Session #80 Round-Up: the Yeas

Well I think I can safely say that Session #80 was a success. I count 27 contributions which I found, with some surprise, to vary widely in their views on the subject. Because of how balanced the debate was, I’ve decided to split up the round-up according to which “side” the contributors were on, beginning with those who argued that yes, craft beer is a bubble.

Of course it’s not all black and white and none of the contributors treated it as such, so many of the responses that I consider to be in the affirmative are to some degree on the fence, and several of them rejected calling it a bubble while still suggesting that a burst or bust of some kind is inevitable.

So without further adieu, in order of appearance, here be the pessimists among us. Come back tomorrow for the rest of the round-up.

Seeing the Lizards: “The Crafties will always have their Craft.  It remains to be seen if anyone else wants it.” The author argues that craft beer is primarily a trend and only available in “fashionable” places (which does not equate to my experience at all). “It could be that regular drinkers are desperate for something better than John Smith’s or Becks.  Or, on the other hand, they could be quite content with their regular drinks and see Craft Beer as poncy and pretentious.” This sounds to me like an argument from the previous decade, as I believe we are past that particular bump.

Drunken Speculation: “Craft beer is not a bubble.” Liam believes that bubble is the wrong word for our purposes. In a long excellent post which touches on too many salient points to summarize here, Liam says we are indeed experiencing a boom and that the bust is on the horizon. “I think a bust is an inevitability. It may not take the form described above but the growth rate of craft beer will eventually slow, go to zero and turn negative. Whether that happens today, tomorrow, next year or next millennium is what I think this Session will (should?) really be about.”

I’m afraid to tell you Liam that this Session has not turned out to be a “not if but when” conversation as you predicted. Most contributors, myself included, seem to disagree with your assertion that a future negative growth rate is inevitable.

Beer is your Friend: “My feeling is that in the US, yep, it’s a craft beer bubble and it’s gonna burst. But not here in Australia.” Glen’s post takes the form of comparing the US and Australian craft beer booms. He describes the growth in the US (“it seems pretty obvious that this sort of rapid growth isn’t sustainable”) and explains that Australian craft beer is growing at a much less feverish (and more sustainable) pace, owing partially due to the absurdly high excise tax for Australian brewers, and partially due to the fact that craft beer in Australia already experienced a bust in the 90s. The latter argument falls flat, unfortunately, because the same thing happened in the US in the 90s.

This is Why I’m Drunk: Bryan Roth’s contribution is actually the final instalment of a thoroughly-researched three-part series to get to the bottom of this question. He came to this ultimate conclusion: “It seems clear that if the bubble ‘bursts,’ there wont’ (sic) be some massive crash. More likely, there will be some small-scale failure and there will be some consolidation, but we also have to remember that recessions in an industry are a normal part of the market economy. It’s all about regulating excess, if necessary.”

  • Part 1: “I feel that the best place to start this discussion is partially what would lead to a popped bubble – market saturation.”
  • Part 2: “At a time when ambition to join the craft beer movement is rising thanks to incredible levels of interest, costs to get in the game may be going down. Does that just inflate the bubble even more?”
  • Part 3: “Yes, I believe we’re in a bubble, but as {V} points out in the comments of my post on the craft bubble and saturation, it’s hard to know what that exactly means because of the historic nature of it all.”

Ramblings of a Beer Runner: This excellent numerical analysis is pretty eye-opening, with insight such as: “If the Growth of Craft Beer Slows to 5% or even 10%, a lot of breweries are going to fail despite this high level of growth.” Redefining it not so much as a bubble but as a ‘correction’, Derrick’s conclusion is in the affirmative:

“Talk to people in the craft brewing industry, and you’ll find them conceding a shake-out or consolidation is on the horizon. In fact, what I’ve basically done is express in numbers the gut feeling many in the industry have. So it’s pretty realistic to expect a few hundred breweries failing each as the market reaches equilibrium. There is little doubt in my mind we are headed towards a market correction of this magnitude.”

Literature and Libation: Oliver redefines the bubble as a wave in a detailed and cleverly realized metaphor: “I see the current trend as the peak of a tsunami. It’s headed to shore and picking up momentum as smaller waves join with the larger mass. There are hundreds of surfers riding the top, some little dudes on boogie boards cruising the bottom, some people in boats bracing for impact as the wave slides closer and closer to the sandy beaches … The net result: less beer but better beer.”

Appelation Beer: Stan, one of the founders of this here activity, focuses his attention on the hop farmers, who are surprisingly neglected by the minds of the craft beer lover despite the overwhelming popularity of highly hopped beers. Quoting Eric Desmarais, a fourth generation hop farmer, Stan concludes his excellent contribution thusly: “‘When will it end? How will it end?’ he asked, referring specifically to the demand for hops but therefore generally about the beers that include them in above average quantities. ‘There’s a trail of tears after every one (hop boom).’” Perhaps it’s not a beer bubble, but a hop bubble?

Beer Tinted Spectacles: “Brewers beware” – the most disturbing of the contributions, in which the author twists the risk of a beer bubble into an emphatic (and troubling) call to arms: “The job is to talk about beer, write about beer (it’s why I started doing this) …remind anyone who will listen why it’s not just about fat football fans swilling larger; or big-boned Jesus-Booted beardy No-Mates drinking flat ale that smells of farts.  We owe it to beer to do that. But much, much more importantly, we owe it to beer to stop the talking and get drinking.  Without more people drinking beer more often, the bubble will burst.” Drunken missionaries will save the day? What very strange advice this is…

I encourage anyone who has the time and patience to read through these arguments and keep the conversation going in the comments!

Tomorrow: a round-up of the fence-sitters.


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