Jim Koch: Craft beer bubble near "popping point"

[scottland]

I've never been impressed with SA because as much as Jim tries to play off the 'homegrown' vibe, their beer was contract brewed from the get-go.

Jim Koch has been an excellent advocate for craft, so I don't want my words to be minced. With that said, I no longer hold him in the same regard as say Ken Grossman, despite the fact Sierra Nevada is almost as big.

 

[jbaysurfer]

Look what happened to Four Loko, Joose and the like. (not beer, I realize, but still an alcoholic beverage) The FDA shot the products down claiming the mixture of a stimulant and a depressant was a health risk. They're still on the shelves today, but now all of the caffeine, guarana etc have been removed from the recipe. The same thing happened to Moonshot as well if I'm not mistaken.

I had vague recollection of this, which is probably why I didn't think it was even legal, thanks for the reminder.

Nonetheless, not helping the person who co-founded SA with him because investing in her company would be "unethical" is lame IMHO.

 

[scottland]

I disagree, and I will attempt to explain. I believe an intermediate tier between "true" small scale craft beer and BMC needs to be acknowledged. I propose a tier for the likes of Sam Adams, who produce somewhere between what I think of as craft beer, and BMC at the macro level. I appreciate what SA has done for craft beer, but at the same time it's important to stay realistic.

I don't believe there will be a craft bubble "burst." I think that there will continue to be a virtual "land grab" for the craft beer market share and that through through business practices there will be a new mini-macro division of brews (think Sam Adams, Shock Top, SN, Widmer etc..) that will do unto "real" craft brews as BMC has done unto.. well, everyone.

I still stand by that statement. The land grab will dry up because not everyone wants a beer with more flavor. Why are flavorless light lagers so popular? It's mostly because American palates like bland flavorless light lagers.

The bubble won't burst in a huge way, but it'll pop when the demand tapers off.

 

[highgravitybacon]

I think we're gonna see a shift from the extreme ends of the style to more quaffable sessionable beers as well.

I think the opposite will continue. More f-ed up ultra imperial extreme beers. This is no joke. It's already happening. Not content to make classic styles, everyone has this paradox groupthink of "brewing to style is what *********s do". Never mind that Duvel is and always will be the best beer of its kind simply because of its simplicity not in spite of it, just to name one example.

Imperial Turkey Gravy Blonde Ale.
Maytag Bleu Hefe
Chelada Bitter
Bacon Lambic Blonde
Imperial Shandy
Berliner Jalapeno Stout
Breaded Cod Ale

 

[highgravitybacon]

I've never been impressed with SA because as much as Jim tries to play off the 'homegrown' vibe, their beer was contract brewed from the get-go.

Jim Koch has been an excellent advocate for craft, so I don't want my words to be minced. With that said, I no longer hold him in the same regard as say Ken Grossman, despite the fact Sierra Nevada is almost as big.

If you have a problem with contract beers, you have a problem with about 95% (no exaggeration) of the beers sold in the world. That includes MANY craft beers. Stevens Point makes some of the most ho hum beers in the world under their own label, but they make some pretty solid brews for other people.

And contract brewing doesn't mean "You give us the recipe, we make it." It can also mean that they hand the keys to the brewery over to the renter for a limited term. They bring in their own stuff, with their own people and operate the equipment.

I heard an interview maybe a year ago with the dude from Crooked Stave brewery. They don't make their own wort. Or at least didnt. Someone else does. They ferment it, but the wort is shipped into them in raw form. I don't think anyone would dispute the legitimacy of the end product, even if it wasn't wholly made in house. But people dog on Granite City for doing that same thing. It's the same concept.

 

[WSB-MBC]

I think we're gonna see a shift from the extreme ends of the style to more quaffable sessionable beers as well.

oh man, I sure hope you're right.

I am absolutely appalled at the "metrosexualization" that many craft breweries seem to be aiming for nowadays

 

[day_trippr]

fwiw, Sam Adams eventually bought the Penn. contract plant.

I saw Beer Wars, and remember the lady that was trying to get her "strange brew" off the ground, and her getting turned down by pretty near everyone she spoke to. Jim Koch works for a publicly held company, which should be all it takes to understand why he wasn't able to help. A publicly held company can't arbitrarily give away a box of paperclips without violating regulations and/or laws...

Cheers!

 

[drainbamage]

I don't think the market is necessarily over-saturated, but I think we'll see more instances of macrobreweries acquiring craft rivals like with AB/InBev and Goose Island. With these mergers comes better distribution opportunities for the bought-out crafts, but the breweries that don't sell out to the Evil Empire might get squeezed out of space on the shelves/taps.

