My FB friend, RateBeer’s Joseph Tucker, today posted a piece – for the second time – from bonapetit.com, titled “Too Many Crafts”, in which the author, Joshua Bernstein, and Dogfish founder/brewmaster Sam Calagione sound the alarm about “too many craft breweries”. Bernstein was typically moderate but Sam was blunt and to the point: “it’s going to be a bloodbath” when what he sees as the inevitable crash of the craft beer boom finally tops out.
I revere Sam, just like any craft beer fan really has to, given his massive contributions to the phenomenon that is American artisan brewing. Few people have made more or larger contributions and almost no one has equaled his daring and wild creativity.
But I don’t, can’t, agree with Sam’s doom ‘n’ gloom pronouncement. I’m considerably older than Sam and have been a businessman all my adult life, owning and running and starting a crazy number of businesses and avidly studying how Americans decide to buy stuff. Nothing I’ve seen leads me to believe that craft brewing or our new-fangled, non-watery-Pilsner beers are going away anytime soon…No, make that EVER.
People seem to forget that there was a time when there were NO huge, corporate breweries – or huge corporate anything else. EVERYTHING was local. No supermarkets, just tiny grocers; sometimes a couple in one small town and always at LEAST one in every urban neighborhood. No Home Depot or Best Buy or Costco or Total Wine. If you wanted what those places sold, you went, in order, to Joe’s Hardware, Joe’s Stereo Store, Joe’s Grocery, Joe’s Haberdashers, Joe’s Tires, Joe’s Department Store, and Joe’s Liquors. In a very real sense, the craft beer culture in the US is starting the American beer story all over again, from scratch. As more and more kids reach drinking age having never seen their parents’ fridge filled with BudMillerCoorsPabst, the habits of thinking about beer will transition into looking locally FIRST, simply because it will be the easiest to get…the very same reason our great-grandparents shopped local.
There is absolutely NOTHING far-fetched about the idea of a small brewery serving a single ten square mile area. People can – and will – walk, cycle, and drive to the neighborhood brewery and enough involved, motivated beer lovers CAN make that sort of culture work because, for the first time in the past 150 years, we actually have choices about what kind of beer we drink. We no longer have to just resign ourselves to Bud because our grandpa drank it or Miller because some Yankee outfielder does their commercials. The total land area of the US is 3,749,000 square miles. Let’s say that 60% is populated. Theoretically, we could accommodate 224,500 breweries, at that one per ten square miles. That’s silly, of course, and we’ll never have even a significant fraction of that many, but what constitutes “too much” will not be either decided or helped at all by alarmist screeching.
Joseph has made the point that it’s a different dynamic when there are urban clusters of breweries but there’s the corresponding dynamic of population density that can accommodate a cluster of different breweries in a small area. That’s the case now, in cities like Denver and San Diego and Portland and Seattle. Past urban areas like those, honestly, they really don’t seem all that concerned with saturation in places where it might well have already happened; places like Bend and Hood River and Asheville. The beer cultures in those places are celebrated, not cause for ulcers. Up here, in tiny, bucolic Poulsbo, Washington, four breweries serve 9,000 people; seven if you extend out to ten miles from the city limits. Poulsbo is collectively, positively bustin’ with civic pride about their mini-mecca. Breweries can and should be looked at not as potential victims but CHOICES offered. Do we bemoan too many supermarkets or gas stations or bars or ice cream parlours? No. The market decides who stays and who sloughs off and, yes, craft beer will be no different. Will we see some breweries close? You betcha and, honestly, there are many which could die off now and I don’t think we’d ever miss them. Since this is not a socialist state, where everybody shares the profits, customer response will determine who stays and who doesn’t but to say that it will all come to cataclysmic end, littered with corpses, overlooks a couple of central facts.
First, and most importantly, out of all the celebrated busts and flashes in various pans, the common factor was that what went belly-up was something with little substance or something that stood in the way of advancing technology. The Dot-Com Boom was destined to fail; even its greatest proponents admit that, now. It was a boom based on enthusiasm, bullshit, bombast, and lotsa sizzle/no steak. It was a primary youthful folly of an emerging technological age, with shockingly little substance to back it up. As soon as consumers realized that, it busted like a watermelon dropped off a water tower. Ditto for fads like the Pet Rock and Cabbage Patch Dolls and pagers and Blackberries and cassette tapes and all those first-generation video games. People outgrow them, the technology renders them obsolete, and you hear that flatulent explosion of stale air escaping the bloated corpse. There will not be a sudden and disastrous craft beer collapse, such as with the dot-coms. It will probably be more like a tire with a slow leak gradually flattening out. That’s what history teaches us, anyway.
