The Craft Beer Boom Has Gone Flat

From the BREWBOUND article on the same Brewers Association report:

Something that could help trends improve during the back half of 2017, however, are increased taproom sales. Watson said he believes an uptick in beer being sold directly to consumers — something the organization can’t accurately quantify at the moment – could shift industry-wide production “up a point of two,” he said.

 

I also noted this quote:

... companies that produce fewer than 15,000 barrels annually reported growth of about 25 percent through June 2017

 

And also in the Brewbound article:

“The last time growth fell below six percent was 2004, when roughly 1,400 craft beer companies made 5.8 million barrels of beer, according to BA records.”

So if we assume that the sales from small, local brewery taprooms could bump up the total growth a point (5% to 6%) then it seems that the craft beer rate of growth for 2017 will be comparable to the performance of 2004 (from a percentage perspective).

A marked change from the rate of growth of the previous few years.

Cheers!

 

Voluntary basis, pretty high return rate. Edit - don't know the exact number.

The members of the BA return the numbers on a voluntary basis to the BA. All breweries have the production numbers for the TTB, for tax purposes.

 

Maybe so, maybe not.
Only time will tell.

 

A bit overkill to say its "gone flat". I doubt that anyone expected the exponential growth of the past 2-3 years to continue.
I think the big national "craft" brands like New Belgium, Bells, Sierra Nevada etc are going to struggle to continue their growth in the next few years as small local microbrews will eat their market share.
I'm probably in the minority that think big companies and investment firms will regret billion dollar purchases of craft brands (if intended purely from a profit stand point) but only time will tell.

 

I can't argue with legit numbers but I feel even for myself, the interest is not as high. I stick to price points, mostly cans. I don't drink exclusively IPAs anymore. Stuff I like is getting pushed out by an over saturation of hoppy beers. I like them but only so much is enough. I did however help a guy last week with questions because he said he was tired of drinking Corona. Somebody said Oskar Blues beerito is similar to Corona and I'm sorry but I corrected him. "Mexican" on that label means nothing really in terms of style. Misinformation causes people to dislike something out of ignorance. He passed on it. A good beer to begin craft IMO but pocked up other things. It's good to see people interested

 

Flat, to me, would be 0 growth. About all you can say about the numbers is "flattening", "slowing", or "saturating". I've been doing my part

 

We've been flooded by new local breweries, mostly in the Raleigh area. With competition speeding ahead I'd assume the money available in the pool would still be quite fixed. Then there's the Asheville breweries. There's breweries I've never heard of and their beers on the shelf are still $11-12 bucks/ six. If I don't see them on tap and try a sample, I'm certinly not dropping that kind of cash on unknown beers. IMO anyway we've hit about max saturation , the beer wall used to be minimum on local now it's a large section plus quite a bit of floor space. I don't need 15 mediocre ipas on the shelf, I'm still pared down to 3-4 that are worth buying. I still ask around though to get a concencus on new beers or breweries, whst I get a lot of is a shrug of the shoulders. If it was outstanding the stuff would fly off the shelf and there would be a local buzz. I don't know what the answer is, but if I was opening a new brewery I'd focus on a very few styles and make every effort to make them stand above the rest. I don't see how any new brewery can hit the ground running making 8 different kind of beers. Alchemist is a great case in point, for a long time there was only one beer, it became famous. Sure there's quality out there, but he didn't find the need to saturate the market with 6 others beers either.

 

It would seem there is a correction in the not too distant future. Between people jumping in because there friends like a home brew they made and people that open breweries because its trendy or because there have been good margins, there is a ton of bad beer out there. Thus far, the market has supported it, but obviously it isn't sustainable. Hopefully competition and more educated consumers will make better brewers who will make better beers. I'd rather see that happen then to see people's dream taken away.

 

I agree. Here is my observations.

There are many people that drink at the new brewery in their town and think it is great because the beer has flavor. They are not beer drinkers with an educated palate, and those flavors are often off flavors, I.e. The beer is bad. There was an online poll for the best new brewery in MI, less than a year old, and some of the ones with poorly made beer were getting a lot of votes.

Some new breweries that are making very good beer that hits the classic styles get panned. Why? The beer is "boring", or the beer is "watery". Once again uneducated beer drinkers that associate intensity of flavor to quality of flavor.

Edit - hopefully that will all change as people get acquainted with well made defect free beers. It may take a long time.

 

From my view on the beer ship. It is most certainly not flat. The only breweries I know of that are not doing well in this era are the ones whose concept does not gel with the reality of their market space. Breweries that try to imitate the previous era of going wide and shallow will probably not survive. The customer is a lot smarter, and they have local offerings that don't suffer the way distributed beer going through the network can.
The numbers won't show the kind of uptick it would have from even five years ago. The kind of thing that drove Lagunitas into becoming the behemoth that it is today. That growth for the sake of it era is completely over, and those were shoot the moon odds to begin with.
Moreover, this kind of hamhocked verbal nonsense they write about is an unnatural kind of growth anyways. Sorry. 15% annual increase is not natural.

 

Homerism is HUGE with new craft breweries. Many of them get their acts together and start brewing better, more interesting beer. Some don't, because people are buying their beer. Only a matter of time before those breweries shutter. I, maybe for one, hope that it would happen in every case of breweries making and selling bad beer that they should know is bad, but that isn't the case because consumers are too committed to supporting THEIR local brewery and/or they have no idea that the beer is, indeed, bad.

 

Great points - BA has booted a lot of volume from what it has defined as independent or craft or whatever. Take those numbers and kick in almost a million barrels of Ballast Point (as a high) and then another 30-60,000 more for every acquisition like Terrapin, Hop Valley, 10 Barrel, etc and its a lot of beer suddenly vanished from the numbers.

Don't know, but is every brewer a member of BA and reporting?

 

You'd be surprised. A LOT of people are drinking the BA Kool-aid.

Most reasonable people knew that the kind of growth that happened wasn't sustainable, though.

Ehh . . . there are more craft beer consumers turning 21 every day. Those national level breweries very probably expanded using conservative growth estimates and those have, again very probably, been eclipsed. Craft beer AND Big Craft will continue to grow as the small, local craft scene attempts to vet itself, hopefully on the premise of quality.

I would doubt that they would, as they were probably using conservative growth estimates, as well. Like you said, though, only time will tell.

 

The Brewers Assoc's The New Brewer, citing Beer Marketer Insights figures, put Ballast Point's 2016 barrelage at less than half that - 430,917 bbl, and BMI further reports that BP sales have flattened quite a bit this year, to around 2-3% growth (compared to the 55% - 126% they'd done from '13-'15).

 

Have they?

Yes. The BA, apparently, uses numbers submitted by the breweries to the TTB for taxation purposes.

 

https://www.brewersassociation.org/statistics/by-state/
VT has the most breweries per capita, ranks third in total economic impact, and produces the most gallons per 21+ adult in the state.

The reason I posted that is to point out that there are a ton of local options for consumers and I think that keeps prices on par with the out-of-state market.

As for quality, with such a "saturated" market brewers have to maintain a standard or a consumer can go elsewhere, which I think will start to happen across the country as more new breweries start to pop up. And if people go elsewhere doors have to be closed.