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Old 11-15-2012, 07:03 PM   #41
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I think there will always be room for a passionate brewery that can find a location that isn't saturated. In South Jersey there's only Flying Fish in the area and Iron Hill Brewpub.
There's a brewery in Cape May, a brewery in development in Little Egg Harbor, the Tunn Tavern in Atlantic City, and One in Vineland. We also get a ton of stuff from PA such as Yards, Victory, and Troegs. Dogfish Head is in our region. There are about a billion local breweries serving Philly.
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Old 11-15-2012, 07:07 PM   #42
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1st: Stone rocks. Period.

2nd: I agree that some markets are saturated, while others aren't. I also feel that there are many untapped markets in the US, but they are untapped for good reason. Texas is a great example. Sure, there are texans that really want more craft beer, but they are the 1%. 99% of people in Texas want BMC or Shiner.

3nd: There are a lot of breweries out there that aren't going to make it. Their beer isn't that good, and they don't bring anything new or interesting to their market. I don't see a huge 'bubble' popping, but as the market gets more and more saturated, it's going to be much harder for the crappy to mediocre breweries to grind out a profit. Expect to see the boom continue for another two years ago. You'll see a leveling off, then you'll see a metric crapton of 3-15bbl breweries for sale.

Any brewery making excellent beer with an owner that has some business sense will be just fine. There are so many breweries pumping out mediocre beer right now. The great breweries won't have any issue rising above them when the bubble pops.

And one small rant: New breweries that just started bottling: Put a GD bottling date on your beers. No, i'm not going to buy a $7 bomber of your IPA if A. I've never heard of your brewery before, and B. I have no idea how long it's been sitting on the shelf. I'm looking at you Knee Deep Brewing and your $11/bomber Simtra Triple IPA. /rant

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Old 11-15-2012, 07:09 PM   #43
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i read an interview or something with a local brewer that is about a year old, and it was something about competing with other local breweries (only a couple close by, but more are opening up). he said that they didn't see each other as competition, and the fact that other breweries are opening up is good for them because it will increase interest in craft beer.

basically saying that the market is going to be ex BMC drinkers not other craft beer.

i have to agree though, if i haven't heard of the brewery, or specific beer, i am going to pass on it unless it has some cool art on the bottle, or a creative name or something similar.

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Old 11-15-2012, 07:13 PM   #44
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I really like the local pub creating their own line of beers, similar to how it is in England and parts of Europe. That would be enough for me if I was a business owner, a small local distribution network, a pub, and lots of local joints with my beer on tap.

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Old 11-15-2012, 07:16 PM   #45
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I really like the local pub creating their own line of beers, similar to how it is in England and parts of Europe. That would be enough for me if I was a business owner, a small local distribution network, a pub, and lots of local joints with my beer on tap.
That appeals too me as well, but if you ran the numbers, could a small brewery make money? Just by selling to a few towns..
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Old 11-15-2012, 07:18 PM   #46
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On the nano comments - I want to start one, but my goal isnt to make a ton of money and be able to quit my job, my goal is to do it on the weekends and have my expenses recouped in a short period of time, after which, be making a tiny profit; however I live in Connecticut, the land of rules and regulations, so it isn't that easy to get going.
In general - All micros/nanos are not great, so I don't expect them all to stick around, and even if the micro/nano tastes amazing, if they can't market properly, and balance thier books, they won't make it either.
I wish someone would open a brew pub in my area, that would be sweet.

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Old 11-15-2012, 07:23 PM   #47
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I think the wine industry comparison may be a fallacy, seeing as how small wineries can directly ship to their consumers, while I don't believe breweries can.

So basically the distributers and their lobby still have a stranglehold here and this really needs to change.

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Old 11-15-2012, 07:24 PM   #48
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basically saying that the market is going to be ex BMC drinkers not other craft beer.
That will continue for awhile, but it won't last forever. Without drawing some curves on a graph it's tough to describe, but I'll try.

Right now there is a huge interest in craft beer, but that demand is going to level off. Basically, craft is never going to pull 100% of the market away from BMC. BMC markets too heavily, and it's too much cheaper than craft beer. Just like small boutique pizza places will never steal 100% of the market from Pizza Hut. It's never going to happen.

So what is happening? The type of people that would be interested in drinking craft beer are discovering craft beer. This is driving demand. This will continue for awhile until the majority of the people that would be interested in craft beer already are. Now you're left with two groups, your BMC crowd, and your craft crowd. Craft may slowly steal more market from BMC, but at a fraction of the rate they are today.

To sum that up. Demand for craft will continue to rise. Heavily in the short term, but then very slowly a few years down the line. That line on a chart will continue to be pointed up, but it will be much flatter than it is today.

Now let's look at the second potion: Supply. As demand is sky high right now, there are tons of breweries flooding the market. As these breweries are entering the market, demand has continued to rise, and rise fast. That won't last though. Once demand slows down, supply will outpace demand. Good breweries will make it, mediocre ones will fail.

Stealing market from BMC isn't a bottomless grab bag. Eventually craft will steal all the market it can. BMC isn't going anywhere, no matter how much people want it to. Local breweries are going to need to start seeing themselves as competitors here soon.
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Old 11-15-2012, 07:27 PM   #49
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And nanos really don't factor into this argument. There's always room for another nano in the market. My grocery store may have 15 brands of jam/marmalade, and sales for jam/marmalade may be falling, but the little old lady at the farmers market will always be able to sell her homemade jam and marmalade. She may never be able to have a jam factory, but she'll always find a market to sell 10 jars at the farmers market.

Nanos are the same way. There's always room for another 1BBL brewery. The problem is if they have aspirations of becoming much bigger in an already saturated market.

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Old 11-15-2012, 07:40 PM   #50
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The only reason this is a problem (or possible problem) is because of the homogenization of grocery/liquor stores. The big national or major regional chains want to sell the same product lines at every location---maybe with a token amount of shelf space set aside for localish options. That only allows room for a limited number of breweries.
That's actually not at all true. I did some consulting work with a supplier to Wal-Mart's supercenters a few years ago. As the "lead" in a particular category, that supplier also was responsible for designing the shelves for WM (they call the layouts "planograms"). They worked with WM to design the set for their products, WM's private label, and competition products. WM's planograms are customized for store size and regional preferences. I think in the lunch meats, they had something like 600 configurations for ~2100 stores. That supplier also planned for many of the other supermarket chains, and the substantial majority of the big players in grocery are moving towards greater customization of their planograms, not less.

Now, I work for another food manufacturer, and I can tell you that pretty much every grocery store in the country has our "core" products on the shelf. (I'd be shocked to find a conventional grocer that didn't carry my plant's flagship product - good old regular Philadelphia cream cheese.) Where you see variations are in the amount of space given to the "specialty" items, even if you're as big as say Kraft is. Everyone's got the 8oz brick cream cheese, but they might not have all of the roughly dozen flavored varieties, etc. Certain varieties sell better in different parts of the country, and the nationwide chains do take that into account as they plan their shelves.

Plus, smart supermarket operators have seen that there's value (and increased sales) when they spotlight locally-sourced product. The only question is how much space out of the liquor department will go to the locals. I'm lucky in that I have a Woodman's grocery store nearby, and they have a ridiculously huge liquor department - they have two full-length refrigerated aisles of craft beer and a non-refrigerated aisle. They have more shelf footage dedicated to craft brews than to BMC - almost a 2:1 ratio, actually.

Then again, I live in Wisconsin. We take our beer seriously.
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