I think the self-distribution thing is a slippery slope. It encourages smaller breweries/businesses to stay small. This isn't necessarily a bad thing, because a lot of people like to have neighborhood breweries/brewpubs, but I don't think staying small helps craft beer as a whole. It's these breweries that are shuttering for a whole spectrum of reasons, but the most obvious reason would be the lack of a decent business plan or understanding of the market they are entering. These breweries are what food trucks are to the restaurant world. They are interesting, but they do not add to the stability of the market. They just encourage more people to enter a market that is already very competitive which takes money away from existing businesses in that market. It's unsustainable.
Self-distribution is a way to get their product out to a wider market, without having to pay someone (a distributor) to get it out there for you. For a small brewery, say with 5-10 barrel system producing maybe 2,000bbl/year, and they just want to be in a few bars and stores in a relatively small area (say maybe 2-3 counties), why pay a distributor, when you can pay one of your cellarman to be a sales guy a couple days a week, and go out to get some taps and shelf space in your area? Using a distributor is more of a danger to the continued health of a small brewery than self-distro ever would be.
Not cheaper. My main reason for going to a brewery is that I can find beer that is not locally distributed to bars or tap rooms. Although breweries don't seem to be doing as many special releases, I like to try them when available. Plus, we don't have a great selection of tap rooms in Silicon Valley.
Agreed on all of this. That said, the enticement that it provided for thousands of people who became brewery owners who probably had no business owning a brewery, is the problem that I was talking about. In my opinion, the craft beer boom, specifically the massive proliferation of very small breweries, was not a good thing for craft beer and we are seeing why with the recent contraction that is occurring and will undoubtedly continue to occur until the segment reaches equilibrium. Essentially those small breweries took business away from the larger breweries and provided little or no real benefit for the segment overall.
How would there only being a handful of SN sized breweries be a good thing? You understand that the 'microbrewery' boom came as backlash to there only being a handful of big breweries, only producing fizzy, yellow beer, right? and now you there to only be a handful of "Approved' big craft breweries? As General Anthony McAuliffe said at the Siege of Bastogne, when the Germans told him to surrender: NUTS!
I don't have an issue with there being local breweries. The fact that most of them are all but identical is a bit silly, but, whatever, not everything is for me to understand. Big Craft is also a necessity, but with acquisitions you have issues with them as well, where you have breweries like Stone, DFH, and Founders that are basically only selling what sells the best instead of what is creative and interesting. A good mix of national, regional, and local is the sweet spot, in my opinion. As I said, the issue is that the Craft Beer Boom was built on small, local breweries proliferating wildly and not very many of them are using tenable business models, including the self-distribution aspect that this thread is based upon, thus the proliferate closures.
How many small breweries in your area have lasted for 30 years? There's a bunch around here. I'd say that's the opposite of untenable. As long as their eyes aren't bigger than their stomachs, there's no reason even a small brewery can't keep rolling as long as they want to.
In general around the Hudson Valley in NY-- no. In fact I often find it can be more expensive at the actually brewery especially if it's more steered towards tourists or such. The cheapest place to get beer ironically is the supermarkets which do have a pretty wide selection of even local craft beers as well as popular ones from other places. I think in general though people go to the actual brewery for pints as well as atmosphere. Especially the socialization aspect where you're with like minded beer consumers who probably share your palate for beer choices. So as long as you like the beer it provides a good social outlet and at that point you're not too focused on cost, but more so experience.
Because competition is a myth most of the time and people have to think about multiple factors when setting prices.
I can only speak for myself here. Pints are always cheaper at a beer bar vs a brewery. Takeaway from a brewery is always more expensive than from my fave liquor stores. I realize that in some places there are separate outlets for beer, liquor, and wine. Here in MN liquor stores sell it all. They are chains or small independently owned. Distribution here is a mystery to me.
That is a boldly meandering premise. Not sure I have the stamina to understand what the hell your actual point is. But, Self distribution is a slippery slope, because where I am. In Chicago. The actual local market is a lot deeper and it takes a LOT more attention to respecting that detail. Because, for a small craft brewery utilizing distribution with its own people. Growing into that is managing logistics and the point a to point b stuff. Staying small helps craft brewing. Because it is craft brewing. You aren't going to get more craft than doing it all by hand. Without the automated stuff. It is not a destination. It is a place in your neighborhood. p.s. Food trucks in a lot of instances are incubators. They are their own market. Competition is vastly over-rated. And not a single person working in any of the industries takes that accolade shit seriously. If they do. They are assholes.
