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rexbanner

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Hey, here's an article I wrote recently on the beer industry. Disclaimer: I am a recently turned pro-brewer and these are just my observations and opinions. My list of beers I have tried is pretty small compared to a lot of customers...if it's not distributed in my area, chances are I haven't had it!


Craft beer continues to grow, with the number of breweries in the United States increasing each year, and the volume of craft beer sales increasing as well. What does the future hold? Let's gaze into the crystal ball...

First, the obvious questions: is the market getting over-saturated, and will the bubble burst? Of course, but let's not get worried. First, a statistic I love to trot out whenever this subject comes up...in Virginia, the percentage of craft beer sales reached the highest level yet over the summer, at 6% of market share. In Oregon, it is 38%. There's plenty of room to grow in a lot of states. Second, some breweries may lose some market share, but overall, the industry will probably keep growing. My prediction is that as more great local breweries in the east start popping up, you'll probably see less taps with west coast IPA's as there will be some fresher local alternatives. Breweries will also need to work harder to differentiate themselves and create a unique identity.

So if the industry continues to grow, what can we expect to see? For years, craft beer has been dominated by IPA--the style has been ubiquitous on the scene since the beginning of the craft beer explosion. One of the reasons for this has been that brewing an IPA was a great way to differentiate yourself from BMC. IPA's are high in alcohol and IBU's, two things that BMC is not. IPA has been the figurehead of the ship, and has lent itself well to the bold attitude of American craft brewers and consumers.

I really think that savvy brewers would do well to explore new areas in brewing, though. I believe that the way the industry is headed, you aren't going to do yourself any favors if you go the typical brew-pub line-up with a pale ale, IPA, wheat, and porter. Does this mean it's time to get crazier? I hope not. I think a better idea would be to explore some of the many traditional styles that have been neglected in the bigger-is-better craft beer movement. How about a nice helles lager or altbier as a flagship? What about making a nice, malty American blonde? I would absolutely love to see a classic American pilsner as a brewery flagship.

Breweries have to meet their sales goals, though. However, look at the success Devil's Backbone has had with Vienna Lager in Virginia. Over last summer, Vienna Lager actually outsold BMC for a brief period! That is pretty incredible. I am a big fan of this beer: a nice, malty lager that really hits the spot. Craft beer is undoubtedly becoming more mainstream, and I am sure that there are plenty of drinkers who would much rather throw back some bottles of a flavorful session ale or lager than Bud Light or Coors.

I also hear this every so often: "Sours are the next big thing. In two or three years they will be as popular as IPA's." Well, I heard that three years ago, too, but sour and brett beers are definitely gaining popularity. I do a 100% brett brux beer called Free Yourself that has gotten such good feedback I recently did a double batch of it. I also have a great recipe that I developed for a sour brown that is a great introduction to sours: lightly tart, with a nice malt sweetness and no ascetic acid. I think most people would like a sour beer if they tried it and kept an open mind.

Right now, it seems like big, barrel-aged beers continue to create the most buzz in the beer-drinking world. These beers appeal to beer geeks, and some well-crafted offerings can be a hit with casual beer drinkers as well. There's nothing wrong with pushing the envelope, but my hope is that brewers and consumers alike will stop letting the Ratebeer community be the tail that wags the dog and take a more balanced approach to beer. Even with traditional styles, you can still do something really different. How about a black American pale ale, or a session basil saison? There really are limitless possibilities, and one thing is certain. It's a great time to be a beer drinker!
 
Great outlook on the industry.

I also don't expect sours to become the next movement in craft brewing but I've hoped before that maybe sours/lambics can be an in-road to draw in wine-drinkers.

Barrel-aging is a good point to bring up. New Holland is a great example where the popularity of Dragon's Milk (and the rest of their high gravity series, it looks like) is causing enough demand to require multi-million dollar expansions.

As a point of critique, I would have liked to see mention of how the current IPA trend got started so we can get a point of reference for how the lifecycle of the 'next big thing' might transpire. There's talk of the present and the future but a little bit of history would help to extrapolate the market better.
 
Great outlook on the industry.

As a point of critique, I would have liked to see mention of how the current IPA trend got started so we can get a point of reference for how the lifecycle of the 'next big thing' might transpire. There's talk of the present and the future but a little bit of history would help to extrapolate the market better.

