IPAs and All-Lactose Everything: Will the Pandemic Burst the Craft Beer Bubble?

Discussion in 'Beer News & Releases' started by M-Fox24, Oct 19, 2020.

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  1. M-Fox24

    M-Fox24 Meyvn (1,464) Mar 17, 2013 New Jersey



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  2. MNAle

    MNAle Poo-Bah (2,412) Sep 6, 2011 Minnesota

    Here we go again with the "craft beer bubble" cliché.

    I didn't fall for the click-bait, but the last people I would look to for analysis of craft beer is a wine magazine. I'm surprised they could lower their nose enough to even smell the beer.
  3. jonphisher

    jonphisher Meyvn (1,391) Aug 9, 2015 New Jersey
    Society Trader

    I definitely think covid has shifted people away from the styles mentioned. I think it has diminished the hype that a lot of these breweries rely on. Now that more “rare” beer is accessible it’s not so special anymore and it’s just sitting at some of these places. Also considering the price tag on said beers seems to be a perfect storm for decrease in purchases. It can’t be good to be an IPA brewery and have a huge stash of beer getting old either, considering the freshness window for what people accept in those styles. That’s just how I’ve interpreted all of what’s happening around here.
  4. FatBoyGotSwagger

    FatBoyGotSwagger Poo-Bah (2,017) Apr 4, 2009 Pennsylvania

    It will be a combination of factors that brings them down albeit the gimmick factor of lactose and such will play a part.

    Price will be one, the novilty factor will wear off after people try them. The larger presence of hard seltzer and new flavors are relevant. Adding in the rediscovery of core beers will be final nail in the coffin.

    Edit.. it won't burst the bubble as a whole but smaller parts within will fail.
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  5. southdenverhoo

    southdenverhoo Devotee (437) Aug 13, 2004 Colorado

    I think the shift is from buying and consuming on-premise-- in bars, restaurants and breweries-- and to consuming off-premise, with some shift in dollars to retail off-premise vendors (groceries, liquor stores, craft beer shops), while the business that on-premise purveyors are doing has shifted towards pick-up, delivery, and away from on-premise consumption though that is still certainly going strong in my market, though obviously reduced by reduction in seating caused by social distancing.

    I think who's hurting is the brewery that doesn't package in a convenient way to sell off premise, ie, has no canning or bottling line. What about the ubiquitous crowler, you ask?

    Even with a Crowler filler/seamer, the price per ounce difference usually sends me to a brewery that has 4 packs of 16 oz'ers for sale, say for around $12-$16 (64 oz), rather than crowlers at $11 or $12 (32 oz) Even an $8 or $9 crowler loses out value-wise to the 4 pack. So I think breweries except for the very apex predators in popularity, who don't have a canning line or a contract with a mobile canner, are hurting. And I care enough about breweries to drive the extra mile to do business with them, as I suspect most BA's do. But there is a large world of craft beer consumers who aren't BAs and maybe don't even know what BA is, and their thought pattern may be, if I can't sit at the brewery with friends and drink the beer there, I might as well just hit the King Soopers or Ralph's or the bottle shop down the street and get a six pack of Voodoo Ranger or Lil Sumpin' Sumpin...

    But you can get pastry stouts and milkshake IPAs and fruited sours at those places, or at least you can in Colorado and Virginia, the two places I've been most recently, so I don't think the pandemic will change the styles consumed as much as it will change the way they are purchased and consumed.
  6. ndepriest

    ndepriest Initiate (155) Feb 21, 2012 Georgia

    Is All Lactose Everything that new release from Other Half?
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  7. deleted_user_1007501

    deleted_user_1007501 Initiate (0) Jun 30, 2015

    Why the fuck are people still calling it a bubble.
    Rug, rozzom, PapaGoose03 and 3 others like this.
  8. jonphisher

    jonphisher Meyvn (1,391) Aug 9, 2015 New Jersey
    Society Trader

    That and also the title is a huge misnomer I feel like.
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  9. ESHBG

    ESHBG Devotee (431) Jul 30, 2011 Pennsylvania

    I can make an argument that it was, though, and my proof is in the beers that people used to stand in line for that are now found on the shelves with ease, some are now even year round, AND they collect dust. My other proof is in how many breweries have opened and failed, how many core beers have vanished, how many breweries are pivoting and making other beverages...

    The $16 four pack of another just okay IPA can only last but so long.
  10. deleted_user_1007501

    deleted_user_1007501 Initiate (0) Jun 30, 2015

    I think the proper term is “over-saturation”. The value of these beers themselves haven’t skyrocketed and suddenly hit critical mass then depreciated.

