Craft beer bubble articles bubble

What problems wrt food are you aware of?

In my area the food available in the tasting rooms are pretty simple:

• Hot Dogs
• Chili
• Tomato Pie (a sort of cold Sicilian pizza)
• etc.

Cheers!

 

Jackhorzempa and Scott17taylor have nailed it - I think small local breweries serving a local market coupled with a growing interest in craft beer will sustain things for awhile. Here there are a lot of smaller places where people just go to hang out. Some have good beer, some have a good local vibe, some are filled with friends and somehave it all. Hopefully the local brewhouse will evolve into something like the British or Irish pub.

 

Nobody ask if there are too many restaurants. As long as each brewery can differentiate itself and make a quality product, there's room in the market. Here in Nashville, a metro area of 1.7 million people, we only have 14 breweries. There's no way that's too many.

 

Amen!

Since the terminology of "quality" can get some folks 'wound up' permit me to slightly change your second sentence to:
As long as each brewery can differentiate itself and make beers that people will purchase, there's room in the market.

Cheers!

 

Twist the boot and the bubble goes away

 

Why do bubble discussions always focus on the number of new breweries? Look at expansions in the works from New Belgium, Stone, Bell's, Lagunitas,etc. Almost every "good" large craft brewer is expanding. They may all be selling all their product now ( and 16% growth for all craft from first half 2014 to first half 2015 helps. But that is alot of capacity coming on line. Folks here seem to think this will hurt small and allegedly mediocre breweries, but I am not sure the larger ones won't mostly try to take business from each other.

 

It is looking like the Craft beer production side has the big ones expanding rapidly, adding huge capacity. Then the small breweries, brewpubs, and nanos that serve the local market and won't get big. The little ones drive the numbers of breweries licensed, the big ones are driving the sales increase.

 

I think the bubble will come with expansions as others have mentioned. Some take their cake and expand slowly (adding a fermenter every once in awhile). Some jump up on their brewhouse capacity, and feel they need to strike while the iron is hot, so to speak. I am not sure which way is better. I have seen places upgrade within 5 months. They either under predicated demand, or money could have been an initial issue.

With distribution the way it is, finding new markets is huge too. You can say you "produce" or "sell" X amount of beer even though its just in the distributors hands. So your product should try to be above par if you want it to last.

This may not be a great side by side example. But many restaurants are content with having hour long waits. They don't look to open up new locations. So many breweries are set at capacity limits their first 2-6 months, they feel they need to bump it up a lot. When will the bank loans, or scouting out investors stop (you may not own a full share of the company for long)? Does anyone know a prominent brewery other than Russian River who just says "Our financial figures are spot on. We're at 100% capacity. And we like it".

So many breweries seem to recycle and resell equipment too. So the field for expansion seems more than a second guess for most breweries. They just do it.

Crafts market share is still so low, that I feel quite a few breweries see that as unlimited growth. Let their be 100 breweries within 100 miles of us. There will be more drinkers.

Expansion #s and new drinker #s need to stay in tune too. Locally in ABQ, it seems the sky is the limit. Personally, I know what I like. I know where I will want to go. I don't need to try every new place. I only go out once or twice a week. Why go to a unknown brewery when that 'go to' place who treated you so well, still produces good stuff. That's where new patrons come into play. Let them like that other stuff. Keep everything flowing. Then again, the fun prospect of it all is that a place will actually product a world class product and surprise people. That's how my favorite places got their start. With the internet age, I can be thankful that someone else can spot it and spread the word.

Expand too slow and the loyal following you think you have may move onto the next "best" thing. Expand too fast and others may be expanding at that same level. And its just competition non stop.

Lastly, what's the end game for many of these guys? Get loans, and expand forever? How many places are completly debt free running a great ship?If not for banks, its investors or partners. Brewers say they just want to get more beer out to more people. But the business side does creep in constantly.

I'm left with no answers. Just a rambling of thoughts

 

Great point. I was thinking along these same lines starting from this question:

So what happens when the bubble does burst?

Does that mean ALL the craft breweries in the world dry up and disappear? Only In-Bev, Miller and Coors stay in business?

Doesn't seem likely, does it? The market is super saturated by great beer, and young people are drinking it up and loving it. They're going to support good beer for the next five to six decades. And I know at least three Texas breweries that have managed their growth so well that the only way they fail is if the owners decide to quit.

Breweries that can't turn a profit will fail, no doubt, but look around your own state/region and pick out the best 5-10 breweries. Can you see all of them drying up and going away for good?

I can't.

 

A brewery just decided to close in Ohio. I believe in is the 4th since 2012. While many more have opened in that time (around 130 now I believe) I think that we are probably at, or close to surpassing our carrying capacity already. I am guessing that for every 2 that open from here on out, 1 or 2 will close. Just a theory of course. Also, not really on topic to original post so sorry