Dead Brewer Walking: Why (Many) Good Breweries Won't Survive a Craft Bubble Collapse

Beer lovers fight over lots of things, but there's one thing we all agree on: there are a lot of breweries out there today.  Others have thrashed out to varying degrees whether that's a good thing or a bad thing, whether too many open breweries too soon, and why you might not want to open a brewery yourself.  This week we'll jump to the end of the page: what will happen in the event that there is (or will be) a craft beer "bubble," and it pops?  

Many, many of the thousands of craft breweries open today will close their doors.

Many of them will be victims of identity or attitude, not product quality.  Brewing great beer won't save them.  

"But why not, you paranoid, pretentious, bloviating alehole?"

First off, that's quite enough of the name calling, thank you very much.  But the answer is that the traditional mechanics of customer choice are being undermined by attitudes that make beer quality a secondary (or tertiary, or quaternary) consideration.  That's a very bad thing for beer quality, and craft beer in general.

"Just Brew Good [Expletive Deleted] Beer"

A brewer friend has a simple (explicit) philosophy: "Just brew good [expletive deleted] beer." The gist is that brewing good beer covers all manner of other problems.  Most of the time I agree with him, and this attitude is part of the reason that his brewery has succeeded and grown.  Brew more beer, and better beer - do that and the rest will probably come clear.  It's kept him focused on beer quality and not on distractions caused by craft beer's Big Boom.  

I'm just not sure it'll be enough for when craft beer's Big Crunch comes. [Remember - for the purposes of today's argument, we're assuming it is coming.]  In a recent Chicago Tribune article, Dogfish Head owner Sam Calagione said, " It's the ones that have quality, consistency, and focus on being well differentiated...that will be successful.  

I don't buy it (no pun intended).

The parameters of the debate in craft brewing today seem to revolve in large part around what is and is not "craft," and around what is appropriately "craft-y" behavior.  How many barrels before a brewery is a "big" brewery?  Will collaboration continue?  Is it appropriate for breweries to open second and third breweries in other regions?  Does expansion and competition lead craft brewers into inevitable conflict?  How long can craft expand?  What role will private equity investors have?  How many breweries would be too many?  In all of this debate, though, there's one thing conspicuously missing:  Substantive discussion about the importance of beer quality.  

I'm not kidding when I say that this almost never comes up when I talk to brewers.  For every comment I hear about quality, I hear twenty about brewery behavior, cred, reputation, and identity.  And it isn't because there aren't bad craft breweries out there.  We all know of at least a few.  Some market watchers have even suggested that a majority of the new breweries out there are struggling to produce good beer.

So we know that beer quality is an issue in the marketplace (even if it isn't always discussed).  And we know that a contraction in the marketplace is possible, maybe likely, and (for our purposes today) even inevitable.  So who lives?

Beer Geeks and the Cockroach Breweries

Ironically, beer quality may not matter (much) in predicting who survives the craft-beerpocalypse.  What's going to matter a lot more is how beer geeks think of craft beer, and how that identity informs their purchasing.  In other words, this is more psychological than practical, and many poorly-brewing breweries are going to beat out high-performing breweries.

Purchase Intention is a simple enough concept: what do you intend to buy?  There are dozens of models to predict it, but most rely in large part on two core principles: perceived benefit (how much you'll like drinking that beer) and anticipated cost (what you'll spend on that pint).  In practical terms, this suggests that beer drinkers will be looking for the best beer they can get at the lowest price.  

But for the "beer lover," one additional (psychological) factor seems to trump the others: impressions of what constitutes a craft brewery.  We generally accept that it excludes those that have been taken over or sold out to Big Beer.  But beyond that?

From this writer's perspective, it seems like there's a consensus forming that what makes craft "craft" is no longer simply defined as "not BMC."  It's the result of an equation that measures size and locus.  Brewing a lot?  Maybe not "craft" anymore.  Distributing widely?  Might be selling out or squeezing your former-fellow craft brewers.  Call it the Craft Suspicion Index (CSI?  Why not.).  CSI = Output x Reach.  The greater the CSI, the less "craft" you are.