    KBS was once a thing stores would have to hide behind the counter. Because there weren’t many BBA stouts on the market. Now nearly every brewery has a BA offering. KBS wasn’t special anymore because so many others were crowding it off its high ground. Same goes for all these styles and popcorn fads.
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  11. maximum12

    maximum12 Poo-Bah (5,281) Jan 21, 2008 Minnesota
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  12. ESHBG

    ESHBG Devotee (431) Jul 30, 2011 Pennsylvania

    Fair point and a case can be made for this but I have seen examples of rapidly increasing value and then having to back off and I have seen this happen with Troegs, DFH 60/90 Min., ST Pumking and many others. And look at NEIPAs right now and how high the price is for many of those, that won't be able to continue and there will be a rapid decline like we have seen with WCIPAs.

    And in many parts of the country KBS has decreased in price and I don't feel as if this can be attributed to a saturation of BA shelf beers. We haven't seen a decrease yet in my neck of the woods but our retailers are pretty out of touch so we generally do lag behind others.
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  13. JackHorzempa

    JackHorzempa Poo-Bah (5,622) Dec 15, 2005 Pennsylvania

    Because some folks like bubbles?

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  14. deleted_user_1007501

    deleted_user_1007501 Initiate (0) Jun 30, 2015

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    WCKDVBZ Poo-Bah (1,783) May 9, 2014 South Carolina

    "IPAs and All-Lactose Everything"

    At least those are still beers. The real enemy is Hard Seltzers, Hard Sodas, Hard Coffee, Hard Sweet Tea, and everything else that's a beverage + alcohol. There's less beer on the shelves, because of that crap.
  16. V1leOne

    V1leOne Initiate (26) Jul 25, 2020 Michigan

    Not even going to pretend I wouldn't buy gallons of this
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  17. jesskidden

    jesskidden Poo-Bah (2,517) Aug 10, 2005 New Jersey
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  18. Urk1127

    Urk1127 Poo-Bah (2,073) Jul 2, 2014 Pennsylvania
    Society Trader

    I agree. After countless beers, and I do think there are great examples of NEIPAs, the more affordable classics will return
  19. JohnnyHopps

    JohnnyHopps Poo-Bah (2,836) Jun 15, 2010 Indiana
    Society Trader

    All of the cows with sore teats will be grateful when the lactose bubble bursts.
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  20. bret27

    bret27 Poo-Bah (1,997) Mar 10, 2009 California
    Society Trader

    We're in this war for the species, boys and girls. It's simple numbers. They have more.
  21. mogulskier

    mogulskier Initiate (150) Feb 3, 2019 California

    I remember the days when Lagunitas' Born Yesterday wasn't sold by the 6-pack, it was sold by the case. Folks lined up out the door, and bought entire unopened cases of Born Yesterday. Sold out in a matter of hours. KBS? You'd be lucky to get a 4-pack rather than a single bottle.

    Remember the days when 2 cases of Pliny sold out in 60 mins? With a 2 bottle limit? I sure do.

    Bottle Logic? Yeah right, good luck. No chance.

    Alvarado Street select beers were 1 can per customer.

    Times have changed. Dramatically.
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  22. rozzom

    rozzom Meyvn (1,059) Jan 22, 2011 New York

    Yeah that's a terrible title, and the article itself doesn't seem to know what its conclusion/point is. It leads with NB Fat Tire's 5.2% increase as a potential consumer trend towards "classic core" beers, but then immediately shows that the latest NB Voodoo Ranger (a mango IPA - blergh) is up 48%.

    So it's not so much about the "bubble" bursting and a move away from experimental/gimmicky stuff, as it is a case of (and the article itself touches on this) people moving to more easily accessible beers - which lends itself to the already widely distro'd, bigger brands - at local supermarkets etc, as the pandemic took hold.

    So I guess the relevant questions/concerns for the craft segment as cases spike, more lockdowns take hold, and the economic impact continues to play itself out, are - a) will this affect craft consumer spending over the medium term as more economic fall out occurs, and b) how effectively do the smaller, direct to consumer (or mostly/part direct to consumer) breweries adapt to keep their head above water.

    On the latter point, anecdotally some local places are doing better than others. Threes Brewing for example really jumped on the delivery/shipping game early, and offers a lot of flexibility. They also happen to make a much broader range of beers - so on top of hazy IPAs, they also offer foudre-fermented lagers. I think their reputation (deservedly so; long overdue) has upped over the last few months. Maybe the combination of their solid handling of recent challenges + offering an extensive ranger of pilsners/not typically sexy styles, has allowed people to (re)discover some more classic styles - it's hard to know though. Other Half on the other hand, while not struggling per se, is less flexible in shipping, and seemingly has a mountain of 30+ different hazy IPAs available to go from their Brooklyn location - a marked change from the 4-8 or so pre-pandemic - clearly their ability to shift the beers is waning. Whatever the true actual underlying $ impact has been at both places, there's definitely a perception thing at play in favor of one and against the other.
  23. stairway2heavn

