Craft's Proliferation Problem

The thing about the craft beer market right now is that a lot of people want to brew craft beer because they just love brewing it but don't have a solid business plan, so that's made the market oversaturated.

The math of '30% of the market is craft so craft should have 30% of the handles' is flawed. Those 30% might not order the same beer twice in a week whereas the 70% who don't drink craft will always order the same beer. So the optimal business strategy is to have lots of large kegs of all the biggest macros, then lots of taps with smaller supplies of a variety of craft.

If you have 15 taps, your best bet might be to have 10 macros and 5 craft. If you have 100 taps, your best bet might be to have 10 macros and 90 craft. As long as the tastes of all the macro drinkers are covered.

I don't think the craft market share is going anywhere though. People are much more likely to switch from macros to craft than from craft to macros. I've never heard of a craft drinker tasting Budweiser and thinking "Wow, I can't believe I've never tasted this before!"

 

Well, there are those of us who have watched good to great beers of less popular styles (which we were loyal drinkers of) fall out of production to be replaced with flavor-of-the-month beers.

An off the top of my head example would be Great Lakes, which retired from full seasonal production The Doppelrock, The Wright Pils, and Holy Moses in favor of an additional DIPA (Chillwave), a rye IPA (Rye of the Tiger), a fruit and chocolate porter (Alberta Clipper), a Belgian IPA (Spacewalker), and whatever else they may have thrown in the mix that failed to catch my notice.

Out of that list of replacements, I had interest in precisely one beer, and would take any of the three retired in its place. There are other lamentations around the retired beers as well.

That said, I can't blame the brewery for preferring to use their brewing equipment on beers that require less time investment and apparently sell quicker to more people. I can just watch options I loved disappear.

 

I think I learned something about this in school. It's called economics. Craft beer is not the first example of this "proliferation problem." Any industry or sector of an industry that has experienced a relatively quick uptick in popularity has seen the same thing. How many computer manufacturers were there years ago and how many remain?
Where there is money to be made, those who think they can make money will jump in whether they have the know how or not. So although this part isn't economic in nature, I think it may also have something to do with Spencer's phrase survival of the fittest which was inspired by Darwin's theory of natural selection. Translation: the good ones survive, the bad ones either go belly up quickly or just fade away slowly.

 

Using your example it appears that Great Lakes is providing beer to the broader craft beer market; “apparently sell quicker to more people.”

I agree that as individuals we may be disappointed if breweries discontinue brewing beer that we like. For example, if Troegs decided to stop brewing Sunshine Pils and replace it with a hoppy beer I would personally be disappointed. Luckily for me I have a number of easy to obtain options (e.g., Stoudts Pils, Neshaminy Creek Trauger Pils, Sly Fox Pikeland Pils, etc.). There are even large craft breweries that can ‘scratch my itch’: Sierra Nevada Nooner Pils, Firestone Walker Pivo Pils, Sixpoint Crisp, etc.

If there is sufficient demand for certain beers styles (e.g., The Wright Pils) there will be other breweries willing to service that demand.

Cheers!

 

It's indeed possible to find replacements - Triple Digit Gravitator, for example, stands in for The Doppelrock quite well during bock season, and I can usually find Celebrator or Korbinian regardless of the time of year. There's even Troegenator available year round, which does the job credibly.

There's just something about watching good beer being replaced by trendy beer that's disheartening on a personal level, regardless as to whether it's trendy beer I like. If Great Lakes were to drop the Eliot Ness to come out with an amazing gose that I loved and rated just as highly, I'd still be disappointed - both because a regular beer staple for me was no more, and because there's way fewer options in the Vienna lager realm than the gose realm at the moment (at least in the local vicinity, where I can grab at least 6 different varieties of gose within a 20 minute radius).

What I see as a potential drawback to the proliferation of craft beer is that said proliferation results in extreme amounts of choice in the flavor of the month, and potentially squeezes out choices and options from the rest - and the choices that are squeezed out aren't necessarily poor to mediocre beer.

 

I agree with your viewpoint. I appreciate beer styles like Vienna Lager and from a jealous perspective I wish there were more of these styles being produced (although I am fortunate that a local brewery makes a fine example: Neshaminy Creek Churchville Lager).

