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"Trendish" Bubble About to Pop?

Discussion in 'Beer Talk' started by brewbetter, Nov 22, 2012.

  1. brewbetter

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    These guys have a good understanding of the different market forces at play. Are we really that close to saturation? Will we see a few major players (Stone, DFH, Lagunitas, GI, Bell's, Deschutes, etc.) eat up all the craft marketshare and craft shelfspace?
     
  2. Casedogg43

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    I tend to agree. But new breweries in fresh markets will always have a good shot at success if the brews are good.
    If you go down the isle of a nice craft beer store it's pretty amazing how many beers there are!

    Praise Jesus!
    Cheers
     
  3. cbeer88

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    I think Greg is spot on with his "trendy" comment. It's a real danger, because anything that becomes trendy inevitably suffers a giant backlash. That's really bad for small breweries, as that backlash will destroy half of them.

    Jim was right too - there are way too many people getting into craft for the wrong reasons and/or making mediocre beer.

    I don't think you'll see the bigger craft players eat up all the space, I just think you're going to see a point where stores stop taking on new breweries. Or, what I've already seen happening around here, is they try them out, and if they don't immediately sell, they don't bother getting them again. There are some local breweries that started up in the last couple of years around here that I don't even understand how they are still in business.
     
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  4. cavedave

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    Yeah, and how long before the pseudo anti capitalists in our group start the "Boycott Stone" posts when they do.
     
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  5. Sludgeman

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    The good beers will survive!
     
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  6. jdklks

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    It is an interesting question, and an inevitable one in any expanding market. And while I believe Greg Koch meant "trendish" in a subtler sense than merely being a popular novelty, I do not think the enjoyment of beer (like alcohol in general) is going to fall to the wayside after all these thousands of years. Still, the market cannot support an unchecked growth in industry, that's about as simple as economics gets, but I don't think it will ever reach the point where only a handful breweries are able to keep their doors open successfully. Soon, if it is not already, it will be the case that the number of breweries closing each day will equal that of breweries opening. That won't affect the number of beers available to consumers, it will simply make the industry more competitive, and will probably lead to a more consumer-research based product.
     
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  7. brewbetter

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    I agree that that point will signify the end of the beginning. As it stands today, I believe many more breweries are being opened than are closing and while that is great for us as consumers, it's definitely not sustainable.

    I guess you could argue that we are in somewhat of a golden age with all these breweries popping up.
     
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  8. MileHighShooter

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    This. Especially here in CO, seems like a new brewery is going up almost every week and some of them....leave a lot to be desired. Although, they seem to be doing ok business wise so it'll be interesting to see just when the breaking point happens. I think there is also going to be a MAJOR backlash from the distributors getting pressure from the larger breweries to play their shelf space games. And I don't just mean BMC stuff either. Even one of my favorite local breweries recently told one of my regular watering holes they can no longer get their special releases unless they permanently have the standard (and ho-hum) line up on tap. So the bar said to go pound sand, we're done carrying you at all.
     
  9. JuicesFlowing

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    What about people like me? I'm in Wichita Kansas and have no shot at getting DFH brews (whether I want to or not is another story), so when more local brews pop up, like Tallgrass, or Free State, I will spend my money on those. We buy what is available, so it's not my fault that a local brewery gets my money while another craft brewery that doesn't distribute to my state do not. Let the bubble burst, I don't care, I will always have craft brew, it just won't be the "touted" anointed brews that BA wax poetic about.
     
  10. jdklks

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    I just don't understand how "trendy" in this sense can possibly be a fear at this point. You are being pretty cynical assuming that people aren't genuinely trying to make good beer. Are there bad breweries? Yes. Will they eventually go out of business? Of course. Beer has NEVER been a trend. The only difference now is that we are seeing an unprecedented "boom" in the number of people interested in the QUALITY of the product. Doesn't it follow that a growing number of people interested in quality will not allow brewers making a sub-par product to survive and saturate the market? The only thing here I see as a potential problem is stores maybe not taking on new breweries. However, there is no reason that stores shouldn't follow the same laws of demand that producers do, though it necessarily takes them a bit of time to catch up. I just think that this whole conversation is premature to the point of cynicism. And if it is not cynical, then it is at best anti-beer advocacy. It reeks of the cry of the esoteric: "I want things for myself and the small group of people who are worthy to experience it along with me. Once it becomes popular, garbage ensues." In some cases, this view may hold true, but not with beer, and I see not a granule of evidence to suggest that it may one day come true.
     
