Many Top 50 Craft Breweries Struggling to Grow, Brewers Association Data Suggests

Discussion in 'Beer News & Releases' started by Todd, Jun 5, 2019.

  1. Todd

    Todd Founder (5,566) Aug 23, 1996 California
    Staff Moderator Fest Crew

    https://www.brewbound.com/news/many...ling-to-grow-brewers-associated-data-suggests
     
  2. ovaltine

    ovaltine Poo-Bah (2,587) Apr 6, 2010 Indiana
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  3. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    FWIW I am personally not surprised by the overall indications here. The beer business for larger, distributing breweries are very challenging in today's craft beer market.

    One snippet from the linked article:

    “Bucking the trend, however, was Sierra Nevada Brewing Company. After consecutive years of 7 percent declines, the California- and North Carolina-based craft brewery returned to growth in 2018, increasing production 2 percent, to nearly 1.1 million barrels.”

    If I am reading the above correctly Sierra Nevada in 2018 had a 2% growth from the previous year (2017) which had a 7% decline (and also a 7% decline in the prior year of 2016). Increasing by 2% after two consecutive years of 7% declines per annum is really nothing to ‘crow’ about. Is this how the Brewers Association tries to put a ‘positive spin’ here?

    I am sure that some of the larger, distributing breweries are likely to blame the ‘crafty’ breweries of the mega breweries for their problems but it seems to me that the continuing growth of small, local breweries are the continuing ‘threat’ here. At the end of 2018 there was a total of 7,000+ craft breweries and by the end of this year (2019) there will be 8,000+ craft breweries in the US.

    How does a larger, distributing brewery ‘present’ themselves as the equivalent of a local, neighborhood brewery?

    Cheers!
     
  4. islay

    islay Aspirant (258) Jan 6, 2008 Minnesota
    Trader

    Based on the threads in this forum, I gotta assume it's because they all made racially insensitive, misogynistic, or anti-abortion social media posts.
     
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  5. NeroFiddled

    NeroFiddled Poo-Bah (10,711) Jul 8, 2002 Pennsylvania
    Society Trader

    Minhas only dropped by 9%? How are they even still in business at all? Oh, right, cheap beers still sell. Nevermind.
     
  6. QuakeAttack

    QuakeAttack Devotee (488) Mar 19, 2012 California

    I would have changed "Many" in the title to "Some". The industry is changing (maturing and adding more numbers) and consumption has changed (more local). So, it's no surprise that some will continue to perform, others slow down, and some will be going "bye bye" in the next couple of years through either consolidation or going out of business.

    I found it interesting (but not surprising) that some breweries have succeeded after acquisitions/mergers (Firestone Walker and Lagunitas) and others not so much (Boulevard, Anchor and Ballast Point).
     
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  7. islay

    islay Aspirant (258) Jan 6, 2008 Minnesota
    Trader

    "Production of Anheuser-Busch InBev’s 11 craft brands combined grew 1 percent, as seven of the world’s largest beer manufacturer’s craft brands are now above the 100,000-barrel threshold, the BA reported.

    A-B’s two largest craft brands — Goose Island (550,000 barrels) and Shock Top (430,000 barrels) — declined 7 percent and 23 percent, respectively. Seattle-based Elysian Brewing Company continued to expand, growing 38 percent, to 220,000 barrels. Three other A-B craft brands crossed the 100,000-barrel mark last year, including 10 Barrel Brewing (100,000 barrels), Four Peaks Brewing (100,000 barrels) and Golden Road (160,000 barrels). Other brands have either already hit that milestone (Karbach Brewing at 125,000 barrels) or are closing in on it (Breckenridge Brewery at 95,000 barrels and Blue Point at 90,000 barrels)."

    That +1% figure sounds awful on the surface, but it appears that a lot of that lack of growth is from the decline of Shock Top, which never was a standalone craft brewery. Still, for AB InBev to be experiencing such slow growth just a few years after its craft brewery buying spree, despite its market power and myriad resources, is a bad sign for actual large craft breweries that don't have nearly as much weight to throw around. It also suggests that those worries about Big Bad Bud coming in to dominate the segment were unfounded; it was in fact the little guys all along who were threatening the established players in craft beer. I've long suspected that AB InBev is not happy with the performance of what it used to call its High End Division, and now I'm even more confident that's the case.
     
