Horrible Time to Open/Expand Brewery?

The problem is that it's really hard to do that unless you're some kind of Shaun Hill. If you have some kind of rabid beer enthusiasm in your area, it may work. However, I feel that most new breweries that just focus solely on distributing locally will have troubles unless you're just crafting amazing, consistent beer that somehow gains some kind of nationwide recognition. Those are the only breweries that are really succeeding from the start now, such as Prairie, Tired Hands, Jester King, Crooked Stave, etc. etc. etc.....

 

The Atlanta market would explode if we could get a little help from State Legislators. People here are getting educated, and thirsty. It is easily the worst of any major city as far as "craft destinations", but that being said, things are happening here at a rapid pace. Place well crafted beers in a city with 6 million people and "Boom goes the Dynamite".

 

Isn't it ridiculously hard to get good hops right now? You hear of breweries like The Alchemist struggling to get hops for 2015 and beyond (I thought I heard that - I could be wrong), and it seems like any new startup would have difficulty in obtaining the most sought-after stuff. With no buying power, you would perhaps have to settle for the more common varieties, and therefore would have a product that wouldn't make you stand out from everyone else. Or, pay out the ying-yang for the more sought-after varieties, which wouldn't be conducive to keeping your costs down as a startup.

Disclaimer - I know almost nothing about hops and all of it's varieties. This is just a random wild thought, and was curious if those in-the-know on this subject could shed more light.

 

I feel like my area is pretty well saturated with breweries ranging from excellent to the mediocre and yet there is a thread in the New England forum listing about 7-10 new ones opening up on the next year or so. I have to wonder how much support there can be for some of these if they're not absolutely amazing right off the bat and somewhat well distributed/talked about.

I can see expansion working for breweries that have a demand they can't meet if they handle it properly.

 

I anxiously await your opening of a brewery.

 

What's unique about craft, is that we're all excited to try the 'next thing', and we all tell our friends about it and try to convert everyone we know to be craft drinkers. That with the combination that I find that we're not particularly brand loyal creates a great environment for new breweries to open. (Yes, we all have favorite breweries or go-to beers, but I would assume most of us have a huge variety that we try.)

There will be a lot of casualties in the industry, just like any other, as the industry and competition continues to grow. However, what this does for us consumers is filter out the 'poor' quality breweries (which unfortunately there seems to be quite a few of) and hopefully we'll see more innovation across the industry.

 

I've heard rumblings of Kane looking into traditional packaging sometime in 2014.


Even if they do lets say can Head High and overhead or something I'm sure they're gonna keep certain stuff brewery only so growler fills will still be a go to there.

 

Florida is really coming along in the craft beer world. The Tampa area has a ton of good breweries with new ones popping up all the time. Southwest Florida is ripe for a boom as well. One year ago, Fort Myers had exactly zero breweries and by the end of the year there will be 4 breweries up and running (Fort Myers Brewing, Point Ybel, Bury Me and Old Soul). In addition to those, Naples Beach Brewing is doing well and Fat Point brewing is opening up in Punta Gorda while I have heard talk of another brewery opening in Bonita Springs. It's a good time to be down here.

 

very true right now. Everyone wants to brew with the same 10 hops and I have heard of massive overselling by hop contractors. Wont be too long before people start working around the middle man...

 

The echoing going on in this chamber is crazy. Opening any business is hard work and is always a risk, regardless of the market situation.

Like I said in another thread, there will be some consolidation. But what seems to get forgotten is that us nerds are only a portion of the market. We can pontificate on how breweries in our area are substandard, but it's all subjective. I recently went to three breweries within 90 minutes of my place. Only one of them has any sort of distribution, the other two are growler-only (which, if you read the current thread on the 'bubble burst', you'll see that's the overall direction I think the industry is heading). At every one of those breweries, my wife and I left with the impression that I could make better beer. What we tried was good, better than some, worse than others, but left us less than wowed. But every single one was packed. At least on this one Saturday, it didn't seem like any one of them was hurting for business.

If you open a brewery with the notion of pursuing beer geeks as your target market, to me, that's a losing proposition. If you open a brewery and put out a good (or great, or phenomenal) product that almost anyone could enjoy and notice the care and quality put into it, combine that with a sound business plan, and you'll probably be OK.

