Quick, without Googling, how many local craft breweries can you name? How many regional breweries? National?
People are often worried about the craft beer bubble hitting saturation levels. Since it’s fall and harvest season, hop shortages have become the crisis de jour with no less than the Wall Street Journal crying havoc. Concerns about shelf space, the number of tap handles at each bar, and even the supply of aluminum cans have all caused worries before.
But are we nearing a point where people simply can’t keep track of all the craft beer out there?
I was recently at a new local brewery talking to another patron about how many local craft breweries we have in Cincinnati. They thought we had 9. I asked my Twitter and Facebook followers how many craft breweries they thought we had. The responses were wide-ranging from as low as 15 up to 67, though the average response was definitely around 30.
As for myself, I was only able to quickly name 21 local breweries, but I know that we have 34 (as of as of 10/8/16). With so many breweries out there making so many beers who can really keep track of them all? And that’s just looking locally, think of the 4,000+ breweries across America. Sure, the vast majority don’t have beer available here, but there are still hundreds of brands from across the world trying to get you to remember them and turn those memories into purchases.
How Can a New Brewery Gain Mindshare?
This seems easy. FigLeaf and Streetside, both with recent grand openings, have been all over social media thanks to news articles about them opening. Meanwhile, I haven’t seen any news articles discussing Blank Slate or Old Firehouse for months. Of course, Wooden Cask and Brink will be pouring beer soon and some folks may already be asking “Who is Streetside again?” by then.
Can an “Old” Brewery Keep Mindshare?
This is where things really get problematic for craft beer. If you
don’t have a grand opening, new beer release, or hot event coming up soon how can you stay relevant?
Thinking of Blank Slate as an “old” brewery is kinda hilarious at just about four years old, but there are more people in Cincinnati thinking about Streetside than about Blank Slate right now. Hopefully, some folks will walk down to Blank Slate after their first visit to Streetside.
Moerlein and Mt. Carmel perhaps feel this the most intensely. Both brands are past the ten-year mark and I rarely hear consumers getting enthusiastic about either. Has their beer quality gone down or have consumers forgotten them by not staying “new” enough?
Based on Brian Roth’s research staying relevant is all about continually creating new brands:
Per IRI, 15 of the top 30 craft brands showed sales decline in the first half of 2016, including names we all recognize like Sierra Nevada Pale Ale, New Belgium Fat Tire and Samuel Adams Boston Lager. Six of those 15 brands have seen declines of 10 percent or more.
As we watch this slow fade, it’s hard not to think it may be because of the threat of flailing flagships or a simple cannibalization of “heritage” brands based on the success of new ones.
According to Beer Marketer’s Insights’ Craft Brew News, about 900 new craft brands have been half of craft beer dollar sales growth in IRI-tracked outlets through mid-August. Of that, 18 new craft beer brands surpassed the $1 million mark in sales, making up nearly half the sales for all new brands.
So consumers aren’t buying older brands nearly as much as newer ones. It doesn’t take an in-depth investigation to see this, just look on Facebook for what people are sharing pictures of.
Peak Mindshare and the Craft Beer Bubble
It seems that, similar to Godwin’s Law, the longer anything goes on being popular the more talk there is about a bubble bursting. If we assume craft beer is in a bubble than I doubt that it will suddenly burst. I suspect that the current growth we’re experiencing will not last and there could be a slow decline. I used to think that breweries making sub-par beer and breweries without great business acumen would lead this contraction.
I now think that even if a brewery is making the “best” beer and is run by a savvy business operator they may still go under if they can’t stay relevant in people’s minds.
So, how many local breweries can you remember in your brain? How many breweries have you completely forgotten about? What about different beers?
BrewMinds 
Great article; I don’t think we are near a bubble (at least not in Cincinnati) but I do think there is a risk of some breweries having a really hard time driving mind share. In my opinion, a brewery needs two things: great beer and even better marketing! People will stop showing up if you don’t have great beer but they may never show up if you don’t have great marketing. I think you can easily look around and attribute some brewery’s popularity to their marketing and the converse to breweries that seem to struggle to drive much attention.
