In the past month, Brewbound.com travelled to Denver, San Diego and New York City for the Great American Beer Festival, the National Beer Wholesalers Association conference and the Beer Marketer’s INSIGHTS seminar — in effort to keep a finger on the pulse of the craft beer industry.
6,000 miles later, a few common themes emerged:
CRAFT IS GETTING BIG — MAYBE TOO BIG
At each event, mumblings of a craft shakeout — much like the one that occurred in the late 1990’s — could be overheard. Many veteran craft brewers expressed some trepidation at the sheer number of startups. In the halls of the Denver Convention center during the 2012 GABF, 578 breweries poured over 2,700 different styles of beers to 50,000 glassy-eyed consumers.
Take a quick peek at the most recent Brewers Association (BA) numbers and it’s easy to see why some brewers have concerns. BA director Paul Gatza said that 376 new breweries have sprouted up in the last 12 months, bringing the nation’s total to 2,263. What’s more, there are 1,381 in planning. That number has the industry buzzing — but it also has many asking themselves “When will the bubble burst?”
Lagunitas Founder Tony Magee — who gave a rousing talk of his own at the November 12th BMI Seminar — said the question isn’t “if” but “when” the shakeout will occur.
“Something will happen, someday,” he said. “It’s like a forest fire; no one knows when it will start or where it will start, but everyone can be pretty sure there will be one.”
Much of the concern over a looming shakeout stems from what Beer Marketer’s INSIGHTS president Benj Steinman calls ‘SKUmageddon.’ He thinks that while the craft beer boom has contributed to a bounty of unique style innovations, some distributors and retailers will eventually begin to push back.
“There is just too much, coming too fast, for everyone to win,” he said. “There is just not enough space to withstand it all and it is going to be difficult for wholesalers and retailers to prioritize. Shelf space is finite.”