Thanks. I'd go into history but I'm only 26, it's all before my time! Beyond the Pale is on my reading list.

I am not sure if there will ever quite be something like IPA and the everlasting effect it has had. I always have to keep one on tap since about one in four people are hopheads! I still really do enjoy them but I am really starting to lean towards English IPA's and balanced double IPA's.
 
I wouldn't know any more history of it than you at that rate. :p

What I'm curious about is if the IPA trend was a gradual work up in response to 'bland' BMC or a sudden stroke of genius. Were there multiple claims to starting the trend or was it a breakthrough from a single source that spread outward? Can we define a tipping point that will predict the next trend?

Was it availability of hops or techniques that limited how quickly it spread or why it happened there and then?

And, most importantly, are beer trends even predictable like this? :D But that's a whole 'nother article.

Been reading the history and differentiation between porters and stouts so getting a bit closer in the timeline to where we can say something took off is neat.
 
A big part of this trend, which has to do with many new beer drinkers getting into IPAs, has to do with these same people trying different offerings at their local breweries. Saisons, imperial stouts, Belgians, etc. I believe this is how the craft beer "fanatics" came to fruition.

Some of that pool consists of people just wanting to be different and saying they hate mainstream beers.
 
Loved the article, great post. Your point is spot on with me. One of my favorite things about the brew pub I visit most is their Vienna Lager. It's one of their signature beers and really a nice change of pace from the in your face hop bombs I seem to find at a lot of other places. Don't get me wrong, I am a huge fan of IPAs and barrel aged beers as well, but sometimes, just sitting down and having a nice drinkable beer really hits the spot.
 
Good post. We've seen an influx of craft breweries in our state, much like the wineries 10 years ago. Probably will fade out like the wineries did 5 years ago. The good ones stay, and the mediocre ones close up.

I do find it interesting that my 'beer snob' friends complain that these breweries are too safe. They don't go far enough with their types of beers. "I'm getting tired of the Ambers and Pale Ales only"

But my BMC friends won't go to those types of places. "The beer is ok, but I still prefer my BMC"

:confused:
 
If I can I may offer a observation,

I think that pales, IPAs, DIPAs, Stouts, Browns and porters will continue to reign supreme for the next five years with out any question. The problem is that even a lot of craft beer drinkers are either stunted or very careful as to what they want to drink. Why is this?

Because generally I see first of a lot of people only really like IPAs, or sometimes a stout, perhaps a nice DIPA or Barleywine. Lagers are not out there and a lot of people say hell, can get a lager at the gas station's BMC isle selection. This is coupled with the adaptation of people's tastes. But things like Sours, Belgians, and other more archaic and odder types of styles let alone someone getting crazy with a "smoked pepper double IPA fermented with a Belgian yeast infused with cherries." Now people may want to try those things but for a lot of people, I state a lot of us home brewers and craft brew drinkers included may not want to try a full pull of that. This is made even worse by the fact that many of those such concoctions are undrinkable. (At times even the flagships are undrinkable..) I would wager a lot of folks that judge home brew competitions have made similar observations about a good amount of the beer offered up for judging.

I think that it is a bit easier to get a specific style right that is well described and familiar with a larger amount of people than things that start to push the envelope. To the OP, I would like to see things trend in the direction that you see them. I however, do not think they will in the way you see them. I think we will start to see a bigger evolution of the American IPA, and we will see perhaps a throw back period coming where folks want to drink the traditional IPA styles a bit more that are true to form. (At least what is in theory the form from the historical texts.) I also think that the idea behind the various Session styles will gain more and more traction. I just don't see a whole lot of crazy stuff taking off because so much of it is poorly made in various ways. And from a industry perspective I don't see brewpubs or even well established breweries getting too crazy too fast. We are seeing some of the experimentation however that you mention even by some of the big players in craft brewing. (Sierra Nevada, New Belgium, Founders, New Glarus, Summit, Alaskan, and Stone brewing are all trying different things just off the top of my head for the better known breweries there are others...)

I think another way to look at it is just how a lot of us are, or a lot of BMC'ers are. Do you want to try something else that's a big leap from what you are familiar with every time or not? What do you really enjoy tasting?

