The craft beer bubble is busting.

[mscroggi]

Negative. You're allowed a buffer on either side. States have their own, most are less stringent. TTB i believe is 0.25%.

AB InBev was sued for misleading customers about alcohol content. I don't think it ever went any where. I know they denied it.

Yeah its a max. Some states have 3.2 and 6.0 beers. Beer up to 3.2% can be sold in grocery stores etc.. but anything over that has to be sold in a liquor store etc. (when I grew up, we always called it 6 point beer because most of the big brewers that were selling it were making it in that range, but it could have been higher.) There is some interesting info here - https://en.wikipedia.org/wiki/List_of_alcohol_laws_of_the_United_States

 

[Gameface]

^^please share where you are getting 12 dollar pounds of hops!

www.hopsdirect.com

and it should be noted that a 1lb package of hops from hopsdirect.com usually has at least 18oz of hops in it. I've had a 1lb package with over 22oz of hops.

 

[njviking]

It isn't anywhere near that simple.. The brewers are obligated by law to sell to a distributor. The distributors are largely controlled by the behemoths, and protected by the ridiculous laws, and big money. Once a brewer signs with a distributor, he has no controls about how much, or even if, his beer is sold. The distributors even stock the shelves in the grocery stores themselves. Walk into a Walmart and look at the 80 foot long cooler stuffed almost completely with Budweiser brands. Then look at the 12 foot un-refrigerated shelf that has a half dozen other brands.

In 2016, Budweiser offered an 'incentive plan' (AKA a kickback) if the distributors would push InBev beers. The independent distributors aligned with AB InBev are contractually required to spend a certain amount each year to advertise AB InBev beers. AB InBev promised to refund 75 percent of this money if its beers make up 98 percent of the distributor’s sales. A distributor that would want to promote a craft beer would be also required to run an equal promotion for Budweiser, which becomes prohibitively expensive.

The deck is extremely tilted towards the corporate beer voltrons.

I wasn't even thinking nationally; I was more focused on local smaller breweries. But you are right. I can't possibly imagine how spendy it would be to bring a beer brand nationally. 10 years ago , maybe. Nobody gave this craze an afterthought. When Inbev started buying small breweries, you could perhaps say that the good old days were over.
Ironically the rat infested state I live in has self distribute laws, meaning no middleman. Straight to the end retailer.

 

[mscroggi]

Ironically the rat infested state I live in has self distribute laws, meaning no middleman. Straight to the end retailer.

Boy do I envy that. Here, brewers can sell to the public directly if they are declared a 'brewpub', but if they produce enough to be a 'brewery', then they can only sell to a distributor. The best workaround they could do is - on weekends, the breweries will host tours with music/food etc.. The tour comes with a few pint 'samples'.. Essentially people pay for the brewery tour and hang out through the afternoon like they would at a bar. It's better than nothing..but still ridiculous they have to go through that. We also have the fairly common blue law 'No beer sales before noon on Sunday'.. ugh..

 

[SanPancho]

In most states where you can self distribute it still isnt a great way to succeed. Lots of competition for shelves and bar taps. Plus you have to add a shipping and delivery service to your brewery. Your keg kicked on tuesday but you dont deliver until Thursday? Either send someone on a special run or watch the bar swap another keg into the lineup. Maybe they put you back on, maybe not. They only bought one keg from you ? Hope it also covered the cost of the tap handle you gave them....

Going for retail accounts? Better have slick packaging, a good story behind the brand, and strong sales support (promo materials, sales reps, etc). Often that means the backing of a distributor.

Trying to get some BMC drinkers? Never really works. That stuff isnt “beer” so much as a commodity alcohol malt drink. Fairly interchangeable. And eventually you’ll have to compete on pricing, where you cant win. So you market heavily? See above.

And yes, the $12 bomber is getting ridiculous. On very big beers, barrel aged, hop bombs, etc i get the reasoning. But still feel gun shy about paying 6-7-8 a pint when you’ve been burned a few times with crap beer. No easy solution there.

I hate to say it but i no longer buy beer from anyone i haven’t either had before or have heard lots of good things about, which tends to leave me with the mid level guys- SN, lagunitas, modern times, founders, etc etc. And even then i can get disappointed. Just tired of getting burned and feeing like i wasted my money. Which is probably pretty common these days.

 

[NGD]

I hate to say it but i no longer buy beer from anyone i haven’t either had before or have heard lots of good things about, which tends to leave me with the mid level guys- SN, lagunitas, modern times, founders, etc etc. And even then i can get disappointed. Just tired of getting burned and feeing like i wasted my money. Which is probably pretty common these days.

