The decline of craft beer

[beentherebefore]

The beauty of the beer world today (from a consumer's perspective) is that there are available choices for just about everyone. I know that I am so happy that there are choices beyond the Miller/Budweiser/Coors of my youth. It's hard to imagine that we argued about which one of those beers was better/best!

 

[cc1091]

I was wondering the same thing when I asked 'Is the Brewery Era over?" in an earlier thread.
The answer then (a few months ago) seemed to be a resounding NO. However, we do still have some anecdotal evidence that not just any brewery can survive (see Bewilderme's comment, "Nope. Just a few ****** ones going under.").

Just a few weeks ago, Thew Brewing in Cedar Rapids opened. Just before Thew, Clock House Brewery opened at the Black Sheep restaurant in Cedar Rapids. So that is two new breweries in CR to take the place of ones in the CR and Marion area which have folded. Just last Saturday I heard word that a new brewery is looking for a Marion Iowa location. More on that if they ever progress past the talking phase.

So, in my opinion, yes there is cause to be concerned, but if you have a product that is very good, and where you can consistently market the product outside your brewery as well as having an attractive tasting room for the locals, then you may have a chance to survive.

 

[JP4CY]

I know that I am so happy that there are choices beyond the Miller/Budweiser/Coors of my youth. It's hard to imagine that we argued about which one of those beers was better/best!

Not Miller, I'll tell ya that.

 

[cc1091]

Would like this to be true. With friends and groups wanting to go to breweries all of the time it is hard to find anything there I like that isn't an alcohol bomb. If I drive I am pretty much limited to a max of two beers or maybe just a sampler flight.

Forget craft beer. The next craze is non-alcoholic brews
http://money.cnn.com/2018/02/09/news/beer-non-alcoholic/index.html

FYI - Millstream has a full line of sodas. Oh, wait. It looks like they now only have their Root Beer and Cream Soda. Believe they used to have a Cherry Cream and Vanilla Cream soda. (The purchase of the BrauHaus - aka, the old Colony Inn - has really changed their financial picture..perhaps for the better).

 

[intrepid27]

Craft beer is a maturing industry. Brewing is very profitable and thus, like any profitable niche it will get overbuilt at some point. Demand will level off and only the strong will survive.

I've felt for several years that the number of breweries being built is outpacing the number of good brew masters available. I've tasted a lot of local brews around the country that were pretty average.

The other side is demand. I'm sure there is a certain segment that is currently drinking craft beer but when it is not longer trendy they will go back to drinking crap beer. That will also weed out some breweries.

All in all, there will be some breweries that will not survive.

 

[CY88CE11]

Yep, we're seeing that with all the trivia nights that go Facebook viral. Parks and Rec trivia, Friends trivia, etc.

Fun time for fans of those things...but it really just gets a crowd in the door for one night and the people that actually care about craft beer get a chance to taste their average product

I assume those trivia nights keep Fox going. Their beer is sub-par, at best.

 

[WhatchaGonnaDo]

I assume those trivia nights keep Fox going. Their beer is sub-par, at best.

I've seen some pop up at New American in Ankeny as well. Been there once and it was pretty blah.

 

[CY88CE11]

I've seen some pop up at New American in Ankeny as well. Been there once and it was pretty blah.

I haven't heard great things about their beer yet, but it sometimes takes a year or so for them to really figure out their brews (see: Barntown).

 

[Cycsk]

The craft beer market is still largely an American thing. I can't wait to see what happens when it takes off in parts of the world that are known for their flavors.

For instance, in India, you have a bunch of ordinary, watered-down beers, such as Kingfisher, and then a few "strong" beers. Right now, the only craft beer in India that I know is Bira 91.

http://www.bira91.com/

I have to think that craft beer will explode in places like India that are otherwise so committed to unique flavors in food and drink.

 

[dmclone]

I haven't heard great things about their beer yet, but it sometimes takes a year or so for them to really figure out their brews (see: Barntown).

Except New American has been around for years and Barntown was putting out killer beers within 6 months. From my experience, if you can't put out decent beer within a year, you should probably just hang it up. I can think of very few that have turned it around.

 

[CY88CE11]

Except New American has been around for years and Barntown was putting out killer beers within 6 months. From my experience, if you can't put out decent beer within a year, you should probably just hang it up. I can think of very few that have turned it around.

