Beer's Future Through a Wineglass Darkly

Pretty much agree with him.

While I haven't used the analgoy of what happened with wine to think about it, this point of view has pretty much been my perspective on how things are shaping up and will continue to shape up.

I won't be surprised to see an increased failure rate among small breweries in the next few years but we're overdue for that. In most small businesses about half of all start ups are gone within 5 years. We've not seen that yet small breweries yet, but we've seen some major shifts in public tastes the last 20-30 years with many folks being increasingly willing to spend money on fine wine, good food, and now flavorful beer.

So I don't think there's a bubble to burst but agree with those who think that there will be a shake-out, and that will make the majority of breweries who survive even stronger. The future of flavorful beer is pretty much assured at this point and what we see the big kids doing is joining in so that they won't be left behind or lost in the shuffle.

 

I agree with him 100%.The craft industry has boomed over the past decade and continues to grow.I think it's great and keeps things exciting.

 

With over 4000 breweries, even if half of them failed and just disappeared, ABInBev, etc. still couldn't afford to buy all of them. Their pockets are simply not that deep.

 

I agree with much of what Tom Dalldorf describes. The biggest difference between beer and wine is that for the artisanal wine producers who grow their grapes, the process is agricultural. Very few breweries grow anything, but a number are delving into hops. Most brewers purchase malted barley, hops, wheat, yeast, and most other beer ingredients and adjuncts. Therefore, for small producers, wine production is dependent on harvest conditions, yield, quality, and a host of other factors. Beer ingredients are surely agricultural, but generally may be purchased at varying prices depending on those same variables. Wineries often buy grapes or finished wine to augment quantities when necessary. Grape growing is risky business. Beer can almost always be made regardless of harvests and yields....but costs can be prohibitive to marginal brewers during barley and hop shortages.
Years ago, when introducing beers like Achel, a huge number of Belgian beers, German specialties, true Baltic Porters, fine English Ales, and much more, many customers would try to resist because of pricing relative to US beers. I would always preach that these beers are true historic forbears to the then developing explosion of American brewing and beer experimentation. I would simply tell these balking customers that they could get the best beers on earth for a great price compared to wine and distillates of comparable quality. I urged many higher end accounts to sell great beer like they sell wine, so that the real value of original world beers would become obvious. It worked, and now there is a genuine beer revolution. This is a natural growth of business, and many saw what was coming.
There is always an evolution with brands that succeed. They get sold, often become a shell of their former quality, but carry the branded name. Many continue to thrive. Many small wineries were subsumed by huge groups just as smaller breweries are being brought into mega-brewers' portfolios. I have always contended that the wine and beer cultures are very different. To be simplistic, beer culture is generally collegial, and wine culture is more reserved and unto itself. Business being what it is, breweries will disappear (or be swallowed up) just as many wineries did years ago. I see beer continuing to evolve and to become an American force worldwide.

 

If they are buying SAB Miller (which produces 276MM barrels per year) for $100BN, and the craft industry only produces 22MM barrels per year, they can definitely afford it. The issue is that it wouldn't make any sense for them to do so since they would have to negotiate 4,000 separate transactions and most of them would have no meaningful impact on Bud's business.