Current capacity expansion might be chancier than expected, Brooklyn Brewery President and co-founder Steve Hindy told a group of industry professionals at last week’s Brewbound Craft Beer Session.
In a brief but informative presentation, Hindy, speaking to a sold-out crowd, discussed the current state of capacity in craft and how he sees the landscape looking as the category continues to mature over the next few years.
“I’m optimistic about craft brewing in America,” he said. “I think there is room for 3,000 breweries in America.” But he added, “A lot of the small breweries today are driven by a passion for beer but whether that is going to become a real business remains to be seen.”
Hindy estimates that 10 million barrels of new capacity is currently being built out, pointing to major east coast expansions from Sierra Nevada, New Belgium and his own company’s expansion as examples.
But that might not be great for every member of the brewing community, he said.
“That’s a big deal and it’s a big risk,” he said. “Not everyone is going to win. There will probably be some spectacular winners and losers.”
To make his point, Hindy recalled the story of Pete’s Wicked Ale, a brand that “went up like a rocket to about 400,000 barrels.” Pete’s, a stalwart of the craft boom of the 1990’s, shut down all production last year.
Hindy also gave distributors a nod for the success craft has experienced as of late.
“The biggest reason for the current surge is that distributors, big distributors have suddenly taken us on,” he said. “They have finally realized what we tried to tell them for years, which is all you have to do is put our beer on your truck. You won’t add any overhead and the profit is going right to your bottom line.”
Hindy closed by welcoming all of the newcomers to the market, but remained cautious of the rapid growth.
“We are in a sweet spot right now, but I think the question is ‘will all those next 1000 breweries be able to find shelf space?’” he said. “I am not sure they will or won’t, but I think it will be a lot of fun watching what happens.”
Below is video of the Q&A between Brewbound editor Chris Furnari and Hindy, following his presentation.