Tuesday, February 12, 2008

Craft Beer slowdown in 2008?

Hop shortages and malt price hikes.

In recent months, we have seen those developments trumpeted in the beer press — and their effects indeed felt by breweries.

What we haven't seen written much of, is the real possibility of slow growth, or worse yet, of no growth, for the craft beer industry in 2008. (Stan Hieronymus did in fact briefly address this scenario in a recent post: We’re screwed - The jinx is in.)

I haven't yet noticed much anecdotal evidence from consumers or retailers to suggest a sales downturn in craft beers.

But, folks, this is a real possibility, and that is really alarming.

In the 1990s, the Wall Street Journal published a famous piece in which it poorly prognosticated: "Craft beer is dead, doomed by poor business practices, poor quality control, and overextension." We know how that turned out!

In 2008, poor business practices are, for the most part, not the case. But there are several worrisome developments:
  • a sluggish economy (whether one calls it recession or not)
  • expectations for this slowdown to continue into 2009
  • continued increases in cost of raw goods — and glass and packaging — to breweries
  • higher prices of craft beer to consumers
  • reduction in consumers' disposable incomes
  • faux craft beers offered by the big boys at lower prices than smaller breweries
Don't forget to support your local breweries. Local sales are what every smaller brewery needs to count upon when expansion is threatened.

Stay tuned ...

[Caveat emptor: I have a stake in all this as I work for the Clipper City Brewing Company. My opinions do not necessarily reflect the stance of the brewery.]


  1. I too have a stake as a brewer. My solution: When I get that fat 1800 check from the tax rebate just approved, spend it all on craft beer! Sh...don't tell my wife.

  2. I guess my problem is the term "craft beer". Have you ever heard of "craft wine"? Why not "Artisnal Beer" or "Boutique Brews"? Quite frankly, it is a price point "product" (sorry, Tom) and as the American public becomes increasingly insolvent due to the huge overdose of Republicanism and high debt to earnings ratios, we are going to experience a slow down. "Craft Beer" must redefine itself from the tongue in cheek, "Ol' leg humper" or "Leg up cream stout" or whatever sophomoronic crap we are dishing out and take ourselves seriously. (I don't believe that was a sentence, but I'm on a roll). Until we rid ourselves of the Animal House swill image of beer, which even occurs at festivals promoting great beer, we are doomed to be compared (on price point) with the big boy "me too"s.


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