Iconic Breweries Face Closures, Financial Hardship

Oh yeah for sure. There is a huge trend towards eating out, especially among the younger crowd, and we are spending more money on experiences. I for one would embrace something like the tiny restaurants in Japan, which specialize on one or two menu items done extremely well.

 

I recognize this question was not directed to me but permit me to opine here.

I think the implications for the craft brewing industry is the same for any industry: adapt or die.

For example if the craft beer drinkers desire Juicy/Hazy IPAs then brew quality Juicy/Hazy IPAs. Maybe these are not the beers that appeal to you as an owner (or your brewing staff) but produce the beers that make your customers happy. Be attentive to the changing craft beer market which should be very easy for smaller breweries with taprooms. You get to see your customers every day so take the time to listen to what they have to say. If lots of your customers think that brewing with Oreo cookies is a good idea, make them a pastry stout with Oreo Cookies as an ingredient (maybe use a judicious amount vs. a lot).

Tired Hands has been a VERY successful brewery over the past 5+ years, mostly for their hoppy beers (Juicy/Hazy IPAs, Milkshake IPAs, …) but throughout they have made a lot of other beer styles including ‘boring’ beers like Helles, Pils, Schwarzbier, … The owner knows these beers will not be big sellers but some of their customers will enjoy these beers (e.g., me) and this provides the brewers with skills to be able to produce high quality beers of varying styles. If the desires of their craft beer customers changes they can quickly respond and give them what they want.

I used to work for GE a number of years ago and the CEO (Jack Welch) would often state: The only job security is a satisfied customer. That was true back then and it is just as true today.

Cheers!

P.S. The ‘crazy aunt in the attic’ of the beer industry is beer freshness. I am of the opinion that in today’s changing craft beer scene (i.e., more and more small, local craft breweries) the larger, distributing breweries have to do a better job making sure that fresh beer is available for purchase to their end customers (i.e., craft beer drinkers) or they will lose sales to their competitors of the plethora of small, local craft breweries.

 

someone wrote an article recently asking something along the lines of "where has all the passion in craft brewing gone?" the article talked about how just a few years ago, certain brewers/breweries chose and represented their partucular passion -- be that IPAs; wild ales; mixed fermentation/sours; Belgian/English/German styles; etc. -- diligently and devotedly. These brewers were always looking to perfect and improve their craft. Nowadays (according to the article) it seems like passion has been replaced with "practicality"...along the lines of "give 'em what they want." so everyone's doing hazies...or fruited beers...or seltzers or froses or beer slushies. the author bemoaned this seeming trend. and added that trend chasing usually doesn't end well, and certainly isn't a replacement for passion. and I tend to agree. my operarion has doubled down on our original mission. we won't chase trends. we will dump beer we don't find as close to our intended target as possible. we won't add variety for variety's sake. and weve found, as a result, that people still respect that (and us). for me at least, I believe the places that retain their passion and dedication to the highest quality (which includes freshness) possible -- and not the places that abandon their passion to chase trends or "give 'em what they want" -- will be the ones that thrive. just my $0.02

 

You spent your first 40 years around Rochester? I'm sorry to hear that. I spent my first 26 years in upstate New York. I guess the name of the world I was looking for was "upstate New York."

 

As long as a business is filling a need, and doing it well, whether it be beer or hot dogs or mattress covers, they will have a good chance of sticking around.

 

You're probably one of only a dedicated few that still buys Nut Brown. I seriously doubt that they're going to close - they're still selling enough (especially at bars) to avoid that. When I think of those solidly regional brewers that have over-extended while simultaneously failing to successfully grasp market trends, such as Smuttynose, Shmaltz, and Green Flash, I'd put them in the Smuttynose category. They're going stay open but probably need to financially restructure and reevaluate their lineup + distribution.

 

I agree here. It's still all about niches; and if you're a niche consumer you're always better off going the extra mile to support those who are serving your needs better than the rest.

 

It was fairly busy when I visited in June. I happened to be nearby, but I wouldn't go out of my way to stop off.

TBH, I think it's a matter of buying a 6 in the fall and forgetting whether or not I liked it by the next year.

 

As long as there is sufficient number of beer consumers who are willing to purchase “niche” beers then this can indeed work.

There is a brewery near me of Stickman and when that brewery opened the owner/brewer of Ethan Buckman had a business plan to brew more ‘traditional’ beers and the few brands I tried were quality beers. But the challenge for Ethan was that his customers wanted to drink beers labeled as IPAs. In a past thread Ethan posted (with emphasis in bold by me:

“Nobody but beer snobs care what style you drink, I certainly don't, and most brewers don't either. But having customer after customer after customer refuse to even sample anything that doesn't have the letters "IPA" next to it can be grating. Changing style names to IPA and watching sales double and ratings soar on the same exact beer that was getting ripped apart the previous week is even more grating.”

