Is the craft beer craze going flat?

Discussion in 'Beer News' started by Todd, Jun 28, 2016.

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  1. dennis3951

    dennis3951 Initiate (0) Mar 6, 2008 New Jersey

    The Cartons and the Kanes might be in line to make some big $$$$$$$$.
     
    LuskusDelph likes this.
  2. SCW

    SCW Initiate (0) Jul 25, 2004 New York

    yes, because that is where all of the growth is right now - and big $ will always chase the growth

    5-10 years ago, most of the growth was coming from the big national and regional brewers - that's why the majority of them got bought out over the past couple of years (if you look now, the majority of the top 30 American brewers have now been bought by other brewers or PE firms, or have deals pending)

    HOWEVER, nowadays all of the big growth is coming from those hyper-local, hyper-relevant brewers like Trillium, Kane, etc. as you mentioned - because they are posting the strongest growth, they will be the biggest acquisition targets

    Big brewers (even big "craft" brewers) are starting to look less like brewers, and more like holding companies/brewing groups seeking to purchase/control growth..... how quickly times have changed!

    the question is - will these hyper-local, hyper-relevant brewers continue to grow if they are no longer independent, and instead part of a larger global brewing group? Only time will tell!

    cheers
     
    JackHorzempa likes this.
  3. JackHorzempa

    JackHorzempa Grand Pooh-Bah (3,181) Dec 15, 2005 Pennsylvania
    Pooh-Bah Society

    And that is indeed a BIG question. The 'allure' of the drink local movement is that the customer base is passionate about supporting businesses that are viewed as being integral to the community. How does a small brewery continue to be viewed that way if they sell out to a large(r) corporation? Any Marketing & Sales person(s) who can make this acquisition sell is worth their weight in gold. Is there a 'new' P.T. Barnum out there!?!:astonished:

    Cheers!
     
  4. SCW

    SCW Initiate (0) Jul 25, 2004 New York

    well if you read that extensive Nielsen study, it did say that independence was one of the most important factors for the consumer...but at what price? :-)
     
  5. JackHorzempa

    JackHorzempa Grand Pooh-Bah (3,181) Dec 15, 2005 Pennsylvania
    Pooh-Bah Society

    I suppose the market will decide.

    Cheers!
     
  6. lester619

    lester619 Initiate (0) Apr 17, 2009 Wisconsin

    Growth measured by percentage is always misleading. If a football team goes 3-13 one season and 5-11 the next, they have improved by a significant percentage but they are still bad. If they go from 11-5 to 12-4 the percent increase is less, but are still very successful. This is a very simplistic way to put it, but I think this is basically what is happening here. Nothing can be expected to keep growing by 19% forever.
     
  7. beertoro

    beertoro Initiate (0) Nov 16, 2015 New Jersey

    So it's trending upwards, but it's flat?

    That's not an accurate depiction of a plateau.
     
    lester619 likes this.
  8. maltmaster420

    maltmaster420 Initiate (0) Aug 17, 2005 Oregon

    One factor that is probably contributing to the drop (but certainly not the sole cause) of the drop is the increase in independent off-premise (retailers) and on-premise (bars/restaurants) in the last year or two, and consumers seeking out these independents rather than shopping/drinking at chain establishments. IRI data is gleaned almost entirely from large companies and chains, so as people move from buying beer at Meier/Kroger/Safeway/whatever to shopping at their local indy store it will cause a drop.

    I think the we'll get a better picture at some point in early 2017 when the final 2016 reports come out and can be compare to 2015.
     
  9. SCW

    SCW Initiate (0) Jul 25, 2004 New York

    The bigger issue is that it is slower growth, and almost all of the growth is coming from the "tail" of the industry. Furthermore, the growth of the tail is coming from the expense of the industry leaders. This represents the end of a growth cycle (which is the beginning of the end) and is the definite confirmation of a big wave of consolidation (which observant people have already pointed out).
     
  10. Norica

    Norica Zealot (636) Feb 2, 2006 Massachusetts
    Trader

    The exact opposite is happening in MA. Only a few years ago there was a limit on licenses, no one person could own more than 3 licenses and the vast majority of retailers were independent package stores (or "packies"). Now they have have increased the number of licenses and the big players like Total Wine, Wegmans, etc have moved into the state or began selling alcohol.
     
  11. JackHorzempa

    JackHorzempa Grand Pooh-Bah (3,181) Dec 15, 2005 Pennsylvania
    Pooh-Bah Society

    And yes you have.

    Cheers to you sir!!
     
    sjverla likes this.
  12. Oktoberfiesta

    Oktoberfiesta Initiate (0) Nov 16, 2013 New Mexico

    It's definitely interesting in NM. A year or two back, NM law changed to allow a total of 3 locations for each brewery. Many have gone away from distribution in package form, and now have satellite pubs to sell their product to. Even the lesser quality breweries seem to be grasping at straws as they open more and more locations. I feel for them.