On the other hand, it seems like most cities with a vibrant craft brewing scene are pretty accepting---even welcoming--of new breweries opening up. I can see things increasing with really small-scale breweries that don't distribute outside of a very local area, or just a couple of brewpubs.

 

[Nightshade]

I don't think the market is necessarily over-saturated, but I think we'll see more instances of macrobreweries acquiring craft rivals like with AB/InBev and Goose Island. With these mergers comes better distribution opportunities for the bought-out crafts, but the breweries that don't sell out to the Evil Empire might get squeezed out of space on the shelves/taps.

On the other hand, it seems like most cities with a vibrant craft brewing scene are pretty accepting---even welcoming--of new breweries opening up. I can see things increasing with really small-scale breweries that don't distribute outside of a very local area, or just a couple of brewpubs.

I work for a nano/brewpub and I love hearing that new brewers are starting a nano/micro. It gives me new brews to try and it is such a relativley small scene here that most of us know each other on some level. We don't share secrets but we do freely discuss some plans and even new brew ideas with each other. Always have to keep in mind that they are ultimatley competition at some level but it also drives the market and brewers to up their game for at least temporary bragging rights.

I have also many times told beer tourists to stop by and check out the others giving them detailed directions to the others location as well as reccomendations on brews to try while there. Some are surprised when you say something along the lines of, "you have to try x place they have amazing brews".

 

[dcarter]

What suppresses the craft beer market in the US is not demand, its the law. If the laws made sense, every bar would be a brewpub.

 

[drainbamage]

Are you saying that more bars want to produce and sell their own beer and the law makes it prohibitively difficult, or that the law should prevent someone from opening a bar unless they are producing their beer on-site?

 

[Knecht_Rupprecht]

It's been said before, but in order for the market to continue to grow new breweries will need to be satisfied with local distribution (1-3 communities) and potentially restaurant or bar. This is how Europe manages to support so many more breweries per capita than the US.

Additionally I struggle with the statement that American's have limited pallets. Provided more economical options, the a large %age of BCM drinkers would opt. macro/nano production (provided they aren't a beef tounge triple or something absurd). The greatest obstacle for most craft brews is that they are a luxury item. It's like shopping at Whole Foods and only buying organic locally sourced items. Sure it's great, but for many families not sustainable.

 

[dcarter]

Are you saying that more bars want to produce and sell their own beer and the law makes it prohibitively difficult, or that the law should prevent someone from opening a bar unless they are producing their beer on-site?

I'm saying that the way alcohol is regulated and taxed makes it difficult for an individual to make and sell small quantities.

 

[Nightshade]

Are you saying that more bars want to produce and sell their own beer and the law makes it prohibitively difficult, or that the law should prevent someone from opening a bar unless they are producing their beer on-site?

Not what I got from that at all.

It is absurd to me that a brewer can't stack a couple kegs into their truck and drive 3 blocks to the local bar to put on tap even thiugh they are taxed as a producing brewer.

The laws prevent a small brewer from easily or economically putting their product into the hands of consumers. The easiest way currently is to open a tasting room or a taphouse...yet you can't sell it wholesale in order to do the same thing.

 

[Phunhog]

It's been said before, but in order for the market to continue to grow new breweries will need to be satisfied with local distribution (1-3 communities) and potentially restaurant or bar. This is how Europe manages to support so many more breweries per capita than the US.

Additionally I struggle with the statement that American's have limited pallets. Provided more economical options, the a large %age of BCM drinkers would opt. macro/nano production (provided they aren't a beef tounge triple or something absurd). The greatest obstacle for most craft brews is that they are a luxury item. It's like shopping at Whole Foods and only buying organic locally sourced items. Sure it's great, but for many families not sustainable.

I think the price is a BIG obstacle for a lot of people...especially the BMC crowd. I have a co-worker who fits the craft beer demographic....college educated with a well paying career. He was asking me about brewing and beer in general the other day. He told me his favorite beer was Natural Ice since it's cheap. He was balking at paying 10 dollars for a six pack of craft beer and I have no doubt he can afford it. The funny part is that I too often balk at paying that much for a six pack...unless it is something hard to find or I am dying to try.

 

[drainbamage]

Not what I got from that at all.

It is absurd to me that a brewer can't stack a couple kegs into their truck and drive 3 blocks to the local bar to put on tap even thiugh they are taxed as a producing brewer.

The laws prevent a small brewer from easily or economically putting their product into the hands of consumers. The easiest way currently is to open a tasting room or a taphouse...yet you can't sell it wholesale in order to do the same thing.