With the exception of Sierra Nevada, aren’t all those breweries owned by ABINbev or Heineken?

I hear you though, $12 for potentially a drain pour is to much of a gamble for me. Unless I hear really good things about a brew, I’m not buying a bomber or a six pack.

 

[Broothru]

In MD it is growing at a rate that I cannot believe to be sustainable. The prices people are paying for beer, as well as the lines outside before opening when there are can releases are unbelievable. $18 for a 16oz can of some sour beer that is sweetened with Icee flavoring seems crazy to me......but anyway.....

I just don't see all of these breweries (or this number of breweries) being here in 5 years even though the number is still climbing.....and even if they all make exceptional beer and maintain great business practices and management. The market is getting pretty crowded IMO.

You're really quite lucky being so close to Frederick, MD. Brewer's Alley, Barley and Hops, and of course Flying Dog. Quite a nice beer scene in what used to be sleepy central Maryland!

Brooo Brother

 

[mscroggi]

With the exception of Sierra Nevada, aren’t all those breweries owned by ABINbev or Heineken?.

Sierra Nevada is privately owned
Founders is owned by San Miguel
Lagunitas was bought by Heineken
Modern Times is employee owned

 

[TechFanMD]

You're really quite lucky being so close to Frederick, MD. Brewer's Alley, Barley and Hops, and of course Flying Dog. Quite a nice beer scene in what used to be sleepy central Maryland!

Brooo Brother

Those are a drop in the bucket these days. There are a ton of really great breweries now - a ridiculous amount for the size of the city.

 

[grampamark]

Sierra Nevada is privately owned
Founders is owned by San Miguel
Lagunitas was bought by Heineken
Modern Times is employee owned

I think the only craft(ish) breweries which have nationwide (or nearly) distribution, and are truly independent, are Sierra Nevada, Deschutes, New Belgium, and Boston Brewing (Sam Adams).

 

[Qhrumphf]

I think the only craft(ish) breweries which have nationwide (or nearly) distribution, and are truly independent, are Sierra Nevada, Deschutes, New Belgium, and Boston Brewing (Sam Adams).

Stone.

 

[mscroggi]

Those are a drop in the bucket these days. There are a ton of really great breweries now - a ridiculous amount for the size of the city.

You are not kidding!.. 7 breweries in the actual township for a town listed with 72k residents. Congrats!

 

[Broothru]

You are not kidding!.. 7 breweries in the actual township for a town listed with 72k residents. Congrats!


View attachment 618553

Olde Mother and Rockwell are new to me. I had some of Monocacy Brewing beers at the Maryland Brewer's Assn. get together a few years ago at Fell's Point in Baltimore and was favorably impressed. The Flying Barrel is a LHBS that used to be the only brew-on-premises place in the state. I still think Brewer's Alley (named after an alley where all the breweries in town were located) has a Kolsch that's equal to any I ever had in Cologne, and I've had many there.

Quiet little Frederick has quite a history and tradition of brewing as well as a vibrant restaurant scene. Neat town.

Brooo Brother

 

[SanPancho]

With the exception of Sierra Nevada, aren’t all those breweries owned by ABINbev or Heineken?

I hear you though, $12 for potentially a drain pour is to much of a gamble for me. Unless I hear really good things about a brew, I’m not buying a bomber or a six pack.

I have no ***** to give about who is the “owner” or investor, buyer, etc. The beer is good or it isn’t.

Its either worth the money being asked, or its not. I generally leave it at that.

 

[Bad Bubba]

+1.. There is no doubt that the market is 'maturing'. It is definitely expected. The growth is definitely slowing down as the markets saturate... The last 'boom' we had was in the mid 80's.. Up until then we were down to 105 breweries in the US.. That boom wasn't anything close to the size of the boom we are in now. It wasn't too long after that boom that the behemoths managed to crush the smaller brewers with huge money, powerful lobby, and questionable business practices. At least this time around, there is a growing amount of reform to protect the independents, and allow them to survive.

Want to see some interesting data? look at this - https://goo.gl/m31rZn

7,154 Open breweries in the US with 1,265 planned. Some of the areas are "catching up" to other states since some local laws have changed for them, allowing them to be viable. I live in Texas.. We are having one of the biggest booms of all the states. We currently rank 7th in the nation with open breweries (297) and we lead the nation with 148 in the planning stages. I have seen several breweries in the area close, but many more come online. Here, there has to be a choice made due to the laws (for now). You can be a brewery and sell to a distributor (and have no control how, or if your beer is sold), or you can be a brewpub and sell locally and in a tap room (but with less growth support and less beer volume). This can be difficult for the new breweries to manage.