  • 7bbl system and only distributing from their own tap room?  Low CSI.  Almost definitely "craft."  Drink at will.
  • 30bbl system, local or regional distribution?  Hmmm....medium CSI.  Check ownership percentages and birth records to determine hometown of brewers, owners.  Possibly "craft."  Drink, for now, but be alert for outside corruption.
  • 60bbl system or larger, multiple brewing locations, national distribution, and available at a major sports stadium? HIGH CSI ALERT!  Even if no macrobrewing ownership stake, high probability of extra-local market-intruding expansion. Drink with extreme caution.  Barrel-aged products only.

And so it goes.  I'm not exaggerating when I say that at least once a month I hear someone tell me that they drink only the most local beer, even if it isn't as good as that "big craft" beer on the other tap, because they want to "keep their money local," or "because at least I know it's fresh."  The breweries they're avoiding aren't those that have been bought out by the big brewing conglomerates.  Usually they're just breweries that have committed the sin of growing and expanding to the point that they've lost their "craft" cred.  Too common.  Too available.  Sure, they have new beers, but there's this other tap from a local brewery...and yes, it's middling or bad, but it's local.  My handy-dandy "CSI App" is reading "green."  [Yeah - green apple - HA!  ACETALDEHYDE BURN!  Good one, Josh...but back to our regularly-scheduled programming.]

So when our Craft Beer Big Crunch goes down, a substantial number of these breweries, floating as they are on a cushion of hometown sentiment, will live on, like the proverbial cockroaches in the wake of a nuclear holocaust.  And a number of their competitors who are actually producing good and noteworthy beer will not.  

And craft beer will be worse for it.

Quality First

This isn't just some woe-is-me, everything sucks, postmodern jeremiad.   It's also going to get into some groveling.  Here goes.

DRINKERS: Please, please, puhleeeeeeze focus on "quality first."  By all means, avoid buying a Big Beer-owned faux-craft session IPA that's just going to mean funding some fat cat's new Gulfstream.  But after that, order the best beer, not the most-local beer.  If you're in the mood for a Vienna and your choices are Boston Lager and an amber lager from a tastes-like-it-had-a-bar-of-Life-Buoy-soaked-in-it local brewery, order the Boston Lager.  If you want a hoppy pale beer and your choice is Sierra Pale Ale or that dry-hopped-with-stale-pine-cones-IPA from the local, buy the SN.

Don't reward mediocrity.  You're undermining the very foundation of the market economy.  You're taking the Invisible Hand and shoving it up its Invisible Ass (my apologies to Adam Smith for the vulgarity).  

BREWERIES: You need to do your part, too.  I don't believe that we'll ever talk all of the "local first" folks around.  But I do believe in two things: one is the power of price, and the other is the ability of people to rationalize their behavior.  

So first, get your costs down.  Let's see more session beers with light hopping for lower prices - a brewpub in the Rockies that I visited coming from and going to Seattle offered a $3/pint ordinary bitter, all day every day.  And it was good.  Even some of the folks who claim to be "local first-ers" will jump on that deal when the Christmas shopping bills come due and they see an $8 six-pack of a good session beer.  

Then, second, get involved.  Sponsor all kinds of local events in any and every market you're in.  Contribute stuff to local homebrew competitions.  Organize a 5K.  Give people a reason to believe that you care about their community.  Host a Rescue Animal Day with your local shelter.  Don't be "just another brewery."  If you are, they'll pass right by your name of the tap list.  But if you show you care, they'll find a reason to buy your beer.  And make that beer good, not just "new."  

This is a fight for beer drinkers' hearts, minds, and tongues.  And I don't know about you, but I don't want to be living in the post-Craft Crunch, Road Warrior-type world drinking something that tastes like Saltines dipped in butter just because some "local survivor" brewer thought of the beer name first ("That's How it Gose") and decided to make a beer they'd never had, and poorly.