Beer is none of those things. “Beer” is an integral part of American life, something which this country – and, in fact, the human race – has embraced for, literally, thousands of years. The ancient Egyptians brewed and, presumably, rested from their labors on your sphinxes and pyramids and such with a nice, warm, icky-sweet beer in their hands. Does anybody really see Americans turning against beer, en masse? Get real.
Then, too, the comparison with our American wine culture is a good indicator of why this is really a non-issue. There are, in 2014, according to Wines & Vines, 8,400 wineries in the US. There are around 3,000 breweries LICENSED – not “in operation “. That number is not known but well short of the number of active licenses. ALL wineries (except for a non-significant percentage which make keg wine) bottle their product. Only about 60% of all breweries do. So, let’s say that we have 2,200 breweries now in business. 60% of that is 1.320. Figure that MOST of those are too small to make quantities of beer that would even allow for broad distribution because that is absolutely the case. Almost 92% of all American breweries qualify as what we define as “micro-brewers”. When they do bottle or can, it’s usually in quantities of under 1,000 cases. Many offerings are sold only in the brewery’s taproom. What’s the final number we’re looking at to saturate the American marketplace? If 40% of those 2.200 breweries – which is an exaggeration on my part – offer an average of two beers in packages that make it out of their immediate area, that’s a grand total of 1,056 beers that have any shot at any retailer seeing them. And, as we’ll see below, distribution of beer is NOT universal. It is, in fact, spottier than a leopard with a case of acne.
Washington has 800+ wineries, now. People up here were screeching about “too many wineries” when we had 200. The Washington wine scene seems pretty stable at 800. I hear nobody whining about competition and we’re definitely not seeing a string of closures. ONE of the reasons is that the wineries have found markets outside the US. And now, breweries are looking that way, too. Sound Brewery and half a dozen others here are selling to the Asian markets and to Canada and Mexico. Export eases the necessity of making a living off one incredibly beer-centric area like Seattle and the response from the beer-starved Asians has been fantastic. So, a brewery’s “reach” isn’t necessarily purely local and there will always be some percentage of brewers who shoot for foreign markets and broader US distribution. That keeps as much beer as they ship out from adding to market saturation.
Then, there’s the issue of that distribution. The idea that we’ll reach saturation, nationally, seems to be predicated on the notion – the totally false (not to mention ignorant) notion – that all those products will be available everywhere; that store shelves will simply groan under the load of all that beer and collapse. Actually, with the main exception of many of the larger breweries, vast numbers of American breweries are available primarily only in their own area. We all know that Seattle is a crazy-intensive beer market. Presumably, we’d have every beer under the sun available here, right?
Wrong. (damnit) Here’s a partial list of what we mildewey Washingtonians can’t find on ANY of on our store shelves:
The Alchemist. Surly. Cigar City. Three Floyds. Kuhnhenn. Alpine. Hill Farmstead. Heavy Seas. Duck Rabbit. Foothills. Sweetwater. Jester King. Perennial. Bell’s. Founders. Russian River. Lawson’s. Revolution. Rahr’s. Toppling Goliath. Kern River. Oddell. Crooked Stave. Grand Teton. Peg’s Cantina. Prairie. Tree House. Maine Beer Co. FiftyFifty. Columbus. Great Lakes. Hoppin’ Frog. Funky Buddha. Fat Head’s. Karben4. Side Project. New England Brewing. New Glarus. Troeg’s. Allagash. Sante Adairius. Live Oak. Thirsty Dog. Three Taverns. Wrecking Bar. Rapp. La Cumbre. Societe. Karl Strauss. Olde Hickory. Old Mecklenberg. Trillium. Pipeworks. Renegade. Grimm Brothers. Terrapin. Captain Lawrence. The Brew Kettle. Half Acre. Jack’s Abbey. Clown Shoes. Fiddlehead. Bullfrog. Tired Hands. Al’s of Hampden. Kane. Other Hands, Peekskill. Helltown. Vintage. Lengthwise. Jackie O’s. Haymarket. Central Waters. Upland. Upslope. Town Hall. Barley John’s. Dry Dock. Lewis & Clark. Funkwerks. Casey. Trinity. Mountain Sun. Good People. Against The Grain. Parish. Straight To Ale. Yazoo. West Sixth. Wiseacre. Lazy Magnolia. Country Boy. Great Raft. Westbrook. Holy City. Wicked Weed. Green Man. Saint Arnold. Arizona Wilderness. Real Ale. Freetail. Austin Beerworks. Deep Ellum. (512), De Garde. Block 15, The Ale Apothecary. Ecliptic. Occidental. Ex Novo. Natian. Below Grade. Silver Moon. Bend Brewing….and it’s the same story in every American market. Many of the brands we do get in Seattle are so sketchily represented, here, that we only see tiny quantities of maybe two beers from the brewer’s catalog. The names may change but no place, no market gets to have everything or really even a sizable percentage of everything that’s being p[ackaged.
