More Craft Brewers = More Mediocrity?

If you're opening a brewery, then you should be addressing a market that either you can grow or you can provide better products than are already in it. If all you are doing is "more of the same" then I don't see what value you add to the world of beer. If you're going to just brew an APA to round out your taproom offerings, like I said, go for it and brew away. But, in my opinion, don't take your mediocre APA and put it into distribution when there is already better ones out there just to fill shelf placements or pocket more cash. If you're a brewer who makes an awesome hefeweizen (or whatever) use your talent to create another beer which is excellent and does blow away the "average hefeweizen".

I understand the first paragraph is tongue in cheek hyperbole, but the second paragraph is...concerning. Either you're stupid, myopic or willing to believe that your taste is a better reflection of quality than that of well established style guidelines (I'm specifically talking about BJCP guidelines, there's a few others that could apply).

Let me use brown ales for example, I don't really enjoy brown ales, there isn't a single one in my fridge, I don't really drink them. That being said, using BJCP style guidelines, I can understand a good one versus a bad one because it provides a metric for that style. "Quality" in beer isn't just subjective belief based on your own tastes.

 

I do not see how the numbers you posted prove there is more supply than demand. You compared placements to dollars spent. Those two things are not comparable without data to show that a certain increase of placements directly correlates to an increase in total sales.

 

Perhaps the growing number of craft breweries does increase the number of mediocre beers overall, but what I really like about it is you can find so many more variations on styles around the US now. Not only this, but some small breweries may do one particular type extremely well. One of the better coffee stouts I've ever had was a small, micro brewery in Colorado. On the flip side, all of their other brews were mediocre. I'll take the trade off.

When I'm making an in-store beer purchase, I know I have checked BA on numerous occasions just to make sure I'm spending my money wisely.

 

Without new breweries starting up you'd have Bud, Miller and Coors, that's it. I don't mind picking thru the chaff to find a nugget. Toppling Goliath and Trillium jump right out, both are smaller breweries both make outstanding beers, two years ago you'd say huh? Not today.

 

I'll have to go back and re-read, but I don't think I ever said that there is more supply then demand (I happen to believe it, but can't prove it without a crystal ball). What I keep saying (or...I think I keep saying) is that the supply is increasing faster than the demand. Here's the simple measurement:

(Placements Today/Placements last year)/($ Spent Today/$ spent last year) The number in the numerator (in my sample) is 5% higher than the number in the denominator. How would you measure it?

Also, if I'm reading it right, your second point is incorrect, if there are fewer placements and continued growth, it would suggest that customer demand is still strong despite a lower supply (less product on shelf). Overall, in a growing market, more supply should be near/around the increase in demand. In this case, the growth of supply (which is what an increase in placements is, more product available to the consumer) is growing faster than the dollars customers are putting into it. You could look at something like unit sales or volume sales, but I think that the beer market is best measured in dollars. You could make a compelling argument that volume is the key, but I didn't bring my work laptop home just to check math.

 

Yes a 1 out of 12 average is probably about right. I will visit new local breweries, but if I'm traveling, I'm doing my research and only visiting a place that is worthwhile. 10 years ago a town might only have 1-2 breweries if you were lucky so visiting them was special. Not anymore. Just too much to visit them all. Got to be more selective.

 

I did not explain it right. You are right you are not saying that total demand is outstripping total supply. You are saying the increase in supply is outstripping the increase in demand.

I can put numbers in numerators and denominators too. It still doesn't mean the two correlate. Unless you are saying that each placement brings in the exact number of dollars to total sales as every other existing placement. I have seen retail store numbers and this is not true at all. I believe your data is real. I also believe there are more placements, sku's or whatever. What I do not believe without more data is that 5% higher placement is actually taking up more demand than the dollar growth in total sales even though it is lower in percentage terms. I do believe that the new placements will be from small breweries that will not or need not sell the same amount of beer out of that slot than the big boys. My mind can be changed if I see data that contradicts my opinion. The exact data I would need is that each new placement increases sales by exactly the average of all the other placements.

 

While there's no factual way to determine whether this statement is true or not, 10 years ago I bet the "average" craft beer was better than today. You were likely purchasing something from a well established brewery such as Brooklyn, Anchor, Sierra Nevada, Sam Adams...etc. which already had years of experience under their belt. Or, you were purchasing a good import like Fuller's, Weihenstephan...etc. which probably were fresher because they moved quicker than they do in today's saturated market.

That being said, I'm not complaining lately, I feel breweries are beginning to branch out with different styles, and many are becoming better as their experience grows. I always leave the liquor store with something, I'm never empty handed.

But, I know to check dates, and I am an active member of this website which helps me sift through anything that's mediocre. I would say the larger issue isn't more mediocre breweries, but more expired/old beer on the shelves. I can't imagine how your average beer drinker picks beer with so many options on the shelves today, and I bet there's a decent chance they randomly grab something past its prime.

 

Well, if I understand your point, and if your interpretation of the secret numbers you're using is correct, then we should see a significant number of new breweries crashing, or, in other words, the craft beer bubble will burst.

 

You have to start from somewhere...

 

First let me congratulate you on you epic ability to rate beer, I'm very impressed. Second, my wife would probably cast her vote for "stupid" because of my bothering to reply to you here.