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  8. Domingo

    Domingo Poo-Bah (2,592) Apr 23, 2005 Colorado
    Society

    Man, I feel pretty discouraged looking at New Belgium and Great Divide plummeting like that. Fresh and local are fine, but I feel like they're still putting out a better product than most of the local options out there. Both seem to go out of their way to ensure the product is fresh, too.
     
  9. BayAreaJoe

    BayAreaJoe Champion (867) Nov 23, 2017 California
    Society Trader

    I'm very curious of the reasons behind the pretty significant growth of Firestone Walker and declines of Boulevard & Ommegang since they're all part of the same parent company now.
     
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  10. dele

    dele Initiate (24) Mar 13, 2019 Massachusetts

    I'm not sure I understand why this is seen as a problem, even by those in the industry. Businesses don't have to be growing to be profitable. The idea that a business has to be constantly growing to be successful seems to me like one of the core problems in our economy and society now, because it leads companies to prioritize growth over taking care of the people they employ.

    Instead of worrying about whether a business is growing or not, why not just worry about whether or not it is making a product that enough of us want to buy to keep its employees paid and its owners taking home enough profit to live on?

    By the way, @Domingo, during a recent visit to Colorado I was excited to drink some fresh Titan. I went to a liquor store in Fort Collins, and the Titan they were selling was seven months old. Needless to say, I passed on it. That's a problem for Great Divide.
     
  11. Domingo

    Domingo Poo-Bah (2,592) Apr 23, 2005 Colorado
    Society

    Wow. That's no good. 7 months isn't the end of the world...but that just down the road in FoCo. Guess it must just be a Denver thing. Around here they even sell a Hazy IPA that's dated within the month and only at certain stores.
     
  12. islay

    islay Aspirant (258) Jan 6, 2008 Minnesota
    Trader

    Firestone Walker did enter multiple new states in 2018, whereas I believe Boulevard and Ommegang already had national distribution or close to it.
     
  13. islay

    islay Aspirant (258) Jan 6, 2008 Minnesota
    Trader

    Many of these breweries have undertaken major debt-financed expansions in recent years and now are heavily leveraged with high debt obligations. They made expensive capital outlays knowing that it would put them in the red in the short term but hoping that it would lead to higher long-term profitability as they grew. In many cases, they made their strategic decisions based on growth forecasts that have proven unrealistically rosy. If that expected growth never occurs, they could face substantial losses that threaten their solvency.
     
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  14. jesskidden

    jesskidden Poo-Bah (1,767) Aug 10, 2005 New Jersey
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    #14 jesskidden, Jun 5, 2019
    Last edited: Jun 5, 2019
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  15. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    Ommegang is not quite nationwide but close:

    “WHERE ARE OMMEGANG BEERS DISTRIBUTED?

    Our beers are currently sold in 47 states – see our Beer Finder for locations near you. Our beers are not available outside the US and Canada, and we are unable to ship. We’re sorry!”

    Boulevard still has some room to grow:

    “Where are Boulevard beers distributed?

    Our beers are currently sold in 41 states –“

    Cheers!
     
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  16. QuakeAttack

    QuakeAttack Devotee (488) Mar 19, 2012 California

    I haven't purchased New Belgium since the 90s. I have been a big fan of Great Divide, but there has been limited to no distribution in my area (SF Bay Area) and most of it's old. I just moved on to different choices which were just as good.
     
  17. jakecattleco

    jakecattleco Poo-Bah (1,985) Sep 3, 2008 California
    Society Trader

    Sadly often in my experience I'm forced to choose from the fresher more local option against a known solid/great beer that happens to be older. Not a problem when the local stuff is comparable in quality, but sadly more often than not its lagging behind.

    805 is now (according to FW tour guide) the largest selling craft brew in CA...to supplant SNPA is no small feat. And apparently it seems to be selling well outside of CA. So add additional distro states plus this trend makes the result plausible (considering the others existing distro footprint). Maybe also aided by smaller packaging of the Vintage beers and increased availability to other markets?
     
