Future Of Beer?

Man I didn’t get a single comment on my April Fools Day post yesterday. The compitition is still on, so get your friends to vote.

futureI’ve been pondering a lot on where the craft beer industry may be headed, and it seems I’m not the only one. With the crazy growth that micro brewers have been experiencing since the 80’s slowing, and the big brewers getting in the game people are starting to think ahead. The glory days of easy money for brewers have been approaching an end in the Northwest for awhile now. We’ve had longer then the rest of the country to develop a taste for what good beer is. The problem is some brewers are no longer as concerned about profit, they want growth, and I think the market will respond.

 If Brewers Alliance, and other beer stock is any clue of the future then may be changing. Several years ago all it seemed to take to make a profit in the microbrew industry were some good homebrew recipes, some old dairy equipment converted into brewery equipment, and an endorsement from beer snobs. So what’s changed?

 One of the first things is it’s getting crowded. Not everyone is content with being a brewpub anymore. They want to see their beer in bottles around the state. Already with the number of imports, commercials, plus the in and out of state microbrews the beer isle is crowded. This amazing amount of choice may make it hard for the smaller microbrewers to break outside of their local communities.

 Another impact is that the big brewers caught on have been releasing their own version of craft beers, and often it seems they are keeping pace with microbrews at restaurants and bars. With beers out there like blue moon the big guys have shown that they’re taking the threat craft beer posses to them seriously, and that they want to continue in the industry.

 Lastly some microbrews are growing too large. Just visiting the Deschuttes brewery was enough to bring this home to me. These larger microbrewers like Sierra Nevada, Deschuttes, Widmer, Sam Adams, and others have carved out a nich in the market through hard work. The problem is they have gained brand loyalty from their customers, and that may be bad news for start ups in their communities.

Is this a bleak outlook for beer? Not really. It just means the industry may start settling down for the time being. People are content with a beer being a beer, and this idea of finding a holy grail of beers looks to be loosing interest. Could I be wrong in my prediction? There’s a good possibility I am. Im neither an economics expert, nor am I a brewery owner. These are just things I’ve observed lately in Oregons beer market.

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6 Responses to “Future Of Beer?”

  1. Carlos says:

    This has nothing to do with the “Future of Beer”….well maybe it does. I have some Belgium beers for you to try:) “Future of Beer in your stomach” I will give them to your mom tommorrow.
    Let me know what you think.

    Sorry I havent posted. I have been so busy.

    Thanks,
    LOS!

  2. Jared says:

    Your right Carlos. It wasn’t so much about the future as it was about my observations of Oregons beer industry. There’s a sister post that goes with this that I’ll put up next week. When I wrote these two I was in a bit of a mood towards the beer industry. Thank you 🙂 I’m looking forward to those Belgiums. Have you tried Ninsaki’s new spring seasonal? If not I’ll get you a bottle. It’s some awesome stuff. Does your wife happen to have a list of spring releases from Oregon breweries?

  3. Carlos says:

    I will ask if she can get one for you or when it will be ready for print. I am sure her boss can get a hold of one.

    LOS!

  4. Mark says:

    The craft beer market is like other markets for niche products. I have observed, close hand, what it is like for a very well made craft beer to fight it out for the attention of the distributor and the tavern. It ain’t pretty. For any long term success, craft breweries do just what the global brands did a century or so ago. They expand operations when sales increase, they add products or brands or both and this relentless upward growth requires them to find more and more outlets for their beer. The successful ones, and those you mention fit this model, spend a great deal of time and money focusing on their brand to cement brand loyalty. Even here in Beervana, local drinkers are just as likely to say, “Gimme a Mirror Pond,” than they are to try some relatively obscure, locally crafted and excellent beer. If your thesis is that the craft brewing industry will ultimately mirror the mega-brands, I think you are right. And, with it, we can expect that at least some will begin to dumb down their products or at least offer products that are more akin to Bud than they are to a hoppy, high gravity craft beer. Unfortunately, craft brewers are not immune from the economic model that all companies face and that is why we had a “beer revolution” a generation ago in reaction to very bland, homogeneous beer. Hope we don’t return to that situation, but that is the trajectory that the larger craft beer breweries are on. (No indictment whatsoever of the products they produce, by the way.)

  5. Jared says:

    I agree with the statement that you may see some of these bigger “craft” breweries becoming the next budweisers (think Sam Adams) But I dissagree that we’ll see them emulating what Bud and Coors offer. The big guys are releasing beers that aren’t pale light lagers. Even after prohibition there existed breweries that weren’t about the pale flavorless lager, but it’s what Americans wanted so it won out. If I had to make a prediction on what the next big brewery beer would be I’d say Pale Ales. Many of the local community based brewpubs I’ve gone to will offer several pale ales, but only a handful of other types of beers. Also if you look at the model for an average brewery their beers they release are all fairly standard. You generaly have a few pale ales, a stout or porter, a blond or cream, a specialty beer that makes them unique, and a seasonal. What happened to just brewing good beer that people like? When did rules become established that the market will only support you if you brew what everyone else brews. I think it’s because of this growth obsession you were talking about. It seems like brewers say yes we make good beer, yes our loyal supporters like us, but how can we steal customes from the other guys. The problem is once a bussines gets in this growth at any cost cycle then they can’t seem pull out of it without failing. So how does a brewery overcome this cycle? A local Salem prewpub called Ram has managed to exist here for awhile without expanding, or bottling, or switching to contract brewing and distributing their kegs. They have the support of the local community, mostly serve their own stuff, only serve in house, and they are content. It’d be interesting to see how they manage to stay in business and make a decent amount without doing what everyone else seems to be doing. Then again maybe that’s why they are succeeding in our local community.

  6. […] brewers. Distributors will inherently carry, and buy more of a beer that sells easy. This is where the selection issueI talked about comes in. With only so much space available for retail distributors won’t be as […]

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