I’ve had some interesting feedback already. Gary Gillman had this to say:
Is he asking whether craft beer itself – the concept of rich, well-made beers – may have a finite life and be absorbed by mega-brewing? I.e., that mass market adjunct beer will reassert itself to take almost 100% of the market again?
A second read is, no, craft brewing itself is not in doubt, but many current players may not survive the recent expansion of the market: there may be another 90′s-style shakeout.
A third reading is, the beers themselves will survive, but perhaps they will end up being made by the megas who will push out all the small players because they can make the same thing at least as well and distribute it better and for less.
To clarify, the question is intentionally ambiguous. We may all have our own interpretations of what “craft beer bubble” means, which I think makes the discussion that much more interesting. If you think we are in some kind of bubble, what kind of bubble is it, and by do you believe it exists?
Nate O. had a brief response I quick like:
It’s hard to tell how close you are to the cliff’s edge until you fall off. Once you hit the bottom, it was all so obvious.
To the extent that the explosive growth in craft beer is based upon predictions (or dreams, gut feelings, delusions, etc.) of continued growth, not on fundamental analysis of realistic operating cash flows, craft beer meets the basic definition of a “bubble.”
I think it’s more useful to consider craft beer as two fairly discrete groups: “real businesses” and “vanity projects.” The “real businesses” will continue to grow and thrive through the bubble, The vanity projects, those with no strategy, no competence, no competitive advantage, no idea how to manage a manufacturing corporation, will fold as soon as the bubble bursts.
I’ll let you know my thoughts on Friday and I look forward to reading yours.