Is Continued Success In The Future?

By Glenn DeLuca

For BeerNexus.com


Craft beer appears to be more popular every day. It’s difficult to measure as the bar
is constantly changing. AB/InBev continues to buy craft breweries, which pulls them
out of the pot. New breweries continue to open at record pace, but some are happy
to just sell out of their tasting rooms and not worry about getting a distributor to deal
with, which makes it difficult to determine how much they’re actually producing.  And
then Boston Beer is out and then they’re back in and then the rules change and
Yuengling and others are in. I guess the Craft Beer Association does it’s best to keep
track but in reality it’s also in their best interest to be promoting the growth and
strength of craft beer.

I read an article recently about the “looming crisis” as growth can’t continue on the
pace it has been and they’re expecting a shakeout or market correction similar to
1996. So what are the issues; well for one some of the newer breweries are not
spending enough time on quality control and producing not so good beer. I will
definitely agree that. I’ve gone to taste a few new beers that I didn’t think were all that
good and I’m not really interested in trying them again. If others feel the way I do,
then those breweries probably will not survive unless they wake up and make better
beer.

Another issue with the proliferation of beers now in bars, but more importantly on the
shelves, is making sure the product is fresh. I would say most bars are good at
turning over their taps (although I did go into one this past spring that still had a
winter beer on tap) but bottles could be an issue. The issue isn’t with the seasonal
beers as you know when they’re out of season, it’s all the “regular” ales, lagers, IPAs
and stouts that could be sitting on store shelves for ages if they’re not paying
attention. Someone unwittingly trying a new beer to them, that’s been sitting around
and not necessarily tasting all that great anymore, may cause them to unfairly form a
negative opinion of the beer and/or brewery. That’s a serious issue that the brewery
trusts the distributors and stores to take care of.

I recently decided to take a bunch of NJ beers up to a party in NH. I guess I hadn’t
really paid attention to how few actually bottle and can as I expected to find more on
the shelves. Keeping your beer all draft should mitigate the freshness issue, but you
need to fight for draft lines to keep up production as opposed to fighting for shelf
space in stores, could be the lesser of two evils. They also point to all the fruit beers
flooding the market as a bad sign, which for those of us who for the most part don’t
like fruit in our beer, is definitely not a good trend. And please don’t get me started
on shandys or radlers; I really don’t want to try any of them. But again if we don’t
drink those beers then the breweries will get the message and not make them or
make less; not a bad thing.

I read another article that all the craft beer success has finally woken up the giant
beer conglomerates and they won’t take it sitting down. They mark the 2011
B/InBev’s acquisition of Goose Island as the first major strike across the bow. That’s
been followed by a flurry of acquisitions, not just AB/InBev but other breweries
(MillerCoors and Saint Archer, Duvel-Moorgat and Firestone Walker, and Heineken
and Lagunitas). Even worse are investments by venture capitalists, who really only
care about making money, not making good beer.

In 2014 AB formed a new business unit; Craft and High End Team, meaning they
understood it wasn’t just acquiring craft breweries, but that they need to become part
of the “craft beer culture” and handle them differently than their main mega brews.  
As long as they continue the quality of the craft beers they’ve acquired we’re not
likely to stop drinking them. And as they begin to produce them in some of their
breweries and extend distribution they’ll continue to make inroads into “true” craft
beer sales. The point is that if the megas feel threatened and decide to do something
about it, they’ve been playing the game for years and have not only the means, but a
huge advantage on both the supply and distribution sides, not to mention cash to
work with, to make life difficult for many craft breweries.

There are those that think the influx of money and interest is a good thing for the
industry.  How many were predicting today’s growth and success of the craft beer
market and industry five to seven years ago; few if any. Some feel the next five years
will see continued growth and success, as long as they continue to focus on quality,
innovation and community. AB/InBev creating a special team is some proof that craft
beer is not a fad, but at this point more of a culture. There are now more educated,
distinguishing and passionate beer consumers than ever before. So even if the
megas bought every craft brewery and shut them down, new ones would spring up
overnight in their place; that’s what many consumers want.

But the picture isn’t all peaches and cream, there are issues as you would expect in
any growing industry.  And we, the consumers, have created at least one of those
issues, the lack of loyalty. I will freely admit that the first thing I do when I sit down is
to scan the list of drafts to see what I haven’t had and what might interest me. Luckily
I’ve tried many so now have a bunch of “go-to” beers that I know I like and will enjoy
again. Most everyone wants to taste the latest and maybe greatest offering so we’re
now hardwired to search it out. So the message to the brewers is make a great beer,
but I may not come back and drink it again; well isn’t that a fine howdy do, what’s the
brewer to do but make something new with a funky or silly name to appeal to us.
Case in point I’m at my favorite beer bar, the Cloverleaf, last month for a Victory
event. Victory is having their 20th anniversary and their tried and true, Prima Pils and
Hop Devil IPA, along with their more recent Dirt Wolf Double IPA are all excellent
beers.  The Victory rep is there and we get a chance to chat with him for a while. I’m
shocked when at one point he says they’re having trouble with Hop Devil sales. How
could that be when it’s such a high quality IPA, but logic tells you there are a ton of
different types of IPAs and many breweries are making multiple types trying to tap
that market. So here’s a fairly well established brewery that’s feeling some of the
squeeze from more competition and our drinking habits.

Maybe we need to look at the consumer side and ask why that has changed and is it
for the best. Years, no decades ago, if you were a Bud drinker you drank Bud, or a
Schlitz drinker you drank Schlitz or a Ballantine drinker you drank Ballantine; that was
your beer and you were proud of it. Today in our “craft beer culture” we
want/crave/can’t wait for the new next beer. Part of that is the sheer number of
breweries opening expanding our possibilities beyond the realm of possible drinking.
But I think there also needs to be the distinguishing craft beer consumer who is
definitely interested in trying what’s new, but also remembers the ones they really
liked and goes back to them when we’re out for a few. I have a top three DIPA (which
includes Dirt Wolf) which evolved over time, tasting different ones, but the
opportunity to have one of my top brews is always exciting when I find one on tap.
Basically I don’t think we can throw out loyalty as a measure of the craft beer
consumer, it’s one of the important aspects.

I came across a quote by Larry Bell, Bell’s Brewery Founder in a Bloomberg article
that really sums it up, “We are in the middle of the end of the beginning of craft
beer.” Couldn’t have said it better myself.





Glenn DeLuca writes about beer and culture of drinking. He may
be reached by writing thebigG@beernexus.com.

***   ***   ***
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