Too Many Breweries? - Bubble Will Burst

I work in San Diego, I cant count how many have opened in the past year, but in a town about an hour north there have been 6 new breweries opened in the span of a few months. I don't see that as sustainable at all in the long run. Most make good beers, but I dont see them taking off to grow much larger than they are now.

 

It's a good thing, the more the merrier. They'll have to compete on quality and pricepoint and the strong ones will stay open. Seems to me like we win.

finance as well

 

More thoughts here:

http://beeradvocate.com/community/threads/will-2013-be-the-year-that-craft-beer-plateaus.59222/

here:

http://beeradvocate.com/community/t...is-unsustainable-but-not-7000-wineries.51103/

here:

http://beeradvocate.com/community/threads/trendish-bubble-about-to-pop.51069/

here:

http://beeradvocate.com/community/t...-beer-market-is-shrinking-or-expanding.43244/

here:

http://beeradvocate.com/community/threads/market-collapse.40039/

here:

http://beeradvocate.com/community/threads/future-wave-of-brewery-closures.14071/

and here:

http://beeradvocate.com/community/threads/craft-beer-in-10-years.12581/

Beyond that, I just gave up searching, but I'm sure there are more similarly topic'ed threads.

 

I agree that there are a TON of brweries these days and that the bubble will burst.

However, this is not a bad thing in RI. We've been way behind. We still need more! We're getting clowned by our neighbors in New England. Our beer scene is rubbish. Grey Sail is the best brewery in RI by a mile in my opinion (although I haven't gotten to try Foolproof yet. I would imagine they will be #2 on the list though, as there isn't much competition 'round these parts).

 

Wow. Where is my CBS snifter so I can sit back and #markintihar it up this AM. You just #Markintihard that dude hard.

Cheers!

 

There are over 1000 breweries in the UK and rising , with a population of ca 60 million. Lots of breweries thrive in Germany. With just over 2000 in the US , bearing in mind its size and population there's a long way to go yet.Look forward to it

 

in the tampa bay area, we too have had an explosion of breweries in the past two or so years. there are a couple winners, ccb obviously, along with 7venth sun are the headliners. but i am of the opinion that as more and more quality breweries open, beer will become far more regionally based. demand will increase beyond the capacity of brewers and will force them to reduce distribution range. craft beer bars wont have a need to carry anything other than regional beers, as so many good options will be available locally. Craft beer is not going away. nobody gets OUT of drinking craft brews and reverts back to natty light or miller lite or whatever swill they drank in high school.

 

One of those past threads mentioned a brewery per 30,000 in population is sustainable I believe. There are two breweries in my town of roughly 75,000 and I know a guy who is getting ready to open one so that would put us right at the tipping point. It will be interesting to see if he can stay in business.

 

The phenomenon that is occurring is that beer geeks are starting to have trouble keeping up with every new beer that every new brewery is releasing. In other words, there are too many new breweries for beer geeks so their perception is that there are too many for the drinking populace to support. The country itself could easily support many more as long as we keep taking market share from BMC.

That's not to say there won't be a few shake outs along the way, but I don't think we are looking at going back to the dark ages of the 70's nor do I think the shake out will be anything like we saw in the 90's. Not a bad thing. The cream will rise.

 

Sustainable local breweries trump the large macro brewers in my opinion.
Instead of large corporate profits keep your local brewer profitable, keep the business regional.

 

Or... if he makes better beer, markets it better, and makes better decisions than at least one of the other two, it will be interesting to see if they can stay in business. That's how this whole thing works.

OP, Washington State has 165 breweries and 6.8 million people. That's a brewery for every 41,000 people. Colorado has 153 breweries and 5.1 million people. That's a brewery for every 33,000 people. Oregon has 142 breweries and 3.9 million people. That's a brewery for every 27,000 people.

Rhode Island has 11 breweries and 1 million people. That's a brewery for every 90,000 people.

I think you'll be fine; in fact, it looks like you have some catching up to do.

 

If there is going to be any sort of shake out in the craft beer industry, I imagine it's going to start with breweries that are mainly/only selling expensive bombers of big/barrel-aged beers, without having a reputation established (so not The Bruery etc. but newer, smaller ones).

 

Too many brewpubs? Thats like saying there's 10 restaurants in my town and only 7 days in the week.

 

I have pondered this as well fellow finance director. I think those who succeed will scale the business accordingly. There is quite the capital investment in running a brewery and I am not sure anyone would get in this business for the money. An initial micro or nano brewery can probably survive some saturation cause the cost structure is small. If a brewery takes that next expansion step, then they better be well established in the marketplace or they will never recover those investment costs. We are already seeing a sort of differentiation between those brewers that have expanded and are expected to be available to customers (Great Lakes, Sierra Nevada, Founders, Dogfish, Stone, Bells,etc.). As such, I expect we will see levels of brewers. Local, regional and more national. Within each segment, those who carefully expand and continually turn out high quality, consistent, in demand product, will survive.

 

It is important that you support local independent businesses-Not just breweries. Support your local hardware store, sporting goods store, shoemaker etc. Local indepenent business are good for your community as a whole.


The fact that some breweries will close does not mean there is a bubble. Not all businesses are successful. that is a fact of life. 50% of new restaurants fail. Does that mean there is a restaurant bubble?

 

By many a nay-sayers' opinion, the bubble's been bursting since 1999.

 

I just took a tour of Stone the other day and the guide was saying that San Diego county currently has 60 breweries with 20 more in different stages of opening. That'll be 80 within an hour of each other.

I don't think this "bubble" will burst anytime soon though. I mean there are roughly 2400 craft breweries/brewpubs in the US. That's one brewery for every 129,829 people. I think we are okay for now. Craft beer makes up around 6% of the current beer market. So there may be a lot of them but they aren't oversaturating the market. If AB-InBev can control 47-53% of the market (depending on if the Modelo deal went through, I'm not up to date on that) and they don't collapse then why should all the little guys? Just keep supporting them and they'll keep growing. We have gone from 3 breweries to 6 in less than a year here in Tucson, AZ and the Phoenix area has probably more than doubled in the past year and they are all doing well.

 

Breweries that make a decent product and can will make it.

 

If you count how many people drink craft beer and then count how many people don't drink craft beer, it sure seems like there is plenty of room for expansion.