Craft Beer's Looming Crisis

Beer destinations like Asheville and Raleigh are changing the local scene here. Lots of terrific option and you can buy beer that's days old not months. I don't see quality being the biggest issue per say. Lots of great CA IPAs dying on the shelf I know are great ... If they're fresh. A good many are not, that's the problem, I see more guys checking dates than I ever did say 3-4 years ago. Breweries with large distribution footprints may take somewhat of a hit as local breweries are booming. But it will never crash, some Brewers may just have to adjust a bit.

 

I've been pondering this the last week or so and this thread is as good of a place as any to post about it. I'm going to use Ohio as an example, though most of fly over country has the same situation: In Ohio, before the end of the year, it looks like we're going to get terrapin, elysian and golden road. In every big Ohio market, there are some dominant ipas, which are all good beers (Columbus ipa, headhunter ipa, truth, psychopathy, etc).

So far, the only macro ipa these brands have had on shelves so far is goose ipa, a decent beer, but an English ipa in a world that loves west coast ipas, which has given the above mentioned local brands a long runway. It'll be interesting to see how local craft can survive against the great macro beers that are coming to town...

 

That's been true for a number of years now. There's actually so much shoddily made "craft" beer on the shelves and bar taps these days that the designation "craft" has definitely become more of a consumer warning than an indicator of quality. There may be more 'local' beer to be had, but the problem is that a lot of it is really just not very good at all.

Most people who have been observing the brewing industry for a few decades agree that there will indeed be a thinning (or a shakeout, or whatever you want to call it). And it will probably be more dramatic than the one in the '90s (some of those shuttered breweries/brewpubs were making very good beers, but were just a bit ahead of their time). This time, it will be partially from a market reaching saturation and partially because the products are simply sub-par.
There will be a small number of casualties that are making excellent product (but perhaps lack good business sense) and they will be missed, but for the most part, the breweries that will inevitably close will be the bandwagon hacks and the numerous 'not ready for prime time' former homebrewers that should probably never have opened in the first place... and they will not really be missed at all.
Really, the saving grace for some of the ones that do survive may just be the fact that craft beer drinkers' palates seem to have become a lot less discerning than in the past.

 

Everyone commenting so far is really hoping that whatever local brewery they don't like will fail. That may happen. But, don't start dancing on the graves just yet.

The rate of growth of craft is slowing, but I think it's from large regional, national craft breweries getting acquired by the Big 2. Ballast Point, Founders, Lagunitas and more are no longer counted in craft beer numbers. None of those are small breweries, so taking those numbers out makes a difference. Without doing the numbers myself, I don't know if that accounts for the entire slowdown, but it's probably a good chunk. Most locals in my area are still on a growth trend (I can't think of any that are shrinking). With much smaller production numbers, it will take A LOT more growth on those scales to make up that difference.

 

That pretty much sums up everything annoying me about beer lately... well put!

Also, is anyone actually making a durian beer?

 

My guess is that after the first waves, the local IPAs guys will decide that fresh Headhunter is just a better bet, it's local and fresh. Other Ohio stuff like Columbus is also a great beer, local will win in the end. Ohio IPAs are quite healthy , hard to see Terrapin making inroads, the others I'm not framiliar with.

 

Yeah, I remember 5 or so years ago having Terrapin beers while on vacation in OBX. Thought they were solid IPAs at the time. Now Terrapin is distributed in MD for at least a year now. I bought a mixed 12pack within the first week, and was kinda underwhelmed and haven't revisited, because there is just so much other options out there to either take some risk and sample new or revisit your old favorites (which are mostly better than Terrapin). I doubt Terrapin will do much at all in Ohio after 3-6 mo. max once "newness" where's off. Ohio has too many other higher quality options.

And I think the situation I described both in MD and my prediction for Ohio with Terrapin as just one example brewer, is one of the red-flags for regional and national beer makers that are either already widely distributed, but even more worrisome for those brewers that recently expanded and really stretched their debt levels to expand production and distribution. I think really at this point, success is going to be expanding outside of US into untapped foreign countries that currently don't have much American styled craft beer options.

