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Box Scores for the Craft Beer Business 2017

Brewers Association Infographic
The business of craft beer continues to grow both in barrels of beer, and in dollars.  The Brewer's Association just published headline data from their annual assessment of industry trends.  It's teasing out a more detailed presentation at the Craft Brewer's Conference at the end of April.

Here are a few key take aways from the data shared so far.
  • Craft beer prices went up by about 1% in real dollars.  There was an 8% Increase in retail sales.  Inflation was 1.8% in 2017.   
  • Breweries are opening faster than the market grows.  There was a 16% increase in brewers.  
The report does not discuss changes in craft brewing capacity, which I think is the an interesting part of the story.  However a follow up analysis by Bart Watson, BA's resident economist, indicated that the revenue growth was limited to the microbrewers and brewpubs, while the larger so-called regional brewers (>15,000 bbl/yr) lost ground, or at best held near constant volume of +/- 1%.  These large regional brewers are stalwarts and trail blazers of craft brewing: Bells, New Belgium, Stone, Sierra Nevada, etc.

The narrative is that the "medium sized" brewers are squeezed from both above and below.  However, volume numbers suggest that craft continues to eat away at big beer.  The pressure from above is most likely for mergers and acquisition.  The real challenge seems to be from the smaller, emerging players with shiny new tap rooms. coupled with some established players making overly aggressive expansions.  There has been a trend of West Coast companies opening east coast breweries citing environmental concerns, related to shipping, leaving stability concerns related to aromatic hoppy beers unsaid.

Recent press has covered a couple high profile regional brewers who over expanded, assuming that their business would grow in trend with the segment. San Diego based Greenflash just closed their new Virginia Beach brewery, and pulled out of distribution to the east coast.    The brewery had been open less than 2 years, and opened while Green Flash was expanding nationally, and at least in New England, was once the next great thing.

One of New England's oldest craft brewery's, Smuttynose, was just sold at a bankruptcy auction.  The financial missteps of this 25 year veteran brewery may end up being the definitive case study for this era of craft brewing.    I'll provide my take on it in a follow-up post, as this is already quite verbose for something entitled Boxscores.

The 7 - 20 bbl breweries expanding to keep their tap rooms supplied, aren't taking money from the big 3.  They are taking it from their inspirational predecessors. It will be interesting to see how the industry frames the narrative around the upstarts taking business from established players.  It's no longer a collaborative us vs. them battle of flavor vs. bland, or small business against multinational corporations with rigged distribution systems.  Its a coming of age story, and a tale of stubbornness leading to decline.  Quality and consistency of product may not be valued as much as an experience. Could craft beer stop being better beer?


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Holiday Gift Ideas for The Beer Lover

The gift of beer itself may seem obvious, but it is fraught with pitfalls. Especially if the gift giver is not as knowledgeable, experienced, or perhaps as jaded as the intended recipient. Craft beer lovers tend to have promiscuous taste buds. They crave new and exciting, and occasionally hard to find beers. How can anyone hope to keep track of another person's sense of new. You may have an advantage if you live a few states away and distribution agreements give you unique access to a hot new Nano, or even a New Belgium scale microbrewery. That's a great in if you have a little guidance. A beer lover that's a bit of a hoarder may enjoy an annual gift of Brooklyn Black Chocolate Stout, or Sierra Nevada Bigfoot for their cellar. However, the safest bet for a beer gift is t he somewhat corny Beer of the Month Club. Has the beer lover on your list has neglected to drop any good hints for gift ideas? Are you looking to surprise? Here are some ideas to consider.

Nostalgia and New Ideas: Craft Beer Luminaries Find Ways To Stay Relevant

I'm not envious of the youngsters starting out in an era when good beer is available on every street corner.   Yes, things have never been more exciting in US Micro brewing but I feel the grip of  nostalgia.  New breweries are opening almost weekly.  New taprooms draw crowds to taste new, photogenic beers.  Novelty, at times, seems to surpass quality in importance to today's promiscuous drinkers.  Which isn't to say that we didn't get around in my day.  It's just that we didn't make such an effort to make an obvious trail, or tally our conquests.  Which were, admittedly, somewhat smaller in number.  Might today's craft drinkers missing some great beers from great breweries, in a quest for the next big thing, and a desire to avoid drinking one of dad's many microbrews?  The good news is that many are doing cool things to stay interesting, and remain in conversation. So many brewing luminaries of my youth are now ancient.  Great Lakes Brewing is 30. 

The Post-Malt Era of American Craft Brewing

Once seen as a key differentiation between better and mass marketed beer, the 2-row barley malt may now be the least important ingredient in a brewery.  Malt has disappeared from our beer conversations.  There are still palettes stacked high with 50 lb bags, and fork lifts. By weight, it's still beer's second largest ingredient, after water of course.  However it's lost our attention, and its contributions intentionally minimized to better showcase on the other players - most typically hops and Yeast (or other microflora). The mighty hop has always been a lead character in American craft beer.  There's something in our soil that makes hops express pungent aromas and aggressive flavors.  European brewers traditionally considered these hops too vulgar to feature prominently in a beer's finish.  They kept quiet about cost savings from the use of american hops to bitter.  American craft brewers found ways to feature these piney, resinous flavors as virtues and birthe