TOPIC:

With more microbreweries than before Prohibition already and 725 planned new breweries (vs. 389 a year ago), could the US Craft Brew market be looking at a bubble?

High unemployment combined with a large home brew community and the perception of "easy money" while there's double digit growth year-over-year; are these things combining to create a US Craft Beer market "bubble"?

-Certainly gives me a similar feel to the .Com bubble of the early 2000s when people who had no real desire or business being in IT were deciding to change careers to become "an IT guy" to chase the "easy money" to me... (During my visits to the US over the past 2 years I've certainly come across more and more breweries making and selling very mediocre beer including in my home town.)

Curious about other's opinions, though.


Adam

I think the same might be true of the UK. There seem to be very very many chasing the beer drinker's dollar or pound. But before I call a bubble, you'd have to take into account demographics and drinking habits. If every pub brewed its own beer, then clearly there would be place in the market for tens of thousands. If the average drinker gets a taste for craft, and especially local, beer the market for craft beer would expand massively. I can't see it happening in the US, but it might in the UK.

I think there's a growing demand that is still not being met in the US. The dot.com bubble burst after IT reached a tipping point in the public consciousness and there was subsequent oversupply of tech companies. With craft still only 5% of the US market, that point hasn't been reached yet for beer.

What is more likely to happen, imho, is beer going regional. Flying Dog, Avery, Allagash, Great Divide, Bell's and Dogfish Head have all pulled out of distributing to certain states in the past year or so not because there's no demand, but because they can't produce enough to justify the costs of supplying smaller markets. With gasoline/petrol costs staying high and so many brewery applications in progress, I'd imagine that local breweries could fill that gap permanently.

Keegan Ales is a perfect example. They do an IPA, a blonde, and a milk stout, all decent but not spectacular, and supply the Lower Hudson Valley region of NY. They're good everyday beers with some regional loyalty. You can't really get them outside of that area, but you also wouldn't want to go out of the way for them anyway. And if you want something nicer, you can still buy Stone or Smuttynose.

I could see this model going nationwide. Competition would mean only the best breweries that expanded cleverly (and there have been so many that didn't - Catamount, Pete's Wicked - and are gone now) would go regional or national. Meanwhile, there's still your local. That sounds like a happy beer market to me.