We have to remember that non-BAs don't care at all about what hops, what barrels, the soft notes of quince 2 days after peak ripeness, whatever. We're the minority of a minority market. Make a good product. Conduct your business with integrity. Work your ass off to hustle and promote. People will buy your product if they like it and they like you.

 

I'd say there is plenty of room for new products. The issues: product quality and marketing.

Assuming you have a product that "everyone loves" -- you can still fail if you don't or can't market it. If you have the ability to market your product and the product is "just OK," you'll probably be able to sell a fair amount of it, maybe even get to cash-flow positive or perhaps even be profitable. But the beverage alcohol market is often said to be over-saturated.

What is needed is good to great marketing of a good to great product. There are probably a whole bunch of great beers out there (somewhere) that are going nowhere fast because they aren't being marketed (or can't be marketed due to financial constraints).

I know the above probably is a blinding glimpse of the obvious, but I really doubt if it is even possible anymore to "build it and [think] they will come." You'd almost be better off marketing a product (that you haven't made yet) and make it once the orders start coming in, rather than making a [very good to excellent] product and finding yourself unable to get the word out.

The reason I say this is a lot of folks only have the funds to make the product or market it, but not both. If you think your product is so good that it will "go viral," go for it. However, know that going viral is unlikely. If you can take the risk, for the potential of a great reward, do it.

It may be worth doing. It may not be.

I'll just close by saying your marketing skills are perhaps even more important than your brewing skills.

 

Possibly but would love to try it out if I had an extra mil sitting around I didnt need. I think it could work in market like Houston. We have three major breweries going for 4 mil people. That doesnt not include all the areas around houston. Its prime right now to start something. Just three years ago we only had one if you can believe that

 

There are alcoholic beer drinkers everywhere. If you make decent beer and sell your beer cheap enough, you could win over a whole area of local support. People always forget price point is king. In competitive situation, lowest bidder that provides the minimum requirements (adequate taste) wins.

 

Such a valid point that cannot be overstated. To the average beer geek, the shelves look overcrowded and saturated. To the novice person, endless possibilities. We're a small, but growing, community in a huge country and an even larger world, so as long as we don't reinstate prohibition (which some people are actually proposing in light of recent marijuana legalization) I think there is always room for new beer.

 

With all of the new capacity coming on line, I expect to see some breweries get squeezed. Happened in the late 90s. Quality issues or poor financials will sink a brewery if the beer is not moving to pay the bills. Many of the new ones do not make beer that will bring me back.

Little ones will be OK selling to the locals. Then again, a small town near me will soon get the second brewery, the first is 2 years old. How many can a town of less than 10,000 carry? Every other town in the area will soon have a brewery, or 2. The local market will be swimming in beer, while the big guys are expanding like gangbusters. Bells just put in 12 800 bbl fermenters to expand production (and did the concrete work for 12 more when needed), that will cover new markets like NY, and supply even more locally.

There is also a production brewery going into the Corktown neighborhood of Detroit. I have heard this is a $15 million facility to do contract brews, some will be for established breweries that are at capacity and need more volume. Big money is jumping in to make a profit. It looks like the 90s all over again, but the difference is that there is more awareness and market share. MI has 5% craft sales by volume, so under the national average with plenty of room for growth.

 

I think the real small and the real big will be fine. Like the top 200 and the bottom 2000. It's #201 thru 500 I think are in an awkward spot. Squeezed out of the shelves and the tap handles by the SKU explosion and too much overhead to survive on taproom sales.

(maybe the line is top 100 or top 150; maybe the jeopardy zone is 150--1000; I don't have the issue of Modern Brewer that has the lists. But you know what I mean, even if I have the cut offs wrong.)

 

This horse is so unbelievably dead.. and yet here are all these people with sticks. I guess I just keep underestimating the appeal of armchair economics.

 

don't rush into things whatever you do

 

Brewing enough on my 1 BBL system now to keep me in beer while I wait. Who knows...my brewing skills might even improve in the meantime. Lord knows the last thing U.S. "craft" needs is another hubristic homebrewer going "pro" before brewing the basics.