“What I see as a potential drawback to the proliferation of craft beer is that said proliferation results in extreme amounts of choice in the flavor of the month, and potentially squeezes out choices and options from the rest - and the choices that are squeezed out aren't necessarily poor to mediocre beer.”

But this ‘trend’ will best service the broader market, right? Should breweries produce beers that appeal to a vocal minority or should they produce beers tor the larger market?

I have been pretty vocal on BA with my desires that Victory bottle their Kolsch beer. In my perfect world this beer would be bottled and available year round. I truly understand why Victory is not doing this and I was happy to drink some of their bottled Kolsch beers as part of their summer variety pack.

It is not realistic to expect that businesses are going to cater to a minority (vocal or non-vocal). It could be argued that servicing the broader market satisfies a larger number of consumers and therefore is ‘better’ for the majority of customers.

Cheers!

 

The market always corrects itself...eventually...to the buyers tastes, etc.

 

Which is a sad reality indeed, which I am all too familiar with (my day job is business analysis and consultation) - and why I said in my original post that I can't blame them, nor do much about it save watch some favorite beers fade off into the sunset. I've said a few times in the past that I'm amazed that any US brewer bothers to make any doppelbock these days, what with the lagering process tying up tanks for at least double the time of an ale that'd sell quicker and create more buzz.

I can grumble about it online, and I can point out potentially diminishing choice in segments of the market which are not the darling of the day when someone asks about potential harm to the customer base, but actually do much about it...nope. I am but a handful of water in the vote-with-your-wallet sea.

Side note to self: check out this Churchville Lager.

 

But there are bright spots too!

I have had more Berliner Weisse and Gose beers in the last 1-2 years than in the previous 20+ years.

As things change there will be positives as well.

Cheers!


P.S. I also recently had my first Lichtenhainer beer. Granted it was on draft (at the Victory Brewpub) but it was a revelation. Victory produces this beer for a restaurant in Philadelphia (Alla Spina). Hopefully we will see more of this style of beer?

http://www.victorybeer.com/beers/alla-spina-lichtenhainer/

 

The article is interesting but over simplified. The composition of the craft beer producers is different from the composition of non-craft beer producers. Craft beer producers are more segmented. Same goes for the market. There are a ton of small breweries that either sell only on site or only sell within a limited area. People buy their beer because they like the brewer's tap room or because it is local or because they like to hangout at bars that sell the stuff. Other segments of the craft beer market chase after anything new or anything extreme or the latest fad. This encourages diversity. Only a small percentage of the 11K+ craft beers compete with the non-craft beers on a regional or national level. The craft beer markeet may not be over saturated. It mnight just be different.

 

Well said, and I concede that, for the unlucky set whose preferred styles aren't en vogue at the moment, the "threat" is closer at hand. My personal experience with craft beer so far suggests, however, that, even when a particular preferred brew goes on hiatus, there are usually replacement options readily available. Of course, that doesn't diminish the disappointment of losing a darn fine brew. So, I guess what I'm saying is, I hear you, and collateral damage does suck sometimes. I think the upsides outweight the downsides, personally, but I understand why you might feel differently if the vast majority of styles you prefer happen to be the ones struggling at the moment.

BTW, you mentioned a few posts later about what can be done, and I think one obvious answer is to get every last one of your friends to develop a taste for your preferred styles. If you and your neighborhood are always buying up all the lagers/pils/doppelbocks/etc from your local stores, they'll eventually take notice, buy more, which will signal to breweries that they should make more, and on we go. Basically, your styles just need a little marketing

 

Lol.. "the market always corrects itself."

 

Hey, that's what the internet grumbling is part of.

 

Frankly, I'm surprised it's not higher than 25 percent. I hate going to a beer bar that has 30 taps, but 20 of them are IPA's.

 

So true. With the advent of all the sours and such (with all of the "bugs"), I'll bet the beer drinking segment of the Activia market has abandoned ship. Poor Jamie Lee Curtis!

 

LOL!

Cheers to you sir!

 

If I were into tattoos I would consider getting this post tattooed on me

 

Leave out the grammatical error I didn't catch.... :-)

 

I must say that I get a little peeved when I walk into my local Kroger. Which happens to have the best selection in my area without having to go downtown, and I can't find the likes of Orval, Saison Dupont, Ayinger, etc anymore. Instead countless 5 month old IPA's have replaced them. Ugh