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Breweries Closing

Discussion in 'Beer Talk' started by Can_has_beer, Sep 13, 2013.

  1. Can_has_beer

    Can_has_beer Advocate (565) Texas May 14, 2013

  2. Not surprised about the rock bottom location closing. After all, in San Diego with all of the breweries nearby, there's little room for mediocre chain brew pubs. Never heard of the hawaiian islands brewing or alaskas ring of fire meadery and had some Steelhead beer and thought it was so-so. Bottom line - breweries open and close all the time. I believe more are opening than closing on a yearly basis, so until more are closing than opening, there is no bubble bursting.

    If you honestly believe that 4 breweries [out of over 2,500] closing is the start of a bubble burst, you watch too much national news media coverage where almost anything negative is the start of something going downhill.
  3. jbdpsu82

    jbdpsu82 Savant (480) Pennsylvania Aug 28, 2012

  4. IceAce

    IceAce Advocate (570) California Jan 8, 2004

    Finished that for 'ya.
  5. Yes, but it's difficult to tell if it will be a slow leak or blow-out.

  6. You might be thinking of Mad River in Northern CA who have a line of beers under the Steelhead name, they are not closing. That's who I thought it was at first.

    The place that is closing is a small brewpub in Southern CA, I've never been there nor heard of them.
  7. I can't believe Steelhead is closing, that place used to be my choice underage drinking place... Maybe the Ant-hill pub did them in...
    rather likes this.
  8. Can_has_beer

    Can_has_beer Advocate (565) Texas May 14, 2013

    It was just a question dude, calm down.
    SteelersX and otispdriftwood like this.
  9. duluoz

    duluoz Aficionado (185) California Aug 11, 2007

    There is no craft beer "bubble." Some areas and markets may be nearing a saturation point, or craft beer "glut," but there's no such thing as a bubble for the craft beer industry.

    Bubbles result primarily from overvaluation, inaccurate speculation, and foolish investment on a very wide scale. There is no such bubble that is going to one day cause the craft beer industry to implode. It's a boogeyman.

    In areas with more breweries than that particular market can handle, some are going to fail. That's glut. Not the same thing, and nothing to panic about. Just basic economics.
  10. Jules11788

    Jules11788 Savant (410) California Feb 15, 2011

    Yeah, Steelhead was nothing spectacular.
  11. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    There is no bubble.

    Does anyone think craft is going to fall from 6% to 3% in the next two years?

    Yeah, I thought so.

    There is no bubble. There wasnt a bubble in the 90s either. Flat to tiny growth is the exact opposite of what happens in a bubble situation.
    nickfl, LordFoul, jkane101 and 4 others like this.
  12. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    In the last 5 years, 12 to 18 breweries and 25 to 51 brewpubs have closed every year.
    nickfl and ChipMurray like this.
  13. Thanx for the clarification.

  14. Don't take it personal - the answer was not specifically for you. At least I didn't capitalize.
    ChipMurray likes this.
  15. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    There was one beer related bubble in the 90s that could appear again in the future: there WAS a bubble in brewing equipment. Manufacturers got stuck with a lot of equipment and couldnt sell new equipment with the glut of slightly used equipment that was available for sale.
  16. LAD

    LAD Aficionado (195) Texas Apr 16, 2008

    The USA is a very big country with plenty of vacant land for many more breweries. Unfortunately, the beer cooler in your store is not so big.
    TastyIsBeer and ChipMurray like this.
  17. leedorham

    leedorham Champion (845) Washington Apr 27, 2006

    But I learned the word "Bubble" from the TV a few years ago and I like to use it to be a cynical naysayer. What am I supposed to do now?


    Bubbles happen because of speculation. That is not what is going on with breweries. Most of these breweries are being opened with large amounts of cash money, not speculative bank loans or VC money, and growing by selling their beer and re-investing more cash money.

    When a lot of businesses open and survive based on real products being sold for real cash money at their real value to the consumer, it is not anywhere close to a bubble.
    prdrums77, vacax and maltmaster420 like this.
  18. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    Even that isnt a sign of a bubble bursting.

    Until craft sales volume starts falling OR prices are dramatically slashed to keep sales up there is no bubble bursting.

