When is the bubble gonna burst?

I don't doubt that some of the small breweries will struggle to stay alive, nor would I be totally surprised if, as you predict, half of the breweries that have recently opened don't celebrate a 15 year anniversary. I was just speaking (or writing, as it were) to your earlier comment that craft, as a whole, is a trend that many current craft drinkers will abandon simply because it becomes less appealing or something else becomes more appealing.

 

That's a good point that I hadn't considered when I responded to @Catchy_Name. I guess I'm just so biased in my love for craft beer that I can't see people giving it up for something inferior tasting like mead or cider, ha ha. Ultimately, I believe you are correct, some, let's call them "scenesters" instead of hipsters, are in the craft community because it is indeed a scene. Nevertheless, if I've learned nothing else, it's that Americans like to drink a lot, as in quantity. We're not fond of keeping track of how many glasses of this or that we've had, we like to just crush em back with reckless abandon. Craft realized that and session IPAs went ballistic in the market. Wine, spirits and mead don't offer that (cider does), so craft has a little more staying power as a result. But again, I think you make a solid point.

 

Craft beer is not a uniform market segment or entity like, for example, the Dutch tulip craze. There are national, regional, and local markets. There are a variety of demographics that respond differently. The folks at the country club, the patrons of the latest bistro craze, the kids at the kegger, the people parked in a lot celebrating before the game, the people who eat artisanal cheese, the motorcycle club, the people at the sail boat race, the people in the beer hall singing La Paloma, the people at the wet T-shirt contest and the people seaking out the obscure brewery all have different needs. There are a variety of different economic segments. Some people focus on whales while others pursue the comaraderie found in the local taproom down the street. Each style has its own market segment aspects. To have a bubble, the market would need more uniformity and to burst all of these different segments would need to somehow converge.

The only beer bubbles are the ones in the glass I hold in my hand.

 

The key issue is this: shelf space is finite. Craft brewers used to be friendly with each other for the most part, and they always viewed BMC as the common enemy. Things ARE changing. They are now competing against each other for shelf space. There can only be so much.

 

There may be a bubble inflating in the Boston area, but I see no signs that it is close to bursting.

I was in the neighborhood of Trillium on Monday during the release of Green Street and thought I might try a bottle. A co-worker was driving us back from lunch and it was 1:20 or so, figured the initial line would have calmed by then. Nope, out the door and down the block. I didn't really want it that badly anyway, so I just told him to keep driving. The whole release sold out in like four or five hours. $12 per bomber.

With all the major breweries in MA expanding and new ones coming online, it would seem logical that eventually there will be some sort of critical mass, but it doesn't appear to be anywhere in sight.

 

When will the hand wringing end?

 

From the late 1990's to early 2000's there was, by appearances, over-saturation in the market. The number of breweries did actually decrease.

That said, the number of craft beer drinkers today probably correlates pretty closely to the exponential increase in brewery count. Although exponential growth curves *usually* don't end well.

 

Here are two articles which I think consumers over look when it come to the discussion of price.

https://www.google.com/url?q=http:/...XyHDUM&usg=AFQjCNEsusSW7RcfAex167fTRjao0SxhIQ

http://www.nationaljournal.com/cong...es-that-s-not-changing-any-time-soon-20140228

 

Bubble? There is no such thing. Oversaturation? Yes, definitely. It's already happening. I see many of the same beers on the shelf that rarely/never sell. I know three different beer managers/owners of good stores in the area. They all tell me the same thing. There are too many marginal/mediocre beers around, and only so much shelf space.

We'll see a contraction as the mediocre breweries go out of business. That will happen. Some of it will be a natural result of bad business decisions, but I feel that it will mostly be due to oversaturation and a shift in the market. There will also be some consolidation within the segment through BMC buyouts and, possibly, mergers.

The main erroneous assumption that I read in this thread is assuming that craft beer consumers will move back to BMC. That won't happen. They'll move on to the next hot trend, and, in my opinion, that will be "craft" spirits (Small batch, limited, etc., etc.). That's how most of them got to 'craft' beer. It was the emerging, hot trend. Many of those folks will leave. We'll still be here, of course.

 

The craft beer world is paradoxical. Never have so many innovative and high quality beers been pretty easily available to the average consumer, yet it seems almost every new brewery that comes down the pike trots out a predictable lineup along the lines of an IPA, a red, a stout, maybe a wheat, and maybe some slight tweak on one of those styles. Meh. Your implication that craft beer on the whole is disproportionately focused on a few styles certainly won't elicit an argument from me.

I'm certainly not bored with craft beer, but I've become much more discriminating about where and on what my money is spent. I don't have time or a burning desire to hunt the whitest of whales, nor am I really interested in yet another hop bomb IPA, but I do seek out examples of styles that tend to get less play in a craft beer scene so seemingly focused on just a handful of styles. Dunkelweizen, Mild, Bitter and its variants, English IPAs, Roggenbier, Altbier, and Zwickel are styles I love that I struggle to find around here. I also try my hand at brewing some of these styles on my own and learning a little more about beer in the process. Creative and experimental beers that don't fit neatly into any BJCP category are another area of focus when I can find them among the fairly limited and predictable selection my local bottle shops offer.

 

I think this is where there will be some rebound effect, though. It isn't that people decide these beers suck (even though there are some that do). The herd of consumers will just change direction, but those who really do enjoy better beer will stay where we are. So that growth curve will flatten out at some point. Not that they are going to go back to other beers, but I would guess a significant proportion will just drink "something else". We've been seeing that in my industry for years, and we still don't have a good handle on what that "something else" is, just that our volume numbers are lower. So it isn't like Beanie Babies or other fad type stuff - but the herd does migrate. Where it goes and whether businesses (pizza joints, beverage companies, breweries, whatever) can adapt fast enough is the question.

 

Exactly! Every day someone is turning 21, and they will more than likely at one point or another walk down the beer aisle and buy something new. Probably the beer with the coolest label, but still.

 

Surely the hand wringing bubble is about to burst...

 

I think there are still many underserved markets and thus, opportunity for continued growth. Many breweries are content not bottling and remaining small, local establishments. The buy local movement is very strong and there are people who will overlook mediocrity for the sake of locality. This really isn't sustainable in the long run but could be propping up quite a few small breweries.

 

Matt Cohen at Fiddlehead has been very vocal about the looming bubble in craft beer and that brewers need to position themselves appropriately. The problem is that so many new breweries are opening. Like 1.5 per day nationwide and a lot of these new breweries are going to be in a tough spot as the clientele out there demands quality from day one, they wont have much time to hit their stride. So as consumers become more discerning, the brewers that are below par or just middle of the road are going to struggle. That's what the bubble is about IMO. It's not about price or styles, but middle of the road breweries not impressing consumers.

 

*Yawn*...

 

Unlikely.

 

Problem is that's not a bubble. That's oversaturation of the market which is a very different thing. However the ways to deal with it are spot on. Brew good beer or leave the playing field.

 

I don't think it's a bubble to burst, but everything will level out.

In Iowa, we've seen a lot of breweries come in the last 5 years. Heck, 10 years ago, there were 3 in Des Moines. And 1 of those is now gone and they didn't make that great of beer.

Hopefully we'll see the cream rise to the top, and the junk breweries will get better or leave.