  11. jdklks

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    Well, then as it stands today the number of beers available to us is increasing. That number will be cut off when the bubble breaks, then you will have a good idea of how many bottles will consistently be on your store's shelves. This doesn't mean that we won't be getting new breweries and new beers. Breweries will shut down and make room for new breweries, some of which will get the consumer stamp of approval and some of which will themselves go out of business. It will drive a better product, and eventually you won't feel that you are wasting your money all the time on breweries you haven't tried yet. I just don't see where people are seeing the bad in this.
     
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  12. jettjon

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    I see this here in the Pensacola area. Not so much beer brands available, but beer bars. Four years ago there was barely any "beer culture" here, with one brewpub and a mediocre beer bar that mainly carried the bigger name import craft brews. Now we have two excellent beer bars right down the street from each other downtown, a local brewery, and a smattering of other "beer destinations." Craft beer very absolutely DOES appear to be a trend here, especially with the "club" crowd that seems to have discovered it in the wake of vodka and Red Bull. I can certainly see a major contraction in this area, not of brands necessarily, but of venues.
     
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  13. mattbk

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  14. brewbetter

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  15. keithmurray

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    With all these breweries popping up, there's only so much shelf space and consumer dollars to support them all
     
  16. rlee1390

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    I think small local breweries may not be able to carve out a distribution unless they are making something good. However when it is asked about mediocre breweries that could be "shut down"; Magic Hat, Sam Adams, Harpoon, Long Trail are some of the ones that are brought up. However those are the gateways for most of us. I think the market will more likely end up divided among breweries that produce ehh beer but is eye opening for BMC drinkers and another segment which produces the big bold beers.
     
  17. mattbk

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  18. xsouldriverx

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    i think there will be a lot of small craft places that are going to open and not make bc there is too much competition, good beer or not.
    either these small guys start fading out or it goes another route. small breweries having a tasking roomand/or resturant of their own and selling there stuff there and keeping it local which would be pretty cool imho. they will still hqve to put out a good product to stay alive. on Li there are about a dozen of small places set to up this upcoming year. they all jhave something that i want to try but if its not up to par then it wont last. with this strategy you also have to think of what locals are asking for and promoting local so people pick you over a founders or sierra..
    my local bottle ahop have about 15 taps. 10 for general/tasting event use, about 5 set for local breweries. this imho helps spread the word especially when a lot of these places rarely bottle or can. there is also li craft beer week where these places have tastinfs and resturant events to put their stuff out..

    ao as for a bubble popping. maybe, not everyone is goibg to thrive. but i think it may be a bit more like the begining of the century. many local breweries for good (hopefully less expensive) beers and we can uuse moderd distribution to get those big guys from across the country.
     
  19. Timmush

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    As far as saturation goes... I thought the same thing.. too many breweries on the shelf. Then I look at the other 90% of the store I am in that is dedicated to wine and I think, Nah.
     
  20. brewbetter

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  21. GreenCoffee

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    In the endgame, I'd rather see a smaller number of options on the shelves with great turnover than a giant wall of beer that can't sell effectively because the variety is overwhelming. Either way, there will always be delicious options available and I have no intention of starting a brewery so it's not a huge concern of mine.
     
  22. mattbk

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  23. brewbetter

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  24. hopfenunmaltz

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    More and more of the seasoned brewers who remember the late 90s are talking this way.
     
  25. jbeezification

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    I once read most of a whole page of comments on Thanksgiving, meanwhile I have a 14lb bird, 8lb slab of ham, 4 pies and 4 bottles of my favorite local Oatmeal Stout about 20 feet away. Peace out, bros.
     
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  26. mattbk

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    Yes, I do have an interest in derailing this thread.

    Imagine this. It's 1975. We're sharing a 6 pack of Schlitz Light. I lean over to you and say:

    "The US is about to experience a boom in the number of breweries open. Small breweries making full flavored beers at small profit margins wil grow exponentially."

    You'd say: "What do you mean? The number of breweries is at an all time low in this country! No one cares about beer taste and flavor, beer profits are based on volume, and no small business can compete with that!"

    And we'd both be right: for another 5 years, until about 1980, you'd be right; and then from 1980-1990, neither of us would really be right; and then beginning in 1990, I'd be right.

    But it wouldn't matter. Because it's all speculation and guessing. It makes sense with # of breweries at an all time low, there would be a period of growth; the same as it makes sense that with # of breweries at an all time high, there will be a period of decline.

    But no one can say when it will happen, and how big it will get, and far it will fall. WE JUST DON'T KNOW. Yet, the wondering and guessing continues over and over again. And so: what is really the point of this discussion?

