Is It Last Call for Craft Beer?

1speed

Incredibly profound yet fantastically flawed
#6
Not sure if this is the way to interpret what is happening if we're going to see things go more toward what they were for all those years prior to the creation of the large consolidated manufacturers. What may happen instead of what Koch is saying is that beer goes back to being very local - no distribution of smaller manufacturers beyond a very small radius around their enterprise. I say that because I already see evidence of it happening - the model for "success" for a lot of local breweries is not the traditional model of national distribution - it's exclusivity in a specific area. For example, take Tired Hands in Ardmore, PA. They do a can release every Wednesday, and they have lines of rabid fans who spread several blocks (regardless of weather -- I was there two weeks ago to meet a buddy who drove out from York for the release and there were people standing on line four blocks away int he pouring rain.) And I hear that sort of thing is happening all over. Indeed, these small batch craft breweries have created their own economy without intending to do so -- there are people willing to drive pretty far to get their hands on small batch releases because they've become currency online - "I'll ship you a six of 'Shape of Hops to Come' if you send me a bomber bottle of Russian River." Of course that's just anecdotal, and there is still the sourcing issue to overcome (although I could imagine that small batch makers could easily survive as a niche market for hops, etc providers since they are all but guaranteed to sell out.) If I were to hazard a guess, I think Koch's viewpoint is a bit overly pessimistic because his brewery is actually sitting in a unique place where the current situation is more likely to hurt him -- Sam Adams is too big to be int he same category as many of the small batch makers that have made the American landscape so good over the last decade. I think the small nimble makers like Tired Hands, or Neshaminy, and especially more local makers like Round Guys, Prism, Kane, Carton, Broken Goblet, or Doylestown could be just fine as long as they recognize and respect their true niches: local, rabid fans and word of mouth. It may not be a road to wealth or a billion dollar valuation, but it's still a better career than most of us can claim!
 

jShort

Well-Known Member
Team MTBNJ Halter's
#7
Not sure if this is the way to interpret what is happening if we're going to see things go more toward what they were for all those years prior to the creation of the large consolidated manufacturers. What may happen instead of what Koch is saying is that beer goes back to being very local - no distribution of smaller manufacturers beyond a very small radius around their enterprise. I say that because I already see evidence of it happening - the model for "success" for a lot of local breweries is not the traditional model of national distribution - it's exclusivity in a specific area. For example, take Tired Hands in Ardmore, PA. They do a can release every Wednesday, and they have lines of rabid fans who spread several blocks (regardless of weather -- I was there two weeks ago to meet a buddy who drove out from York for the release and there were people standing on line four blocks away int he pouring rain.) And I hear that sort of thing is happening all over. Indeed, these small batch craft breweries have created their own economy without intending to do so -- there are people willing to drive pretty far to get their hands on small batch releases because they've become currency online - "I'll ship you a six of 'Shape of Hops to Come' if you send me a bomber bottle of Russian River." Of course that's just anecdotal, and there is still the sourcing issue to overcome (although I could imagine that small batch makers could easily survive as a niche market for hops, etc providers since they are all but guaranteed to sell out.) If I were to hazard a guess, I think Koch's viewpoint is a bit overly pessimistic because his brewery is actually sitting in a unique place where the current situation is more likely to hurt him -- Sam Adams is too big to be int he same category as many of the small batch makers that have made the American landscape so good over the last decade. I think the small nimble makers like Tired Hands, or Neshaminy, and especially more local makers like Round Guys, Prism, Kane, Carton, Broken Goblet, or Doylestown could be just fine as long as they recognize and respect their true niches: local, rabid fans and word of mouth. It may not be a road to wealth or a billion dollar valuation, but it's still a better career than most of us can claim!

I didn't read the whole thing :p, but I think your point was that the article doesn't account for the small Brewers who sell direct. Which I agree with. I dont need the middleman, I'd rather go directly to the brewery and get fresh stuff anyway
 
#9
Big beer wants their shithooks into everything. One of them recently purchased Northern Brewer so they could get their mitts on the home brew market.
 

soundz

The Hat
Team MTBNJ Halter's
#14
If OH sells out to Big Beer, what line will he stand in on Saturday morning?
IMO the big dogs are not interested in small breweries selling 500 cases of beer out of their garage, no matter how high they are ranked. In order for OH to get to a national (or even a state) scale, they're gonna need investors to mass produce and actually put their beers in places where people don't have to stand in a line.