Myself I do enjoy great Sours. But they are hard to find at a reasonable price due to the additional investment of time and space they seem to require for a brewery. So as a result I have in my fridge right now a Porter, Some of my Bavarian Dunkel home brew, a Rye IPA home brew, a few double IPA's from various places, a few IPAs, a few Imperial Stouts, and things like that. I don't mind going out to try different things or having others in my rotation but generally when I come home from work I want to have a beer I know I can enjoy and relax to while I make dinner. So I will always go to a beer I know already is great, not one I've picked up a 4 pack or a 6 pack of that I've not tried or may appear to be dubious. I think I may not be the only one like that. Adventure is great when you can pick and choose the path you go on.
 
i work at a beer&shot type of local bar where there is only bmc on tap.
th eplace is busy and makes money hand over fist and the owner is not stupid.
he is aware of the craft beer movement taking place, but doesnt seem to care.
the answer is pretty simple- you can only sell so many 8% IIPAs to someone. sure you can charge more but they also cost way more for the bar to buy. with a bar you want the room full, people buying, and a crowd that hangs a long time.
a lot of people that stand around and drink miller lite for 5 hours straight dont really care what theyre drinking or how it tastes. the less taste the better for these people, really.
session ales may help this, but then these people will be confronted with spending more for beer that tastes better.... only they never cared how it tasted in the first place.
as far as just making money and domintaing market share BMC still have the right idea producing sub 5% swill and pricing it 30% under craft beer.
sorry, just had to my take on this and only now realized it's only partially relevant, haha
 
i work at a beer&shot type of local bar where there is only bmc on tap.
th eplace is busy and makes money hand over fist and the owner is not stupid.
he is aware of the craft beer movement taking place, but doesnt seem to care.
the answer is pretty simple- you can only sell so many 8% IIPAs to someone. sure you can charge more but they also cost way more for the bar to buy. with a bar you want the room full, people buying, and a crowd that hangs a long time.
a lot of people that stand around and drink miller lite for 5 hours straight dont really care what theyre drinking or how it tastes. the less taste the better for these people, really.
session ales may help this, but then these people will be confronted with spending more for beer that tastes better.... only they never cared how it tasted in the first place.
as far as just making money and domintaing market share BMC still have the right idea producing sub 5% swill and pricing it 30% under craft beer.
sorry, just had to my take on this and only now realized it's only partially relevant, haha

That's true, but I am just talking about the craft beer industry. Still, though, with Bud Light being $6.99 for a sixer and Torpedo at $7.50 where I live, the price-points may stop becoming such a differentiater.
 
Make-up of Craft Beer Sales:

IPA/PA - 41%
Lagers - 28%
Porter/Stouts -13%
Other - 18%
 
Where did this get published, OP? Nicely written on the whole, but still needs a little editing.

That silly stuff said, I agree with your call for greater variety in flagship and consistent offerings. As the craft movement grows and evolves, we'll need more than just IPAs to keep people interested and involved. There will always be a place for big beers, no doubt, but a well crafted yet more easily drinkable beer will also be important for the movement.
 
Bottom line the breweries/bars will only make/stock what sells. I have a great bar near me that has 100 rotating taps. However at least 20-25 of those taps are pale ale/IPA/IIPA. Obviously those are the beer styles that sell. I think there was only 1 or 2 German lagers on tap. Sours will only be a niche market. They are too costly for most breweries to produce and difficult to brew well. I know a few well established breweries are doing sours (Firstone Walker and New Belgium come to mind) but they have the cash flow from their "boring" flagship beers to support their sour program.
 
Instead of thinking of beer styles overtaking one another, maybe the stout/IPA type market is here to stay as much as BMC is? This could be a division in the beer drinking world that we're settling into for the long haul.

We get three tiers of commercially available beer then. Each successive tier being more expensive to produce or buy while having a smaller market share.

-"BMC" adjunct lagers
-Standard "mainstream" craft beers around established styles (flagship beers designed around being widely liked rather than standing out; stouts, PA, etc.)
-Experimental, historic, or fringe beer styles (lesser known styles; vintage recipes; molecular anthropology; sours or advanced aging)

And a single brewery isn't limited to production or categorization within just one tier.

