Is it generally true that craft breweries are selling everything they brew, and that they are brewing at or near current capacity?
Those are really vague questions, but I’d say yes. Certainly someone brewing at capacity would be selling it all, and usually someone selling it all would expand to at least their current capacity.
If you look at the BA stats, 1.8% of craft breweries closed in 2011, and again in 2012. That number has been dropping for as far back as I can find the data (2007: 5.2%).
Edit: Official Poobah of No Life?! I thought it was more of an ad hoc position.
that’s an interesting statistic! is it broken down at all by new startups vs. established breweries?
+1. I’d be curious how the numbers break down too. Sort of like the “half of all restaurants close in the first year” saying - I wonder what the early failure rate is vs the others.
Wow, 1.8% seems really low. The bubble expands…
I think it is more of a boom than a bubble, and booms are followed by busts. Sometimes I think some craft brewers have a lot of capacity dedicated to 6 packs that set on the shelf. The quality brewers can not make enough, and are constantly expanding, or building new breweries.
There are many that are getting into the business now that are not making good beer on a homebrew scale. I wish them good luck.
Brewers are always looking to expand their capacity because the only way you can really make money is to sell a hell of a lot of beer. We got to a point where we had to hire a sales guy, because we had been backing up at the distributor. We also depend on the distributor to move our beer and often times they do a piss poor job.
Craft beer in ALabama is most likely different than other parts of the country because it has not been established as long. But the trend here is now (finally) toward craft beer. But I can certainly saturate the market on styles if I am not careful. That said, aside from draft, we only do limited supply of 22 oz bottles. 6 Packs open up a whole new untapped market for us and volume is much greater.
Not on the website. I believe the BA publishes some more in-depth statistics for members’ eyes only, but I’m too poor to join right now.
It’s also worth noting that the actual number of closures per year is also dropping. I said something similar in a previous thread, but I expect that in the next few years the number of brewery closings will increase dramatically as the nano market shakes itself out. No one can operate at a loss forever.
Still. 1.8%. I imagine most of that is due to bad management rather than bad brewing or more importantly, a saturated market.
Which is why I asked the question. The few breweries I have spoken to are brewing at capacity and are selling everything they brew. A remarkable situation that is duplicated in very few industries.
A couple of related thoughts: First, it seems to me that this would be a primary indicator for when the growth curve would begin to flatten or reverse.
Then, I wonder about the dynamic of converting BMC drinkers. I mean if craft breweries DOUBLED it would still only be about 13% of the US market.
What am I missing here?
Perhaps the trend is that entering brewers are more capable and better informed? I’m thinking there are plenty of brewery owners who have professional business/marketing skills prior to opening a brewery as a second career after the economic woes of the past years.
I don’t think that the ‘craft’ market will ever capture more than 50% and if it does so much of the ‘craft’ market is being bought out by the BMC/INBEV/SABMiller crew that there will be market to try to grab from the big boys for a long long time.
I think the homebrew market will take off a few days after the zombie apocalypse. Might be less beer than we brew now, but a much larger percentage of the market
See, I switched from nuclear engineering to brewing once I realized which will be in more demand after the dead rise.
Better start stocking up on grain! Kinda hard to run a malting operation while shooting zombies. Just sayin…
If it got to that point I’d be brewing something more efficient. Something that takes up less space and requires no refrigerator
+1 fire needed only…
I agree. I have had beers from small start up breweries that really had no redeeming qualities at all. Insipid would be an apt description.
The ones I’m familiar with are.
I’ve been reading about a bunch of nano startups in Chicago and been wondering how much shelf space and/or taps they’re going to be able to get. I think the big local liquor chain (Binny’s) has been pretty good about carrying all the local stuff, but I’m not sure about the smaller stores. There’s been a bunch of out of state breweries arriving, too, and shelf space isn’t infinite. Great for me as a consumer, though. Surly just came back and Ballast Point arrived last summer.
I think the bubble will not so much burst as slowly deflate. What’s going to happen in a few years when all these breweries realize that they are pretty much “as big as they are ever going to be”? Long hours with low pay is great when you are starting out but how about 10 years into it? At some point I think a lot of people are going to get sick of it and go into other careers. Like someone said…shelf space isn’t infinite and you can only sell so much out of your own taproom. Plus a small brewery IS competing against the big craft brewers who have the infrastructure, marketing, and money to make/keep customers.