Keep it simple.

JJW

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Overheard: Nonsensical Statements About Beer

When it comes to beer, people talk too much.  Rich, I know, coming from someone who is often accused of writing too much (yes, I know B:S posts are sometimes long, but there's usually a reason for it, and believe it or not I do edit!).  But I'm not talking about volume; I'm talking about content.  They speak beyond their level of competence.  They mean well, I'm sure, but they're just out of their depth.  To give you an example and show you I'm not just being snobby, here's one I'm sure we've all heard: "I like ales better than stouts." 

Sigh.

It's hardly unique to beer, but I think (like politics) beer is particularly prone to this because it's such a ubiquitous and familiar thing in your life, even if you're not a beer person.  Beer is everywhere.  And it's simple, right?  So when presented with, for example, a tap list, or a beer judge, or a homebrewed keg at a high school reunion, there's an almost involuntary, verbal-diarrhetic reaction.  

And what comes out...well, it's sometimes amusing, but almost always frustrating.  So, as a service to you, dear readers, below are some common nonsensical beer statements, possible root causes, and some responses you might consider offering that might turn this from a choke-a-stranger-or-friend moment into a teachable moment.

So let's take a common beer query: "What beer can I get you?"  

Why not start with...

I like ales better than stouts!

This whole nomenclature thing is at the heart of a lot of beer misconception - and by the by, we beer people aren't immune.  We all associate beer names, categories, and types with pictures in our head that represent a counterfeit reality (go read "Public Opinion" by Walter Lippmann).  When I say "lager," some people automatically picture a super-light macro lager; others (like me) picture Bock.  That disconnect can cause some misunderstanding.  

But most of the time, this isn't that complicated.  It's someone who thinks that "ale" (however they picture it) is a commonly-understood term.  They also don't know that stouts are ales.  But you know what you shouldn't do?  You shouldn't go all beer-professor-y and teach them up on ale v. lager yeast strains.  Instead, maybe just talk about flavors instead of styles/categories.  We can usually all agree on flavors, at least, right?

Until you hear...

Is that beer hoppy?

I got hit with this one just yesterday.  Being a homebrewer, I field this one a lot, simply because when people come over they often want to at least try homebrewed beer.  But they don't like hops.

Look, folks - all beer is hoppy.  If it isn't, it isn't beer, it's gruit.  But you know what you shouldn't do?  Go all beer-professor-y and teach them up on beer v. gruit.  Instead, try to figure out what they're asking.

One possibility is that they don't like bitterness, and they're trying to avoid something with a high IBU count.  The other possibility is that they don't like a lot of fruity, herbal, piney, or really much of any flavor in their beer.  So maybe ask what flavors they like and/or avoid, or what commercial beers they usually drink.  After all, they'll give you some style information when they name the beer, right?

But then they say...

I Really Like [Insert Brewery Name Here]

"I like Sam Adams."  "I had a great Sierra Nevada the other day."  "May I have a Victory?"

This is pretty common stuff - non-beer people often think in terms of brewery, not specific beer. This is probably an artifact of the homogeneity within labels in macro beer (there's not much perceivable difference between MGD, High Life, and Lite, after all), and in most cases people also bought into the idea that they were more a "Coors person" than a "Bud person," so they were thinking in terms of brand (as the breweries' marketing folk intended).  

So what do you do?  Well, you're probably safe assuming that they mean the most-readily-available version of that brewery's beer.  If you hear "Sam Adams," then they mean Boston Lager, not Scotch Ale.  "Sierra Nevada" probably means "Pale Ale."  "Alchemist" means...well, that person's probably just showing off, because I'll bet lots of beer people don't even know who brews HT!  

But just in case, maybe ask for a quick description of the beer, as they remember it.  It should clear things up and help you respond.

Unless they go with...

It's Dark, so That Means it's Strong

This one bugs me primarily because it's dangerous.  I was at an event with my in-laws, and there were two beers on offer: a growler of Schwarzbier and a growler of Belgian Tripel.  Just for fun, we asked anyone who wanted a taste which beer was stronger.  100% assumed the Schwarz was, just because of its color (and some thought that even after tasting them, but that's a whole different problem).

