Author Topic: OK one more thread on the Brewery bubble  (Read 2154 times)

Offline yso191

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OK one more thread on the Brewery bubble
« on: December 04, 2013, 04:11:15 PM »
Is it generally true that craft breweries are selling everything they brew, and that they are brewing at or near current capacity?
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Offline a10t2

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Re: OK one more thread on the Brewery bubble
« Reply #1 on: December 04, 2013, 04:23:07 PM »
Those are really vague questions, but I'd say yes. Certainly someone brewing at capacity would be selling it all, and usually someone selling it all would expand to at least their current capacity.

If you look at the BA stats, 1.8% of craft breweries closed in 2011, and again in 2012. That number has been dropping for as far back as I can find the data (2007: 5.2%).

Edit: Official Poobah of No Life?! I thought it was more of an ad hoc position.
« Last Edit: December 04, 2013, 04:25:40 PM by a10t2 »
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Offline morticaixavier

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Re: OK one more thread on the Brewery bubble
« Reply #2 on: December 04, 2013, 04:25:28 PM »
Those are really vague questions, but I'd say yes. Certainly someone brewing at capacity would be selling it all, and usually someone selling it all would expand to at least their current capacity.

If you look at the BA stats, 1.8% of craft breweries closed in 2011, and again in 2012. That number has been dropping for as far back as I can find the data (2007: 5.2%).

that's an interesting statistic! is it broken down at all by new startups vs. established breweries?
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Offline HoosierBrew

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Re: OK one more thread on the Brewery bubble
« Reply #3 on: December 04, 2013, 04:34:12 PM »
+1.  I'd be curious how the numbers break down too.  Sort of like the "half of all restaurants close in the first year" saying - I wonder what the early failure rate is vs the others.
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Offline Pinski

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Re: OK one more thread on the Brewery bubble
« Reply #4 on: December 04, 2013, 04:35:52 PM »
Wow, 1.8% seems really low.  The bubble expands...
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Offline hopfenundmalz

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Re: OK one more thread on the Brewery bubble
« Reply #5 on: December 04, 2013, 05:21:29 PM »
I think it is more of a boom than a bubble, and booms are followed by busts. Sometimes I think some craft brewers have a lot of capacity dedicated to 6 packs that set on the shelf. The quality brewers can not make enough, and are constantly expanding, or building new breweries.

There are many that are getting into the business now that are not making good beer on a homebrew scale. I wish them good luck.
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Offline majorvices

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Re: OK one more thread on the Brewery bubble
« Reply #6 on: December 04, 2013, 05:33:37 PM »
Brewers are always looking to expand their capacity because the only way you can really make money is to sell a hell of a lot of beer. We got to a point where we had to hire a sales guy, because we had been backing up at the distributor. We also depend on the distributor to move our beer and often times they do a piss poor job.

Craft beer in ALabama is most likely different than other parts of the country because it has not been established as long. But the trend here is now (finally) toward craft beer. But I can certainly saturate the market on styles if I am not careful. That said, aside from draft, we only do limited supply of 22 oz bottles. 6 Packs open up a whole new untapped market for us and volume is much greater.
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Offline a10t2

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Re: OK one more thread on the Brewery bubble
« Reply #7 on: December 04, 2013, 05:42:24 PM »
that's an interesting statistic! is it broken down at all by new startups vs. established breweries?

Not on the website. I believe the BA publishes some more in-depth statistics for members' eyes only, but I'm too poor to join right now.

It's also worth noting that the actual *number* of closures per year is also dropping. I said something similar in a previous thread, but I expect that in the next few years the number of brewery closings will increase dramatically as the nano market shakes itself out. No one can operate at a loss forever.
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Offline yso191

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Re: OK one more thread on the Brewery bubble
« Reply #8 on: December 04, 2013, 07:52:27 PM »
Still. 1.8%.  I imagine most of that is due to bad management rather than bad brewing or more importantly, a saturated market.

Which is why I asked the question.  The few breweries I have spoken to are brewing at capacity and are selling everything they brew.  A remarkable situation that is duplicated in very few industries. 

A couple of related thoughts: First, it seems to me that this would be a primary indicator for when the growth curve would begin to flatten or reverse.

Then, I wonder about the dynamic of converting BMC drinkers.  I mean if craft breweries DOUBLED it would still only be about 13% of the US market. 

What am I missing here?
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Offline euge

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Re: OK one more thread on the Brewery bubble
« Reply #9 on: December 04, 2013, 09:19:53 PM »
Perhaps the trend is that entering brewers are more capable and better informed? I'm thinking there are plenty of brewery owners who have professional business/marketing skills prior to opening a brewery as a second career after the economic woes of the past years.
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Offline morticaixavier

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Re: OK one more thread on the Brewery bubble
« Reply #10 on: December 04, 2013, 10:07:38 PM »
Still. 1.8%.  I imagine most of that is due to bad management rather than bad brewing or more importantly, a saturated market.

Which is why I asked the question.  The few breweries I have spoken to are brewing at capacity and are selling everything they brew.  A remarkable situation that is duplicated in very few industries. 

A couple of related thoughts: First, it seems to me that this would be a primary indicator for when the growth curve would begin to flatten or reverse.

Then, I wonder about the dynamic of converting BMC drinkers.  I mean if craft breweries DOUBLED it would still only be about 13% of the US market. 

What am I missing here?

I don't think that the 'craft' market will ever capture more than 50% and if it does so much of the 'craft' market is being bought out by the BMC/INBEV/SABMiller crew that there will be market to try to grab from the big boys for a long long time.
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Offline klickitat jim

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Re: OK one more thread on the Brewery bubble
« Reply #11 on: December 04, 2013, 10:19:36 PM »
I think the homebrew market will take off a few days after the zombie apocalypse. Might be less beer than we brew now, but a much larger percentage of the market

Offline a10t2

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Re: OK one more thread on the Brewery bubble
« Reply #12 on: December 04, 2013, 10:33:39 PM »
See, I switched from nuclear engineering to brewing once I realized which will be in more demand after the dead rise.
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Offline yso191

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Re: OK one more thread on the Brewery bubble
« Reply #13 on: December 04, 2013, 10:55:59 PM »
Better start stocking up on grain!  Kinda hard to run a malting operation while shooting zombies.  Just sayin...
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Offline klickitat jim

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Re: OK one more thread on the Brewery bubble
« Reply #14 on: December 04, 2013, 10:59:03 PM »
If it got to that point I'd be brewing something more efficient. Something that takes up less space and requires no refrigerator