The end is nigh for craft beer! There are too many breweries saturating the market!
From the Consumerist to the Examiner to the Philadelphia Inquirer and all manner of publications in between, writers have been heralding the existence of a "craft beer bubble" in both shock and speculation.
These rumors have been bubbling under the surface, with very few willing to go on record to say these things, but when they do, it sparks waves of controversy. Take Greg Koch of Stone Brewing in California. He spoke with Business Insider about what the craft market has done to consumers. "We are giving the consumer a dizzying array of choices, which range from super-high quality to rather mediocre stuff," Koch told the paper. "You can expect that consumer fatigue will show up again, just like it did in 1996. It's like a school of fish. It will turn, but you don't know when."
They claim that this bubble exists because there are just too many craft breweries opening and the market can't support them. I say this is bollocks.
The number of breweries in 2012 grew to its highest number since 1887. That might seem problematic on the surface, but what needs to be understood is that during the 1890 census, the United States population was determined to be 62,979,766. In 2010, that number became 308,745,538. So there are roughly the same number of breweries for a population that is now five times as large. Still a lot of room to grow.
Another facet posited by this idea of market saturation is that there will be no more room in stores for the growing number of breweries. That may very well be true to a point. However, not every beer could or should be on every grocery store or convenience store shelf. Some will be available only in a small area around the brewery, others in larger swaths of territory.
Take wine, for instance, which has its fair share of product that's available in certain high-end wine shops, big-box liquor stores, and inexpensive bodegas. Is there concern for a wine bubble? Not particularly.
Beer ingredients may go up in price, and that may reduce the number of get-rich-quick operations (or those thinking that they can... craft brewing is not easy money no matter how good the market is). But this is a force that affects every part of the industry, including macrobrewers.
At the end of the day, craft breweries will survive if they have a couple of key points down: They make good beer, and they have local support. If they can do that, then they are on pretty good footings.
Are there ups and downs to the markets? Sure. But to call any market growth, no matter how good it is, a "bubble" is just fear-mongering. South Florida especially has no fear of saturation to come anytime soon. Until that happens, and I hope it does one day, I'll be waiting with breathless anticipation for each and every new brewery that opens its doors.
Oh, and this will probably be my one and only article on the topic of "the bubble." I'll leave that "issue" to others.
Doug Fairall is a craft beer blogger who focuses on Florida beers and has been a homebrewer since 2010. For beer things in your Twitter feed, follow him @DougFairall and find the latest beer pics on Instagram.
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