Beer Monopoly




    International Reports




mern von Alexander in Frauenau:








Posted May 2017

Keep it real but keep it afloat

US craft beer | America now has more breweries than ever. And that might be a problem. New arrivals, riding the craft beer wave, are clogging beer shelves and eating into the sales of legacy brands. Alarmists have declared a state of emergency: a shakeout looms large. Or does it?

It was a bright cold day in April when Him Indoors and I took a break from visiting craft breweries in Asheville and went for a beer at Wicked Weed, a local brewery famous for its sour beers and, unbeknownst to us, about to be sold to AB-InBev. As we sat down by the fireside outside Him Indoors had some sort of epiphany. Out of the blue he turned to me and said: “Ina, I think this craft beer thing is no longer a niche. It’s a universe.” What could I say? When he’s right, he’s right.

In the US, these days it’s basically impossible to escape craft beer. You don’t have to travel to Portland, Oregon, where craft beer has nearly 50 percent retail market share, to see groovy beer labels everywhere. Even in the rest of this vast and diverse country, craft beer has entered the mainstream. Try buying a coffee on Amtrak – the much maligned US train service – and you will notice that at the buffet car out of the six beers sold four are craft beers. Or fly with Delta, one of the major carriers. Its food options are still underwhelming but when it comes to beer it has probably the widest range of craft beers of all US airlines on its menu.

Making craft beer as American as apple pie is no small achievement. There were 2,000 craft breweries in 2011 and everybody thought “wow”. Then the number of craft brewery openings kind of exploded. By the end of 2016 the Brewers Association (BA) recorded over 5,300. That’s an increase of 16 percent over 2015 alone. With an estimated two to four breweries opening each day this year, the US will have witnessed a tripling in craft breweries in only six years.

It should not come as a surprise that the 13,000 or so craft beer industry members who descended on Washington DC for this year’s Craft Brewers Conference (10 – 13 April) swaggered about town clearly full of themselves. You have to give it to US craft brewers: they have reversed the image and respect for American beer in a few decades only. As Jim Koch of Boston Beer put it jokingly at the Beverage Forum in Chicago (27 April 2017): When he started out in the 1980s, US beer was like making love in a canoe. In case you don’t get the point, here’s the explanation: “It was f****** close to water.” Mr Koch’s words, not mine. This is certainly no longer the case.

Considering that the overall beer market has been on a slow decline since 2008, the fact that sales of craft beer rose to 24.6 million barrels (28.8 million hl) or 12.3 percent market share in 2016 deserves another round of applause. But craft brewers who had been spoilt for success pulled long faces. After racking up two-digit sales hikes (18 percent in 2013 and 2014, 12 percent in 2015) the uptick in 2016 was far more modest: only 6 percent.

Eventually the realisation hit home that craft beer sales had slowed and the impact on big craft was measurable. Ominously, the category had witnessed some serious cannibalising. Instead of eating into the Big Brewers’ sales, the small guys had chipped away at some of the big craft brewers and the most recent upstarts at dependable well-established legacy craft beer brands. You’d say “oy weh”, but not the major craft brewers. They go by karmic rhythms. Like Jim Koch of Boston Beer, they decided to grin and bear it, while some secretly pushed the ROI of their spectacular new breweries in the eastern US further into the future.

Toward an age of humility

Of course, this being the US, last year’s single digit growth rate was met with hysterics. Instead of making pundits sober up and acknowledge that craft’s phenomenal rise in the past had been achieved on the back of drawing more consumers to the category, which is to say, recent entrants had it easy as they were just riding a big wave, out came the doom-mongers and in droves. Wailing loudly, they proclaimed that craft beer had reached its peak and that a shakeout was imminent. The rise in the US brewery count notwithstanding, they pointed out that the number of breweries that closed each year had gone up too. In 2011, just 44 breweries brought down the shutters. By 2014, that number had climbed to 75 and in 2016 it had reached 96. True, the cold number belies the individual tragedies of breweries going bankrupt but then again the statistic is not all that dramatic when contrasted with the thousands of brewery start-ups that seem to be doing alright.

So rather than join the chorus of worrywarts we should take a hard look at the failure rate according to business types. Nearly half of the companies going bust were brewpubs. In case readers need reminding, brewpubs are basically restaurants. And what’s the failure rate of restaurants in the US? Research shows that around 60 percent of new restaurants fail within the first year. And nearly 80 percent shutter before their fifth anniversary.

Sorry, but to continue reading you need to subscribe to Brauwelt International. Read on



2017 march · february

2016 november ·  july · may · march · february · january

2015 october · september · may · march · january

2014 november · october · august · march

2013 october · july · june · april · february · january

2012 november · october · july · may · march · february

2011 november · october · august ·  june · april · february

2010 november · september· august · june · april · february

2009 november  · october · july · june ·  march ·  february · january

2008 november  · october  · august  · june  · april