76°Scattered Clouds

Your Beermonger: The Bubble Bursts on ‘Craft Bubble Bursting’ Pieces

by Ethan Rothstein — January 10, 2014 at 1:00 pm 410 0

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Editor’s Note: This sponsored column is written by Nick Anderson, beermonger at Arrowine (4508 Lee Highway).

With the start of every new year come predictions as to how the craft beer business will fare. I was pleasantly surprised by a column I saw this week by wine writer Jamie Goode, who sees 2014 as potentially a “big year” for craft beer — though I don’t believe that craft beer’s rise has to come at the expense of wine’s fall.

The point is that all too predictably, columns start popping up every December and January warning of the craft beer bubble bursting; of impending “collapse;” that there is “too much craft beer” on the market and that a 1 percent drop in overall beer sales means that the market is closing in on craft beer’s approximately 10-12 percent share, leaving no room for new brewers to succeed – no room I tell you!

The predictions of impending doom for craft beer come in spite of craft’s continuous, steady growth. The Brewer’s Association (BA) is a trade association whose mission is the advancement of the craft beer industry, so you’d expect them to try to put the best possible spin on any bad news; it’s just that there doesn’t seem to be any.

The BA hasn’t yet posted numbers for 2013, but its 2012 figures indicate craft beer sales grew 15 percent by volume and 17 percent by dollar over 2011; a year that saw sales grew 13 percent by volume and 15 percent by dollars over 2010. This, by the by, is during a period where big beer saw dramatic losses, leading to the major mergers that have taken place over the past few years (and will continue to take place).

The BA figures bear out when I look at craft beer’s growth in our area. Growth of beer sales in shops I’ve worked in over the past ten years bears a close resemblance to BA’s reporting, and one local beer distributor has seen its craft beer sales roughly double every year from 2010 through 2013.

With more breweries opening in the U.S. than ever, you will see more fail; that’s simply unavoidable. Not every brewery will light the world on fire, and a lot of money-chasing will inevitably lead to busts. A true craft beer bubble could burst any year now, but from my perspective and experience it appears to be years, perhaps decades away.

It will happen someday — all things must pass, after all — but not while the biggest names in craft beer are still dwarfed in size by the smallest of the international conglomerate brands. Personally I think 2014 won’t be about any bubble bursting so much as craft finally breaking through to the mainstream, becoming less a niche and more accessible to more consumers than ever.

In any case, none of us knows what’s going to happen, so let me have some fun and call it here: the only bubbles in the beer business are for the big boys, who have saturated the market in nearly every possible way and have nowhere to go but down, and for concern-trolling columns by everyone who wants to be able to say they were the first to notice the sky falling- — as if it won’t be obvious when/if it does happen.

Until next time.

Nick Anderson maintains a blog at www.beermonger.net, and can be found on Twitter at @The_Beermonger. Sign up for Arrowine’s money saving email offers and free wine and beer tastings at www.arrowine.com/mailing-list-signup.aspx. The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Community discussion guidelines: Our sponsored columns are written by members of the local business community. While we encourage a robust and open discussion, we ask that all reviews of the businesses — good or bad — be directed to another venue, like Yelp. The comments section is intended for a conversation about the topic of the article.

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