 

What I think you and perhaps @nc41 may not be considering is that the difference between terrapin before it was owned by Miller and after is that the ability to enter a market with a very strong distribution and strong marketing make them a different player than when they were just another regional brewery. Also, if the bar owners has the choices of local ipa which bar owners may be bored of (or wanting some change to boost volume) and their ab guy is in there selling space dust, I don't know how many of those taps local will be able to hold...

 

So this sounds like a typical BWW 20 tap situation, with Terrapin IPA, Goose Island IPA and Elysian Space Dust IPA. Ugh, its all the same pretty much with 20 craft taps and nothing interesting.

 

I'm wondering if you have had hopsecutioner or space dust. They beat every Ohio ipa I can think of in regular distribution except head hunter. Essentially what I'm trying to draw a comparison to in craft beer is I think that until recently if the only macro crafts were blue moon, goose ipa and shock top, then local craft has been playing pro ball and thrilled they have beat the twins, angels, Braves and (as much as it hurts to say) reds.

The question is, can local craft hang on its its own merits against the Cubs, blue Jay's and Yankees? This is the looming crisis.

 

If this is true then the numbers do lie but as the posters above mentioned it's more about the end game and not the present.

 

The one thing I feel nearly certain about when it comes to the future of craft beer is that the nationally-distributed IPA will become largely non-existent.

 

I have any amount of money you wish to bet that the next few years, you will see the exact opposite.

 

It may not happen immediately, but it seems inevitable over time. The Stones, Sierra Nevadas, and Goose Islands will still have their IPAs on every shelf. The breweries that will really be in trouble, IMO, are those that distribute to 5-10 states and produce mediocre (at best) beer. Once everyone lives within a short drive of a brewery making a great IPA, I just can't see the Titan IPAs of the world remaining on every shelf.

 

I live 20 minutes from one. They still are not cost effective. I scroll past a new $15+ 4 packs weekly.

 

Most IPAs aren't cost effective unless you're willing to drink dusty ones or those from the real giants that are going to survive any craft beer "crisis". Freshness in an IPA is becoming increasingly important and people are becoming increasingly willing to pay for it.

 

With more then 30 brands of shelf IPA available one or two is bound the be week or two fresh. Maryland might be different.

 

Just to clarify, I don't think the amount of IPAs on the shelves will diminish. I just think fewer of them will be nationally distributed. I'm a big fan of most of the old standards (Two Hearted, Centennial, Union Jack, etc). But if I'm choosing between 3-month old Union Jack and 3-week old Manor Hill IPA from 20 miles down the road right next to it on the shelf for the same price, I'll buy the Manor Hill.

As a more extreme example, I don't see much future for any beer like Sculpin where $16 gets you a six pack of nationally-distributed old beer.

 

I would bet a good many that are fresh would be local. The retailer doesn't have to buy in bulk, and in some cases he's driving right to the brewery and buying say 30 cases. He can replace them with fresh as needed as most can on a weekly basis. He goes as far as Asheville, Raleigh and Charlotte cutting out the distributor on these smaller breweries. National IPAs that are fresh would likely be only 1, Bells Two Hearted is always under 30 days old. The state of IPAs here is more local that are very good to terrific, really making the splits between a good bit of those CA IPAs even more severe. They just turn over slower. In some cases I have no idea why their still on the shelf it just looks like lost cash flow to me.

 

Ditto here with Chicago. It is never a problem to get beer that is a day old. It is a distribution game of knowing which distributors supply which shop, or where they drop stuff off. etc. As a city. We still have plenty of space to grow and take on new things, and ideas for making beer in the city. Both, because it is so large and and that it is diverse. We now have three or four chef/culinary driven breweries now in addition to botanical, and lager focused breweries. There are now two coolships creating open fermentation lambics in the city, and cider is taking on a life of its own now, and there is Off Color.