"The bubble is bursting!"

I like to see craft beer strive and all... But I don't own stock in it. I just like good beer!

 

I agree. Interest is at an all time high and continues to grow. People's tastes are becoming more discerning and breweries are continuing to push the envelope through innovation. From a consumer standpoint, competition is a good thing.

The only issues/concerns that I see is that with the glut of new breweries, will there be a shortage of quality ingredients available in the future?

 

I agree that the potential growth for craft is exciting. I'm sure there will be peaks and valleys along the way as the market weeds out the weak, but overall I'm optimistic about the future of this thing we all love so much.

 

The only real concern is the finite nature of shelf space, for those breweries that wish to grow into, or expand, their distribution. This will mean more competition, a little shake-out here and there, the consumption of scared chickens by hungry wolves, and hopefully, better beer at great prices for decades to come.

Cheers!

 

I have mixed feelings on the subject.

As more breweries open, there are also more consumers "seeing the light" and choosing to try new/different beers over BMC swill. I have witnessed many convert from die hard swill drinkers to craft beer.

On the flipside, there are more breweries opening that are destined for failure. Consumers might latch hold and patronize an establishment because its local but as options increase, the mediocre will fall to the wayside.

Instead of focusing so much on the number of establishments, it would be more interesting to see if the population of craft drinkers is growing at the same rate as I believe that would have a more profound impact on the bubble bursting.

 

There will be a market correction because finite shelf space demands it. A bubble though? The herd of cats are too far out the bag, and there have been way too many inroads made and ah-ha moments with them, and there also too many examples where breweries that become destinations have a positive impact and raised the rest of the boat where they decide to hang their shingle.

 

i dont see it as a bubble bursting so much as maybe saturation in some markets....
i mean if i drank every single day and did nothing but go to taprooms and brewpubs here in colorado all day every day(hmmmmm,,,,,that sounds like fun!) i dont think i could sample all the beers made in the state in my lifetime
the same goes for bottle shops.....i was at Liquor Mart in Boulder on Tuesday night and it was agonizing picking the bottles to take home.....so many great choices and too little refrigerator space...some breweries are going to have to fail at some point

 

I would like to know what happens when the bubble bursts? Is it a post apocalypse mad max type thing where water, ammo, and Budweiser is the hot commodities.

 

I don’t think we even close to the bubble bursting. Not sure if this is a fair comparison but I always compare beer to wine. The US has around 8K wineries and they are fine. I think beer can eventually get there. I imagine a future where beer bottle shops are just as common as wine stores. Craft beer is already starting to make its way into fine dining establishments. Our generation of craft beer drinkers will also pass down their love for beer and fewer people will go with the MBC of the world. I might be overly optimistic though.

 

Considering the amount of mediocre breweries jumping in with "ME TOO!"... you really don't think there's going to be a point where we start seeing a bunch of closures and mergers? When people say the bubble is going to pop, they aren't saying that there'll suddenly be no craft beer. Same as when the housing bubble popped, there were still houses. Consolidation and weeding in a sudden cascade of dominoes.

Not sure why this sounds like such a crazy out there idea when it happens in booming industries all the time.

 

When people talk about the bubble bursting they assume that the 4,000 craft breweries are like the small regional breweries in the 60s and 70s that got gobbled up by Heileman's and the like. They are not. They serve several different markets. Many are little mom and pop operations that sell growlers out of a warehouse or old machine shop to people in the neighborhood. Many others are bars that make beer and attract a small local crowd. Most that bottle or can beer don't distribute much farther than the city limits and again have their own local following. State, regional and national craft breweries each fill a different niche. As other people have noted the market has also shifted with more people buying artisan bread and cheese, coffee other than Folgers and Maxwell house, and craft beer. There is too much diversity and complexity in the industry for there to be a single bubble that bursts. There are also too many homebrewers with a dream to stop the creation of small mom and pop breweries, taprooms and brewpubs and too many people seeking them out.

 

The main difference being thst most of the beer people arent trying to trick single moms into repopulating in a strange apocolyptic orgy fueld by tostitos and rumchada.
On the real, I think as long as the "upper echelon" of breweries still exists, it wont really matter how many pop up. Its harder for a brewery to prove itself with quality, consistency, variety, etc. not worried.

 

The trend in craft will continue. As the market saturates, poor performing breweries, pubs, etc. will begin to fail. It's the normal business cycle in other words. Craft brewing isn't a fad, such as discos were.

 

I was all about the bubble, as I had seen the roof cave in a few other times, but I have allowed myself to imagine a paradigm change (sorry for the late '90's buzz word....) in the way craft breweries are viewed and sustained. A few very good points have been made by @MostlyNorwegian , @gmoneyproductions and @pat61 that recognize the focus on breweries maintaining a local feel, within or out of the "drink local" movements - these breweries are becoming organic color to the areas they serve. The overwhelming localization, through movement or not (I'd like to think through invisible hand, but I digress) have carved out a niche in their communities that a lot of breweries had not done nearly as effectively the first few burst periods. The consumer, communities and overall economic environments set up far better now for the community feel than they did even 15 years ago. Basically, it's the right time for the breweries that have taken up the community gathering place identity. This saving grace rescues these brewers from only being able to resort to the crowded shelves in order to sell their product - a fate which I have always pounded upon as being a precursor to a bubble. Can the bubble still happen? Of course. All we need is a meaningful recession and / or inflation (talks of QE4 have me VERY concerned about this) to create a headwind that won't suffer lower quality or inconsistent breweries.

Oh, and @brother_rebus , I'm not sure whether that first sentence in your post would make a better cheap SyFy Channel B-movie or **** flick, but either way, I'd watch it.

 

I agree with you. My area, the Triad flies way under the radar at around 1 million population, with colleges everywhere. Keeping these young folks around is critical; to start families, businesses, community, and a vibrant future. Lots of good local beer is being brewed and locals do love it. Something like local guilds set up to support all kinds of local-oriented operations seems like a wise option. I'm on it!

 

Gopens44 summarizes things up pretty well. What the bubble bursters don't get is that there are people like us who go to these places once or twice a week because there are usually people we know there. They happen to sell beer. We also troll through the beer isles looking for things we have not seen before and/or the latest cult beer and fill up our shopping carts with great regularity. There are other people who follow certain brands with a fervor and schlep up anything the brewer produces and around here there are people who spend the weekend going from one tap room to the next. There are restaurants and bistros who cater to this crown and sell people the beer they like.

 

I think this is where it's going. The good news is that I feel like it's easier for a mediocre brewery to make drinkable beer than it is for a mediocre winery to make drinkable wine. But where wine saw its explosion in the aughts, we're seeing craft beer explode this decade. Maybe the 20's will bring the same type of explosion of legal marijuana dispensaries. One can dream right?

 

Can the bubble still happen? Of course. All we need is a meaningful recession and / or inflation (talks of QE4 have me VERY concerned about this) to create a headwind that won't suffer lower quality or inconsistent breweries.
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Vices are recession proof. You get sad. You reach for your vice. You get happy. You reach for your vice. The only hissing sound I can hear now is the one of market correction for having too much product where it cannot be supported, and a thinning of the herd because their growth projections in relation to their actual sales is unsustainable and they take too much on and their product doesn't speak, or if it does its voice rings hollow.

 

I think growth is good, but IMO, I believe the number of breweries will start to slightly slow down, as we are seeing more and more mergers and buyouts...