IMO the arguments made in this article affect breweries like Flying Fish, Riverhorse, Neshaminy, etc.. Although at this point I think the Magnify's and Bolero's of the world are killing them more than the big dogs.

Perhaps the Founders and Stones of the world will be affected, although I feel that they are already well established. I think they are good candidates for acquisition.

When I see it I will believe it. I've yet to see see Goose Island beers taking over the shelves. At this point the small craft breweries that go out of business do so because there is not enough people drinking craft beer and someone else is making better beer and better sales people/logistics than they do.

As much as we like to think craft beer is the best thing since sliced bread, it is still a small percentage of the alcohol drinking public. How many women and minorities have you seen in a OH line?
 
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qclabrat

Well-Known Member
#16
wasn't able to read the article since many of the US news outlets are blocked here in China. So I'll just go by what I've read on these posts.

I've thought about this quite a bit in prep for my trip and had a number of conversations with others here on exactly this. My question was always what's next? What's the next thing OH or Treehouse going to do to blow us away. Can the beer actually get cleaner and fresher than what we are getting today?

I don't see the industry bursting like the dot com bubble, but it's surely getting saturated. What I presume will happen is a maturity in the industry in a few years. Whereby a number of brewers will cash in with the big brands while even more will close due to lack of differentiation and innovation.
 

The Kalmyk

Well-Known Member
#17
IMO the big dogs are not interested in small breweries selling 500 cases of beer out of their garage, no matter how high they are ranked. In order for OH to get to a national (or even a state) scale, they're gonna need investors to mass produce and actually put their beers in places where people don't have to stand in a line.

IMO the arguments made in this article affect breweries like Flying Fish, Riverhorse, Neshaminy, etc.. Although at this point I think the Magnify's and Bolero's of the world are killing them more than the big dogs.

Perhaps the Founders and Stones of the world will be affected, although I feel that they are already well established. I think they are good candidates for acquisition.

When I see it I will believe it. I've yet to see see Goose Island beers taking over the shelves. At this point the small craft breweries that go out of business do so because there is not enough people drinking craft beer and someone else is making better beer and better sales people/logistics than they do.

As much as we like to think craft beer is the best thing since sliced bread, it is still a small percentage of the alcohol drinking public. How many women and minorities have you seen in a OH line?
The OH and Magnifys in the world will eventually go big or go home. Hard to believe but 'tis is the world of macroeconomics
 

qclabrat

Well-Known Member
#18
The OH and Magnifys in the world will eventually go big or go home. Hard to believe but 'tis is the world of macroeconomics
I don't completely agree
good beer is not hard to make but great beer is. It really depends on the expectations of the owners. If they are happy with the economics of direct sales of 500 cases a week and still have a product people are will to travel for, they will survive. Unfortunately the majority of small business owners nowadays won't be content and poor decisions or selling out could lead to their demise.

I've seen an example of this in a NYC bakery. Kossar's, hands down the best bialys around, until they sold out to a bunch of yuppies who thought they could use their MBAs to make an even better product. Turns out their bialys suck and though they have the brand, it is no where close to the original. Brewing great beer is not easy, if it was I'd be drinking local stuff in Shanghai.
 

The Kalmyk

Well-Known Member
#19
I don't completely agree
good beer is not hard to make but great beer is. It really depends on the expectations of the owners. If they are happy with the economics of direct sales of 500 cases a week and still have a product people are will to travel for, they will survive.
Certainly there will be survivors but there will be a shrinkage. The percentage of people that stay true to there beginnings is so small. Making great beer will get easier and easier as processes are refined.

I would guess a large percentage of these guys won't sell out now because they are unsure of the potential. When they see shit is saturated and consumers are following the newest cool kid on the block, they will be looking to sell out quick. Staying on top is a very hard thing to do and it takes a lot of money in many cases.


As a business owner myself I can't depend on inflation to grow sales year after year. Volume has to come into play.
 
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Roadie

Well-Known Member
#20
I wonder if it will start to become like wine where people started to follow winemakers vs wineries. Will we start following brewmasters as they cash in, sell off a brewery or brand to the big guys and then start up thier next project? This happens pretty frequently with small wineries that get a cult following.