The Maturing Craft Beer Market

There’s some legit craft beer in some Ralph’s locations out here. And Whole Foods has tons of great local craft, too.

Boston Beer has a huge brewing facility in the Lehigh Valley…which used to be Schaeffer’s, then Stroh’s. Considering Yuengling as a “craft” brewer is a joke…not sure about the criteria used by the Brewer’s Association.

Kind of interesting that Victory Brewing near Downingtown grew in to a 25,000 sqft production facility, then merged with Southern Tier Brewing (Lakewood, NY) to form “Artisanal Brewing Ventures”…which then acquired Sixpoint Brewery in Brooklyn. I’ve enjoyed a number of Victory beers. It’ll be interesting to see how that kind of growth model works out.

RT

I used to consider Victory Prima Pils one of the best pilsners in the market. Now it’s not even close. We see the Sixpoint beers out here occasionally, and they get pushed by their distributor pretty hard, but no one that I know seems that interested in them.

I’ve actually been a lot happier, at least in VA, with the quality of lager and English styles in the last few years. Hard for breweries to avoid the urge to put a craft spin on them to appeal to the hoppy or quirky crowd, but the import beer fans have been getting crowded out of the market with increased shipping costs and freshness issues. A good, fresh, clean lager with the right type of hops, or a true English style ESB, can win a LOT of import fans over, but they are scared off by the overabundance of tweaked versions in the last decade+. I’ve had conversations with some people at an extremely hyped VA brewery that craves making Pilsners and Kellerbier in small lots for their own consumption, but don’t think they can do them for production levels in fear the crowd they developed will support them and kill off part of the money printing line of IPAs.

I live easily within 15 minutes of a dozen craft brew pubs in Colorado. Some suck and I would have thought at least a handful would be gone by now, but they all keep going. Parking lots are full. Maybe trivia nights and tap take over days keep the cash flowing.
Another head scratcher for me is Ballast Point. My sister lives near the main brewery in San Diego. Every beer I tried was just meh, yet the place was packed. More power to them.

Yes, it is. They changed the definition a few years back so Boston Beer Company and Yuengling could still be included. The term is now meaningless as far as I’m concerned.

You mean the Boston Brewers Association?

The Russian River Brew Co founders took a big bet on flourishing amidst all the increased competition. Their Windsor expansion cost $50 million, and they managed to do it with no outside investors. Sure they have a cult brand, but that’s bold!

Rick it seems to me you are doing it the right way, and probably how many of us dreamed it would/could be done as I’m sure we’ve all had the open a brewery fantasy. I’m sure the lure of striking it rich is just too much for many, but there’s something nice about keeping these breweries regional and even hyper local really. I think more of them need to focus on that and get back to the basics.

On the other hand it is frustrating because I can read all about your operation and your beer, but will probably never get to tip the glass.

There are a lot of breweries that have a lot of debt…

What do you mean?

Agreed.

It seems that the market is oversaturated from a demand/supply standpoint with decent quality product which is plenty good enough for the gen-pop. The market for craft beer is niche’y and fickle in the sense that those people are always chasing something new. Depending on large scale growth and expansion for a craft beer seems like a bad business model. Most customers will buy whatever is available within a category, and that’s among those with a deeper appreciation for beer beyond the Coors vs. Bud crowd. Overall, it’s not a growth model business. Most should probably be satisfied with a profitable, steady local business. But that will never satisfy outside investors.

The Brewers Association has repeatedly changed its definition of Craft to insure that it includes the Boston Beer Company (Sam Adams). When Sam Adams grew out of the category, the Brewers Association raised the ceiling on what a craft brewery was (this happened twice). With the last increase, Yuengling, a producer of adjunct-heavy beer not at all dissimilar to Pabst qualified for membership. Then when Sam Adams became more of a beverage company rather than a craft brewery, they changed the rules again to keep them in. The Boston Beer Company sells more cider (Angry Orchard) than they do beer, and they also sell hard seltzers.

As the rules stand right now, Pepsi could buy my brewery and be a member of the Brewers Association, though if Heineken bought my brewery, we would be out. Frankly, the differences between my brewery and Boston Beer Company are far greater than the differences between Miller Coors and the Boston Beer Company.

Ah, I see. Yes, I knew the limit had been increased drastically to include Boston Beer Company. I agree that they are in no way a craft operation. They engage in the same business practices that the smaller companies hate about the 2 largest.

When Yuengling was reintroduced into the MA market, a coworker and I tasted it alongside Budweiser. Styles were a bit different, but quality was very similar.

The craft beer market seems to have gone the way of baseball - more locally/regionally v. nationally. I’m fortunate here in Napa to have a handful of high quality, local producers that scratch most beer itches I have. I keep a growler in my car and all my locals will fill it.

In the 1990’s…Yuengling brewed a higher quality beer IMHO. I preferred it to Bud, Miller, etc. It never approached the quality of many of today’s legitimate craft lagers. Something happened as they ramped up production. It’s quite a jump from 150 thousand to nearly 6 million barrels/year.

RT

[flash=][/flash]Boston Beer Company - Dogfish Head merger. This is likely a non-event for most modern craft beer fans, but perhaps will make the combined enterprise slightly more profitable or at least stave off a larger decline in sales.

Saw some social media comments where someone questioned whether they thought this was good or bad (presumably was a DH fan), and whether the combined entity was still “craft” and “independent”. One guy was obviously offended by the suggestion that it was negative and asked why craft needed size or ownership limits. Wasn’t really in the mood for an internet fight, but glad to see some folks are in favor of an acquisition by someone other than MC or ABI, even if the acquirer is a public company whose future success lies in non-beer products.

How ridiculous. Obviously that person refuses to acknowledge blatant realities. I wouldn’t be surprised if they know Koch or are even commenting for him.

The move by the Boston Beer Company is reminiscent of Invbev’s acquisitions to pump up their market share. BBC is too big and too corporate to be considered a craft brewery, and Dogfish Head wasn’t far behind. Combining two struggling enterprises isn’t going to suddenly make them successful. BBC hasn’t been relevant for well over a decade and DFH hasn’t been cutting edge for about 7 years.

I have not consumed or seen anyone consume a Sam Adams beer since my college days (‘94-‘98), and have not consumed a Dogfish Head Beer in prob 8-10 years (believe I bought a few bottles of the Bitches Brew bottling in honor of the release of the remastered version of that album, or maybe it was the Pearl Jam 20th anniversary). Drank a few DH beers when I first got into craft in mid to late aughts, which was before the local craft beer scenes really took off.

This move may help BBC and DH in the NE, but struggle to see how this materially moves the needle in a positive way going forward.