    I say: enjoy it while it lasts.
     
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  27. digdug1810

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    meh.. the way i see it is I don't care.. i'm not in the business... i'm a consumer.. if it's a good beer i'm going to buy it, i don't generally buy stuff i haven't done a little research on.. if it's not a good beer/brewery they won't last.. the cream usually always rises to the top.. i think that will continue to happen and some of the new guys/old guys if they don't produce quality product will stagnate/struggle/trip over their own feet and eventually go out of business or get dropped from distributors offerings to their customers(beer stores/liquor stores etc)
     
  28. jdklks

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  29. marquis

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    I think there's a sales level limit which is finite but still a way off.This will be when enough people have experienced craft beer and those who like it continue to buy it.But I'm afraid that macro lager or its successor will still dominate for the same reason that it ousted highly flavoured beer in the past-personal preference.
    It's nowhere near a bubble yet and there's plenty of scope for increase-in the UK for example the proportion of our equivalent to your "craft beer" is 15 to 20% of beer sales , it will slowly level off but the demand will always be there.
     
  30. OneBeertoRTA

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    There is only a finite amount of shelf space. A three tier system in itself makes it especially trying to get new suppliers in the distributor's portfolio. What craft beer has going for them is that they offer high margin for the distributors compared to the BMCs. This is why the BMCs are blabbing about loyalty and trying to limit new suppliers in their distributor houses. At the end of the day the shelfs need stability and consistency and without it, both the retailer and suppliers suffer.
     
  31. mychalg9

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    Maybe New Glarus is doing it right, maybe we need smaller markets for craft beers. Sell within your city or state only and don't go regional/national. Still though, eventually even those markets will be saturated.
     
  32. CellarGimp

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    This time it's different. The world is full of foodies and craft is part and parcel of the overall culinary scene.
     
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  33. herrburgess

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    But places like New Glarus have, as craft brewers, managed to develop brand loyalty by staying regional. From everything I've heard/read, not only can you find Spotted Cow at pretty much every bar/restaurant/gas station in WI, you can also find a large percentage of the general populace drinking it. Olde Mecklenburg has had similar success with this type of business model in Charlotte, NC. How many other craft breweries can make such a claim? Or to put it another way, how many craft beer geeks do you know that are loyal to a single brand? Perhaps brand loyalty, or the lack thereof, will be the key to craft beer's ultimate long-term viability or undoing.
     
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  34. drtth

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    "Now this is not the end. It is not even the beginning of the end. but it is, perhaps, the end of the beginning." Winston Churchill.
     
  35. ColonelCash

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    In theory, this should be true...but in the marketplace, I don't fully buy this. The best decent tasting / mass appealing and best marketed beers will survive. It takes capital to put your brand on the shelf, look at the brews you can get nationwide. Red Hook, Sam Adams, Kona, Widmer, etc. Those breweries never top any craft beer list, but they are above average and provide a decent tasting alternative to Bud / Miller. I think we'll see more smaller breweries restrict their distribution in the coming years and we'll have a bigger regional scene. Just my $.02
     
  36. Sludgeman

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    What I was trying to say in simplified terms is that the "market" will decide. Craft beers will probably never be a large percentage of the market - heck I still need a Corona-like substance when I'm on the beach. And some good brews may fail for reasons other than taste. But in the end the best beers will survive to satisfy what is still a niche market.
     
  37. draheim

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    From a lot of these posts it sounds like I should seriously consider investing in a shelf-building company. Anyone notice that a lot of stores are considerably bigger than they were 20 years ago? Shelf space will expand for the products that sell and contract for the products that don't.

    I'll leave it to the "experts" to argue about whether the growth we're seeing is an unsustainable trend—they generally seem to be right about 50% of the time.
     
  38. brianthelion23

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    i feel that "good beer" isnt what makes a brewery sucessful. Its a part of it, but if it was all of it, Budweiser, Coors, and Miller would not be leading beers here in America. It mostly has to do with the hype around a said beer. Budweiser is the official beer of Football and their whole marketing scheme is something with Fantasy Football right now, correct? So, do people continue to buy the beer for the product or the for the hype surrounding thee product. Same goes for music. Shitty music sells because of hype. Its not about the product,but who can get the most people into your thing. Thats why business is lame in my opinion. It boils down making a marketable product and selling it for the most you can and making it for the least as possible. So the good beer will survive, but the people got to buy it too.
     
  39. lurchingbeast

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    People like predicting the end of things. 22% of Americans think the world will end in their lifetime. It's vanity.
     
  40. StubFaceJoe

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    And then go smoke a cigarette.
     
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