So, one of the strategies that Ethan adopted was labeling some of his non-IPA beers with the three letters of IPA in order to make sales at his taproom. We can debate the ethics of this business decision but the fact remains that beer consumers (in mass) have their wants and the breweries that will remain in business are those that fulfill those wants. For those breweries (microbreweries?) that can succeed fulfilling the needs of a niche customer base I wish good fortune to them; they are serving their local/small customer base well.

Cheers!

 

Staying local, I realize that I'm offering a pretty small sample size; but it does offer some insight that counters the notion of a sea of upstarts are squeezing out the OG's. Take two older Richmond breweries of different eras; Legend, about 20 years old or better and Hardywood whom is what, 8 years old now? But Hardywood arrived well before the flood of breweries came in and certainly before Scott's Addition bloomed.

Legend has maintained its lineup for the most part, but introduced a seasonal release line based on local lore that overall was just ok. But powered by the local favorite Legend Brown and possibly buoyed by the ongoing popularity of their restaurant, situated perfectly for both the business commuter crowd as well as residents of the recently gentrified neighborhood, they seem to be holding up fine. Keep in mind though that they have never pushed product beyond central VA for the most part (feel free to chime in if you are like outside the state and see distro) so they haven't banked on expanding their distro footprint to match a momentary and insanely fickle surge in popularity that didn't hold up to debt and distributor obligations.

Hardywood was kind of like the trailblazer in Richmond, as they set the standard at release frenzy and a quality across a broad spectrum of styles, but like Legend, they do have a local tap stalwart in Singel. Popular amongst folks that aren't even remotely beer geeks. They also gave cred to Richmond as a legitimate beer town before The Answer and The Veil started to become the primary draw. So Hardywood, they've only expanded their original brewery to the point where they moved in next door; opened a satellite operation in Charlottesville; and opened a massive new brewery and general good time spot west of town that has become a refuge for the 30,40 and 50 somethings in the middle of sprawling suburbia. They have expanded their footprint a bit out of state but I never really had the feeling that they were overextending themselves on the distro side, and instead they have invested heavily into their presence and relevance in central VA.

So maybe that's the difference? Focus on the local crowds with a consistent quality product, offer local space that transcends beer geekery (as in a place that people without beards can feel comfy) and offer at least one beer that has appeal to folks just a few feet away from opting for a macro instead.

 

There's any number of ways to do it, and most places do at least try to appeal to the most types of customer. So there's always room for an IPA, or flavored beer here and there among the other styles. That's not the situation that people usually present, however; it's always like they were forced to make everything they brew along those lines. I don't believe the overall market is like that; not from the places I go to, which are very much more 'balanced'.

Sure, there are quite a few breweries who have gone "all in" on the craftie thing, and I'm sure there's a greater chance of success for going at it that way, but it's not like the market demands it.

My earlier comment, however, was more in relation to strictly appealing to a lesser served niche. It has been shown, like Scott has done, that going that other direction can work as well. It just requires making certain decisions in the planning and marketing stages to insure success if you want to do that from the outset.

 

And what I posted above is in agreement with this concept (with emphasis in bold this time):

"For those breweries (microbreweries?) that can succeed fulfilling the needs of a niche customer base I wish good fortune to them; they are serving their local/small customer base well."

Within the context of Ethan Buckman (Stickman Brewing) is was his intent to concentrate on providing predominantly 'traditional beers to his customers but:

• The customers who came to his taproom had demands for IPAs, not the beers that Ethan originally planned to concentrate on.
• There was not a sufficient "niche" base of customers in his area to support his 'traditional' brewing concept.

Ethan, as with most businessman that are not independently wealthy and need revenue to make payroll, etc., had to adapt and provide the sorts of beers (even if in name only) that his customers would be willing to purchase.

For those businesses that provide "niche" products and have a local customer base willing to purchase in the necessary quantities (and necessary prices) then this is a business/customer win. The business can make sufficient revenue to remain in business (i.e., pay their bills and hopefully make some profit) and the customers who prefer "niche" products get what they want.

Each business (brewery or otherwise) has their own unique set of circumstances:

• The brewery located in region A will have a differing customer base then a brewery in region B
• Customer demands will shift over time
• The competitive environment will change over time (e.g., the first small, local craft brewery in town will enjoy more locavore market then it will when x number of other small, local craft breweries open up at later dates.
• etc.