    Competition is stiff but overall, I'd rather drink at home than drop $5 on some of these mediocre pints. I hope they have a solid game plan for the future. Right now so many cities have residents who are in that experimental mode. I've caught my own groove and when other newcomers taste a superior product or find some that suck, it may be game over for some places. For many newcomers, anything is better than macro crap. So as they expand their palates, that local average pint may be average to them too, and not just me.

    I've become a budget drinker as quite a few package options are brand new to me, or have gotten cheaper.

    I want good beer everywhere. But so much is just sorta average and not worth the cost. So I am quite ready for that fall off I'm go. I think it's just a matter of time
     
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  13. LuskusDelph

    LuskusDelph Initiate (0) May 1, 2008 New Jersey

    It's good that you have great local breweries popping up near you. Most of the new local breweries I've visited in the last five years have been pretty disappointing, selling disappointingly amateur tasting products.
    I totally agree and will go even further: "local" and "craft" frequently don't even seem to reflect "quality" in my recent experience.
    Some of the strong will surely survive (and probably grow to the point where they lose their snob appeal), but I have no doubt at all that most of the new "local" breweries that have opened in the last few years will be history in as little as five years from now.
    It actually makes me sad sometimes to think about some of the truly great small breweries of the '80s and '90s that didn't survive the first shakeout...despite the fact that they were making really great beer, far better than a lot of what calls itself 'craft' these days.
     
  14. ArsMoriendiOU818

    ArsMoriendiOU818 Pooh-Bah (1,620) Nov 5, 2013 Virginia
    Pooh-Bah Society

    My question is, do these breweries have to make an announcement that they were bought out? Perhaps in the not-to-distant future, purchasers will realize there's a benefit in keeping ownership secret and we may never know about certain deals. I mean as it is, brands like Blue Moon and Shock Top make absolutely no mention of Coors or AB, respectively, on their packaging.
     
  15. jesskidden

    jesskidden Grand Pooh-Bah (3,071) Aug 10, 2005 New Jersey
    Pooh-Bah Society Trader

    Two different situations.

    Lagunitas, CBA brands, NAB's brands, Founders and all of the other "former craft" breweries also do not note their macro-ownership (partial, in some cases) on their labels, and Blue Moon and Shock Top and many of the other macro-owned brands/breweries - like Leinenkugel, Rolling Rock, etc., are openly stated to be owned by their corporate parent on their websites, in press releases, etc.
     
  16. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania
    In Memoriam

    My understanding is that it is usually interpreted as a slowing of growth which may be, but is not necessarily, a possible indicator of downturn.
     
  17. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania
    In Memoriam

    Just occured to me. If a large percentage of the surge in new brewery startups involves homebrewers turning pro there would be an effect on those reports. It would be interesting to know if the ABA separates out renewals and new memberships. If not their growth could be slowed in part by prior members leaving the fold. Similarly for the Homebrew Shops and suppliers. If several of their best regular customers have moved on....
     
    SCW likes this.
  18. rgordon

    rgordon Pooh-Bah (2,677) Apr 26, 2012 North Carolina
    Pooh-Bah Society

    So, the "Big" brewers scoffed and made fun of the fledgling craft brewers not so long ago, then began to lose "market share". Now, the "Big" brewers buy up pieces of the "tail" and act as if they knew what was happening all along. Now the "tail" becomes part of the "head". The "Big" brewers were blindsided then, are spending big pieces of their wealth for other folk's ideas now, as their core brands continue to decline. This is all normal business practice I would assume, and for small brewers to turn down huge money for their good efforts is going to continue to be not likely. Turning the aircraft carrier around and going the other way will continue to be difficult.
     
  19. kdb150

    kdb150 Initiate (0) Mar 8, 2012 Pennsylvania

    This seems to be the "bubble" that is eventually going to burst. So many regional craft breweries have expanded at ridiculous speeds, to brew beer that to my eye, nobody is buying. I'd be very interested in knowing if there is any way to track buybacks or returns, to figure out how much of a given brewery's sales to distributors end up unsold. Is this data available, or is beer considered "sold" once it leaves a brewery, with no way of finding out its ultimate fate?
     
  20. SCW

    SCW Initiate (0) Jul 25, 2004 New York

    @hopfenunmaltz

    another interpretation is that people used to homebrew a lot more because they had no consistent access to good beer - but nowadays there is good, affordably-priced beer just about everywhere, so there's no longer the necessity to homebrew your own to generate quality :-)
     
    rgordon, TongoRad, dennis3951 and 2 others like this.
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