News "We are in a time of irrational exuberance in craft brewing" - Greg Koch

Discussion in 'Beer News & Releases' started by Levitation, Nov 15, 2012.

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  1. EJLinneman

    EJLinneman Aspirant (213) Mar 2, 2009 New Jersey
    Beer Trader

    Expect go find a lot of large brewing equipment on Craigslist over the next few years.
    Beerandraiderfan and Levitation like this.
  2. Ohsaycanyoubeer

    Ohsaycanyoubeer Initiate (0) Feb 8, 2012 Colorado

    I don't post here often, but I'll chime in.

    There are regional bubbles. There are places where there are just too many breweries to support too few a population, my hometown of Denver is one of those.

    However, there are still a ton of regional vacuums that are just waiting to be filled. If someone could actually come down to Orlando and start brewing world-class beer, there would be a HUGE market for it.

    Regardless of what you may think on the issue, a vast majority of craft beer drinkers would rather drink local if given the opportunity and there are still a number of markets out there yet to be tapped. Most of those are in the South, in states with antiquated beer laws, however.
  3. BierGartenok

    BierGartenok Initiate (0) Apr 4, 2009 Oklahoma

    I say we wait and see...meanwhile, Lets drink all this damn beer!
  4. bdub32689

    bdub32689 Initiate (0) May 19, 2011 Massachusetts
    Beer Trader

    I really feel that for a brewery to be successful they must first establish and sustain themselves for several years in their state. The problem seems to be many start ups want to expand to quickly, because of the growing market these breweries experience an extended honeymoon period meaning their initial success is exaggerated and instead of focusing on supplying the local demand they look for more territory and end up with their hands tied only being able to devote half the resources to your base customers making it hard to have a bigger imprint in your home market and leaving the door open for other local breweries to widdle away your marketshare.

    I can see the urge to want to have a nationally recognized brewery not just regional but lets not forget in the US regional breweries were the cornerstone of the industry before prohibition.

    Brewery's like New Glarus in Wisconsin only distribute in their own state and have no plans to expand outside WI. They focus on being able to meet the 100% of the demand and only expand at a pace to be able to do that. It allows them have a strong portfolio of year round beers, seasonal, and limited release unplugged beers.

    Whats impressive is that even those in WI who are not into craft beer as much think of New Glarus as a brewery that produces good local beer because they offer spotted cow a beer that is more a segway to their more unique offerings. So they have beer enthusiasts regularly buying their product as well as those who tend to stick with the basics.

    I really do see craft beer in general expanding its market share because if you think about it a lot more college students and young professionals are growing up with craft beer and will eventually replace the baby boomers who for the most part stick to the buds and millers and other large imports
    herrburgess likes this.
  5. Bluecane

    Bluecane Initiate (0) Dec 30, 2011 New York

    Not even water? Musta been rough. I know that feel bro.

    Obviously, if more people start drinking craft, then the number/total capacity of craft breweries can continue to grow. Whether the former will continue rising is the key question.

    One thing to note is that not everyone has to be "switched" from BMC to craft. Before I found craft beer, I drank very infrequently, and then almost always whisky/vodka/rum (with soda) or some wine. I didn't switch, but I now consume a fair bit of craft beer, and also more alcohol overall than I did before.
  6. Chugs13

    Chugs13 Zealot (599) Dec 11, 2011 New Jersey
    Beer Trader Subscriber

    Exactly. First, I'm pretty sure thier just referring to the SD market, and all he's saying is that those who are hanging onto the roof are going to fall off eventually, but those that are driving the bus and have firm seats (ie Stone, Ballast Point, Green Flash, Bruery) are going to keep on driving along.
  7. ao125

    ao125 Initiate (0) Dec 1, 2010 Virginia

    I'd agree to that. It seems like everyone that hates their day job and has a Mr. Beer kit, fancies themselves a professional brewer. I know for damn sure I personally couldn't take it past the hobbiest level, but it seems like there are a fair number of people out there that can talk a few coins loose from investors pockets, to make their half-assed dreams a reality.
  8. Jason

    Jason Founder (7,986) Aug 23, 1996 Massachusetts
    Staff Subscriber

    Lots of states with their own "beer" or "drinking" laws, not just the south, will hinder growth in the next 5-10 years unless they are changed.
    chanokokoro likes this.
  9. Brad007

    Brad007 Poo-Bah (3,325) Mar 28, 2007 Vermont

    But it's this desire that fuels the American dream. I would love to start a brewery but I have never had much confidence in my homebrewing skills. LOL. Plus, I'm poor as dirt with bad credit.

    I'm happy to continue to homebrew and support the breweries that I like until I hit the lottery someday or whatever.
  10. Ranbot

    Ranbot Devotee (427) Nov 27, 2006 Pennsylvania

    Considering that craft beer consumption is only about 1% of the total U.S. beer market, I think there's still plenty of room for craft beer growth. I could see some localized bubbles occuring in potentially over-saturated regions (like Philly, San Diego, or Portland), but there are still plenty of under-serviced markets for craft beer to grow into, whether it be new start-ups or established breweries changing their distribution.
  11. jesskidden

    jesskidden Meyvn (1,207) Aug 10, 2005 New Jersey

    The Brewers Association claims "...craft brewing sales share in 2011 was 5.7% by volume and 9.1% by dollars" and their figure doesn't include several large craft companies with ties to AB, MC or other non-craft companies (Goose Island, CBA, Mendocino) or any foreign brewers.

    (Never thought I'd see the percentage of craft beer sales under-stated on BeerAdvocate ;))
  12. mattbk

    mattbk Devotee (466) Dec 12, 2011 New York

    What does data and facts have to do with this post? By the way, I speculate I can drink 22oz of beer out of a 12 oz bottle. Prove me wrong.
  13. Ranbot

    Ranbot Devotee (427) Nov 27, 2006 Pennsylvania

    I stand corrected. That's why I like having you around JessKidden, to keep us honest.

    But, I still think there's room for growth, although I'm more convinced now that some local markets might have shake-ups.

    Also, is anyone considering craft beer expansion beyond the USA, Canada and Europe? (I just got back from a trip to Costa Rica, so it was on my mind.) In Costa Rica there are only two craft breweries in the entire country and they have little to no distribution beyond their breweries as far as I could tell. Interestingly, Costa Rica does have a commonly available beer called "Bavaria Dark" which I think was similar to Negra Modelo and quite flavorful in comparison the other mass-produced American/Euro/Mexican light lagers. Not to mention that the tourist areas are crawling with people from the U.S., some of whom might jump at the opportunity to try a local [or imported] craft beer. Anyway, it seems like there is an untapped (pardon the pun) market there and I'm sure there other similar examples from around the globe. I know there would be substantial obstacles to craft beer in less-developed economies and the craft beer market would probably never be as robust in the US/Euro, but I think there's unrealized potential.
  14. hopfenunmaltz

    hopfenunmaltz Meyvn (1,242) Jun 8, 2005 Michigan

    Arbor Brewing is opening a brewpub in Bangalore India. First brew is tomorrow.
  15. BeerNDoggerel

    BeerNDoggerel Devotee (497) Mar 13, 2011 Illinois

    I hear about all the breweries in development, but my home area has two local microbrewing taverns and one chain, for a city of 150,000 and metropolitan area of 250,000, with no one bottling. It does seem like there's room for more--perhaps the one per 30,000 figure is accurate.

    I worry more about Greg Koch. The beard phase has been troubling. Has the maximizing of San Diego potential and national distribution, with European expansion a nonstarter, gotten to him? He's an arrogant SOB with a need to conquer. What's next Greg?
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