Have they really? I feel like I hadn't heard about them until recently, but I don't get all the way out to Ankeny often.

 

[JP4CY]

Have they really? I feel like I hadn't heard about them until recently, but I don't get all the way out to Ankeny often.

Yeah, they used to brew out of a Morton style building in the industrial area.

Previously mentioned, Fox beer, yeah I have no idea how that stays in business.

 

[Gunnerclone]

Would like this to be true. With friends and groups wanting to go to breweries all of the time it is hard to find anything there I like that isn't an alcohol bomb. If I drive I am pretty much limited to a max of two beers or maybe just a sampler flight.

Forget craft beer. The next craze is non-alcoholic brews
http://money.cnn.com/2018/02/09/news/beer-non-alcoholic/index.html

This is what I want to see. Like a 1-3% ABV session IPA.

 

[thatguy]

I work in the industry and own a wine and spirits sales and marketing company. Craft Beer is declining, but for specific reasons.

1) As more and more states go away from mom and pop liquor stores to grocery and chain markets we are getting less shelf space. The AB and Miller/Coors guys are coming in and going, hey if you want Bud Lite, you can only carry these micro brews that we either own, or are part of our distributor. Very limited shelf space for smaller brands/new brands/eclectic brands. Most chain buyers aren't in each location, but part of a big national buying program so all they care about is volume discounts and Nielsen data (sales numbers), and could care less about local products*. So AB is going, "buy this much Bud Lite i will give you Goose Island for this price", etc etc.

2) Bubbles were up 22% last year, Gin was up 12% and other Spirits were up 8-9%. This is because millennial females drink bubbles, specifically pink bubbles, and the growth of the cocktail market (this is huge). On-premise establishments make more money selling wine and spirits than they do beer, so they are pushing the $12 Old Fashioned or the Provance Rose. Beer as a whole was down over 7 percent, but most of that was tied into the domestic cheep beer brands. Which is why AB and Miller/Coors are throwing their weight around when it comes to their micros (they keep buying up more and more every day) or at least keeping the brands that work with their distributors, which AB is also starting to buy up, happy.

*-some chain stores have local or regional buyers which do have a local section or a couple doors dedicated to local brews, but at the same time, it comes down to who will pay the most, or eat the most margin to be in that space, thus becoming an opportunity cost for some of these small breweries/distillers. Can I afford to eat that much margin, just to be in those stores? Where is my breakeven amount? How much do I have to sell to make this work?

Tasting rooms are very important for these places. They can charge whatever they want, they don't have to deal with retail/distributor mark ups, they control the marketing and presentation and they can speak better to the product. As convenience of buying your booze/beer at Target and Grocery grows that just means less variety, and sadly, less small brands that can't pay to be featured or displayed properly. Plus, their is just a **** load of craft beer brands.

 

[Clonefan94]

At what point do all the people who drink craft beer have enough choices? At this point you either like craft beer or you don't, right? Aren't new craft breweries just taking market share from other craft breweries?

New people turn 21 every day. So, there is always room for some growth in the market. I think this is more of a case of not knowing the market was going to grow like it did. If you are going to open a brewery now, you have to have a very good product. If you are going to go nationwide, you have to have one of the best products.

I consider myself a fan of craft beer, but I prefer to drink it exceptionally fresh. I'm not a big fan of cans or bottles unless I'm going to be drinking at an event that requires it. I also brew my own, so in a lot of those cases, I just fill up one of my 2.5 gallon kegs and bring that a lot with my CO2 bulb tapping system.

If I've already tried it, most beers that travel and sit on a shelf for some time just aren't what I prefer to drink when I can stop by a brewery and get it fresh. I think a lot of craft beer drinkers seem to be the same as I am. Even my mainstay beers that I buy at a liquor store tend to be those brewed locally. I know what stores they move quickly at, so I'm always guaranteed a fresh product when I go in there.

So yeah, this seems more like expanding too fast and putting out a sub par product. I have had green flash, but never bothered to purchase it again after that. If you are going to go national, you better be on the top of your game. There are just too many choices out there to go any other way.

 

[dmclone]

Have they really? I feel like I hadn't heard about them until recently, but I don't get all the way out to Ankeny often.

