CRAFT BREWER CLOSURES ARE BECOMING THE NORM…
Craft beer may have gained percentage points when it came to dollar and volume sales last year, but segments of the industry continue to suffer as Big Beer and small, local beer squeeze out mid-sized craft brands. And last week saw an onslaught of bad news for bigger brewers in the independent sect:
- Pabst Brewing Company laid off about 18 percent of its workforce.
- Green Flash eliminated about 15 percent of its workforce, pulling out of 32 states.
- Mendocino Brewing Co. of California and Olde Saratoga Brewing Co. of New York shuttered.
- Chelsea Brewing Co. closed its location in the Bronx after a decades-long history in NYC.
- As we reported last week, Smuttynose is up for auction this spring.
Even Boston Beer, the nation’s top selling craft brewer, saw sales slip in 2017.
Although this is somewhat alarming, it’s really nothing new. If you follow the beer industry, or participate in it as a beer drinker, you know that niche, nano local brewers are all the rage. The new goal for brewers isn’t to up production and expand distribution until their beers are collecting dust on shelves in every state. The focus has shifted to serving their local communities, which puts larger, first-wave craft brewers in a precarious position. They paradoxically continue to grow while simultaneously losing relevance in a booming industry with vast competition and minuscule consumer attention spans.
Is this the bubble bursting? For some breweries, it is reaching that point of tensile stress. However, craft suds will still have plenty of lather.
…BUT IT’S STILL THE BEST TIME FOR BEER IN AMERICAN HISTORY
“Beer is one of the unambiguously happy stories in the U.S. economy.” So statedDavid Thompson, who pointed out in the Atlantic last week the many positives of the current craft beer economy in the U.S.
Craft beer is facing challenges, yes (particularly among the “boomlet” brewers of the 1980s, like Sam Adams), but overall, as his headline optimistically states, “craft beer is the strangest, happiest economic story in America.”
Here’s why: In the face of the beer duopoly that is Anheuser-Busch and MillerCoors, small and independent breweries are very much flourishing. He points out that between 2008 and 2016, the number of breweries has increased sixfold, and their workforce has grown 120 percent.
Between 2007 and 2016, shipments from the big boys (Anheuser-Busch, MillerCoors, Heineken, Pabst, and Diageo, which owns Guinness) dropped 14 percent.
And, as VinePair reported last week, we’re paying more for beer but drinking less of it — average prices of beer have grown almost 50 percent, according to the U.S. Bureau of Labor Statistics. Less beer, better quality.
CRAFT BEER’S FOUNDING FATHER TO STEP DOWN
That said, there was another bit of sad news this week. The Brewers Association announced that Charlie Papazian, the cheerful, much-adored, founding father of American homebrewing (and thus, the man basically responsible for today’s thousands of independent breweries), will step down next year. After 40 years serving the craft beer industry, he will resign on his 70th birthday, on January 23, 2019.
Papazian is founder and past president of the Brewers Association (BA), the founder of the American Homebrewers Association (AHA) and the Association of Brewers (which eventually merged with the Brewers Association of America, becoming what is now the BA), and his first book, “The Complete Joy of Homebrewing,” is the beer-making bible every American brewer learned from and leaned on when homebrewing became legalized after 1978 (which, by the way, also happened because of Papazian).
He founded Zymurgy Magazine in 1978, the Great American Beer Festival in 1982, and is all around revered by the beer industry for his devotion to the craft.
Papazian stepped away from his role as president and began an archival project for the BA last year, collecting craft beer history and organizing four decades’ worth of publications, photos, and footage of the independent brewing movement, along with creating 140 video interviews with America’s craft beer pioneers.