Craft Beer’s Looming Crisis
You may want to grab a barstool before you hear this: Craft beer has some very serious issues.
While things certainly seem bubbly on the surface for the category—years of double-digit sales growth have led to a large increase in brands and an overwhelming selection of IPAs, stouts, saisons, and just about every other conceivable type of beer on store shelves—growth is slowing, putting pressure on the industry. What makes matters worse is that breweries are still opening at a rapid pace around the country and unfortunately, many of those bottles on the shelves are old or have gone bad.
And there is also the fact that fruit beers are flooding the market, which is truly a sign of the apocalypse. (Mango IPA, anyone?) This will not end well.
You might be tempted to dismiss these warning signs and order yourself another pint of your favorite cask-conditioned session brew. Don’t. This is not a prediction, it’s a replay. These events, commonly referred to by people in the business as “The Shakeout,” happened before, in 1996. Some of the bigger brewers went out of business, others were bought by competitors, and sales of craft beer—the term that was then just beginning to replace the word “microbrew”—went flat for five years.
There is increasing speculation (and worry) that the bubble will burst again.
The main concern is that despite the hype around craft beer, its rapid growth may have peaked. Thanks to an explosive decade, where the category went from representing under 4 percent of total beer volume in the U.S. to more than 12 percent in 2015, sales during the first half of 2016 were considerably slower.
At the same time, expansion continues unchecked: Roughly three new breweries a week opened in 2015 alone. The Brewers Association, the category’s official organization, has called for increased quality control, with director Paul Gatza citing beers that “were not good.”
And then there are all those fruit beers. “The signs you point out are humorous, but also serious,” admits Bill Covaleski, co-founder of Victory Brewing in Downingtown, Pennsylvania, which he opened in early 1996 as things started shaking the first time. He remains bullish as long as “everyone spends their money wisely, on quality control and assurance.”
But will everyone spend money wisely? Will young brewers, who may have been in grade school in 1996, learn the lessons of the last correction?
I hope so. Fortunately, the industry has always had a strong tradition of cooperative competition, sharing information and experience among brands. Plus, the Brewers Association has invested in setting up quality assurance standards. “If [new brewers] aren’t paying attention to them, they’re foolish,” says Covaleski.
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First of all the fella obviously doesn't care for fruit beers LOL! Can't say I blame him, most I have tried are fiercely gross. Otoh, I've had a couple that are outstanding! One was shared by a fellow NTer buddy Peter Faden from Utah, Epic Brewing Brainless on Cherries ,,,what a wonderfully deep yet elegant brew that one was! Another brewer that I have tried that does it up right is Upland brewing in Indiana (where my folks live, where I was born and raised). Their sour ales are killer.
I agree with much of the article in that the industry had best take a good look at the future and how they are gonna maintain what they have. One of the differences I see is that the Craft brewing phenomena is riding like a wave across the country, having already saturated most places on the coasts and in urban centers, there is still room for growth in the plains and northern states. Depends on where you are.
There is a shakeout though for sure, as I have personally witnessed as we travel. Chaff is being separated, and local brews are becoming more recognizable. Here locally we are actually just beginning to experience our own brews in Grand Forks and Fargo now bearing 3 new brewers in just the last 3 years...there were ZERO breweries between those cities before that.
In the long run, employing good quality control and, a locally focused business practice is going to be key to survival.
An oh, I have a large supply of mango's and rock melons....I better start dumping them before the market hits bottom.
You're killing me Kavika...I love mangos...I will be there in approx. 17 hrs. with the suburban,,,we should visit...
You and your family are welcome anytime, Larry.
I have placed some of the mango's in suspended animation, so they will be fresh when you arrive.
You right Larry, I don't drink.
There is evidence that a few tribes did brew a form of beer, most did not and what there was, was used in ceremonial services.
The wide spread use of alcohol came with the Europeans.