    stairway2heavn Initiate (132) Aug 17, 2017 New Jersey

    I think definitely the lack of draft sales, which clearly was a significant part of the OH model, has hurt them. They're making beers with more limited shelf life and quicker brew times than many of Three's options, so I would imagine Three's in generally would have a harder time building a backlog, if their brew times are more like 6 rather than 2 weeks. Obviously there is hype/scarcity stuff around OH historically as well which has been mentioned broadly here, as well. In general for NEIPA heavy producers with direct sales historically, it's going to be a tough road. I expect as mentioned here more of those brewers are going to start making some seltzer, as tired hands has. That said, winter will be telling. Evil twin in ridgewood has done well due to outdoor space allowing for up marked taproom sales vs canned, and in more suburban areas obviously many breweries during good weather times have a similar situation. Winter is coming though, and it'll be sad/interesting to see what happens to many smaller places.
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  24. tinoynk

    tinoynk Initiate (126) Sep 25, 2010 New York

    I definitely think that the currently “hyped” styles are established to the point that there are many people who got into craft beer via those styles and are now branching out.

    But I also think theres enough alcohol drinkers who still think of craft beer as being unapproachable and pretentious, but who might enjoy a juice bomb NEIPA or a heavily fruited kettle sour despite not knowing they exist, that there may be more room for growth than with previous craft trends, which were mostly driven by much less accessible styles.
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  25. bonsainut

    bonsainut Initiate (40) Oct 23, 2014 North Carolina

    Well, there are different ways to define a bubble. Craft beer sales had been growing about 3% in 2019 (which is good, given that overall beer sales were flat to slightly down). However the NUMBER of craft brewers is increasing at an increasing rate... up about 15% per year in 2019, with a lot more in the planning stages.

    Of course, coronavirus has put a stick through the spokes of the craft beer industry. Who knows what 2020 is going to look like - how many plans were delayed or cancelled, and how many brewers just couldn't manage to stay afloat.

    However, the rate of growth in the number of craft brewers simply isn't sustainable. They will simply be fighting over smaller and smaller slices of the same pie. So there is going to be a shake-out, and when the dust settles, coronavirus may simply have accelerated it.
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  26. deleted_user_1007501

    deleted_user_1007501 Initiate (0) Jun 30, 2015

    I think a more proper term for that is “oversaturation”. Bubbles refer to the value of something.
  27. bonsainut

    bonsainut Initiate (40) Oct 23, 2014 North Carolina

    Trust me... there is a bubble in the craft brewing business, because money is rushing in at a rate greater than the net economic future of the business segment.

    Unless, of course, you happen to believe that you can independently grow the industry.

    Another way to think about it... if not a single new brewery opened, every existing craft brewer should expect to see revenue growth of 3%. 12 month return on the S&P 500 is 9.7%. Why would any right-minded person invest in a craft brewing business when they should expect to lose 6% versus just investing in a diversified market portfolio?
    #27 bonsainut, Dec 2, 2020
    Last edited: Dec 2, 2020
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  28. BillAfromSoCal

    BillAfromSoCal Zealot (542) Aug 24, 2020 California

    to me the biggest related factor is what the pandemic and related restrictions has done and will do to the disposable income of craft beer consumers. I dont know the demographic breakdown of people who buy most of the beers in the $3-10 per 16 oz can range but if their income is impacted by covid then I am guessing they will pay rent and feed family first....maybe
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  29. bonsainut

    bonsainut Initiate (40) Oct 23, 2014 North Carolina

    And don't forget, a large segment of craft brewers depend on brewpub income to pay the bills. With bars closed, or with restrictions on social gatherings, the money just isn't there.
    BillAfromSoCal likes this.
  30. BillAfromSoCal

    BillAfromSoCal Zealot (542) Aug 24, 2020 California

    I was talking with the owner of a nanobrewery/pub on the CA Central Coast and I noticed his kitchen was quite busy because all people ordering beer at breweries are now (or were) required to order food. I commented that his business must be booming because the food orders were inflating the value of each customer's tab. He said he was actually not gaining anything because lots of customers were going to regular restaurants where they can order beers WITHOUT ordering food. So to drink at a brewery you have to buy food but to drink at a restaurant no food is required. Thus the impact of the crazy-ass rules in California where the state picks winners and losers.
  31. BillAfromSoCal

    BillAfromSoCal Zealot (542) Aug 24, 2020 California

    I really believe that if the craft brewing industry wants to get more of these "other alcohol" drinkers to try the newer/trendier kinds of beers then they need to encourage more retailers to sell single cans. Many more people will invest $3-4 to try one can of something that appears unusual or new than will invest $13-14 for a 4 pk of something they might not like, especially when finances tighten. I patronize Trader Joes SPECIFICALLY because they will sell single cans of anything they stock.
  32. bonsainut

    bonsainut Initiate (40) Oct 23, 2014 North Carolina

    Was typing something, and decided to delete my post.
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