When is the bubble gonna burst?

There's competition to go extreme, but there is also competition to produce the next amazing "regular" IPA, too. In terms of market saturation, I don't know if supply has met demand yet - the dream of the freshest IPA possible is alive and well - it's a popular style, very accessible, and freshness matters (freshness is the new whale). Economic Darwinism will rule here - those breweries that do not survive did not possess the characteristics to compete successfully in the craft beer market.

 

Drink beer, watch the bubbles in the glass and any other bubbles become unimportant.

 

"Total number of pizzerias in the U.S. 70,000
Total number of pizzerias in the state of New York alone 9,000"
--- source​

 

Beat me to it.

Also mentioned how it won't go back to 30 (!!!) years ago when BMC dominated. look at market share... BMC still dominates.

www.statisticbrain.com/top-beer-brands-by-market-share/

 

I'm not sure if the bubble will "burst" or perhaps just "shrink."

Whichever happens, I believe it will be caused by a combo of these three things:

1. There are just too many breweries out there. Kind of goes with the shelf space issue.
2. Beer consumption dramatically declines due to all the people who like because its "trendy" have moved on to something else.
3. A major world event causes beer drinkers and most of society to put their priorities elsewhere. Possibly an environmental catastrophe, economic collapse, or large scale military conflict.


Hopefully, the beer market stays healthy and all remains well. We are truly blessed to have access to all the great brews we do!

 

They don't dominate to the same degree that they did 30 years ago was the point. I should have been more clear on that.

 

the craft beer bubble will burst tomorrow.


Maybe it's because I live in a booze city, but I don't hear anyone complaining each time a new brewery opens up down the street from another one. If anything, most people are excited to check out yet another place to go hang out and drink some good beverages, possibly good food, maybe a show or open mic as well. (Don't forget, a lot of breweries also do other things to keep customers coming...) If it sucks, then the market will decide and they will go out of business. It's not even basic economics, it's just common sense.
Also someone mentioned it up a few posts, but craft spirits are whats next. The larger craft brewers are already starting to branch out. New Holland, Rogue, Anchor, Dogfish Head (see aforementioned diversifying)...these are just the ones from the top of my head, as well as micro-distilleries popping up everywhere.

 

One of the reasons "market saturation" still has some room is beer shelf life. For ales of lighter character such as IPAs (clearly the most popular craft beer style in the US by my estimation), fresher is better. Not everyone sees this, but they all notice subtle differences and may not know the reason. When you have access to and are used to one region of breweries, but then continue to taste varying flavors of the same genre from around the country, you tend to buy and buy until you are sure you have run the full gamut of the style. I've been IPAing for a decade now and still encounter some new experiences here and there. My point is, when you combine the number of beer styles, number of variables within each style, and number of newcomers to the market each year, demand may not be dropping off any time soon.

 

I sorta get what you mean. There are all these new breweries opening in Michigan and I try them, and they are good. But I mean, the stout is good, it taste like a stout. The IPA taste like an IPA. Sooner or later, you ask yourself, "what is the draw to this place?" I mean, I will go anywhere and drink beer, so yeah, but, besides location, I wonder what a lot of these breweries plan on being their competitive edge.

 

Okay... How many of those are Pizza Hut, Dominos, or Papa John's locations? Quick Googling gives a ballpark of 15K or so between the 3. Still quite a few others out there. It would be interesting to know how many unique pizza brands are out there. Also might be relevant to consider the total numbers of people who eat pizza vs. those who drink beer so you could compare the "pizza joints per capita (of pizza eaters)" to the "breweries per capita (of beer drinkers)" or what-have-you.

Maybe a more pertinent example - in my hometown of about 8,000 people, I'll conservatively guess that there are beers from 40 different breweries in the local liquor store. There are 4 pizza places and one gas station that sells pizza. If 10 more pizza places opened up, 9-10 would probably fail.

Looking at my quote again, I stated that if there were as many pizza joints open as brands of beer available (not breweries located in the area), the majority of pizza places would fail. I'll adjust that to say different pizza companies, but I'm going to stand by that statement otherwise in this context. Open to having my mind changed if there are as many different pizza companies as there are breweries available in Chicago or somewhere, though.

 

Considering what Americans in general think "pizza" is it wouldn't surprise me if we went almost all the way back to when real men drank BMC.

I buy liquid laundry detergent that is "perfume free" but can smell perfume in it. When I call the company to ask WTF? they say what I'm smelling is a "masking fragrance". People are major F'd up and will cotton to the bullshit first.

