It’s looking like heady times again in the craft
brewing business. Maybe too heady?
Certainly the numbers are impressive, with
the segment roaring into the new year up well
into the double digits as consumers glom onto
pale ales, porters, hefeweizens and other styles
not long ago viewed as too obscure for primetime.
There’s little question that the influence of
craft styles is far more pervasive than a dozen
years ago, when the first craft boom crested.
Back then, only a tiny minority of taverns and
restaurants offered a range of draft styles, and if
you stopped into a strange place and found Sam
Adams Boston Lager or Sierra Nevada Pale Ale
on tap, that was enough for you to count yourself
blessed. These days, multi-tap houses seem
to be the rule, certainly among new openings.
That’s all testimony to the increasing culinary
sophistication of Americans, and certainly suggests
that the image of beer itself remains exceedingly
healthy, even if the marketers of some
major brands may perceive the segment to be in
trouble (hint: look at your TV ads, guys).
So we’re living in this exciting period when
brands are proliferating, styles are adventurous
and everyone, from big Boulevard in Missouri
to tiny Saint Arnold in Texas, has embarked on
an expansion. It’s great for consumer choice, and
if you subscribe to the trendy “long tail” theory,
there seems no reason that the good-beer segment
can’t continue to profitably splinter into
ever-tinier and tastier niches.
Still, some of us with longer memories are
haunted by the spectre of the first microboom’s
unraveling a decade ago (even if, contrary to
many impressions, the shakeout didn’t result in
an overall decline in craft beer sales, just a flattening).
Certainly, there are parallels that make
me wonder whether history may be about to
repeat itself: the not-quite-rational exuberance,
the ratcheting up of capacity, the headlong rush
into new, far-off markets. It’s reassuring to note
that there are some differences from that experience.
First, we haven’t seen a proliferation of mediocre
and novelty beers (anyone remember
Wanker Beer?) offered by opportunists who’d
gravitated to the business for its perceived cachet
and get-rich-quick potential (they’re too busy
making energy drinks, I suppose). Nor have we
seen misguided and perhaps intentionally confusing
entries from major brewers – remember
“stealth” brands like Plank Road Icehouse and
“fake” imports like Azteca? – or the marketing
assaults on contract-brewed craft beers and “bitter
beer faces.” Those trends left store shelves
cluttered with brands of dubious provenance
and stoked a consumer backlash that tarred the
segment for years. To their credit, the major
domestic players have focused on allying themselves
with authentic craft brewers (Anheuser-
Busch), carefully nurturing their in-house craft
brands (Coors, with Blue Moon) and not giving
their wholesalers grief over their efforts to be
represented in this thriving segment.
Still, I worry that some of the lessons learned
last time around are being forgotten. The shakeout
left many of the survivors swearing to put
aside national expansionist ambitions and instead
tenaciously defend their regional base,
expanding only where they could adequately
support their brands. Not everyone, they acknowledged,
can be a national or super-regional
brand like Sam Adams, Sierra Nevada or Fat
Tire, nor is that necessary in order to prosper.
So when I see terrific brands like Stone and
North Coast (from California) or Goose Island
(from Chicago) showing up in my New York
market, the consumer in me exults even as the
businessman in me worries. Though I certainly
believe the current resurgence is sustainable, I do
wish craft brewers would take it a wee bit slower.
While I don’t expect American consumers to roll
back their tastes, there is a limit to available shelf
space, not to mention truck space in a wholesale
segment that is consolidating, not expanding.
Nor is it out of the question that an economic
correction could cause people to cut back on
splurging. In that environment, with shelf space
shrinking and pricing under pressure, not everyone
can be a winner. Since most everyone out
there today is brewing interesting beers that deserve
the local loyalty they’re winning, I’d sure
hate to see the land grab’s losers jeopardize their
core business.