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THIS is what a craft beer bubble looks like
"Is this a craft beer bubble?"  While it may be a sexy sensationalist headline in non-beer dedicated media publications, it is often weakly argued and I have yet to see anyone succeed in making the case.  And how sexy is it anymore really?  The question has been rhetorically asked so many times that it's starting to get pretty tired.  Actually, it's really starting to get on my nerves.

The question was asked yet again, yesterday in the Food and Drink section of Free Times in an article by Gerald Jowers entitled "Is There Such a Thing as Too Much Craft Beer? Yes."  Clearly, the title gives us the conclusion that the author came to, but what the author fails to do in the article is make us understand exactly how he came to that conclusion.

Recently, a few pundits have opined in various beer publications that the industry is heading for the same type of shakeout that occurred in the late 1990s. During that time, there was a quick spurt of growth in craft beer that ended in a collapse that was labeled a bursting of a bubble.
Today's craft beer boom is fueled by an honest passion for brewing and this shows in the quality of the beer.  According to this article, this was not the case in the late '90s, when entrepreneurs greedy for big pay-offs were getting into the business and producing sub-par beer.  Despite the authors own arguments which lead us to believe that today's craft beer climate is nothing like that of the '90s, he somehow comes to the conclusion that "the danger is real." 
For generations, megabrewers have used effective and relentless advertising to increase the demand for their products and create brand loyalty, but craft brewers are financially unable to do this. Craft brewers by necessity rely on word of mouth and guerrilla marketing techniques such as festivals to reach potential customers — a slow process, indeed.

So will there be a shakeout? Unfortunately, I think so, because the number of craft brewers is increasing too quickly. The survivors will be the brewers (and their investors) who have the patience to tolerate slow growth and the capital to hold on during the lean times. Regrettably, these survivors may not be the best brewers. The most successful and widely distributed craft breweries today, such as Rogue, Brooklyn Brewing and Sierra Nevada, have been around for over 25 years. The new guys have a long road ahead of them.
Without any apparent data to back it up, the author concludes that the growth of supply is outpacing the growth in demand.  Without any metrics to go on, it's hard to be certain.  But, with certainty, I can say that all of the craft brewers I know are currently working at capacity - they can't make enough beer fast enough to meet demand.  This includes two breweries which opened in 2011 and 2012 (The Commons and De Garde, respectively) and have already had to expand their facilities. 

Which brings me to the author's second point that I must dispute.  Word-of-mouth - and those wacky "guerrilla marketing techniques" like festivals - have been an incredibly fast and effective "marketing strategy" within the craft beer community, particularly with the abundance of beer writers and bloggers that we have today.  This is likely why, when a brewery produces a very good product, they find themselves having to expand within the first year.  Meanwhile, for all of Budweiser's "effective and relentless advertising", their sales have been plummeting.

That's because it isn't about marketing - it's about quality.  Only a very small percentage of beer drinkers are craft beer drinkers, though market research studies from last year indicate that more people would drink craft beer if they knew more about it.  As people learn more about craft beer, the demand has huge potential for growth.  Once growth in demand plateaus, then you can talk about a "bubble", but until then, don't waste my time.  Sure, there may be a "shakeout" of some of the craft breweries that produce sub-par beer, but that's always the case, in any industry.  And they should be shaken out, for the betterment of the industry as a whole.
...My concern is that many enthusiasts, while they do not have brand loyalty, tend to gravitate toward a particular style such as IPA and stay with it; the style becomes a comfort zone.
Really?  This is the final point that I have to dispute.  Is the author perhaps misusing the term "enthusiast" with casual craft beer drinker?  With very few exceptions, the craft beer enthusiasts I know actively seek out the new and different, across many different styles.  So don't be too concerned.  "Relax.  Have a home brew."
 


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