Breweries Closing

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.

 

*pop*

 

Finished that for 'ya.

 

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

 

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.

 

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...

 

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.

 

Yeah, Steelhead was nothing spectacular.

 

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.

 

In the last 5 years, 12 to 18 breweries and 25 to 51 brewpubs have closed every year.

 

Thanx for the clarification.

 

Don't take it personal - the answer was not specifically for you. At least I didn't capitalize.

 

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.

 

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.

 

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?

/sarcasm

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.

 

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.

 

Yeah, its a particular pet peeve of mine. What really annoys me is that Greg Koch keeps using the term wrong.

 

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?