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  18. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    Maybe this competition will motivate the non-local distributing breweries to improve the freshness of beers for retail in your area? I would think that lost sales to locals because they are fresher would be catalyst here?

    Cheers!
     
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  19. ConorM

    ConorM Initiate (17) Mar 2, 2019 California

    One thing I've noticed is that 805 has been the "light craft beer" of choice at bars. Whereas before it was either Boston Lager or SNPA, it seems 805 has taken over.

    One thing that tends to get lost here in BeerAdvocate is that we are such a small segment of the craft beer industry. The vast majority of craft beer consumers aren't obsessively checking dates or waiting in line for the latest can release. They don't need to find the latest and greatest DDH New England IPA on the market, they just want something that's good and reliable, which beers like 805, Boston Lager, SNPA and even Solid Gold (and prior to Solid Gold, All Day IPA) all satisfy.

    For whatever reason, Boulevard's attempts at drafting a beer for this market have failed to capture the audience's interest (such as their Kolsch or wheat beers) and there seems to be this overall push from the market against Belgian style beers (every West Coast brewery I know that tried to start as Belgian-only or Belgian inspired, like Monkish or Original Pattern or Brouwerij West or Laughing Monk, has had to pivot to New England IPAs and kettle sours because those are the ones that sell), which hurts Ommegang as that was their specialty.

    At least, this is my (admittedly superficial) reading of what's going on here as I don't have any hard data to back this up other than 805 being the top-selling craft beer, followed by beers like SNPA and Boston Lager.
     
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  20. jakecattleco

    jakecattleco Poo-Bah (1,985) Sep 3, 2008 California
    Society Trader

    Yeah, let's hope their distributors help by ordering small shipments with greater frequency. But that comes with additional shipping costs.
     
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  21. jzainasheff

    jzainasheff Initiate (36) Apr 8, 2017 California
    Industry

    What is cool is I don't think I disagree with anything said in this thread. Funny how the Interwebs can surprise you. I will say that my guess is that FW is not selling much of anything other than 805. It is their high volume beer that they push hard. Other beers they make are pretty much done and dusted. (I could be wrong from where I sit.)
     
  22. RobHB

    RobHB Initiate (78) Aug 20, 2017 New Jersey

    Much of that growth is due to Hazy Little Thing, which I've seen reported in a few spots, but I'll stick with Brewbound (from January 2019):

    "(Sierra Nevada chief commercial officer Joe) Whitney credited the company’s return to growth to Hazy Little Thing, a year-round New England-style IPA that launched last year and is already the company’s No. 4 brand. According to IRI, Hazy Little Thing IPA finished the year with more than $24 million in dollar sales.

    Overall, Sierra Nevada produced about 106,000 barrels of Hazy Little Thing, Whitney said."
     
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  23. jakecattleco

    jakecattleco Poo-Bah (1,985) Sep 3, 2008 California
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    Think they said on the tour that 805 is using almost 70% of their being capacity.
     
  24. gueuzegeek

    gueuzegeek Zealot (578) Aug 11, 2003 New Jersey
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    Many of us in or near cities are starting to get very spoiled by having great beer so close to home, that means it IS tougher for the top craft brewers to get attention! I confess, I do like to support my locals, so I am partly responsible for this! If you make a GREAT beer, I will still drink it, but the competition for my attention is tougher when my locals make great beer! Tonewood is 2.5 miles away and they are becoming a regional powerhouse.
     
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  25. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    Yup.

    And lost sales have a cost as well.

    Cheers!
     
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  26. BrewmanCapote

    BrewmanCapote Aspirant (250) Feb 3, 2013 Illinois

    Thank you.
     
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  27. rodndtube

    rodndtube Devotee (430) Feb 24, 2007 Maryland
    Society

    Several dark beers have disappeared off MD shelves, including Uinta's Baba and New Belgium's 1554. Seems like they are chasing the crowded IPA, DIPA, NEIPA, GOSE space and sexy packaging.
     
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  28. AlcahueteJ

    AlcahueteJ Savant (978) Dec 4, 2004 Massachusetts

    Weird, we get Firestone but I don’t think I’ve seen 805 in Boston.

    Tell this to Allagash.
     