They've been around for around 5 years. There bottles have been in stores for awhile now. Their tap room is pretty new though. Hopefully they can turn it around. They do make 1789 w/vanilla bean that is pretty good.

 

[Torks Pub]

At what point do all the people who drink craft beer have enough choices? At this point you either like craft beer or you don't, right? Aren't new craft breweries just taking market share from other craft breweries?

Spot on. Evidently craft breweries are like apartment developers in Des Moines. They don't know when to stop.

That being said, a great summer beer, i.e. lighter brew, is Big Grove Boomtown.

 

[srjclone]

I work in the industry and own a wine and spirits sales and marketing company. Craft Beer is declining, but for specific reasons.

1) As more and more states go away from mom and pop liquor stores to grocery and chain markets we are getting less shelf space. The AB and Miller/Coors guys are coming in and going, hey if you want Bud Lite, you can only carry these micro brews that we either own, or are part of our distributor. Very limited shelf space for smaller brands/new brands/eclectic brands. Most chain buyers aren't in each location, but part of a big national buying program so all they care about is volume discounts and Nielsen data (sales numbers), and could care less about local products*. So AB is going, "buy this much Bud Lite i will give you Goose Island for this price", etc etc.

2) Bubbles were up 22% last year, Gin was up 12% and other Spirits were up 8-9%. This is because millennial females drink bubbles, specifically pink bubbles, and the growth of the cocktail market (this is huge). On-premise establishments make more money selling wine and spirits than they do beer, so they are pushing the $12 Old Fashioned or the Provance Rose. Beer as a whole was down over 7 percent, but most of that was tied into the domestic cheep beer brands. Which is why AB and Miller/Coors are throwing their weight around when it comes to their micros (they keep buying up more and more every day) or at least keeping the brands that work with their distributors, which AB is also starting to buy up, happy.

*-some chain stores have local or regional buyers which do have a local section or a couple doors dedicated to local brews, but at the same time, it comes down to who will pay the most, or eat the most margin to be in that space, thus becoming an opportunity cost for some of these small breweries/distillers. Can I afford to eat that much margin, just to be in those stores? Where is my breakeven amount? How much do I have to sell to make this work?

Tasting rooms are very important for these places. They can charge whatever they want, they don't have to deal with retail/distributor mark ups, they control the marketing and presentation and they can speak better to the product. As convenience of buying your booze/beer at Target and Grocery grows that just means less variety, and sadly, less small brands that can't pay to be featured or displayed properly. Plus, their is just a **** load of craft beer brands.

Need any Marketing/Advertising or Business Development people currently?

 

[Clonebydesign]

Local craft beer is what is hurting larger craft beers national distribution numbers, similar to what craft beer has been doing to BMC for several years. People are choosing to drink the good beers made near them that they can “see and touch” rather than supporting a national brand you can get almost anywhere. You’ll see a decline in national craft numbers perhaps but they in general will continue to take away from big beer along with small local breweries helping that out. One large national brewery has seen its largest gains in recent years in its carbonated water sales and not in beer sales. Beer styles and their popularity will come and go but in the end no matter what good products must be made no matter what scale.

 

[Clonefan94]

This is what I want to see. Like a 1-3% ABV session IPA.

That's a tough nut to crack. Seems the charm, even in a hop bomb, is the right combination of malty backbone to give the hops something to rest on. A big one here is Founders All Day IPA, which I still think clocks in at 4.7%. I just don't like it, it has all the hops, but none of the character of what I like in an IPA. As you go lower in ABV, you lose that body you need to prop the hops up. This is of course my opinion as I too would love to see something like that hit the market.

I've tried brewing my own a couple of times. Cheating with some malts that add flavor and character without beefing up the ABV, but the balance of alcohol, flavor and hop is easily messed up. I've made a few drinkable ones around 4.5% - 5%, but nothing that really satisfies that IPA taste I look for when I want to drink an IPA.

It's been a goal of mine for a while to brew a true session IPA, but it seems almost impossible to put all the right parts in place and not jack up the ABV. I don't have any real science to back up my thoughts, but so far, it seems alcohol content plays a big factor in the balancing of a beer. It's like salt on good Iowa Sweet corn. Without it, it just isn't the same experience.