There's plenty of customers for bars to cater to each tier and that's pretty much what's in place now . You have your sports bar BMC-only type places, the places with standard offerings like Sam Adams or run of the mill craft beer, and the heavy duty places that offer hundreds of options from around the world with no BMC in sight.
 
Bottom line the breweries/bars will only make/stock what sells.

True. My Belgian single is consistently my top-selling beer, though. It does well because it captures light beer drinkers, non beer drinkers, Belgian fans, and hardcore beer geeks. American IPA is number two, though.

Instead of thinking of beer styles overtaking one another, maybe the stout/IPA type market is here to stay as much as BMC is? This could be a division in the beer drinking world that we're settling into for the long haul.

We get three tiers of commercially available beer then. Each successive tier being more expensive to produce or buy while having a smaller market share.

-"BMC" adjunct lagers
-Standard "mainstream" craft beers around established styles (flagship beers designed around being widely liked rather than standing out; stouts, PA, etc.)
-Experimental, historic, or fringe beer styles (lesser known styles; vintage recipes; molecular anthropology; sours or advanced aging)

And a single brewery isn't limited to production or categorization within just one tier.

There's plenty of customers for bars to cater to each tier and that's pretty much what's in place now . You have your sports bar BMC-only type places, the places with standard offerings like Sam Adams or run of the mill craft beer, and the heavy duty places that offer hundreds of options from around the world with no BMC in sight.

Yep, totally true. I will say though that even fringe styles can sell really well if the venue has a good beer menu with accurate descriptions and knowledgeable bartenders. I am burning through my English mild right now in the tasting room with many requests to do larger batches for distribution. I won't, because without the aforementioned requisites I don't think a 3.5% brown ale would succeed, but people get really excited when they try some esoteric beer they've never heard of and totally love it. My customers are mostly average people that live in town, not hardcore beer geeks, pretty representative of casual craft beer drinkers.
 
True. My Belgian single is consistently my top-selling beer, though. It does well because it captures light beer drinkers, non beer drinkers, Belgian fans, and hardcore beer geeks. American IPA is number two, though.



Yep, totally true. I will say though that even fringe styles can sell really well if the venue has a good beer menu with accurate descriptions and knowledgeable bartenders. I am burning through my English mild right now in the tasting room with many requests to do larger batches for distribution. I won't, because without the aforementioned requisites I don't think a 3.5% brown ale would succeed, but people get really excited when they try some esoteric beer they've never heard of and totally love it. My customers are mostly average people that live in town, not hardcore beer geeks, pretty representative of casual craft beer drinkers.

I think you're kind of hitting on the point that's often missed by the bubble doomsayers. There's a somewhat differing market between distribution and tasting room sales. The bulk of sales are going to come from store shelves where there is limited space. Most breweries are going bottle and sale beers that appeal to the most craft beer drinkers. Currently, that is pale ales and IPAs. The tasting room provides smaller sales but a greater opportunity to present a variety of styles, both because of tap space and the fact that drinkers seeking out the brewery are going to be open to a larger variety of styles. Since you seem to be in Virginia, I'll use Devil's Backbone as an example. The Vienna Lager and Eight Point IPA are their flagships. However, the brewpup always offers a wide variety of beers. (The Ale of Fergus is my favorite.) Now, to actually make my point, I think the stage of craft beer history that comes after distribution saturation is localization. I think there's plenty of room in the market for smaller breweries with a small (or nonexistent) distribution footprint. We'll wind up with a lot of breweries that earn a large portion of their revenue from on-site sales. And, with this trend I believe will come a move towards more varied flagships. Again, Virginia is a good example of the potential of this trend. Hardywood has their Single and Cream Ale. Center of the Universe has an altbier. Blue Mountain is pushing their Kolsch harder then the Full Nelson these days.

Sent from my Nexus 7 using Home Brew mobile app
 
If Cleveland water becomes a water profile for homebrew clones... :D

I really like the idea of localization and people have favorites right down the road. Maybe it's a way to boost jobs on that scale - one of Ohio's only industries to experience a growth lately has been brewing.

Though sometimes I wonder if there are just too many brewpubs or maybe too many not making a mark.
 
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