Tag Archives: craft beer industry

One Beer Article You Need To Read And Why, 4/20/17

Wooderson is kind of cool.  Yeah, it is creepy he still hangs out with high school girls when he is somewhere in his 20s, but he is still kind of cool mostly because he is played by Matthew McConaughey.  He hasn’t learned Chris Rock’s advice about being the old guy at the club.

I don’t think Sam Koch or Boston Beer company has learned that.  However, circumstances are proving that Chris Rock was correct for some brewers as well as Wooderson or guys like this.

Bryan Roth has written a great blog post about Boston Beer and why it may no longer be considered craft by the Brewers Association long after it is no longer considered craft by most craft beer drinkers.  I posit that the average 26-year-old sitting in a tap room he walked to from his apartment this afternoon thinks of Sam Adams the same as he thinks of Bud or Miller.  It seems at least recently Sam Koch didn’t understand this.  Also, until recently the Brewers Association agreed, literally changing its own rules to keep Boston Beer as a dues paying member.

That time is probably over and it should be according to Roth’s research.  Currently, estimates project that only 57.2% of Boston Beer’s barrel production comes from actual beer.  Why is that you ask?  They produce Angry Orchard and a bevy of hard sodas, teas, and other liquids with just enough alcohol to make the drinker think they are living on the edge.

I think it is harder for larger (and particularly legacy brewers) to change course as fast as the current craft beer scene requires.  I believe brewers like Boston Beer, Stone, Lagunitas, Stone and even Sierra Nevada are in danger.  That danger is not from ABI or MillerCoors.  It is from all the small locally focused brewers who were inspired by Boston Beer, Sierra Nevada and their like.

My advice to those breweries is not really an answer, but it is to be nimbler.  Figure out how to change course and quickly and adjust what you are offering to the craft beer public without changing the core of who and what you are.  The one way to do that is to bring in new, younger leadership.

That doesn’t mean to go out and find some hired gun CEO type to run the business.  It means elevating someone who has been with the brewery for a while and is steeped in what the brewery stands for to a position of true leadership and influence.  That is often the child of the founder like in the cases of Sierra Nevada and Bells Brewery.  In the last few years, both companies’ founders have begun the process of turning over decision-making to their children.  Time will tell if the younger leaders can manage this changing craft beer dynamic.

Valar Morgulis.  No one likes to see companies fail and die.  However, no company (or country) is guaranteed infinite existence.  Just as all men die, so do all companies eventually.  We, the craft beer drinkers of this country must accept this, especially of the next few years because some of the brewers that will go away will shock and surprise us.

One Beer Article You Need To Read And Why, 4/19/17

This week I’ve been concentrating on the future of craft beer after the shakeout it is undergoing is over (here and here).  The more I look at craft beer and its future, the more I think comparing the industry to a young college-aged man is apt.

In college, I remember bitching about my favorite bands selling out when they had the temerity to sign a real contract for real money with a real record label.  I remember wondering why women would get offended at sophomoric jokes about women and would use silly gay slurs when talking to my friends.  I remember being young and trying to figure out how to live a life that combines what I believe with finding a job that will pay me actual money.

Look at craft beer at the moment.  We have craft beer drinkers and fans who swear off any beer that takes a dime of “corporate” money while attacking anyone who doesn’t share their vitriol.  We have brewers who can’t understand why women and a growing number of men are offended by some of the, at best, insensitive names of beers and their accompanying labels.  We are watching craft beer grow up in front of us like a parent watches their college-aged son grow up and it is painful at times.

Today, I have two articles that I think speak to the growth and maturity of craft beer in different ways.  The first is about Brewdog.  This article that confirms what I have believed about Brewdog from the beginning which is while I believe that have a core set of values that centers on independence, much of what they say and do is simply self-promotional b.s.  They seem to care as much if not more about people talking about them then they do the independence they espouse.  They are the punk band you grew up liking because they seemed so real.  Then, you found out that was all part of the plan to get signed to major label.