Just like @day_trippr mentioned, it seems like a fluid market where small scale breweries can popup and go away quickly, just like the food business. It seems to be doing pretty well to me.

Thanks for the link. You can see why people have different perceptions. Colorado (where I am) has the second most combined breweries far outpacing more populous states like New York, New Jersey, Texas, etc. in fact, Colorado has about 40% of the number of breweries that California does but only about 1/8 th of the population. So what I see around here will be much different than what people see in Texas or Florida. I have seen many breweries close and I know of about 10 for sale.

The restaurant analogy is not always a good comparison. If you sell on premise only it may be comparable but the problem is you have limited ability to scale. So you will have high margins but low gross revenues. I have seen financials on several small breweries and gross revenues are under $400K per year- you can do the quick math and see you may be better off getting a job than opening a brewery. On the other hand breweries that want to drive their gross revenues up need to distribute their product and that is very much different than the restaurant business. Margins go down but you can drive revenue.

I know one brewer who has successfully started 3 breweries. Right now he has a small brewery and sells everything on premise. He wins awards at the GABF and has a nice following. He does well enough to make a good living. Selling at $4.50 a pint over the counter makes a nice profit.

The other people I know who are successful in the brewing business are well funded.

I think if I was opening a brewery in Colorado today I would look into outsourcing most of the brewing. That would lower the initial investment while establishing your brand.

 

[mongoose33]

The problem here is the average homebrewer and average craft drinker tend to diverge. To many craft drinkers there simply is no "go to" any more, regardless of how good it is. They already tried it. Why would they drink it again? But as has been mentioned already (maybe not in this thread) the increasing prevalence of 1 gallon brewers shows the same general trend in thought (obviously that can't be applied completely to everyone).

There are two types of people in the world: those who divide the world into two types, and those who do not.

Nah. But among beer drinkers, I do think there are two basic types: Those who want something different all the time, and those who, once they find a good beer, will tend to keep ordering it. Or maybe a few good beers in rotation.

I'm more the second type. When I find a GREAT beer--whether I or someone else brewed it--I want to drink more of it. I like it.

I can't understand why people who, when they find a great-tasting beer, proceed to try something else for which the odds of meeting or exceeding the quality of that great-tasting beer are very low. Great is on one end of the distribution; try any random beer and you'll almost certainly be disappointed in comparison to that great beer..

I don't know if the motivation to try new things in the face of having found an outstanding beer is simply seeing who can taste more, or rate more on the online sites, or what. I'm not saying they shouldn't do it, I'm saying I cannot understand it.

I do like to see what's out there, but that's what flights are for. And in the end, I want a pint of a beer I know I want to drink, not something I'm going to wish I could pour into the nearest potted plant.

I'd love to have someone explain why the constant trying of new things. I'm not trying to denigrate those who do it, not at all; I'm just trying to get a handle on the motivation.

 

[beernutz]

I think the only craft(ish) breweries which have nationwide (or nearly) distribution, and are truly independent, are Sierra Nevada, Deschutes, New Belgium, and Boston Brewing (Sam Adams).

Bell's?

 

[bleme]

Bell's?

I've never seen Bell's locally so I don't think they are quite nationwide.

 

[grampamark]

To me,"nationwide" means the beer should be available in, at least, the larger cities of almost every state, if not in every convenience store or rural general store in flyover country. Here in Montana, if I’m at our farm, I can walk into the local Albertsons (in a town of 800 folks 150 miles from anything resembling a city) and find at least one style of beer from Sierra Nevada, Deschutes, New Belgium or Sam Adams. If I’m at our city house (in a metro area of 150K) the only places I’ve ever seen anything from Stone are a couple of specialty stores and I’ve never seen any Bell's anywhere.

If it's available in BF Nowhere it's distributed nationwide. If you have to go on a search for it in the largest city in the state it's a white whale. YMMV.

 

[beernutz]

I've never seen Bell's locally so I don't think they are quite nationwide.

They're distributed in 39 of the 50 states by my count which is arguably nearly nationwide.
https://www.bellsbeer.com/beer-finder

 

[TechFanMD]

Being an east coaster who has travelled to the midwest and from Maine to FL, I thought Bells was nationwide. Not so much.....I wonder how many 'craft' beers not owned by BMC actually see nationwide distribution.

 

[grampamark]

They are pretty close. Thirty nine of the 50 states by my count.
https://www.bellsbeer.com/beer-finder

Thirty-eight out of 50 states? That's not even close in horseshoes.

 

[beernutz]

Thirty-eight out of 50 states? That's not even close in horseshoes.

Quibble: I count 39 since So Cal gets Bells.

I'll admit when I first thought of Bell's I had no idea where they were distributed but I remembered seeing Two Hearted all over the SE and up the atlantic coast so I assumed they were at least nearly nationwide.

