Is the craft beer bubble here?

[adipocere]

Speaking from afar- ex beer industry guy who now drives charter motor coaches around the country- it looks like the bubble is about to burst. A small far NW IL town of about 2800 peeps (Lena, IL) has TWO craft breweries. It's a farm town on the way to tourist trap Galena IL- which itself has a brewery, a distillery and a couple wineries.

Too many yet? I see a bazillion breweries, wineries and distilleries nationwide, in places where one would not expect them. Many wineries along I-75 in Georgia, for example. Georgia?

I used to believe that growth could go on forever, more or less. I'm no longer sure about that. Any comments?

 

[Josh2]

Any comments?

 

[Rails]

The only hope for a lot of these breweries is if we become a nation of alcoholics like Russia.

 

[GoodDon]

The only hope for a lot of these breweries is if we continue to be a nation of alcoholics like Russia.

 

[stakem1]

There are half a dozen breweries in my general area that make sub par to mediocre beer at best and they are thriving. There have also been that many (or more) breweries just open up. So no, its not too many yet. That might not be the case in other areas though.

I use to think that this is just a phase and one day brewery growth will surpass the buyers interest but I dont think we are anywhere near that yet (again, just generally speaking for my region.) With every passing year more people are coming of legal drinking age and are aware and interested in craft beer and just as many people are converting from BMC to craft drinkers.

My opinion might change once places start closing or start showing signs of having to reduce their luxury pricing or have spontaneous releases that dont sell out in minutes/hours.

 

[mjohnson171]

I'll bite since I might be one of the few who are working on this Monday Holiday and bored at work.

Yes and no.

Yes, a bubble with burst, but I think there's more than one bubble with craft beer. There are lots of bubbles, some will pop, some will persist, others will pop up in the previously popped bubbles place, etc.

I think there is a shift in the last few years in craft of not just the ever expanding number of breweries, but the shift from larger national and regional breweries to local breweries and brewpubs servicing their small markets. Recently we haven't seen many small breweries grow to be regional players or regional players become national players (aside from acquisitions by national big guys like AB-INBEV w/ Goose, Elysian, etc). There's some neighborhoods in Chicago that have like 6 breweries, they all have their niche and can survive harmoniously together. I also honestly think we won't ever see a Boston Beer Company in our lifetime.

Naturally there will be a saturation point but I think we're still far from it. We're what, close to 5,000 breweries in the US right now (4,269 in 2015)(source). I honestly think we'll go even higher... maybe 8k? 10k? But we won't see many rise to be regional players, we won't see them with larger distribution footprints, hell, we probably won't even know the name of the majority of them. These guys will be the small brewpubs and local breweries with taprooms where locals can grab a growler fill.

It's cyclical and we're getting back to pre-prohibition days. In 1873 there were 4131 breweries in the US of a population of about 43M. That's a brewery for every 10,400 people. Today we're roughly at a brewery for every 75-80k people.


There will be bubbles bursting; possibly the secondary market? bottle price of special releases? waiting in line for a release? the shear number of brewery societies/club? etc

 

[BelgianChris]

The more the merrier.

 

[Vanlingleipa]

The beer industry is still dominated by Bud, etc., There's room to grow.

 

[Arbitrator]

I'd like to see some metric like "barrels per capita" (production-side) or "consumption per capita" (demand-side) with appropriate context against other countries to see if we're anywhere close to a saturation point, rather than "this small town has two breweries."

This question has been asked since 2010 in various forms on BA, and yet craft beer has continued to grow. Growth may slow at some point, but that's not proof that we were ever in a bubble or that it burst.

 

[screwyouguys]

There are half a dozen breweries in my general area that make sub par to mediocre beer at best and they are thriving. There have also been that many (or more) breweries just open up. So no, its not too many yet. That might not be the case in other areas though.

I use to think that this is just a phase and one day brewery growth will surpass the buyers interest but I dont think we are anywhere near that yet (again, just generally speaking for my region.) With every passing year more people are coming of legal drinking age and are aware and interested in craft beer and just as many people are converting from BMC to craft drinkers.

My opinion might change once places start closing or start showing signs of having to reduce their luxury pricing or have spontaneous releases that dont sell out in minutes/hours.

I agree just in nj alone there are so many breweries. Ranging from great to id rather not return. The thing is some of the not so good breweries imo have large followings friends family etc.
not gonna state names but there are some breweries in pretty close proximity
Brewery A I think is a good brewery and continues to improve and I visit regular
Brewery B no where near has good brewey A imo. But I know so many people who visit brewery B and have either never stepped foot in brewey A or have not even heard of them.

Now don't get me wrong I'm not one to tell anyone where to go but they follow specific breweries for many more reasons besides quality

So no I don't think the bubble will pop anytime soon.

 

[jivex5k1]

I saw it pass by the other day. If you watch closely you can probably spot it.

 

[Saind]

I'll bite since I might be one of the few who are working on this Monday Holiday and bored at work.

Yes and no.

