Went to Woodman's here on the east side of Madison, WI...the consistently have 300+ varieties of beers. Went looking for the new A-B sampler pack of their pseudo-craft Budweiser Project 12 ZIP Code beers...and it was not there. But they have recently added Leinenkugel's new Vanilla Porter...but only in cans (and not chilled). Seems like shelf space is getting very tight...in other words, retailers no longer automatically add the newest beers to come around. Woodman's is easily the largest liquor store in the city and, with three locations in the county, probably the only one with leverage over distributors. Anyway, back to my point. Has the market reached capacity? In other words, if a liquor store needs to bump one brand to add another, shouldn't that brand be substantially different (and desired) than other offerings? Two more breweries are slated to start up in the area within the next 9 months...frankly, I don't think we need MORE breweries...we need the ones we have to develop better beers.
No matter the size of the shelves, they'll always be filled. Yes, the market all over the country (in some places more than others) is becoming increasingly saturated, but if you're unhappy with which beers a store chooses to sell, that seems like something you should bring up with the store's management. Personally, I don't see a problem with pseudo-craft vanishing from shelves...
In this case, I think it's probably a case of the Project 12 beers aren't in from the distributor yet. That being said, stores will always fill shelves to the max. Get more product in front of the consumer = make more money. The store will stock what gets them most profit, whether it be low volume high margin craft or high volume low margin BMC. It's economics.
I'm not sure there's a simple answer to this question. Many of the existing breweries are expanding to keep up with demand, some are pulling out of markets because that can't make enough to keep up with their main distribution area, and a few western breweries are building completely new facilities to supply the east coast markets. Still, you can't keep adding new brewers if you aren't adding new customers to the mix. Where are these new drinkers going to come from? As is the craft beer market is roughly 5% of beer sales, can it get to 10, 15, 20, or higher? You'd need a crystal ball to tell where this is going, and I don't have one.
I don't have a crystal ball (but maybe I have a foggy one) and I think the number of craft drinkers is getting ready to explode. I have had BMC-drinking co-workers engage me in conversation to learn more about craft beer, and they want to get started to see what this is all about. I think the BMCs know this, and that's why the quasi-crafts are showing up more.
I don't see any evidence that the craft beer market is becoming saturated. As frazbri points out, many craft brewers are unable to keep up with demand. There are currently more successful small wineries around the country than breweries, despite the fact that more people drink beer than wine. I would suggest that your favorite bottle shop running out of shelf space is not a problem of too many beers available, but the retailer not having capacity to display new beers. We'll know when the market is saturated. Startup breweries will stop opening and newly opened ones will close.
Different is all well and good, and ideally found on store shelves, but the only factor that ought to decide what sticks around on shelves from a business perspective is what sells. If a beer doesn't move then don't re-up on the next batch. If a brewery consistently never sells product at your location then they're the ones likely to get pushed out to make way for the next new thing. The main caveat here though is that distributors have significant pull in many of these situations. It's tough to say no when the guys supplying 40% of your product start making demands. Many locations can and will find more space for the growing craft segment, but you're right, there is a limited amount of beer that can be sold at any given location. Competition is already fierce and it's only going to get worse in the next few years when the nation doubles the number of operating breweries. Likely the tipping point before the numbers start to fall back into equilibrium again...
I should have been more precise above. I don't think the market is truly saturated anywhere, just that the number and density of breweries is increasing everywhere (thus progressing toward saturation, in loose terms). As long as the market for craft beer keeps expanding at a crazy rate, I don't think we'll have to worry about saturation. That's not to say that all breweries will be successful, of course. I'm sure a large portion of the new breweries opening up every day will fail, which is a little sad, but hey, circle of life.
Definitely, true. What I am afraid will happen is that the A-B's and MillerCoors of the world start introducing more and more brands--and throw more marketing dollars behind them--and squeeze out the little guys (again). Even mediocre craft brewers will drive up the cost for barley and hops...and brewers that try to expand by shipping beer into saturated markets will risk future profitability.
I hope you are right, and more, unique, craft offerings squeeze out the macros and inferior imports. I think a tepid economy will greatly keep the growth of micros in check. Also, at Hy-Vee today, I saw some Great Lakes' Pils for $2.99 for a 6-pack...of course, it's "best by" date was the middle of last month. Obviously, the buyer bought too much, and now floor space and open-to-buy dollars are tied up in an inferior product...worse, if a newbie buys it due to price and doesn't like it, they could think ALL micros are overrated.
I think saturation is not too far off, as the number of offerings, at least here in Madison, has increased by 10-15%, at least, over the past 6 months. I'll never be able to try them all to determine which few I like best--and some will likely be gone before I can try them. Seasonals create a guerrilla mentallity--the brewer gets them out the door and moves onto the next one...and unsold product takes up floor space. I saw that a winter sampler is already out...even before the Oktoberfests have run their course.
I'm afraid that the InBev's and SAB's will gobble up the successful ones...and find ways to cut costs and lower quality. It would make some sense for the craft industry to start forming alliances or partnerships--say, a West Coast brewer with a Midwest brewer and with an East Coast brewer--and contract brew each others' brands for their market. Not only does it avoid shipping costs across the country, it diversifies the portfolio of brands for each brewery and giving them some flexibility in production.
My thoughts. Perhaps I'm in the minority....but I'm more than happy that Pseudocrafts never make it to the shelf and displace my New Glarus, Bells, Three Floyds, Founders, Lagunitas, Firestone Walker, St Bernardus, Two Brothers, Great Lakes, etc, etc, etc.....
I could see this happening down the road potentially - though we have kind of seen something like this already with the Craft Brew Alliance. The thing is that this only seems appealing to larger breweries, but most large enough to contemplate such a move are positioned to handle national growth by themselves if they so chose (most likely). The other issue is that you'd have to pair up breweries that were all highly profitable/sought after, and while not necessary, it would make the most sense to join forces with breweries who made significantly different products - further complicating things. (How many breweries brew a stout, an IPA, a brown, an amber, a christmas beer, a pumpkin beer, a session beer, etc?) While the brands may have somewhat different followings you still poach business from your own two IPA brands by brewing two beers that compete for the same customer. Add in the fact that most (good/successful) breweries have trouble meeting demand in their current markets, I don't see how they could contract brew other brands in any meaningful way without doubling or tripling their size - which begs the question, why not just double the production of their own bands?
I'd think customer demand is a lot more important than shelf space. If demand for craft beer continues to grow, stores will just cannibalize space that used to go to wine/liquor/vegetables, etc. The nearby Total Wine has 1.5 aisles of beer and ~five of wine. Anyone have some kind of statistics on which type of aisle has a higher turnover?
