Iconic Breweries Face Closures, Financial Hardship

In my opinion Iron Hill has the Brewpub business done perfectly. The beers will range from good - very good - excellent (mostly due to preference of style vs. brewing process) the food is very good and the service is very good. Overall a very well run business; they are now up to 16 locations with most in the Delaware Valley but also SC and GA too.

I really do have a good answer as to why one is packed vs. another. Maybe dependent on bar/restaurant competition in a given area?

Cheers!

 

Beat me to it.

Oh, maybe "longstanding"?
Iconic doesn't really describe small regional breweries that virtually no one outside of upstate NY has ever heard of...

 

I don’t know that I’d use GE as an example right now.

While I do believe in this method (if you brew great beer, you will be successful, no matter the style) I think a good to great business plan is paramount as well.

In fact I’d go so far as to say you can have mediocre to good beer, but if you have a great business plan you’ll succeed. But if you have great beer and a poor business plan you’ll be in trouble.

 

You only have to visit a good beer store to realize how crowded the craft beer market has become. Even down here in a small community in Florida, the choices are bewildering. The Florida breweries alone take up a large section. I believe a lot of the offerings from less known breweries just sit on the shelves for a long time. Choice and competition are great for the consumer but hell on a company's profit.

 

Well, needless to say that is not helpful when you are competing with two brewpubs plus the other businesses you referenced.

In your personal opinion is the Media on-premise craft beer scene saturated? I am aware of Pinocchio's but not the other businesses you 'reference'.

Cheers!

 

Did you read what I posted: "I used to work for GE a number of years ago and the CEO (Jack Welch)"?

I am in no way using GE of 2019 as an example.

 

Sorry, should have used the emoji.

I understood what you meant.

 

I agreed with this position until not long ago; give the people what they want if your goal is to maximize risk-adjusted rates of return. Now I'm starting to think that the breweries that have gone all in on fan service in the form of hip styles are highly vulnerable when the cultural winds inevitably shift. I think there's a big risk that the people who are driving sales of the styles you mention -- mostly newer craft beer drinkers who came to craft beer first and foremost because it's cool now and who demanded that the flavors of craft beer morph to suit their greenhorn palates -- gradually largely exit the craft beer consumer base over the next few years. That may be because craft beer can't stay cool forever, and other products are coming onto or back into the market that better suit their tastes.

I think the most vulnerable type of brewery right now is the sort that has excessive, debt-financed capacity, rosy growth forecasts in the present or recent past, and relies heavily on distribution. But I think the second most vulnerable type is the taproom-focused brewery located in a hip neighborhood of a major city and that specializes in all the trendiest styles. Such breweries are like the nightclubs that have long lines out the door for their first few years but are constantly on the verge of becoming passe and seeing their revenue plummet. Sure, some of them will try to pivot when consumer expectations change, but, at least among restaurants and bars, that strategy usually doesn't work; you live by the trend, you die by the trend.

We haven't seen craft beer become uncool yet, so we haven't yet witnessed that phenomenon among breweries. Don't get me wrong, until the '10s, craft beer definitely wasn't "cool," but it became cool, and it hasn't yet lost that status, but I can't imagine it's not only a matter of time.* I think that if a brewery can make it while being off-trend -- and that's certainly an "if" -- it's much better positioned in the long term.

* Yes, I know about the '90s brewpub boom and bust. I'd argue that craft beer wasn't ever cool then, even if it became more popular. I believe there were a lot more middle-aged suburban folks driving that trend, whereas current craft beer coolness starts among social-media-savvy, hip, urban 20-somethings and extends outward culturally.

Now, that said, there's a middle ground, where, if you run a brewery, you keep the focus on the beers you believe in while still indulging trends as a secondary area of focus. That way, you capture some of that passing fad business while never becoming too closely associated with it.

 

Or you can provide both "trendy" beer first and beers you "believe in" as a secondary market like I discussed with Tired Hands:

"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."

Be responsive to you customers of today (2019) but continue to listen to them and be responsive to them in 2020, 2021, 2022....

Cheers!

 

switchIng gears as quickly as trends change is a lot trickier than people make it sound. heck, we just recently brewed our first ever hefeweizen, and it required major "calibration" of equipment/processes -- not to mention yeast purchase/cultivation/ maintenance etc -- to get conditions right...and (hopefully) produce a truly quality product. in fact, just this week we sent 15 BBL down the drain bc it wasn't up to our standards. now...brewers can always take shortcuts and/or put out subpar takes on new styles. but I, for one, wouldn't advise it.

 

Tired Hands has brewed several Hefeweizen batches already and I have tasted every one of those batches (so far). Those Hefeweizen batches are of excellent quality. Needless to say but these are not brisk sellers but they brew smaller batches (compared to their hoppy brands) and sell out well given the batch size consideration.

Cheers!

 

ok.

are you somehow claiming it wasn't/hasn't been tricky for them to produce/maintain these high-quality beers as a part of their portfolio?

 

Damn, bet that hurts draining that much beer, but it would hurt more if you put it out there anyway and guys thought your beers sucked. That attitude can cross style lines pretty quickly.

I’m risk adverse to a large degree, so as a brewer how do you decide that any style is worth the time and expense to put it out there? I’d suppose when your introducing styles you don’t have dialed in the margins might shrink a bit? As you mentioned you drained a 15bbl, so at that point is margins out the window on that batch? Tough business no doubt about that, don’t think I’d have the stones to do that.

 

honestly, in light of the article I referenced earlier and the increased competition out there, we thought it a good move (from a marketing perspective) to reinforce our reputation for perfectionism. And judging by the social media/PR reactions, we were right. Financially it was a hit; but not too bad Few 1000 dollars is nothing compared to losing respect and reputation. As to who/what factors decided; it is still pretty much all me. My team members tried it and were kinda split on whether to keep or ditch. Most wanted some quantity saved (as a low-cal/ABV "version") but I disagreed. Too big a risk as our first go at the style to put it out in any quantity without it meeting standards

 

I do realize, however, that a LOT of places would not be in a position to take such a financial hit these days. To tie back in to the OP's point: times are tough and funds are very very tight for a lot of breweries

 

But your absolutely right reputation and integrity cannot be bought per say. I have to admit there’s certain breweries where I thought their beer was sub par, and for me this crossed style lines, if beer A sucked, surely beer B will follow suit. And I don’t buy their beers.

I’m thinking back to Foothills Brewing. Someone made a mistake with Jade, forgot to add near enough malt, so it was put on tap, as Baby Jade. It was like a 3.6 ipa that just sucked, nothing but overly bitter Hop juice, should have been dumped it instead or trying to salvage it for what they could. And I do like Foothills beer as a general rule.

 

Looks like Ithaca is getting it's tax break...

https://ithacavoice.com/2019/09/ithaca-beer-company-approved-for-amended-tax-abatement/

 

If they did a reboot with their wild/barrel program, that might help. Been a long time since Lebleu, Brute, Luminous, Old Habit have been brewed. Not likely without the Chief though. Glory days.