 

I really like the pizza angle to this thread.

 

Ran some quick math because I'm bored. All unofficial, of course.

Sources: http://www.gallup.com/poll/174074/beer-americans-adult-beverage-choice-year.aspx
http://pizza.com/fun-facts
https://www.brewersassociation.org/statistics/number-of-breweries/

About 65% of Americans drink; of that, 41% list beer as their drink of choice. So using 318.9 million as the population of the US, we have about 84,986,850 who are primarily beer drinkers. And we have around 3464 breweries, according to the Brewers Association. So that gives us a brewery for every 24,534 beer drinkers.

94% of Americans eat pizza regularly and there are 61,269 pizzerias. So that gives us a pizzeria for every 4892.6 pizza eaters.

I guess the takeaway is that beer has a way to go to catch pizza and I am kind of an idiot. Still, you aren't getting more than a handful of pizzerias in my hometown.

 

It is making me hungry.

In Seattle, I have no idea how many local independent pizza places there are (not including your Dominos, Papa Johns, Pizza Hut etc.), but it's definitely more than the number of breweries. And Seattle has more breweries, according to some sources, than any other city on earth—50 or 60 I believe. Most of them seem to be doing just fine, and their biggest problem is growing fast enough to meet demand.

Bottle shops here carry beers from hundreds of breweries. They are doing fine too, although I think there are definitely some shelf turds.

I guess my point is, if there is a beer bubble, it's just expanding into the domain of the likes of ABInbev and MillerCoors. From where I sit, it doesn't look likely to burst anytime soon.

 

I have no idea. I live in Pennsylvania and have no idea how our small bubble would apply to other areas/states/regions.

 

Ha, me too.

Upon further reflection, I think you guys are right on the pizza bit. Honestly, I thought more of them would be Pizza Hut, etc., but I'm not sure that even matters. I was also looking at it from the number of different pizza companies vs. the number of beer brands available in bottle shops and such, which probably is not a great comparison. I will stand corrected.

I agree that whatever bubble exists in the beer world isn't likely to burst soon, which I hope I made clear from my first post. I still think that some of the lesser breweries that sprung up in the "craft gold rush" won't make it long term, though that isn't necessarily any indication of a bubble bursting. I see it more as the market adjusting to "right size" what will have become a known entity. I've also been wrong before, so maybe there will be 50,000 breweries someday.

 

The only time we're going to see breweries shut down is if they make poor business decisions. Variety is the spice of life and we've made having options an integral part of our economy. It's pretty interesting, Millennials statistically tend to seek out and spend their money on new experiences and opportunities, and with many of them in their 20s and 30s the current craft beer market is a proverbial playground. I've never met anyone in the craft beer community, aside from the casual drinker, that doesn't seek out new beers to try- partly because they're constantly looking for something bigger and better, partly because they just want to experience something different.

I work at a a major liquor store that sells craft beer and I'm constantly seeing people seeking new beers to try. The majority of consumers I see gravitating towards the same beer are those in their 40s+ and those who don't drink craft beer (generally they drink whatever is advertised on TV- Shock Top, Blue Moon, Angry Orchard…). Not to say that my life / work experiences are the be-all-end-all say of the overall craft beer market, but it's a trend I've noticed.

Maybe it's my hippie, left-winged, liberal, laid-back, California-way of thinking, but that's what I think.

 

I think craft beer will continue to grow and its only scrathed the surface of what it can and will become. Breweries are popping up all over the place and - like anything else - the weaker ones will fail. But most will thrive as long as they produce decent brews. I'm seeing more n more that people want to support local businesses and thats especially true here. I am also seeing more n more people who drank lawn mower beers for many years converting over. Personally I have played a part in many friends coming over from the dark side. I see continued growth for these reasons.

 

Disagree all you like, but what you may think are high prices for luxury items that people are regularly paying does not a bubble make. Is there a wine bubble just because people pay $50-100 for a bottle of wine? Is there an automobile bubble just because some people will buy a BMW, Porsch, or Mercedes-Benz?

 

If craft only makes up 10% of the beer market share, we can't even begin to call this a bubble. The variable is the future change in market share. If there is a hypothetical spike in market share to say - 14% - over a short period of time, demand could temporarily outpace production. I think what you are seeing is capacity building for expected continued market share changes. Now that craft is more mainstream, it wouldn't be terribly surprising to see increases in market share pick up in pace.