Is Beer Dying?

[Roland_deschain]

Beer dying out?!?

 

[sudbuddy]

They is learning that Africa is a nation that suffers from incredible disease.

Nice follow up

 

[slym2none]

You didn't get the joke there. Goes back to an old George Bush II quote

I think I did. Hence, the " "

 

[Phunhog]

Not dead....but the level of growth we have seen the last few years is not sustainable. I have done a ton of research and the breweries make money by selling their beer in the tasting room. The problem is that there is a real limit to how much beer you can push from a bar. The other way is via distribution. Then you are competing against hundreds of other breweries for shelf/tap space.

 

[Dirt_McGirt]

It's already dead.

That beer you're drinking? Not really there.

THERE IS NO BEER.

 

[cyanmonkey]

It's already dead.



That beer you're drinking? Not really there.



THERE IS NO BEER.

$hit, I knew it.

 

[TaoBrewer]

Believe it or not, it's just getting started. The market will grow and grow and grow for better and better beers. Higher quality and higher priced Beer is in the early stages of a long term growth trend.

 

[cyanmonkey]

Believe it or not, it's just getting started. The market will grow and grow and grow for better and better beers. Higher quality and higher priced Beer is in the early stages of a long term growth trend.

Is it all IPA? How can hop crops keep up with that? At some point hops are going to be SO expensive and only the big boys will be able to afford them.

 

[Magnus314]

Is that bubble finally beginning to burst?/QUOTE]

Beer as an Industry has been dying slowly for at least the last two decades, three depending on if you go by sales or dollars.

CRAFT beer is a small-but-increasing slice of the MUCH larger beer market as a whole.

CRAFT has been doing better, beer has been doing worse, and only by getting NEW drinkers can CRAFT expand much more.

This has come up before, but I will re-state... if your local store will only carry "X" many IPA's, then after a very low point, more in the market means less growth for all.

That's why there's so many "gimmick" beers, and fewer new beers of the same kinds. Because they hope to get a piece of an increasingly small market.

 

[day_trippr]

Is it all IPA? How can hop crops keep up with that? At some point hops are going to be SO expensive and only the big boys will be able to afford them.

Classically, market forces would stimulate production.
If there's a fly in that ointment, it'd be Mother Nature.

Still, if there's a buck to be made by increasing acreage in a particular - available - strain, someone's likely going to do it...

Cheers!

 

[signpost]

Classically, market forces would stimulate production.
If there's a fly in that ointment, it'd be Mother Nature.

Still, if there's a buck to be made by increasing acreage in a particular - available - strain, someone's likely going to do it...

Cheers!

I know there seem to be hop farms popping up all over Michigan and they seem to be doing pretty well so far. The only breweries that will have trouble acquiring hops are the breweries that are not willing to try new hops or hops from new producers. If you make a beer and market it based on the use of one specific hop, you are painting yourself into a corner. If you make a beer and market it based on how well made it is, you can adjust as the availability of hops fluxuates.

 

[cyanmonkey]

When I hear conversation about Big Beer buying up hops, conversation goes to whether they will make it harder for mom 'n pop breweries to get said hops.

Discuss.

 

[krackin]

Interesting. Maybe I should up the hop supply for local mom and pop by 10 to 15 acres or so. I'm increasing ag production ground anyway and some ground is more suited for long term crop. We have more than enough apples around here and sugar bush takes too long.

 

[cyanmonkey]

Interesting. Maybe I should up the hop supply for local mom and pop by 10 to 15 acres or so. I'm increasing ag production ground anyway and some ground is more suited for long term crop. We have more than enough apples around here and sugar bush takes too long.

Now we're talkin'.

Are you a hop grower, then?

 

[krackin]

Now we're talkin'.

Are you a hop grower, then?

I dabble in agriculture. I grow mostly sweet corn for local market and wholesale, plus seasonal items. I also provide custom raised high end hogs for discriminating custom orders.

At this time I don't do a lot in the way of hop production but that has been under change for a couple of years. I've been weighing what seems to be trends, fads and solid markets for hops.

 

[madscientist451]

Is that bubble finally beginning to burst? With all the recent acquisitions, cash grabs, and attention seeking fads, everything feels so...manufactured? Is beer, and homebrewing at that, starting to wane in popularity?

Is that good or bad?

No, home brewing is going great, and will continue because home brewers can make better beer (or just as good) as commercial beer.
I do think there will be an industry shakeout at some point, prices for "craft beer" are just too high and one of the big producers will eventually cut prices to gain market share. The resulting price war will leave highly leveraged breweries without cash flow to cover debt and they will get gobbled up or go under.

 

[BrewSavage]

The financial industry term for all this is "peak beer.*"

The wikipedia article for this doesn't exist, but if you just read the "peak oil" article and change most of the words, dates, and places you'll get the idea. Luckily the term "barrel" will still apply. https://en.wikipedia.org/wiki/Peak_oil

*It's a new term and hasn't gained much traction as you can tell from google trends. https://www.google.com/trends/explore#q="peak beer"
But now that you are in the know you can rattle "peak beer" off your tongue when hitting up investors for that microbrewery you're trying to finance.
​

 

[ViciousFishes]

I grew up and had my early career in the San Francisco Bay Area. In 1993, when I was in grad school to get my MBA, I wrote a business plan to open a brewery/pub as a part of my Strategy course. As a part of my final grade, my professor remarked that there was no room in the market for another brewery because there was exactly one brewery on the mid-peninsula - Gordon Biersch.

Is beer dying? Nope, it's a renaissance.

 

[JGF]

I'd agree with a lot of what's been said. I think, in general, there's been a movement away from foods/drinks that are mass produced. Beer is down, soda is down, fast food is down, the many Applebee's-type restaurants are down. At the same time, craft beer is up, as are artistically soda, farmers markets, CSA, restaurants serving local foods, local coffee roasters, wineries, and distilleries, etc. People seem to be looking for more local, authentic offerings.

Beers seemingly go through some fads, for lack of a better term. IPAs (and IIPAs and IIIIIIIPAs) seem to be all the rage nationally - barrel aging and sours are gaining a lot of steam.

Wisconsin, where I live, seems to be a little different. We don't have a lot of brewers making a ton of hoppy beer - there are some but they don't dominate the market here. There are some really good IPAs (and IIPAs) but they don't dominate the market. If anything does, it seems to be the more traditional brews - lots of lagers, stouts, and there are always good Kolschs and alts to be found. Sours and at least for a couple of breweries, barrel aged beers are growing.

While there's been a growth in the craft market, it's not all been rosy. I've seen a few breweries/brewpubs go out of business but for the most part, they were putting out decent but not great products. Locally, I have a brewpub 5 miles away that makes average beer and a newer one a bit further away that's been making fantastic ales (no lagers that I've seen). I gladly traveled to the one 20 miles away to grab a flight and a growler this afternoon. Another brewpup in a non-touristy town of less than 5,000 didn't make it - they had good, local food but beer that was largely at best, average. Did they not make it because of the beer or was it just a bad market for a brewpub?

The problem with bubbles is that they're often hard to see coming to a crash. In the local food/drink movement, who knows if it keeps going? We went hard towards mass produced food and drinks and now we're moving away from that. Does that continue, who knows? Places that make good beer across a variety of styles or make exceptional beers in a particular style will continue to do well. Those that make mediocre to average beers will die out. Around Wisconsin, we seem to have fewer breweries selling nationally or widely across the region and more selling in the state. They might have a little less buffer in their sales but also have lower expenses in distribution.