That was more or less what I meant by the first part of my post...my wording just sucked. :cross:

 

[HeavyKettleBrewing]

This build up to a fictional bubble is nonsense. The only reason for failure would be due mostly to poor business planning. Poor planning could mean anything from lack of capital to location. I live north of San Diego and there are nanos and tasting rooms springing up faster than you can pump $20 into your tank. I have tried many and many I will never try again. Some start ups are dreamers with mad skills and some are backed by brewemasters with pedigree. Any which way you look at it, capital fuels the start up and the quality of the beer will determine the return customers, not Mr. Koch.

 

[weirdboy]

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

Simtra is a pretty good beer.

 

[Phunhog]

So I think the best way to measure this is simply ask the question....have any breweries in your local area gone under recently? None in my area....just waiting to see if any do.

 

[Darwin18]

Looks like Asheville is losing it's first brewery:

http://www.citizen-times.com/articl...-Dec-1?odyssey=tab|topnews|text|Entertainment

I had tried Craggie's beers a few times at beer festivals like World Beer Festival and found it to be awful. They were hands down the worst beers I tried at either the 2009 and 2010 World Beer Festivals. After that I just stayed away from their table. My wife and I had our honeymoon in Asheville this past May and went on several brewery tours including Craggie. The beer at their brewery was surprisingly good; a couple were actually fairly unique. I spoke with one of the brewers and asked him why there was such a difference and apparently they were transporting all their beer from Asheville to venues like world beer festival in growlers. They didn't sell any kegs or bottles; just growlers. It was very telling to me that their distributor only sold their beer in Tennessee...in growlers. They didn't sell any kegs as far as I could tell locally at any of the restaurants in Asheville. The locals seemed to have written them off, which is odd in a city like Asheville.

The general consensus I got from other breweries was that Craggie wasn't serious. Asheville is a big tourist crowd and the local breweries are a big draw, so the local brewing guild didn't take kindly to Craggie. I'm not surprised to learn that they've closed, but I am surprised that their head brewer was hired by Oskar Blues. I spoke with him and he looked at me funny when I asked him about their yeast handling techniques - like he had no idea what I was asking him about. I'm fairly certain they just pitched right back on the old yeast cake.

There is a local brewery here in Raleigh, Roth Brewing, that seems similar to Craggie, although their beer at their brewery is just a foul as it is commercially available. It's also telling to me that despite being next door to a distributor, you can only find their beer on tap in a couple random bars here. They sell seasonal bombers of poorly brewed beer and don't seem to have much direction at all. They seem far more interested to wear Viking helmets at the local beer events than to work on basic boring things like temperature control or sanitation. My wife tried their cinnamon porter and spit out on the ground, it is that offensive.

 

[scottland]

Simtra is a pretty good beer.

Until you pay $11 for one that's been sitting on the shelf for lord knows long, and it's oxidized to hell. (I did, worst $11 I've ever spent)

I'm not mad at them for the oxidized beer, that's out of their control, and normal for big IPAs that have been on the shelf too long.. I'm mad because they don't put bottling dates on their beer. I'll never buy another hoppy beer from them until I see bottled dates. $11/22oz is way too much money to have to roll the dice. It could be 1 week old, or 7 months old.

 

[scottland]

If you have a problem with contract beers, you have a problem with about 95% (no exaggeration) of the beers sold in the world. That includes MANY craft beers. Stevens Point makes some of the most ho hum beers in the world under their own label, but they make some pretty solid brews for other people.

And contract brewing doesn't mean "You give us the recipe, we make it." It can also mean that they hand the keys to the brewery over to the renter for a limited term. They bring in their own stuff, with their own people and operate the equipment.

I heard an interview maybe a year ago with the dude from Crooked Stave brewery. They don't make their own wort. Or at least didnt. Someone else does. They ferment it, but the wort is shipped into them in raw form. I don't think anyone would dispute the legitimacy of the end product, even if it wasn't wholly made in house. But people dog on Granite City for doing that same thing. It's the same concept.

95% isn't contract brewed. Bud, Miller, Coors, and Heineken brew their own, and they have enough market share alone to debunk your 95% number.

Yes, I understand that TONS commercial beer is brewed at a brewery with a different name on the building (Blue moon, shocktop, rolling rock, Stella, etc, etc etc). I was talking about craft beer though. I'd venture that 95%+ of craft beer is not contract brewed.

 

[Bulls Beers]

http://www.utsandiego.com/news/2012/nov/15/tp-craft-beer-at-a-crossroads/

There's a lot of Breweries in the San Diego area....