Those last ten on that list are OREGON breweries. They aren’t even distributed in the largest city in the Northwest because they don’t have to be. They sell all their beer in Oregon, locally. TONS of breweries, nationwide, don’t want to be in Seattle because we, here, are notorious homers. We were living by “Drink Local” before “Drink Local” was cool and a good number of great breweries have come here, flopped, and pulled out: Russian River, Speakeasy (back now), and Allagash, just to name three. The idea that all 3,000+ breweries will be available everywhere and completely max out all markets is ludicrous. Even if that happened, stores wouldn’t be physically able – even mega-stores like Total Wine – to stock all of them.
Much as I love and respect Sam Calagione, how exactly is this “bloodbath” supposed to come about? A mass rebellion of consumers, all holding their heads and crying, “Too many CHOICES!! I need FEWER breweries!”?
Last, and probably the most important aspect of this, in a larger sense, is whether we should be scared of too many breweries. I know this and believe this with as much conviction as I know and/or believe anything else in life: the best and most solid way to insulate ourselves from further recession is to get off the “SuperStore” needle and get back to the bedrock: Americans Making Stuff. Some people reading this won’t remember but it wasn’t all that long ago that pundits and commentators and economists were calling the US “a nation of middle-men”. The service segment of our economy had become so bloated that we were faced with the Grimm’s Fairy tale scenario of legions of people running around the country, working to sell things, and nobody making enough things for them to sell. We’ve outsourced so many parts of our manufacturing base that our own categories of those products became anemic and couldn’t compete. (Japanese autos and electronics, anyone?) Small breweries serving small areas, artisan distillers, artisanal cheese makers, locally-made ice cream and bread and the delightful sub-culture of artisan sodas like our Seattle brands, Jones and Dry, the emergence of Kombucha, online sales of small-producer bacons and steaks and exotic game meats, small producers of beauty products, like my pal from Ringgold, Georgia, Kim Corelle and her “Miz Kim’s Creations” or Joseph, Oregon’s sublime “Bee Crow Bee” natural face scrubs and make-ups and soaps…this is the bedrock upon which a genuinely stable economy is laid, not the shifting sands of mega-stores and the vague idea of agenting the procurement of everything.
This whole “too many craft beers!” argument is silliness. It makes Chicken Little look like Chuck Norris.
In a very literal sense, we all have little or no choice about what will happen, anyway. People will always feel the urge to brew, to let their home brewed recipes out into the world to stand for comparison with all those “pro” brewers…many of whom started as home brewers, anyway. The impulse toward opening a brewery is no different from what impels a good home cook to open a restaurant or what leads a woodworker to finally make his cabinets and end tables for commercial sale. In the beginning, at least, it starts with the sort of passion and love for the craft that simply won’t leave you alone. And if we stifle that impulse, that root cause of all American ingenuity and entrepreneurship, we’re strangling the Golden Goose that gave us the US economy in the first place.
The Market will decide when enough is enough and the alarmists and hand-wringers and those smirky Euro-beer codgers, praying for a return to liederhosen and a Pilsner in every fridge and for the demise of American craft beer, can go suck it.