The second article is from a panel Jason Notte participated in recently centered on what is currently happening in craft beer and how that will affect the industry’s future.  I take away two things from the article.  One, near term, we will see a shakeout of the smaller breweries who fail to consistently make quality beer.  This is similar to what happened in the late 90s/early 2000s shakeout.  The breweries that couldn’t produce enough consistent and consistently good beer closed leaving a core of brewers and breweries who led the charge to today’s explosive growth.

Two, many of those breweries that survived that period have become midsize/regional brewers and they are the most vulnerable in this new world order.  With the huge number of breweries, it benefits breweries to either be extremely small and local, part of a loose confederation of mid-sized breweries, or be owned by a huge conglomerate.  Trying to go on your own as a midsize/regional brewer like Stone has its pitfalls, at least in the near term.  I will be very interested to see how all the Colorado and west coast breweries building breweries on the east coast fare long-term.  Remember, Flying Dog tried this before eventually shutting down their brewery operations in Colorado.

This is a wonderful time to write and think about craft beer.  It is at a flection point where things can go many ways.  This is what I believe will happen.  The midsize/regional brewers like Stone, New Belgium, Deschutes will either join together or they will be purchased outright by the huge conglomerates.  At the same time, all the small local breweries that serve their city and maybe a few surrounding counties will continue to thrive because they serve the local need for fresh beer and an authentic experience.

One Beer Article You Need To Read And Why, 4/18/17

“Every time I call it a game, you call it a business. Every time I call it a business, you call it game.”

Today’s article is a clip from one of my favorite movies, North Dallas 40.

This is inspired by two things.  First, me wanting to explore what may happen to craft beer as it matures as an industry.  Here is yesterday’s post to start that off.  Second, it is inspired by a Twitter argument I watched happen last night between craft beer fans and writers.  It is the same argument that has raged in art circles for centuries.  At its heart is the, “You’re not (fill in your art form) enough.”

In craft beer, this usually manifests itself when someone, usually a writer who focuses on the business aspects of beer, talks about beer in a sometimes clinical manner that doesn’t scream “death to macrobeer.” This leads to them being called a sellout or worse yet a trader to craft beer.

Here is my take on this argument.

I started out my working life as a grant writer whose favorite job was working for McColl Center for Art + Innovation.  It is an artists-in-residence program here in Charlotte.  Working there gave me the opportunity to watch artists up close and see how the process works in real life and not in the romanticized version of art we all grew up with.

Real artists don’t sit around waiting for inspiration.  They work all day everyday at their craft.  The most successful of those artists know that at least 25% of that work is selling their art as well as the idealized version of themselves that patrons want.  The best artists not only understand their art, but they understand their place in the greater art world as well as the worth of their work.

I think brewers are as much craftspeople and artists as the painters and sculptors I met at McColl Center.  That doesn’t mean I think every brewer is a true artist just as I know not everyone who sells a painting they created is a true artist.  Some are individuals who found they have an affinity for something and have decided to monetize it as best they can.  Does that make them bad people? No.  It does mean that while their beer or their art is financially successful, it doesn’t inspire the way it should. The thing is, that is probably the majority of what is being sold and it is necessary for the industry to function.

Maybe my favorite part of that clip is when Matuszak says, “Job. Job. I don’t want no fucking job. I want to play football, you asshole.”

Anyone who makes their money in craft beer holds that sentiment dear to their heart. Whether they are an artist or not.  I do.  I have had real jobs.  They suck.  Whenever I’m annoyed by my job, I think back to almost all the other jobs I’ve had and I thank the stars that I run a craft beer bar instead.

I also think that anyone who pays their rent and buys food thanks to their job in craft beer lost their rose-colored glasses about craft beer long ago.  Just remember, you don’t have to lose the fun of craft beer or think of beer simply as a widget to be made and sold to think of ways that you don’t go broke doing this.

There should not be a dialectic between the art & craft of craft beer and the business of craft beer.  For any brewery to be successful and for the industry to be successful as it matures there must be a marriage between the two.  The artists I worked with those years ago taught me that.

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.

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.

Five Beer Articles You Need To Read And Why, 6/18/15

A quick hit links for today.