"The bubble is bursting!"

The rate of growth of Homebrewing has slowed to mid single digits growth. That is down from >20% growth for several years. Homebrewing is an incubator for going pro. Is this an indication that things will slow? No one knows, but it has been documented that Homebrewing is past the explosive growth.

 

What could make the "bubble burst"? I think we saw a good example this past week. One of the largest can suppliers announced to small accounts that they were being cut off as all production has essentially been bought by an unnamed "large customer". So, if you're a brewery who has a good portion of your business in canned six packs, you may now be completely SOL.

The mistake that many breweries have made is that they haven't built a business as a neighborhood pub that happens to brew beer, but they saw the potential in distributing (both in kegs and packaging). As the BMC brands get more dedicated to craft, they are going to be able to better sell, distribute and maintain accounts. Yes, small local breweries are "local" but if you look at their sales trends, they go gangbusters for the first few months then sales fall off quickly (and sharply) as new breweries enter the market and there's some new hotness.

I think that the canary in the coal mine is already dead, I think the Lagunitas/Heineken JV was Tony Mcgee's way of realizing that the craft market in this country is completely saturated and the only future is global expansion.

 

As long as people are willing to pay $10-$15 for a six pack of good beer. I don't think the bubble will burst. It will put a hurt on the mass produced piss beer.

 

What does "craft beer strive" mean ?

 

Vices are recession proof, but the premium parts of the vices get hit regardless. Vegas took a huge hit in the last economic recession, with at least one premium product getting scuttled. The vice of alcohol is recession proof, but the sub-vice of craft beer is not, especially with rising prices. While many BAs might still be happy to shell out, 90% of craft drinkers are going to be much more price sensitive when push comes to shove.

 

strive
strīv/
verb

1. make great efforts to achieve or obtain something.

To see it make great efforts or achieve something... I also don't really know what "Its bubble bursting" means. I think people are too obsessed with the amount of Craft Breweries. It's the in thing now.... So of coarse people are going to try to cash in. I think its cool in a way. How many make above average beer though? Very few new ones. I just dont get why any one is overly excited about it.

 

I do think growth in craft beer will slow, but I don't see a bubble bursting affecting anybody making great beer. I do think that growth into a huge national sized brewer will become more and more uncommon, and there will be more local small breweries that only distribute in their state or even just in their city. I think today's craft beer market can handle every city having quite a few breweries as long as they make something of quality.

 

I agree that craft beer adoption will keep growing, but I question the number of breweries that can participate. New breweries keep popping up and unless their beer is world class people will try it once but not re-buy it. Competition is tougher than ever because quality is better than ever... It's kind of like the tech bubble... When it burst, technology didnt go away, but a lot of start ups did!

 

The idea that a bubble will burst is that good beer is just a fad, and that people are simply jumping on the wagon. And that one day people will decide to jump off and the beer stock will fall suddenly. But do you guys ever see yourself just stop wanting to try good beer? I don't think so.

However, with this sudden rise of breweries all over, competition has increased, and certain breweries will make mistakes and close their doors. Doesn't mean no more beer.

I'm not worried. Beer will still be everywhere.

 

Vegas is a fantasy and in that time as well, a host of other options to play loose with money have also taken hold.
So, somehow I don't think so. Once you get a taste of the good stuff. It's hard to go back.

 

Nothing significant has happened to the industry since this same topic was posted last week, so my opinion remains unchanged.

 

Not true currently. There are a ton of bad to mediocre breweries doing just fine. The majority of people who drink craft beer aren't looking for the latest greatest. They found something better and will stick with it. A peek at many people's ratings here and other places points to a ton of people not even knowing what bad beer is. Everything craft is a 3.75+

Blue Hills Brewery still exists. I'll bet it continues to do just fine even when trillium opens 5 min away. People I work with buy beer there, a lot. World class beer, even next door, isn't going to change that.

 

I am less concerned about the number of breweries than the amount of capacity coming on line. At some point sales growth will slow, and there will be surplus craft brewing capacity (because there is a time lag fro brewery construction to opening. ) Who is hurt and who survives - small local, national and regional craft, or BMC crafty, remain s to be seen.

 

We are in the consolidation phase as craft brewers are now being acquired by larger breweries. I am not concerned as I believe there will always be good beer available, I don't think certain breweries will disappear but I do think that the mediocre ones will close and those being acquired will fail to meet BMCs standards and be shut down.

 

Apocalypse parties? I've been missing out!

 

Definitely still in the growth phase, especially with the robust economy. Thinking it will last at least two more cycles, then contract (slightly). OTOH I kinda miss the tough times

 

Part of me wants to see the bubble burst. There are way too many mediocre breweries out there, and while I recognize that it's someone's dream and well-being, the fact is that not everyone was cut out to be a brewer. Until it actually affects brewers that deserve to succeed on their merits, however, I don't really care that much about "the bubble."

 

I agree about there being more mediocre beers than that above par to good, to WORTH YOUR money type stuff. How is mediocre crap the same price as the legit stuff? Then there are local places that seem to do okay, but their beer just sucks.It sucks to that 10% here I guess. Location maybe? Their beers may be just good enough to have some flavor? I have been seeing quite a few locally who see a mediocre place doing well, and they know or feel that their homebrew is better, so they do dream big. NM is not different than any other area. We see it too.

For every 9 mediocre places, it seems like there may be ONE that hits a true home run. I do want there to be a weeding out effect. But maybe not yet.

I'm seeing lots of competition from larger regional breweries who are expanding their distrobution foot print in a major way. I have basically stopped going to breweries as much because in large part, package variety is a better value, and a better selection. I think the weeding out will happen from all around (not just # of breweries per say).

 

A burst bubble is not inevitable. There is the possibility that growth will taper off slowly as we approach the number of breweries that can actually be supported.

 

Craft beer is only 12% of the market right now. They have a lot of room to grow. Most projections I see are for it to hit 20%. That is a lot of room in the segment. The bubble will start losing some air someday, but never while the market is growing 20%.