drink it, they know what a good witbier tastes like, but they don’t know what a witbier isn’t supposed to taste like.

I understand and support the idea of craft beer as part of the slow food, local, artisanal cultural dynamic that shuns chain restaurants, big box stores, and big beer.  I’m one of the people fortunate to be able to afford to buy a lot of those things (artisanal soap, yes please), but the products must be good (and somewhat affordable) to survive long term.

A great story is wonderful.  It should help with the marketing and selling of your product. However, if that is all you have at some point someone is going to call you on it and you will fail. Kind of like what happens here.

One Beer Article You Need To Read And Why, 2/9/17

Craft beer as we know it is about the same age as Major League Soccer, a league whose growth gets dissected daily by the most critical of sports fans and watching its growth over that same period is just as fascinating.  None of us imagined there would be over 5000 breweries with more coming in this country.  Honestly, we were just happy to get a beer that didn’t taste like fizzy yellow water.

This article is about a speech Brewers Association economist, Bart Watson gave to the Ohio Craft Brewers Association conference yesterday.  In it, Watson touches on some of his thoughts on the growth of craft beer.  He points out that the market is changing.  In his opinion, the idea of a brewery going from startup to a regional multi-state player is not dead, but much harder.  That is because most us live within ten miles of a brewery now.  In some markets, it’s even more than that.  I live in an area with 19 breweries within 6 miles of me.

The primary implication is the one mentioned above, it becomes harder to stand out and explode like Wicked Weed has and become a multi-state power.  So how do you stand out in an almost saturated market and survive?

Primarily, you will need to make your beer stand out.  You must make good and interesting beer.  That means you must master the craft.  This goes hand in hand with another article with an interview of Ken and Brian Grossman in which they lament the lack of mastery in the craft of brewing. (Our society has lost respect for craft or skill. No one wants to be an apprentice.) It’s easy to start a brewery and that leads to a lot of people getting into professional brewing for the wrong reasons.  Either they are a good homebrewer whose friends keep telling them how great their beer is or they are a group of investors who think they can be the next Golden Road and cash out in a few years when one of the big beer companies come knocking.  At some point, it will always come down to the liquid in the glass and if that isn’t spot on, the brewery will fail.  The problem is that not only hurts that brewery but it often affects the perception of the other breweries in the area.

The second way you differentiate yourself in a crowded market is to appeal to underserved segments of your customer base.  Look, we can’t really increase the number of white guys drinking craft beer.  So, you go after the increasing female demographic and you go after non-white groups.  So, the question I asked a couple of days ago if it matters if African Americans drink craft beer has an answer.  Yes, because if they don’t (and Latino Americans don’t and Asian Americans don’t) the customer base for craft beer will begin to shrink and this will precipitate that bubble we’ve all been afraid is just around the corner.

One Beer Article You Need To Read And Why, 11/10/16

The Colorado Brewers Guild is one of the strongest state craft beer guilds because its membership is made up of some of the biggest and strongest craft brewers in the country.  This summer when some of the largest craft brewers split from the guild to create their own group, Craft Beer Colorado, it was big news in the craft beer world.  This split was a harbinger of things to come in the US craft beer world.  The dissidents have “reconciled” with the dissident group coming back to the fold when the guild agreed to ditch its executive director and rework the bylaws to look exactly like the Craft Beer Colorado bylaws.

The specific details of what was at issue are not important, but if you follow craft beer at all you can guess that the major issue was how to deal with big beer buying craft brewers.  The straw that seemed to break this camel’s back was the purchase of Breckenridge Brewing by AB-Inbev. Also, at issue was how the group responds to legislation and government regulation.  The spin-off group wants a more proactive stance towards legislation, whatever that means.

Most of the complaints of the Craft Beer Colorado group centered around the existential questions at the heart of craft beer’s future.  First and most basic, what is the definition of a craft brewer?  Second, how do you respond legislatively to a legislative and political landscape where people don’t care what that definition is?

In a world where some craft brewers have enough money to build breweries across the country or across the world, what is a craft brewer?  In a world of mergers and acquisitions and capital investment, what is a craft brewer?

This a world where the people putting up the money for brewery expansions don’t care what your definition of a craft brewer is.  Neither do the big beer companies who are buying craft brewers nor do the legislators who are tasked with writing laws that legislate alcohol distribution.  Most importantly, many of the people new to craft beer don’t care.  They just want a beer that tastes better than Bud Light.