    I dont think there is a bubble to burst, because I think craft sales volume is solid. I dont see it declining in the near future, or prices getting slashed.
    dennis3951 likes this.
  19. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    Yeah, its a particular pet peeve of mine. What really annoys me is that Greg Koch keeps using the term wrong.
  20. For you guys who've been around for a while, how well do mediocre breweries in a specific locale tend to do? What if the vast majority of breweries in a locale can be considered mediocre. Will they survive simply because the competition is so weak that there's little motivation to improve?
    Dave1999 likes this.
  21. leedorham

    leedorham Champion (845) Washington Apr 27, 2006

  22. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    Depends on the locale. Mediocre brewpubs fail quick because the restaurant business is hard. Mediocre breweries can last a while if there isnt a lot of better local beer. I havent seen a brewery local to me close since the 90s. A few brewpubs have come and gone.
  23. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    Me engineer. Language hard.
  24. Jonnyoutlaw

    Jonnyoutlaw Initiate (0) Kentucky Sep 12, 2013

    I think as far as breweries surviving due to lack of competition is true and I also think it is somewhat the consumers fault, obviously if all the brews in a locale are mediocre there is something wrong with the people running it and the people consuming it. The consumers and the brewmaster should want nothing more than to get the best and most out of their product. That being said I guess all consumers can't be to blame as they may not know any better, I know plenty of people who drink the standard watered down yuck simply because it is cheap and it's what they know and don't want to try anything else.

    As for any kind of bubble I doubt that is happening, hence Cincinnati having 3 new breweries opening up and doing rather well. I think again this has to do with the end product and getting the word out there.
    Casterbridge likes this.
  25. There's one in Burlingame and one in Oregon, too.
  26. Can_has_beer

    Can_has_beer Advocate (565) Texas May 14, 2013

    So, if I am understanding correctly, is the general consensus here that as more breweries open the weak in the herd will be eliminated?
  27. Jonnyoutlaw

    Jonnyoutlaw Initiate (0) Kentucky Sep 12, 2013

    I think that is a good way of looking at it, the good part of more breweries is hopefully they will push each other and create new brews. Those that can't keep up will more than likely fail, but even when they close the doors that doesn't mean down the road they could be back again.
    Norica likes this.
  28. leedorham

    leedorham Champion (845) Washington Apr 27, 2006

    Well what will happen is that the best breweries will begin vanishing mysteriously and the government will subsidize the rest and ration brewing ingredients.

    Eventually we will find that all the best breweries have relocated to a secret place where all the beers are tasty, rare, and the trade values are all based on merit.

    Within a few years the mainstream brewing industry will collapse and all of the vanished breweries will return to repopulate the earth with rare beer.
  29. Bubbles are fairly rare. Boom and bust cycles are more common.

    In the 90's the growth went from a long period of >30% to a max of 50% annual growth, to a period of 0% to 3% growth over 7 years extending into the early 2000's. That resulted in the closure of many breweries. Some of the established ones with a good product line had large growth in the flat period, take Sierra Nevada as an example.

    In Michigan there is much room for growth as craft beer is below the national average, but the established breweries have installed, or are installing, a huge amount of capacity. It is going to be interesting to see how long things continue.
  30. jmw

    jmw Savant (440) North Carolina Feb 4, 2009

    You have just spelled out the definition of this place.
  31. Hanzo

    Hanzo Champion (965) Virginia Feb 27, 2012

    Any places that make good beer closing?
    Horbar, dauss, mjryan and 5 others like this.
  32. In other words, capitalism at work.
    Xandrose and Jonnyoutlaw like this.
  33. Got any stats on how many have opened?
  34. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    Michigan Brewing Company. I liked their version of Celis White. I dont know about anything else they made.
  35. rlcoffey

    rlcoffey Advocate (500) Kentucky Apr 20, 2004

    Yep, I posted it in another thread earlier this week, but I can repeat.

    Range in last 5 years was 59-310 breweries opening and 49-99 brewpubs.

    Edit: details of last 10 years on page 3 of billionaire thread.
  36. A brewery that also made Kid Rock's Bad Ass Beer. They made very good beer around 2000 when Dan Rogers was the brewer. He is now at Griffon Claw in Birmingham MI. He learned to make Celis White from Pierre Celis, so his Wit is excellent. It is a packaging brewery that has a 20,000 bbl a year footprint.
  37. kingofhop

    kingofhop Advocate (555) Oklahoma May 9, 2010

    Bubble talk here, bubble talk there. Has me thinkin' of carbonation levels.
  38. jmw

    jmw Savant (440) North Carolina Feb 4, 2009

    I'm guessing that range per year over the time period specified.