 

[Qhrumphf]

40ish since there's still Bell's stock on shelves in VA while it lasts

Is Deschutes nationwide now? I know they've only been on this side of the country maybe 5 years or so (was hella excited when that happened).

And stone is in 44 states. That's pretty much nationwide.

 

[Hwk-I-St8]

There are two types of people in the world: those who divide the world into two types, and those who do not.

Nah. But among beer drinkers, I do think there are two basic types: Those who want something different all the time, and those who, once they find a good beer, will tend to keep ordering it. Or maybe a few good beers in rotation.

I'm more the second type. When I find a GREAT beer--whether I or someone else brewed it--I want to drink more of it. I like it.

I can't understand why people who, when they find a great-tasting beer, proceed to try something else for which the odds of meeting or exceeding the quality of that great-tasting beer are very low. Great is on one end of the distribution; try any random beer and you'll almost certainly be disappointed in comparison to that great beer..

I don't know if the motivation to try new things in the face of having found an outstanding beer is simply seeing who can taste more, or rate more on the online sites, or what. I'm not saying they shouldn't do it, I'm saying I cannot understand it.

I do like to see what's out there, but that's what flights are for. And in the end, I want a pint of a beer I know I want to drink, not something I'm going to wish I could pour into the nearest potted plant.

I'd love to have someone explain why the constant trying of new things. I'm not trying to denigrate those who do it, not at all; I'm just trying to get a handle on the motivation.

I can answer this in one word: Untappd. People race each other to get the most unique checkins. They want to be able to say "had it" for as many beers as possible, and really want the white whales. I have a buddy who will walk into a bar, scan the beer menu, and order a beer he's never had that averges 3.75 on Untappd instead of ordering a beer he loves and would score a 4.25 or higher...all just to get another notch on the belt.

I took a very short jaunt down that road and quickly found myself thinking: "yeah, I've had beer A before, but that's what I want to drink right now, not mystery beer B that has marginal ratings". I still use Untappd, but only to get a feel for whether I want to try a new beer or to track ones I've had. I don't give a rat's ass how many unique beers I've had.

Beer isn't a race, it's an adventure.

 

[grampamark]

40ish since there's still Bell's stock on shelves in VA while it lasts

Is Deschutes nationwide now? I know they've only been on this side of the country maybe 5 years or so (was hella excited when that happened).

And stone is in 44 states. That's pretty much nationwide.

Deschutes isn't as widely distributed as I thought (29 states). It's just that it's available in the middle of the country where brands like Bells and Stone aren't.

I think that leaves Sierra Nevada, Sam Adams, and New Belgium as the only independent brands that are available pretty much everywhere. And some will argue that those 3 are too big to be "craft".

 

[Qhrumphf]

Deschutes isn't as widely distributed as I thought (29 states). It's just that it's available in the middle of the country where brands like Bells and Stone aren't.

I think that leaves Sierra Nevada, Sam Adams, and New Belgium as the only independent brands that are available pretty much everywhere. And some will argue that those 3 are too big to be "craft".

Then one could deduce that to reach "national" distro (especially by your metric) is impossible without ceasing to be craft at all.

 

[bob1852]

Then one could deduce that to reach "national" distro (especially by your metric) is impossible without ceasing to be craft at all.

I know many EAC that consider any distribution at all to violate their definition of "craft"....


It's stupid that they felt the need to define craft in the first place, but then also to continually change the definition so that Sierra Nevada, Yuengling, and Boston Beer remain under the "craft" definition...

 

[grampamark]

Then one could deduce that to reach "national" distro (especially by your metric) is impossible without ceasing to be craft at all.

It depends on how one defines "craft". I would consider SN, SA, and NB pretty crafty; other folks, not so much.

There are more than 7,000 breweries in the US today. They aren't necessarily evenly distributed, but there are enough that in most parts of the country it isn't hard to find craft beer. I understand the complaints of some who wish that more styles were available in their areas, but that's as much of a local supply/demand thing as anything else. Factor in the number of former independents now owned by the BMC conglomerate and there are a lot of alternatives to fizzy, tasteless light lagers no matter where one lives.

A brewery that is operating at max production and selling all of that at a profitable price probably doesn't care if the demand is across the street or across the country. If the cash register keeps going Ka-Ching! all is well. Nationwide distro probably isn't necessary below a scale which few breweries can, or ever will, meet.

 

[histo320]

Obviously at some point the market will start to trend down due to over saturation.

What I hope happens is that each town will eventually have it's own brewery like before prohibition. A brewery just opened in my town and the beers are ok but continue to improve.