Yes, a brewery can provide "niche" products and can indeed succeed as long as their is a sufficient local customer base to purchase the necessary amounts of beer.

Cheers!

 

It’s a shame, these smaller breweries are obviously targeting a very small percentage of beer drinkers which are the craft beer guys, and there’s a glut of indistinguishable beers on the shelf. With intense competition for what truly is for a handful of beer drinkers is a daunting task, how do you separate yourself from the rest when your all brewing the same kind of beer? The vast vast majority drink AALs and could give two shits about these smaller craft breweries, they’re cool with their Bud or Miller Lite. Really a dilemma for brewers and smaller craft retailers, big beers distributors live off Macro sales and wine, the craft stuff is a niche and probably more trouble than its worth.

 

As Jack notes, these are business. As such they can only survive if they serve a costumer. Yet there is no need to think that a successful business requires one to sacrifice their passion.

What is required, especially in a small business like the vast majority of breweries, is authenticity in relation to the purpose of the product. Maybe the brewer has a particular passion for Kolsch or Bitter. Well it will be difficult to grow a business focused on that alone. So brew those beers, and channel that same passion into a beer that will keep the doors open. If your passion is unable to sustain itself, it will either die or become a hobby.

 

By shifting one’s concept of what an “entry level” beer is. Maybe a decent IPA gets them in the door and keeps the lights on. Meanwhile, the wow beers quietly sneak up on those who are fertile ground for a new experience.

 

Maybe, but you have to get your beers out there to into distribution too. Harder if your tap only, you have to convince bars to give you a try, if you can or bottle you have to convince retailers they can sell your beers. Tougher to do when the retailers have to charge $11-13 for Pils and such, and Hazy NEIPAs pushing $20. It can be done but it certainly cannot be easy unless your absolutely nailing a style, or you win a major competition etc. if beer drinkers can only get your beers on site it’s doubly hard to be that destination place. There’s a dozen in Greensboro fighting for the money.

 

A possible example here is Tired Hands Brewing. Tired Hands is most acclaimed for their hoppy beers (e.g., Juicy/Hazy IPAs, Milkshake IPAs,..) and it could be rightly argued they deserve this acclaim since they produce high quality hoppy beers but they produce a plethora of other beers styles of high quality. I made previous mention of their 'boring' beers of Helles (of many brands), Pilsner (of many brands), Schwarzbier, etc. but they also produce a large number of brands of Saison and all of these non-hoppy beers are of very high quality. Tired Hands produces by volume mostly hoppy beers (because these are the beers that are preferred by the customers by LARGE margin) but they are also able to sell their non-hoppy beers as well. Needless to they produce these non-hoppy beers in smaller quantities (e.g., they only have two horizontal tanks for lagering their lagers and they appear to be about 15 barrels in size) but they do sell (albeit at a slower rate).

Jean and Colin (head brewer) and all of their brewing staff are passionate about their large portfolio of beer styles/brands but there is zero doubt in their minds which of those brands are 'keeping the lights on'.

Cheers!

 

This is not solely a brewery/taproom story:

There is a town not too far from me of Media, PA. have been meaning to go to a craft beer bar that has been operating there for a long time - Quotations. After attending a Phillies businessman special game my wife and I decided to stop off in Media on the way home and she suggested we go to Iron Hill (in Media). We walked in on a Thursday afternoon/early evening and the place was PACKED. There were people waiting to be seated. We walked to the bar but the bar was PACKED with people even standing behind the customers seating. A 'lightbub' went off and I said to my wife: Let's go to Quotations (which was directly across the seat). We walked in and the place was dead - maybe 3-4 people sitting at the bar and most of the table empty. During our stay (a couple of beers including Three Floyds) and dinner I got a chance to meet and speak to the owner, Mike. Eventually the discussion came to how was his business. He was quite dour while speaking but it was clear just by looking around that the brewpubs of Iron Hill (which has been there for well over a decade) and the newer brewpub of Sterling Pig (a mile down the road) where creating too much competition. I was quite pleased by my experience at Quotations (top shelf craft beer on tap) and the food was good but it makes to wonder how long Quotations can thrive. If he has been in business long enough and he is the owner of the building (e.g., mortgage close to being paid off?) maybe he can ride through these very competitive times? If has a lease which is pricey I wonder?

Cheers!

P.S. I did not have the heart to tell Mike the part about we previously went to Iron Hill and ended up going to his place because Iron Hill was PACKED! That would be like stabbing him with a knife and twisting it.

 

So in your opinion are the beers from Iron Hill that much better? Why is one packed and the other not?