Session #80 – Is Craft Beer a Bubble?

On the first Friday of every month, beer bloggers from around the world all write their own perspective about a single topic, as chosen by a monthly host. As this month’s host, I have chosen the top to be “Is Craft Beer a Bubble?”

I’m going to take a local approach to my answer and talk specifically about craft beer in Ontario.

Let’s start with numbers. There are 31 breweries in the Ontario Craft Brewers Association, the newest of which are Ramblin’ Road Brewery Farm of La Salette and Sleeping Giant Brewery of Thunder Bay, and there are a few more craft breweries in the province that don’t belong to the OCB. The total number is probably around 40.

For a comparison, Belgium, with a population less than that of Ontario, is served by nearly 200 breweries. Closer to home, Michigan, again with a smaller population than Ontario, has around 140 craft breweries, having grown from only 3 in 1991.

The incredible growth rate in Michigan is representative of the US as a whole – in the 1970s there were less than 100 breweries in the States, including the BMCs, while today there are over 2,500. This is an all-time record; the number had previously peaked at a little over 2,000 before Prohibition.

Clearly, if we take the States as a comparison (and I think it’s fair to do so), a craft beer bust is not imminent in Ontario. If anything, the boom here is just getting started.

Could craft beer be a bubble in the States? The market is much more saturated than in Canada (California alone has over 300 breweries) while still very much a young industry. However, it’s misleading to compare the number of pre-war breweries, almost all of which closed due to Prohibition, to the number today without factoring in population growth.

The 2,000 American breweries pre-Prohibition served 63 million people, while the 2,500 of today serve 316 million. So if the market was in equilibrium before prohibition (a big “if”), then it won’t reach saturation today until there are at least 10,000 breweries in the States.

In Ontario specifically, the most obvious (and possibly the best) thing to compare to the craft beer industry is the wine industry. There are more than 180 wineries in Ontario, and hopefully we’ll have that many breweries soon.

The Lake Erie North Shore (Greater Essex County) is the latest recognized wine region in Ontario and has grown from 4 wineries to almost 20 in the last 11 years. Yet the same region still only has one craft brewery and one micro-brewery.

It’s far too early to start worrying about a craft beer bubble in Ontario. And here’s hoping that when the growth does finally taper off, the breweries that will survive will be those that focus on specialisation, localisation, and quality. A competitive craft beer market is a good thing: it rewards quality and punishes sub-par breweries, ultimately benefitting the beer drinker.

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7 thoughts on “Session #80 – Is Craft Beer a Bubble?

  1. I think it’s misleading to compare pre- and post-Prohibition brewery numbers. Modern transport allows regional breweries in a way that wasn’t practical in the recent past.

    It’s a bit off-topic, but people drank an insane, unhealthy amount pre-Prohibition. It wasn’t just a bunch of stuck up teetotalers agitating for Prohibition. Alcohol was a serious societal problem back then. It’s still a problem today, but no one in the craft beer scene wants to admit it. Binge drinking is typically defined as 4+ drinks a day. Two IIPAs would easily exceed that. Every craft beer person I know exceeds that regularly.

    I am very concerned that craft beer provides “up-scale” deniability for alcohol abuse. If someone drinks 10 Bud Lights in a night, most people would say they have a drinking problem, while drinking 5 IPAs is socially acceptable.

    • Certainly not a perfect comparison, but an interesting thing to consider I think.

      I agree that many in the craft beer scene don’t want to admit alcohol can be a problem, myself included, though the increasing demand for quality session beers shows that craft beer drinkers want to keep drinking good beer without always having to get drunk.

      However I don’t think drinking 10 Bud Lights in a night is a problem, drinking 10 Bud Lights regularly is a problem. Part of the reason I come to the defence of alcohol so much is because I think that the idea that “beer is evil” is still deeply ingrained in the English-speaking world and I’m playing the devil’s advocate to bring some balance to the conversation.

    • Men are driven to madness by beer and women- shall we then also outlaw women?
      One of those muddles type quotes that I can’t recall where it came from or if I quote it correctly but love the message.

      Moderation in all things- sessionable beers are in demand for a reason. Being drunk/disorderly is never promoted. Most craft beer drinkers aren’t the brawling Oktoberfest types, so let them turn their piss into hop infused fizzy yellow stuff, lest they harm none but themselves.

      One of the big problems of pre-prohibition alcohol abuse was that people were seeing a shift from low abv beer drinking to the cheaply made whiskey which they still drank on a daily (hourly) basis. Men used to come home for lunch and have a beer or two, like the French with wine do to this day. Pre-prohibition had lost their beer/proper drinking culture and were having a glass or two of moonshine at lunch. Wrecked day, wrecked life, abused starving women and family theeeen we get prohibition pushed into place. Beer just happened to be involved, innocent by stander.

      Derek nails it- English speaking drinking culture is too focused on age limits and restrictions to teach healthy consumption to new generations. But the young generations are learning about quality themselves. My father drank heaps those 10 Bus Lights every night, I hate beer. I learned that beer could be amazing AND that it object of drinking was just to get drunk- there was flavor and enjoyment!

      Beer isn’t evil- people are evil.

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