Nowhere To Go But Up

Unfiltered by | Oct 2016 | Issue #117
llustration by Chi-Yun Lau

The dreaded craft beer bubble. There is perhaps no greater bogeyman in the world of craft brewing, and no greater straw man in debates over its future. Derided early on as a fluke, a blip, a passing trend, craft brewers slowly, purposefully propelled themselves forward, even if they didn’t always know where they were going.

To be sure, there were stumbles along the way, among them the much discussed housecleaning of the mid-1990s. Debates can be had about the true severity of this era, when some less-than-qualified players entered, then quickly exited the industry. But what cannot be denied is that the beer world of 2016 looks nothing like that of 20 years ago.

In 1996, craft breweries still barely registered with the public. Beyond a small but energetic subset of drinkers, Americans knew very little of flavorful beer let alone anything called “craft.” Small brewers—and almost all of them were small—were dubbed “micro” both to describe their size but also to undermine the seriousness of their aims. These small brewers were pioneers, with visions of not just merely surviving, but of vanquishing bigger foes and making the populace bend to their dreams of redefining American beer.

America’s small brewers achieved their lofty ambitions, not through brute force or fistfuls of marketing dollars but through hard work, meeting consumers face to face at festivals and tastings, and by hand selling beers in neighborhood bars. They built strong businesses on foundations of loyal consumer support and by deepening ties to their local communities. They became stewards of a new way, a new world of flavor in American food and beverage.

Mistakes were certainly made along the way. Some brewers attempted foolish expansion projects without the requisite local personnel or capital to support them. Others sought to make a quick buck through public stock offerings. And many unwisely cut corners in their brewhouses, leading to bad beer experiences for the public. These players, and some more innocent ones, paid a heavy price, disappearing from the beer scene altogether. Their legacy as ghosts of failure continues to haunt the industry today.

Despite some stumbles, though, these pioneering brewers also staked out a clear and manageable path for several successive generations of new brewers to continue moving the cause of flavorful beer forward. As with any industry or generation, the future will likely little resemble the past. And this makes people nervous. Now, after experiencing several years of solid double-digit growth, the rates of advancement have begun to moderate. Craft brewing’s nervous side has once again entered. It encourages loose talk of downturns, losses, and bubbles.

Of the future of craft brewing, little if anything is predictable. The next generation of brewers will develop and rely on entirely new models just as the reinvention and focus on taprooms led to the radical expansion in the number of small brewers. By cutting out the revenue lost to distributors, bars, and liquor stores, these operations have made small-scale brewing newly profitable. And we largely have nano-brewers, a group that didn’t even really exist a decade ago, to thank for this development.

There will undoubtedly be challenges moving forward. Over-expansion, the renewed interest of big brewers, crowded store shelves and competition for tap handles, the failure to properly invest in quality brewhouse talent, and the unwise decision to cut corners in quality will all arise. But no one could’ve predicted craft brewing’s rise just as they cannot accurately anticipate its trajectory. We do know one thing however: it survives. And comes back stronger for the future.