Bursting the Craft Brew Bubble

IS THE CRAFT BREWERY BUBBLE REALLY ABOUT TO BURST?

“The bubble is bursting! The bubble is bursting!”

Claims like this of craft brewing’s oversaturation have been uttered for a couple of years now. But according to numbers released on Tuesday by the Brewers Association, rumors of craft beer’s demise are greatly exaggerated.

In 2017, there were 6,266 craft breweries up and running in the United States. That represents an increase of more than 800 breweries from the previous year. Craft brewers produced 25.4 million barrels in 2017, up nearly one million from 2016.

 

2017 Craft Brewer Stats

Operating Craft Breweries

2017: 6,266

2016: 5,424

2015: 4,544

Volume Share for Craft Brewers

2017: 12.7%

2016: 12.1%

2015: 12.1%

Brewery Openings and Closings in 2017

Openings: 997

Closings: 165

The numbers illustrate that the growth of craft beer continues. But there’s more to it than that. It’s an evolving industry that has seen some interesting changes over the past couple of years.

One trend seems to favor the small, local brewers. A quote on the group’s recent press release from Bart Watson, chief economist for the Brewers Association, struck me.

“Beer lovers are trending toward supporting their local small and independent community craft breweries. At the same time, as distribution channels experience increased competition and challenges, craft brewer performance was more mixed than in recent years, with those relying on the broadest distribution facing the most pressure.”

We’ve seen some downsizing from the bigger craft breweries. Green Flash in particular was highlighted in an article early this year by Mike Pomranz of Food & Wine. But it makes sense when you consider the situation in Milwaukee just a few years ago. The bigger craft breweries used to fill plenty of shelf space in a town that basically had just three — Lakefront, Sprecher and Milwaukee Brewing (brewpubs not included).

Now, there are more than 20 breweries in the area, and more on the way, and many of the newer spots are also distributing.

The shift to locals and Wisconsin-brewed beer is pretty evident if you look for it. Tap handles and retail shelves seem to be showing more local love. I stopped at Ray’s Wine & Spirits last week and saw the evidence first hand. An eye-level shelf was stocked neatly with several options from Good City, Third Space, Raised Grain, Eagle Park and City Lights. That’s a sight that wouldn’t have been possible three years ago, simply because none of those breweries existed.

The craft beer industry appears to be healthy, but that doesn’t exclude it from a fair amount of market disruption in the near future. If that disruption swings in the favor of Milwaukee’s hometown breweries, I’m fine with that. But I also make it a point from time to time to drink beer from some of the breweries that got us here. A Sierra Nevada Pale Ale always tastes good.

by Dan Murphy

Original Article