  29. hopfenunmaltz

    hopfenunmaltz Meyvn (1,436) Jun 8, 2005 Michigan

    They have only recently started shipping to other Western States. The installed a 300 bbl brewhouse, and some large fermenters to up production of 805.
     
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  30. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    I am unfamiliar with FW 805 since I have never seen that brand in my area. I went to learn more about this beer on BA:

    “BA SCORE

    3.48/5

    Okay”

    And:

    “A light, refreshing blonde ale created for the laid back California lifestyle. Subtle malt sweetness is balanced by a touch of hops creating a versatile beer with a clean finish. 4.7% ABV and available wherever beer is sold if they don't have it, demand it.”

    Maybe this beer is akin to the best-selling beer of New Glarus: Spotted Cow?

    It is interesting in today’s craft beer scene where IPAs tend to get the most love that easy drinking beers like FW 805 seem to be ‘best sellers’.

    Cheers!
     
  31. stevepat

    stevepat Zealot (598) Mar 12, 2013 California
    Trader

    It's definitely a beer built for easy appreciation, not to wow the beer nerds. In southern california it seems to be the go to beer for many many people. It is also sold in gas stations/corner stores in 24 oz cans right along with all the macro tall boys and the cheladas. It is also very well branded to appeal to the broader california aesthetic, unlike the ornate branding that most FW stuff has.
     
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  32. AlcahueteJ

    AlcahueteJ Savant (978) Dec 4, 2004 Massachusetts

    I wonder why this one appeals to the masses but other similarly easy drinking beers haven't.

    Like Easy Jack, Pale 31, DBA, and Pivo Pils.
     
  33. BayAreaJoe

    BayAreaJoe Champion (867) Nov 23, 2017 California
    Society Trader

    They've definitely got the lifestyle marketing angle to it down, I'm still sort of amazed when driving down to the Central Coast area just how many 805 bumper stickers and branded merchandise I see all over the place. I'm personally reaching for a lager like Alpenflo or Firestone Lager when it's time for easy drinking, but man tons of people out here love their blonde ales.
     
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  34. stevepat

    stevepat Zealot (598) Mar 12, 2013 California
    Trader

    To me it's because sweetness is the dominant flavor in 805. If I recall correctly it was originally labeled a honey blonde ale and I think that the same way really sweet neipas and fruity goses and such appeal to segments that don't like any other style of beer 805 is just a sweet and inoffensive beverage that makes you look cooler than drinking a pbr
     
  35. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    Firestone Walker seems to be marketing 805 as 'separate' product. They have a separate website dedicated solely to 805:

    https://www.805beer.com/

    This is an intriguing marketing & sales strategy.

    Cheers!
     
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  36. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    Just 2 minutes ago I 'discovered' that - 805 has its own separate and dedicated website with lots of lifestyle 'imaging'. Surfing, etc.

    After 'witnessing' the 805 website I now have a better sense of appreciation for maybe why Sierra Nevada decided to create a new year-round product of Sierrveza. Sierra Nevada thinks they can get a part of this lifestyle beer action?

    As a non-Californian I gotta admit that this sort of stuff comes off as a bit weird to me. Maybe this sort of thing 'works' in California but will it 'translate' elsewhere? I am willing to bet this stuff will not work on the East Coast.

    Cheers!

    @SierraTerence
     
  37. AlcahueteJ

    AlcahueteJ Savant (978) Dec 4, 2004 Massachusetts

    Ha yeah.

    When it's 40 degrees and raining, or 20 degrees and snowing, or I'm buried under two feet of snow, I can't see myself reaching for this blonde ale.

    I'd probably still grab their DBA or Pale 31 though if they were still around. :wink:
     
  38. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    Because you are not a Californian dude!?!

     
  39. AlcahueteJ

    AlcahueteJ Savant (978) Dec 4, 2004 Massachusetts

    I bet Sierra Nevada Jesus definitely digs 805.
     
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  40. JackHorzempa

    JackHorzempa Poo-Bah (4,012) Dec 15, 2005 Pennsylvania
    Society

    :astonished:

    I am pretty sure that the new COO of Sierra Nevada (Jeff White) would he aghast to hear that!?!

    Cheers!
     
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