Craft's Proliferation Problem

Oh Noooo! The craft beer bubble is going to burst!!

"...might be..GuestMetrics believes...might be...could serve...could explain...very probable...might not...probably very unlikely..." Sounds to me like the company should call itself Guessmetrics.

So the genius who wrote this figured out that as a segment of a consumer product increases in popularity, the increase tends to slow down? Gosh, ain't math puzzling?

BTW, when the last iteration of this thread topic popped up, someone pointed out that there are more small wineries than craft beer breweries and it hasn't seemed to hurt the wine industry.

 

This is an easy one to answer. There are craft beer bars, and there are non-craft beer bars. In a non-craft bar (the vast majority of all bars in existence), I'd expect maybe one or two handles to be given to Blue Moon and Sam Adams. Whereas in most craft bars there is not a single BMC handle.

 

To be fair, people who deal with statistics and statistical anlysis almost always use such language becuase they are dealing with fuzzy things and if they state a strong generic claim someone will pop up and insist that the exception they know of makes it all invalid (which is an even worse thing to do). Furthermore most people neither understand nor want to know about things such as "margin of error" or "deviation from the norm."

We all want to keep in mind that statistics, despite any bad reputation they may have, were developed to aid us in knowing how to bet our money (or our lives) when there is the picture is fuzzy. (As is most of the world most of the time. Either/or, black or white situations are much less common that most of us would like to believe.)

 

It's a great time to love great beer! So much variety. lots of great brews out there at reasonable prices. However...

I don't like seeing the glut of old IPAs at local stores. How in the world would they all be consumed within optimal drinking conditions? (Obviously, they aren't.) I don't know what this will result in, but probably something not good.

 

Even though I can't seem to stop ticking myself, my thought is to stop ticking since the odds are high that most everything out there is either underwhelming or at the very least, not as good as a product that you dearly love and should be spending money on to make sure it doesn't go away. Perhaps this will be my new month resolution.....stick to IPAs that I already know I love.

 

More craft brewers in 2015 vs. 2013 and more changeover of brewing lineup and more special release/seasonal options = less volume sold per beer. 5% growth in craft beer volume overall in 2 years is good. Brewers know that the current state of the union in craft, is the culture of drinkers are into constanly trying new brews and not as into the repeat sales of the same exact beer quite so much. That is why Stone went to 2.0 version and others are dropping brown ales and ambers from their lineup for other IPA variants, session ales Gose etc.

 

It appears that this article concentrates solely on on-premise sales (sales at bars). Beer is also sold at retailers like liquor stores, supermarkets, etc. Another point of sale is the brewery itself (e.g., tasting room, brewpub setting). A rather incomplete assessment of the overall retail market IMO.

Cheers!

 

The first bullet shows that craft beer drinkers are more into variety than loyalty. This should not be a problem for brewers that understand this and can make a couple core beers that do well then experiment with a lot of styles.

Number 2 points to the fact that a lot of small brewers are entering the market. I do not know that I see this as a bad thing.

number 3. IPA's are hot duhhhh.

number 4. You can cover 90% of the other 70% of sales with 2 tap handles. 2 of either coors light, bud light, or miller light depending on geography. Why would you have multiple tap handles for the bmc. Maybe your biggest seller you do 2 for efficiency. This still leaves 7 handles to cover the other 30% without losing 1 sale.

 

Since I am principally a craft beer consumer I agree with what you are stating here.

It is my understanding that among BMC (AAL) beer drinkers there is a strong preference for a particular brewery. In other words Bud Light drinkers solely enjoy drinking Bud Light; they will tell you that Miller Lite/Coors Light is awful and not worth drinking. Now the bar could make the beers that are not on tap available as bottle products; serve Bud Light on draft and serve Miller Lite/Coors Light in bottles. Whether this 'compromise' is good business I am not sure; it seems like folks prefer to drink beer on draft. That example bar may lose Miller Lite/Coors Light customers?

Cheers!

 

I will elaborate a bit on what I was trying to say. I think bud light is a big seller everywhere. I think the miller light and coors light fanatics are a bit more geographic. Most bars could have bud light and coors or miller on 1 tap each for a total of 2. If you want to add them all then you only need 3. Most bars would probably rather have 2 of their best seller to keep the line down for that tap. Your idea of bottles of their worst selling bmc is probably good. Have a special on those to make them feel special. It would all depend on how uniform the craft sales are at the low end of sales. Any decent point of sale system would give this information in seconds. The original question of why have so many craft handles would give 100 different answers in 100 different bars.

 

I think it's even easier than this. If so-called craft has a 30 share, Bud has a 40 share, and Miller has a 30 share, but so-called craft drinkers prefer variety, you can easily serve all your customers on one handle of Bud and one handle of Miller, and save the other 8 for so-called craft to provide variety for the consumers who care about such things (usually those drinking the so-called craft beer). It's not as though having one less Bud handle means you can't serve as many people their Bud...

 

Are there too many breweries, or do craft breweries brew too many different beers? From the little I know, I lean toward the latter. It might be better if breweries focused on what they do best, and if craft drinkers focused on drinking the beers that a given brewery is best at. Of course for breweries focusing on sales at their taproom they will want a wide range of beers, but for sales to restaurants and retail would that be so strong a consideration?

 

The craft beer market is completely saturated, anybody shocked?

 

Perhaps the ‘answer’ will vary based upon the given craft brewery and its distribution area?

It seems to me that a small (in terms of beer volume) craft brewery that is located in Roanoke, VA (and services Western Virginia) might have a different lineup of beers (type and number of varieties) then a lager craft brewery like Sam Adams.

Cheers!

 

I would be willing to bet that there are large areas of the US where the craft beer market is not even close to being saturated.

Maybe Oregon is approaching saturation but since there seems to be a great love of craft beer there I doubt if even that is the case.

Cheers!

 

I guess my question would be "detrimental to whom"? To the consumer? How would the consumer be harmed in the long term? The only things I can come up with that may "harm" the consumer is a) seeing a favored brewery go out of business or b) not being able to find your favored breweries' stuff on tap, because it's been displaced by other stuff. To the former, though I concede there may be some good stuff lost as collateral damage, my guess is that most of the underperforming brands are underperforming for a reason. To the latter, if I really want something from my favored brewery, I'll buy it off-premise. So, in short, I really don't see much threat to the consumer. To the breweries out there? Sure, maybe, inasmuch as any highly competitive climate poses threats.

 

My takeaway: apparently I need to be drinking even more beer.