Talk about faulty logic... And talk about non-universal... Just because a business is primarily focused on one thing does not mean it won't do other things well I think I understand what you're saying, although it took me reading it a couple times over to get it. You're saying that, if most breweries were just microbreweries (to use an outdated term), then the market would be so hyper-competitive there would be no room for larger craft breweries. There is some truth to that. There are several larger breweries I can name that don't distribute to western North Carolina but you can find them on the Eastern side, simply because Asheville has so many local breweries and they think they can't compete. We FINALLY got Red Oak over here in the last year or so. They're a large lager-focused brewery that started in 1990 (damn, I didn't know they were that old til I just looked it up) in the Greensboro area. We're also less populated than the eastern part of the state, so overall less beer sales volume-wise even with all the tourists we get. I was amazed when I visited Raleigh recently and saw the same beers I see at home months fresher. They just have more people, so there's more rotation and can bear the weight of more competition. Precisely. I worked for a large, highly renowned craft brewery at a beach town with huge tourist draw, and people would sometimes get downright offended at how high the prices were vs. what they saw at their local grocer or whatever. The logic is: They've traveled all this way specifically to have this beer, they're going to buy it anyway At the end of the day, this is the real truth. Show me one example where scaling up has made a beer better
Curious to know what you think is being done "by hand" in smaller breweries that isn't being done in basically the same way in larger ones, just on a different scale.
In theory, scaling up should make beer better and more affordable: access to more efficient equipment, less dissolved oxygen, purchasing power to get better ingredients and make deals on price cut, pretty much all the economy of scale stuff. At a certain point, though, the technicians and accountants take over, and the artisans are left behind. The desire to see a return on investment start to weigh more heavily than the original desire to make something great and unique. Costs may go down, but prices don't, and then the big boys start cutting checks, and you're exhausted from starting this thing in a shed with a bunch of cobbled together used or repurposed stainless steel, pouring over P&Ls, putting on a happy face whenever you are dealing with the public, and having to keep the staff happy. That big check starts to sound like a great reward, you know that giving up control means that it won't be your vision anymore, but... buying that nice house with a yard, not having to drive a serviceable but ugly pick-up (you're not a truck guy, but you need one for work), and being able to spend a couple of weeks away from headquarters and not also have to be at any work events sounds really nice. Not having to work when your hands have curled into claws and your back is so broken that you lean forward when you are walking at a slow pace also seems a lot better than trying your best to keep up with the kids that are doing the thing that you originally loved, with all the heavy lifting in a hot, humid, slippery floored space, or pouring over spreadsheets or in meetings with salesmen, or hearing from average Joe's that you should've kept making a product that no one besides a few dorks bought, or that you lost your shirt on at the pricing people would actually buy it at. That check from the Netherlands or Brazil or wherever starts to seem a lot more enticing. I think that Sierra Nevada is the only national brewer that hasn't sold a stake (probably wrong), and even then, the Little Thing series shows that they aren't above market pressures.
The one place that is always cheaper for draft pours at the brewery is Sierra Nevada. They are biggest brewery in a relatively small town, so they can get away with it. Also, their beer is often cheaper than other breweries in town at bars. I’ve noticed most bars/restaurants all have their core beers for a little less but a lot of the more “hype/trendy” beers for non local breweries that sell for a stand price.
Although the economies of scale thing definitely impacts the bottom line, the TPO (Total Package Oxygen) difference is a real reason that larger breweries with better packaging equipment make better, more shelf stable, beer. This is a sad, but very real, scenario. Interesting to look at this list with the above in mind: Annual Craft Brewing Industry Production Report
if you ever find out what the fuck this person is talking about please share with the rest of us. makes no sense. aloha.
Around here, breweries charge just as much for a pour and for cans to go as bars, restaurants, and stores do. Often more. As a customer, this irks me. The basic tradeoff should be this: by purchasing your beer directly from you, I allow you to cut out the middlemen, and in return, you let me purchase your product at a price that reflects that there are no middlemen involved. If a brewery won't meet that agreement, then there's no way I'm going out of my way to support them.