So when you hear someone say, "oh, not the dark beer, I need to drive home later..." you might mention that beer color isn't a great guide for ABV, and to always ask what the alcohol content is, since it can vary by several hundred percent.  The more you know [cue PSA music].

Unless they just straight-up tell you...

All Beer Tastes the Same

No, it doesn't.  They can't possibly support that statement.  Prove it to them by lining up a Rodenbach Grand Cru, a Miller High Life, a Lagunitas IPA, and a Salvator Dopplebock.  Put money on it and triple your purchasing cost.

But so far these are honest and simple errors, usually made by people who wouldn't call themselves beer enthusiasts.  These people are fine.  What really gets me are the...

Dumb Things Aleholes Say

These are all 100% un-exaggerated, non-hyperbolic-for-narrative-effect things that I've heard out of the mouths of alehole-ish beer geeks, judges, bar owners, brewery reps, and more.

  • "You really can't appreciate [beer/style] unless you travel to [place they make it]."  I've heard this one all over the place.  It isn't true.  It might be fresher there, and it might taste marginally better as a result, but you can buy fresh beer everywhere.  I don't need to visit the UK to have a "real understanding" of Old Ale (as I actually overheard at a competition - one judge overruling another citing this as his crusher of a justification for why his pick should win).
  • "I can absolutely tell one IPA from another, blind."  No, you almost certainly can't.  You can probably pick out an IPA from a selection of other styles, but if you had the kind of savant-like palate it would take to parse the hop flavor variations in multiple IPAs then you'd already be the lead taster on a sensory panel for a prominent brewery.
  • "Don't drink that beer yet - save it for a vertical tasting!"  Look, I like a good vertical.  But very, very few beers benefit from anything like real cellaring/aging.  Just because it's old, it doesn't automatically make it better and/or more complex.  I've never been sorry for opening a beer when it's fresh.  I've often been sorry for opening one that's old.  You can do what you like with your beer, but don't try to browbeat me into hanging onto an American Barleywine so I can wait until it has a tiny fraction of its hop flavors left and really enjoy its "complexity."
  • "The best beer is the one in your hand."  I may get flack for this, but I don't care - this is overly-precious, "I'm a cool beer person" nonsense.  Really?  So you're going to tell me that skunked-out Michelob Ultra you're drinking is "the best beer" just because you're not willing to dump it?  Yes, judging/rating beers can be pretty subjective (especially when talking "best beers"), but there's a lot of bad beer out there, too.  Ignore that if you want, but...
  • "It was worth waiting in line for [super-rare bottle release]."  Maybe it was.  Maybe it wasn't.  But can you seriously tell me that what you waited in line for is better than a dozen others you don't have to wait in line for?

I really could go on for quite a while here, but I'll need to stop sometime.  When you hear this stuff, just nod politely.  It usually isn't worth the argument.

Dumb Things I Say

No one is immune here.  I'm sure I say stupid things, too.  I may not know what they are, exactly, but that's one great thing about this blog: you guys love pointing them out for me!  In all sincerity, I love hearing it, and I don't offend easily (or, really, at all), so be as direct as you like.  I might disagree with you (and say so, if I have a reason), but I'm always grateful for the input.

So if it's me?  Let me know, and don't worry about being polite.

But for anyone else, as always my advice is to be considerate.  Don't deliberately embarrass people, sure, but be conscious of the potential for inadvertently doing it, too.  Don't get hung up on the mistake - try to focus on what they mean and less on what they say.  Manners cost nothing, and kindness never hurts and usually helps.  

No one likes an alehole.

Keep it simple.

JJW

Please help support BEER SIMPLE by visiting the Support page and saving the links there as your bookmarks, especially this Amazon link!  Every dollar you spend will help keep BS coming your way, and more often (which is at least as much a threat as a promise).