Now, part of what makes craft beer so good and so different is that definition and that definition is very important.  How the craft beer industry sees itself and how it defines itself has always been what sets it apart from big beer.  That fearlessness and innovation at the heart of craft beer is a direct result of how craft brewers define themselves and their beer.

Sticking to the core principals of what has always defined craft beer is important.  At the forefront of that is independence.  Craft beer’s challenge going forward is to stay true to those principals while communicating those principals to people who have no real stake in those principals.  The average beer drinker who comes into my bar doesn’t care who owns Golden Road or Elysian, they just want good beer.  The state guilds and the Brewers Association need to figure out a way to make them care.  The beer world will look mighty different (yet somewhat familiar) if they don’t.

Five Beer Articles You Should Read And Why, 4/8/16

Friday is here.  Onto the Five Articles.

Five Beer Articles You Need To Read And Why, 4/6/16

There is a distinct to the Five Articles today, and it is a familiar one.  One of the cool things about the United States is it is in a constant state of evolving into the more perfect union it purports to be.  People are constantly fighting to expand the rights this country professes to love.  Sometimes it is just about allowing consumers to buy beer and sometimes it’s about treating people who are different than you, whom you may not completely understand fairly.

Of Alternative Music And Craft Beer

1991-1994 was a great time to be an alternative music fan.  August 1991 was the release of Ten by Pearl Jam.  A month later Smells Like Teen Spirit hit the country. That was the moment we alternative music thought we had won.

We, the weird, geeky kids everyone else made fun of were on top of the world.  We weren’t the cool kids.  What we had done was bring the cool kids into our world.  The musicians everyone was listening to were just like us.  They had been the ones dressing weird in high school.  They were the ones acting weird.  They were the ones reading weird books.  They were the ones drawing weird pictures.  Now, they straddled the world like colossuses.  It felt like we could do anything.

Then it ended.  You can attribute it to Kurt Cobain’s suicide.  Or, maybe it was Pearl Jam warring with TicketMaster.  Somehow it all ended up with Creed being a hit band.

I have much the same feeling right now as a craft beer fan as I did as an alternative music fan in 1992.  Craft beer has the same critical buzz. Craft is in every magazine and on every bookshelf.  Entrepreneurs are figuring out how to make money using the words craft beer.  It is a heady time.  It is also a dangerous time.

Back to Creed.  I’m sure the guys in the band are nice enough.  OK, maybe they have their issues, but who doesn’t.  Creed as an entity doesn’t matter.  In this case, they represent the idea that grunge music could be broken down into a scientific formula for success.

One-part muddy guitar + one-part gravelly voiced baritone lead singer + one-part flannel = successful band.

There is a soul in art and music that you can’t capture by the use of certain chords and instrumentation.  What money men and accountants forget is that the thing that makes art great, its soul, can’t be codified.  Great music is more than just chords and instrumentation.  Much of the music that came after Nirvana sounded fine.  It provides a good soundtrack to your time spent in a bar or a coffee shop, but it doesn’t make you feel.  It is missing that ineffable thing that soul actually is.

You can taste soul in beer as much as you can hear it in music.  Budweiser is a solidly made beer.  Each can taste like the can you had 5 years ago.  Making beer taste the same or close to the same from batch to batch is the holy grail.  That is a hard thing to do.  Ask any brewer.  However, that doesn’t mean Bud has any soul.

The company that makes Budweiser isn’t a brewery.  It is a beer company that manufactures and sells beer much the same way Goodyear manufactures and sells tires.  For them, beer is a commodity.  Its purpose is to appeal to the broadest possible audience at the highest possible price to produce the greatest profits.  That formula leaves room for no soul.

Think of it another way.  You can eat macaroni cheese that comes in a box.  It tastes fine in a pinch.  The macaroni and cheese your mother makes from scratch taste wholly different.  The Budweiser you drink could be brewed in Virginia or it could be brewed in China.  You won’t know the difference.  The beer you get from the brewery 10 minutes from your house could only be made in that particular place by those particular people.

That will be craft beer’s saving grace just as it has been the saving grace of good music.  There are independent music labels popping up every day.  Bands tour constantly.  They connect with people at a grass roots level every day all over the world. Going forward, the most successful breweries will be the ones who continue to innovate and connect with the public at a grassroots level.