Yes, a bubble with burst, but I think there's more than one bubble with craft beer. There are lots of bubbles, some will pop, some will persist, others will pop up in the previously popped bubbles place, etc.

I think there is a shift in the last few years in craft of not just the ever expanding number of breweries, but the shift from larger national and regional breweries to local breweries and brewpubs servicing their small markets. Recently we haven't seen many small breweries grow to be regional players or regional players become national players (aside from acquisitions by national big guys like AB-INBEV w/ Goose, Elysian, etc). There's some neighborhoods in Chicago that have like 6 breweries, they all have their niche and can survive harmoniously together. I also honestly think we won't ever see a Boston Beer Company in our lifetime.

Naturally there will be a saturation point but I think we're still far from it. We're what, close to 5,000 breweries in the US right now (4,269 in 2015)(source). I honestly think we'll go even higher... maybe 8k? 10k? But we won't see many rise to be regional players, we won't see them with larger distribution footprints, hell, we probably won't even know the name of the majority of them. These guys will be the small brewpubs and local breweries with taprooms where locals can grab a growler fill.

It's cyclical and we're getting back to pre-prohibition days. In 1873 there were 4131 breweries in the US of a population of about 43M. That's a brewery for every 10,400 people. Today we're roughly at a brewery for every 75-80k people.


There will be bubbles bursting; possibly the secondary market? bottle price of special releases? waiting in line for a release? the shear number of brewery societies/club? etc

Over here we have about twice the amount of breweries per capita and it's growing fast. You've got some growing left to do.

 

[stupac2]

I'll bite since I might be one of the few who are working on this Monday Holiday and bored at work.

Yes and no.

Yes, a bubble with burst, but I think there's more than one bubble with craft beer. There are lots of bubbles, some will pop, some will persist, others will pop up in the previously popped bubbles place, etc.

I think there is a shift in the last few years in craft of not just the ever expanding number of breweries, but the shift from larger national and regional breweries to local breweries and brewpubs servicing their small markets. Recently we haven't seen many small breweries grow to be regional players or regional players become national players (aside from acquisitions by national big guys like AB-INBEV w/ Goose, Elysian, etc). There's some neighborhoods in Chicago that have like 6 breweries, they all have their niche and can survive harmoniously together. I also honestly think we won't ever see a Boston Beer Company in our lifetime.

Naturally there will be a saturation point but I think we're still far from it. We're what, close to 5,000 breweries in the US right now (4,269 in 2015)(source). I honestly think we'll go even higher... maybe 8k? 10k? But we won't see many rise to be regional players, we won't see them with larger distribution footprints, hell, we probably won't even know the name of the majority of them. These guys will be the small brewpubs and local breweries with taprooms where locals can grab a growler fill.

It's cyclical and we're getting back to pre-prohibition days. In 1873 there were 4131 breweries in the US of a population of about 43M. That's a brewery for every 10,400 people. Today we're roughly at a brewery for every 75-80k people.


There will be bubbles bursting; possibly the secondary market? bottle price of special releases? waiting in line for a release? the shear number of brewery societies/club? etc

You're close to my thinking, but I think I'm subtly different. It seems to me that in terms of breweries/brewpubs that serve their local area and hardly distribute, we're nowhere near a saturation point. Even areas that have a ton of breweries see more open and succeed. Those places are essentially replacing bars/restaurants and are barely competing with each other, if they are at all. To call that a bubble is asinine, you may as well ask if we have a restaurant bubble. The only systemic risk I see there is an economic contraction that causes people to dial back their entertainment spending, but that's always going to be a risk.

However, for larger breweries it's a different story. The ones that are trying to follow the BBC/Lagunitas growth paths are going to find it tough sledding. Sure, some will work (Modem Tones is all over the place here now), but there's only so much space on shelves and people in the industry are apparently talking more and more about limiting the number of SKUs they deal with because it's just saturated. I wouldn't be surprised to see some contraction there, but probably nothing that would get called a bubble. At the very least I think it would be borderline insane to start a brewery with a lot of debt and plan to grow via distribution of bottles/cans unless you're somehow in an under-served market. I have no idea what markets are still under-served, but it's sure not here.

 

[Snarf1]

 

[RyanG1]

I like Pliny the Younger

 

[tikk]

I like Pliny the Younger

Heady is better

 

[RyanG1]

Heady is better

Know it ain't!

 

[tikk]

Know it ain't!

I'll trade you some heady for piney and you can see. Also open to big stouts

 

[reverseapachemaster1]

I feel like every time somebody sees a brewery close or tries a brewery they don't like they think the end times are here.

 

[Slimmer1890]

There are a lot of good breweries. I feel there is plenty of room for more great or exceptional breweries. In my area we do have a bunch of breweries, not one I think that stands out. Plenty of room in the market for more tree house, side project, monkish, holy mountain, breweries doing different things and making amazing beer. Idk. That's my 2 cents. Then again I am new hear and will never claim to know what I'm talking about.

 

[hornydevil]

The BA is delusional.

http://www.beveragedaily.com/Sector...tion-Craft-beer-must-resist-imposing-big-beer