[reverseapachemaster]

The market may just be approaching its cap for the traditional methods of sales with the number of shops currently in the market. You can only sell so many starter kits to so many new brewers before you have to find new ways to generate new customers and sell more products to existing customers.

We saw years of organic growth to homebrewing and that's probably hit its limit as well. The market downturn drove a lot of people to DIY options like homebrewing. With the economy rebounding people are giving that up. The growth in craft beer got a lot of people to try out brewing at home only to find out they hate all the cleaning. The wide availability of good craft beer also deters people from feeling like they need to take up a hobby and wait a month to drink a beer when there's a six pack waiting at the store.

[tommymorris]

Here we have at least one brewery that will sell grain and hops cheap. We have several beer stores and a health food store that moon light in homebrew supplies. No dedicated stores. None of the local options is compelling.

One of the local beer stores is promising a full scale LHBS. They used to have a decent selection of supplies. But, they sold off their stock of homebrew supplies a few months ago and don't plan to open the new stand alone LHBS until late summer. I don't like that lack of commitment to the market and customers. They are making me go elsewhere for 6+ months. I may not come back.

[amichuda]

Firstly, I brew all grain because its fun, and extract is more expensive. Second, I wonder what the sales are like at Morebeer? I'm almost an exclusive online shopper mostly because I can get EXACTLY what I want from a big online store.

I recently went into my LHBS for an impromptu brew day and they didn't even have pilsner malt. OK, any European munich malt? "I don't know where my munich malt is from." I've also found that the hops they sell aren't very fresh or aromatic. I simply can't trust the ingredients I buy there. Nonetheless, I need a local store for emergencies and CO2, so I try to stop in every once in a while.

Do all LHBS suck this bad?

[69franx]

Maybe homebrew shop sales are down as people are brewing more and buying bulk supplies.  As much as I want to support LHBS, I would be brewing less with the differences in cost.

I also wonder is the homebrew shop sales are including the sales online or are they just brick and mortar sales?

I brewed an extract batch back in December, but it was a hard root beer.

The sales are down all over, at least per the interview. It didn't sound alarmist, just an observation. AHA does do some very good surveys of brewer behavior. I understand the hypothesis (all-grain brewing takes time, therefore people brew less, more brewers start out with AG or move to it earlier in their brewing experience, and brewing less = fewer sales overall), though there could be other drivers, such as an overall "craft beer bubble" that is softening. Gary Glass noted a significant number of homebrew stores closing last year. Whether or not you agree in tinkering with market forces :-) it's a really interesting interview.

Extract has a higher margin, so less extract hurts the bottom line. All grain is popular now, and combined with the rise of brew in a bag, less extract and fancy all grain equipment sales is a double whammy. Some are brewing less, but the AHA also knows that 4200+ breweries is having an influence on that. As Mike pointed out, more stores in an area dilutes the sales per store. There are the bigger internet stores that are growing and taking some business from the mom and pop Local store. The AHA membership is strong, but the hobby is not seeing double digit growth like in a string of previous years, just single digit growth. Then there are all of those guys Homebrewing like crazy to nail the recipes down, then they go pro and don't Homebrew (much). No one single answer, is there?

Jeff, this is an awesome look at the situation and I think all your points hit home to the LHBS industry.

Firstly, I brew all grain because its fun, and extract is more expensive. Second, I wonder what the sales are like at Morebeer? I'm almost an exclusive online shopper mostly because I can get EXACTLY what I want from a big online store.

I recently went into my LHBS for an impromptu brew day and they didn't even have pilsner malt. OK, any European munich malt? "I don't know where my munich malt is from." I've also found that the hops they sell aren't very fresh or aromatic. I simply can't trust the ingredients I buy there. Nonetheless, I need a local store for emergencies and CO2, so I try to stop in every once in a while.

Do all LHBS suck this bad?

I am in the same situation as your first paragraph. I love the hobby and find my brewing time to be my only time: nobody bothers me while I am brewing. For your second paragraph, I feel for you mainly because I have access through work travels to 3 different LHBS around town. I dont think for the average homebrewer around me that all 3 are interchangeable because of distance and none are what i would consider close to home(closest is half hour drive from home) i am always happy with Dan Listermann's brewing supply store. Great selection of ingredients, nice discount for either AHA or club membership, knowledge level of all employees that are also all homebrewers, great tasting room for the Brewery side of their business, and general friendliness of the staff. I therfore don't think all LHBS suck the way that yours does but again, I am very happy with my local options. As a final note, I am sure that I would never shop again at an LHBS that was regularly out of a base malt such as Pilsner and the lack of knowledge or unwillingness to share origins of produc are also a huge turnoff to me as a prospective buyer. I occasionally buy online if or when I find an unbeatable deal, but that is rare. Saving shipping and spending locally works well for me in my situation

I guess that was not really my final note, but this is: I would not likely buy an an extract kit to help out the LHBS, but I do shop my local stores regularly. Unfortunately, ymmv

[kgs]

I personally think homebrew sales are down because there are MORE homebrew stores. When I started we had one and then a few supplies were available to members at a Co-op. Now I count at least seven stores in the same area and there may be a couple more lurking out there. I know homebrewing increased with the last drop in the economy, but a sevenfold increase in stores means unless the number of homebrewers increased by 7X sales had to drop for the single store.