And last but not least, the OP wasn't asking about good vs bad, it was about "mediocre" beer and that my "friend" can be very subjective. Individual "taste" and tasting ability CLEARLY varies and one persons good will be another's mediocre regardless of your precious BJCP guidelines.

Thanks for playing.

 

Craft beer appears to be the only industry in the history of economics in which, according to some posters on here, more competition leads to an inferior product/marketplace for craft beer consumers.

 

I think you're right about this and I was reluctant to bring it up. For me at least, that was the peak and it's gone downhill since. Now it may improve again, but I've come to realize that if those are your style preferences, then there's a good case to be made for saying things were better back then on average. I also think the freshness was much less of a problem then, including imports, and prices were more modest for imports too.

 

Hey, I'm willing to try all these new brew's. The odds are against them, most will not be that good, but many, many will be. I've heard, the North East, New England areas are making some pretty tasty brew's, right now. Just about when I stopped trading I was getting some brew's from that area, and yeah, they were very tasty. Now, I hear there are even more brewery's from that area, and are also very tasty. People that trade have a very very good idea of what brew's from what areas are great, and upcoming, whatever you what to call it. I'm also up for a new brew.

Cheers!

 

I would add that many more people are jumping into the market with little brewing experience, especially on a commercial system. I realize many of the pioneers started as homebrewers, but they were also entering a hostile market and had to create a high quality product to create a demand for the product. People with limited brewing experience opening breweries is a large contributor to these beers with noticeable flaws hitting the market. In the last 18 months, I have had seven new breweries open in my immediate area (prior to this time there were two which had been open for a number of years). Six of the seven new locations were opened by homebrewers. Of those six, only one hired someone with commercial brewing experience. Five have produced such quality offerings as Band-Aid IPA, Ashtray Hefeweizen, Buttered Popcorn Pale, Exploding Gose brewed with Morton's table salt, Creamed Corn Brown, Safeguard Blonde, and Watered Down Nail Polish Remover Lambic. Guess which five produced those beers? They still have a sizable presence in the area, primarily due to the drink local crowd which is also new to craft beer. Every tap handle these beers take is tap handle that used to belong to a Sierra Nevada Pale, Sweetwater IPA, Franziskaner, or other similar beers. The two older breweries were also started by homebrewers, but they had minimal presence until the recipes were refined and any QC issues were resolved. One of the two hired a professional brewer before gaining any traction. Now people drink anything which is local. Not an improvement in my area.

 

Some on this thread do not like the OP's attitude but I think he is dead on correct.

I understand the elation at the steady increase in the number of craft brewers because it points to a general increase in the demand for quality made beer.

However, most of the craft breweries (new or not) out there are churning out mediocre offerings. I don't see the need in extolling the virtues of breweries that churn out mediocre beers just because they are not InBev or Miller Coors.

 

I think the root cause of perceived mediocrity is the fact that we have more options than ever before and it takes more to wow us than in years past. There are a lot of brews that have set a very high benchmark for their styles and as consumers we are often comparing the new things they try to these previous experiences, falsely or not. In this current state of adjunct laden stouts, over the top DIPAs, etc its become harder to appreciate something more simple. Not pointing fingers, I've been there myself

*I will say though that there is some bad beer out there that needs to be called out for what it is, even if it is "local." Though that's a whole different debate

 

I think we're getting close to an "agree to disagree" point here. Each placement obviously does not bring an exact number of dollars as any others. You will always have your winner packages and your loser packages, we can all think of examples. That being said, shelf space is a finite resource and the beer dollar is a finite resource. The data you're asking for is...a bit too small of a sample size to be useful. I can pull the dollar sales from every planogram for every store of several major retailers nationwide and combine them with dollar sales and spit them all out to tell you the exact dollar figure...but until you break them down significantly, they it's data without knowledge (I know, I have the coolest toys in my office)

So, that's why I am choosing to look at things in aggregate. It's completely reasonable to assume that some growth in craft may or may not be actually growing dollar sales. The problem is that this is a sign of market saturation, that there is no consumer demand for that additional product on the shelf. Now, were I to break down all this data to specific retailers, it is absolutely also possible that their is saturation in retailer A while retailer B is doing a better job of attracting the craft customer. This is a possibility (along with thousands of other scenarios). But, I'm sticking with the incredibly high level calculation I've already done, I'm off the clock...though who knows, maybe I'll be bored later and log into my work computer...I might have done it before.

You too can see my secret numbers, pull out your checkbook and log in here, they'll be happy to show you the numbers. If you actually get an account I'll even walk you through pulling my "secret numbers": http://www.nielsen.com/us/en/client-login.html

I've said many times that I think we will see a significant number of breweries failing, though it really does depend on where the saturation point of craft beer is and the markets it serves. Also, in such a highly regulated industry, I think a lot depends on the legalities that are put into place or repealed.

I think we could see another 5,000 brewpubs successfully if the brewpub simply is another restaurant which happen to sell beer made in house. I also doubt there will be an immediate Black Tuesday (pun intended) type of crash where thousands of brewers will be closing up shop overnight. Instead, it'll be brewers who either opened before the current boom and are being crowded out or smaller brewers who never really got traction in the market. I suspect that breweries which will go out of business will go out with more of a whimper than a bang.