Now we come to the nays. In answering my own question, “Is Craft Beer a Bubble?” it turns out that I chose the winning side. Of the 28 (including me) beer bloggers who contributed to the Session #80, 13 leaned heavily to the ‘nay’ side of the debate.
Of course this doesn’t make us right. I would think that beer bloggers would have some bias, and as Jon Abernathy said in his contribution on The Brew Site, “people on the inside of them have such a hard time recognizing there is, in fact, a bubble until it’s too late and it bursts.”
Still, it was a remarkably balanced debate, with 9 bloggers suggesting there is indeed a bubble (or something like it) and 7 on the fence. In order to give every contributor the time of day without having to subject the world to a 4000-word blog post that I wouldn’t expect anyone to read, I decided instead to split the round-up into which of the three camps I felt each blogger fell into.
And finally, here be the optimists among us:
Boak & Bailey: “People have learned there’s fun to be had in being picky, and it’s a hard habit to kick.” They are very optimistic about the future of craft beer in Britain, considering how much the numbers have grown despite existing (and hopefully on their way out) challenges. “It doesn’t seem inconceivable to us that we might one day get back to having a brewery in (or at least serving) every town, the availability of outlets (free-of-tie pubs and bars), and of capable brewers, being the current blockages.”
Simon Tucker of Medium.com: “To ask ‘Is there a Craft Beer Bubble?’ is to ask ‘Is there a Beer Bubble?’ which of course is ridiculous.” Simon, a UK ex-pat living in San Francisco, finds that the distinction between ‘craft’ and ‘macro’ is an American phenomenon and is essentially artificial. He comes to this conclusion via a personal story of his former and current locals, leaving us with this beautiful thought:
“It is often said, and I often felt, that the lack of pubs in the US would be a depressing experience — but now I start to understand: the pub is not a building or a social structure. You make your own pub, you find the places that you feel comfortable in and build a structure around you.”
The Beer Nut: An Irish-centric contribution which includes a brief history of recent craft beer in Ireland and a beer review. But before the tangents, the author gets right to the point with an astute historical perspective: “For me the answer is no. The recent growth in Irish microbrewing — and the bubbling potential which occasionally spills over into an actual real new brewery — is a re-normalisation of sorts, a return to the days of local breweries and local beer which aren’t really that far outside living memory.”
Ed’s Beer Site: “I don’t think so. One thing I learnt when working at a microbrewery was just how small many of them were. Many of them employed only one or two people and in the grand scheme of things the amount of beer they can produce is really a drop in the ocean. This was brought home to me when I saw that Fullers, a reasonably size but not massive brewery, produces as much beer as the 600+ SIBA members combined … I see no reason for a bubble to burst.”
Baltimore Bistros & Beer: “I think a better question would be Is there a bubble within Craft Beer?” Douglas makes a unique point: “If it were a bubble, I’m sure the genius economists at the macro brewers wouldn’t have their companies in a tizzy trying to come up with ‘crafty’ ways to fight back.” I don’t think I can agree with this perspective, but it is interesting food for thought.
“With that said, if new brewers focus on the local aspect of Craft Beer I think they stand a much better chance of surviving the increasingly congested highways. If they have a mindset of serving their community first and world domination second then the bubble that does exist can be reduced greatly … I’ll take ten quality local brewpubs over TGI Fridays and Chilis’ every day of the week.”
Saints Arnold Society: The author’s answer is a resounding no, explaining that the closure of breweries is due to their failure to compete, not the fickleness of the customer base. “Microbreweries not succeeding should never be looked at as a failure of craft beer. Restaurants quite often don’t succeed. Not all brewers and restaurateurs are created equally in talent, skill, business administration, planning or luck. Great businesses, products, and people will succeed and thus create strong markets.”
It’s Not Just the Alcohol Talking: Realizing that enough bloggers would be discussing the subject, in my own contribution I narrowed my focus to my home province of Ontario. Referencing the overused graph above, I pointed out that, while the number of breweries in the US (2,403 in 2012) is indeed a little bit higher than its pre-Prohibition peak (2,011 in 1887), the population is five times larger, so the breweries per capita is much, much lower today. In Ontario, the saturation is lower still. “If anything, the boom here is just getting started.”
Growler Fills: “I do not get the impression we’re experiencing a bubble.” Alan has the advantage that his sister is an economist, and uses that advantage to write an excellent, detailed post about how the craft industry is in fact behaving according to the standard competitive model.
“Once craft beer reaches much higher on the trendiness line (i.e. occupies a much greater share of unsaturated/unexplored market areas and has converted far more fans) and therefore becomes less trendy, the standard competitive model makes more sense than some sudden crash due to a predicted bubble.”
Draft Magazine: “Will there be a violent, sudden burst? I don’t think so. Will growth eventually slow down? Of course—how could it not? It might speed up first, but eventually all things reach equilibrium. And there will be casualties.” The author models their contribution on an article in the same magazine by Joe Stange, in which he spoke to brewery bar owners and beer consumers, most particularly Greg Koch. “Breweries that make quality beer, excel at customer service and contribute to their local culture will continue to thrive.”
10th Day Brewing: Jon, like Alan, sees nothing out of the ordinary about the state of craft beer, comparing it to the restaurant industry to make his point. “The thing is restaurants close all the time and no one notices. Breweries close all the time and no one really cares. The closings are a statistic. No more no less. This doesn’t make it a bubble. It makes it a normal business day. When people who get into a business for the wrong reasons and don’t learn how to run it as a business, the business will fail.”
Make Mine Potato: This contribution reads like a rant, and one that doesn’t catch the eye. Avoiding the compelling urge to skim and move on, I did pick out one passage of rare lucidity: “Isn’t Portland something like 15-20%? That means that almost 80% of the people in Portland, maybe the best market in the country for craft beer, don’t drink craft beer. 80 %. The majority by a landslide.”
Beer Search Party: “I base my non bursting bubble assumption on the fact that there are states in America still playing catch up to craft beer and many countries around the world yet to enter the game too.” Sean’s assumption, as he explains, is also based on the fact that, in general, there’s no way that people who have switched to craft beer are going to switch back to Bud/Miller/Coors. “I see the Big Brewers losing market share and I don’t see them making craft beer so I see potential in the 85% of America that doesn’t buy it yet.”
*Note for Sean: You mention that at any moment China’s “wine buying binge … could translate into beer too.” China is in fact already the world’s largest beer market.
The Brew Site: Jon’s contribution comes from the unique perspective of living in Bend, Oregon, “currently home to 16 brewery operations.” Using Bend as a model, he describes how something can look like saturation, then just keep on growing with great success. “For all the talk about craft beer’s runaway growth it’s easy to forget that, nationwide, it accounts for only 10% or less of the overall beer market!”
Jon focuses on a good point also touched on by several other contributors: “Small, in-house brewpubs that serve on premise only and stay under 1000 barrels per year … your local restaurants, your neighborhood hangouts, can make just enough beer to sustain themselves and still offer up something unique to beer drinkers.”