Exactly.  As I read this thread I was wondering if it's total sales or same store sales that are dropping.

The hobby has grown so quickly I would bet there are too many stores.

Hmm good point. The interview pretty much said that there were too many stores and that was one reason they were closing. I was wondering when we would hit "peak homebrew."

I may still do an extract batch for fun. Do a cream ale for my better half or something like that.

[denny]

Drew and I discussed this back in episode 3....http://www.experimentalbrew.com/podcast/episode-3-over-barrel-experimentally

[klickitat jim]

It would be interesting to see a breakdown. Ingredients for a 5 gallon batch (gross income to the store) and how many you would need to sell per month to break even. I'm not bored enough to do the math but I have a feeling that for most small town owner operated LHBSs its just a hobby that almost pays for itself, and the exit plan is to pocket a little when its time to sell out.

[denny]

It would be interesting to see a breakdown. Ingredients for a 5 gallon batch (gross income to the store) and how many you would need to sell per month to break even. I'm not bored enough to do the math but I have a feeling that for most small town owner operated LHBSs its just a hobby that almost pays for itself, and the exit plan is to pocket a little when its time to sell out.

Define what you think of as a "small town".  I consider Eugene a small town, but we have 2 shops doing very well.

[pete b]

It would be interesting to see a breakdown. Ingredients for a 5 gallon batch (gross income to the store) and how many you would need to sell per month to break even. I'm not bored enough to do the math but I have a feeling that for most small town owner operated LHBSs its just a hobby that almost pays for itself, and the exit plan is to pocket a little when its time to sell out.

Define what you think of as a "small town".  I consider Eugene a small town, but we have 2 shops doing very well.

That's not a small town, the population is around 150, 000.

[Stevie]

I'd imagine by mosts folks standards a population of 150k+ is more of a small city vs a small town. To me a small town is <5k, maybe 10k. Not to say that any given town or city can't have a small town feel. Or even neighborhoods within a city may feel small.

[klickitat jim]

My LHBS is Keller's in The Dalles, Oregon, (~16000 pop) and has 1 employee (the owner). A random guess is about $900 for rent, and maybe $300 for utilities etc. He probably does his own books. He drives to Portland about every other week for a supply run on heavy items, glass/grain. If we figured $1500 overhead...?

I buy 55lb sacks of Simpsons GP and Best Pils for under $70 if memory serves. Hops vary from $16-24 per pound. Yeast is $7. So on just ingredients it seems like he would need a pretty good pile of regular customers. A ball park estimate, I probably spend around $100 a month there. Sometimes nothing, sometimes its $500 to get out of the door.

[kgs]

Drew and I discussed this back in episode 3....http://www.experimentalbrew.com/podcast/episode-3-over-barrel-experimentally

I'm so behind!

[Slowbrew]

I'd imagine by mosts folks standards a population of 150k+ is more of a small city vs a small town. To me a small town is <5k, maybe 10k. Not to say that any given town or city can't have a small town feel. Or even neighborhoods within a city may feel small.

I grew up in a small town.  <400.  About all towns that small can keep in business is the Farmers CO-OP.

Paul

[pete b]

The closest city to me is Worcester at 183,000. I have always considered it an average sized city along with Providence and Hartford with Boston being a big city and NYC being THE big city.
I live in a town that is one of the largest in the state geographically with a population of only 5,000. I can't see another house looking out a window.
Needless to say my town doesn't have a homebrew store. The one I go to when I get a chance is just outside of Worcester and I consider it quite good and it seems to do well and it's been there for close to 20 years. I used to go there regularly when my son was in college in Worcester and we would meet for lunch CH in Worcester. The last time my girlfriend and I went there the owner seeemed to be laying a guilt trip on us: "I haven't seen you guys in a long time...". I just don't have time for a two hour trip back and forth there and usually order from an online store.

[kpfoleyjr]

I brew AG and the "significant other" factor should be considered too.  Lately, I've been getting a lot more "are you brewing again?" from the wife.  She just doesn't get it.

When I get asked, "Are you going out drinking?" I reply, "No dear, I'm doing research for my hobby.  Why don't you come with me?"

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