That’s simply not going to happen.Īt some point, things must slow down. beer market would be, well, completely craft in 17 years. ![]() If sales of the category continued at 2015’s rate of 12.8 percent, the entire U.S. (He also points out that for some small breweries, meaning those that produce less than 20,000 barrels a year, direct sales are the only way their brews are available.) It’s a rapidly growing phenomenon, and one that could very well account for a percentage of the disappearing growth rate.īut even if one figures in direct brewery sales, the recent meteoric rise of craft beers can’t go on forever. He estimates that 20 percent or more of total craft beer sales go unreported. Industry consultant David “Bump” Williams, who once ran IRI’s beer data division, thinks the amount is significant. So much beer is purchased there, in fact, that some people think category sales are significantly under-reported by retail sales-tracking services like IRI or Nielsen, which rely on register data from large store chains. And as consumers become increasingly interested in locally-made products, there has been a rise in beer bought in brewery tasting rooms, which is much more profitable for a brand considering it cuts out several middlemen from the transaction. New brewers may actually have an advantage, the same one their predecessors had over the mainstream brewers: fresh ideas paired with a quick decision cycle. “If aren’t paying attention to them, they’re foolish,” says Covaleski. Plus, the Brewers Association has invested in setting up quality assurance standards. ![]() Fortunately, the industry has always had a strong tradition of cooperative competition, sharing information and experience among brands. He remains bullish as long as “everyone spends their money wisely, on quality control and assurance.”īut will everyone spend money wisely? Will young brewers, who may have been in grade school in 1996, learn the lessons of the last correction? “The signs you point out are humorous, but also serious,” admits Bill Covaleski, co-founder of Victory Brewing in Downingtown, Pennsylvania, which he opened in early 1996 as things started shaking the first time. The Brewers Association, the category’s official organization, has called for increased quality control, with director Paul Gatza citing beers that “were not good.”Īnd then there are all those fruit beers. to more than 12 percent in 2015, sales during the first half of 2016 were considerably slower.Īt the same time, expansion continues unchecked: Roughly three new breweries a week opened in 2015 alone. Thanks to an explosive decade, where the category went from representing under 4 percent of total beer volume in the U.S. The main concern is that despite the hype around craft beer, its rapid growth may have peaked. There is increasing speculation (and worry) that the bubble will burst again. Some of the bigger brewers went out of business, others were bought by competitors, and sales of craft beer-the term that was then just beginning to replace the word “microbrew”-went flat for five years. These events, commonly referred to by people in the business as “The Shakeout,” happened before, in 1996. You might be tempted to dismiss these warning signs and order yourself another pint of your favorite cask-conditioned session brew. (Mango IPA, anyone?) This will not end well. ![]() What makes matters worse is that breweries are still opening at a rapid pace around the country and unfortunately, many of those bottles on the shelves are old or have gone bad.Īnd there is also the fact that fruit beers are flooding the market, which is truly a sign of the apocalypse. While things certainly seem bubbly on the surface for the category-years of double-digit sales growth have led to a large increase in brands and an overwhelming selection of IPAs, stouts, saisons, and just about every other conceivable type of beer on store shelves-growth is slowing, putting pressure on the industry. You may want to grab a barstool before you hear this: Craft beer has some very serious issues.
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