Some of the most financially successful musical acts today get little to no airplay on traditional popular radio.  However, they play to sold out concerts night after night and get plenty of airtime on independent radio stations and online streaming services.  They find a way to connect with their audience on a grass-roots level almost person to person.

Big music companies stripped music of its vitality by dumbing it down to the least common denominator.  They stripped it of what makes it vital and kind of scary. Big beer companies are doing the same thing to craft beer through purchasing existing craft breweries and creating faux craft brands under their own umbrella.

 

Hey – he’s the one
Who likes our pretty songs
He likes to sing along
And he likes to shoot his guns
But he knows not what it means
Don’t know what it means
— “In Bloom” Nirvana

Most people don’t want to think too much when it comes to their beer.  They just want something to drink. They don’t know what all these words mean and they don’t care.  They just want to get a little buzz and they will get it from something that tastes good enough unless they are convinced that there is something better.

People have so many choices to make in their lives that they don’t want to think about choosing the music they listen to or the beer they should drink.  They want someone to curate those things and tell them what is good and what is important.

If the big beer companies are allowed to curate, they will do it in a way that maximizes profits.  They will drown the world in the least offensive, least creative, most soulless, cheapest beer possible.  Beer that is merely close enough to good.

It is incumbent on us, the people who love craft beer, for all that it is and all that it can be, to stand up and make sure the big beer companies aren’t allowed to convince people that just close enough is good enough.

Five Beer Articles You Need To Read And Why, 2/25/16

This will be quick.  I have another blog post that was supposed to be up yesterday to finish editing and post before I leave for work.

Five Beer Articles You Need To Read And Why, 2/18/16

A pattern is emerging.  American craft beer and American beer in general is going through a lot of changes.  The big beer companies are scared so they do what the overly rich do when they see a threat, the purchase and/or coopt it. At the state level, most states still have Prohibition era or post-Prohibition alcohol laws that seek to keep people from drinking alcohol instead of making sure people are able to enjoy alcohol legally and safely.

Five Beer Articles You Need To Read And Why, 2/13/16

Let me make a case for crappy television.  Let’s say you work as a bartender or another job where you don’t leave work until after 11 at night.  You have two choices: go somewhere and drink and eat or go home and crash on the couch and veg out.  It is in that second choice where you get to enjoy a lot of the crappiest entertainment television and movies can produce.  Hence, I’ve seen the original Shadowhunters movie and the subsequent and even more execrable television show.  Anyway, on the Five Articles.

I’m sure the Craft Brewer’s Guild was paying bars to put up their taps.  I am also sure other distributors are and they will be punished soon.  I’m just interested to see if any of the other distributors punished will be distributors of the big beer companies.

“The industry is structured a certain way, and all the power and the money exists and is used to keep it that way,” said Rep. Buzz Brockway (R-Lawrenceville).

This is the best description of why this country’s alcohol laws are so hard to change at the state level.  The most monied and powerful group in the three tiers are the distributors and they like the way things are currently.  The way things are has led to them having so much money and power and they are not going to let that system change without a fist fight.

Oskar Blues is quietly one of the most successful craft brewers in the country.  They just quietly go about making good beer and expanding their reach.

I think sixty percent is a bit high, but I agree with the basic sentiment from John Taffer.  We have this record number of breweries in the US because of an explosion of startups over the last 3 years.  Taffer is right when he describes the people starting many of these breweries. They are either homebrewer who have been convinced to give it a go with a 5-barrel system but haven’t mastered taking their recipes up to a commercial size. Or they are a group of friends with more money than sense who think they are going to invest in the next Golden Road that ABInbev will buy for an obscene amount of money.  Neither one of those groups makes good beer. This is why I believe the number of breweries will begin to level off if not decline over the next 12-18 months. The breweries that make bad beer will start going out of business soon.  Of course, that will lead to a lot of handwringing articles and blog posts about how craft beer is dying.  That will be loads of fun.

My advice to vintners trying to attract more Millennials or anyone else is, don’t change your product simply to attract new customers. Change you messaging to show potential new customers how great your product is and make sure your product is great. This is what the big beer companies don’t get.  They are smart enough to not change their product, just change the messaging. Their problem is the product sucks to begin with, so the new messaging almost doesn’t matter.