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Yep, and don’t forget about the importance of location, only 1 local brewery has a streetcar stop literally next to their front door.
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You raise a few pertinent questions in this article Tom. Toward the first question of how many local breweries can you remember I would argue setting up some kind of ale trail where you check off stops like collecting Pokemon is an effective way to get people to recognize the number of local breweries. It seems to be working well in Columbus.
I would argue that the broader question of how older businesses and products stay relevant is one that many businesses and products face. In more mature sectors of the economy the answer is advertising, marketing, and clever ways of making your brand seem new and fresh. The breweries who take this seriously and have qualified people devoted to that activity will likely do better than those who do not. When I was in college my father ran a bar in a smallish Idaho college town and it was a constant struggle to seem new and cool.
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When we started you could still build a fan base by following the “make good beer and everything else will take care of itself” mantra. Unfortunately I feel that in the last few years this statement is no longer true. These days you can shit in a can (or bottle) and as long as you market it well, people will go crazy for it. As you mentioned what’s new rules the world, at least until the next new thing. Even in referencing Figleaf and Streetside as the new guys in town, you are already overlooking Woodburn and Nine Giant which aren’t even a few months old yet.
We are constantly innovating and putting out new beers, albeit not to the scale of some bigger, more attention grabbing breweries. When we release a new beer in the taproom we draw a few extra people than normal via social media. No one has ever lined up outside the door waiting for us to open on a day when we release something new. Admittedly, our marketing is thread-bare but these expenses have to be proportional to the size of our operation. Without spending significantly more (and thus disproportionate to volume) than some of the bigger guys, we may still never be able to “shout louder” than those guys to gain additional attention.
It sucks but it is what it is. I agree 100% that this will be the main thing that slows the craft beer boom in Cincinnati (as well as other cities potentially). When you have to spend more money on marketing to “stay relevant” as opposed to actually growing your bottom line, things can get upside down on you real quick. I personally struggle with this every day. When I go back and read our original business plan (circa 2011) it talks about our biggest competition/threat being the influx of craft beer from other states and how we can combat that by being local. This seems almost laughable now as every new brewery that opens locally is spending more and more to raise the bar (pun intended) on the drinking experience with beautiful taproom buildouts and brewing systems that will make WAY more beer than they could ever sell there. It’s a great time to be a beer drinker with all these options, but the question of whether or not there is room for everyone looms large for sure.
Scott LaFollette
Proprietor – Blank Slate Brewing Company
BTW – Thanks for the mentions!
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Scott,
As always I love and appreciate your comments on these subjects. I did try to get a picture from Woodburn in that section with a comment of “Wood who?”, but it just didn’t work layout wise. I won’t be down tomorrow to try the caramel apple beer so I hope it hangs around until Saturday.
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Always happy to throw my $.02 in whether people want to hear it or not 🙂 Keep the Doctor Away will be around for a while. We brewed a whole batch of it, not just a pilot test.
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Very well stated Scott. Thanks for brewing great beer and being who you are to this industry.
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It doesn’t seem to me that the craft beer bubble is going to burst; more like it’ll spring a pinpoint leak and not grow as rapidly. We’re already seeing this as craft beer growth is only up 6% this year vs 19% two years ago (http://www.cbsnews.com/news/is-the-craft-beer-craze-going-flat/).
This is really going to hurt the breweries that rely on distribution since the shelves are already overflowing with craft options, many of which will collect dust and be forgotten in favor of the new hot beer on the market (in my experience). Fortunately many of the newer local breweries aren’t focusing as much on the distribution side yet and are slaking the thirsts of their neighborhoods first and foremost. This is nothing new though; we’ve all presumed for years if craft beer was going to continue to take big beer’s market share it’d have to be done by converting local drinkers by going small, not big.
I recently made a map of the locally owned breweries with taprooms within the 275 loop that I’m going to use for a brewery crawl in a couple weeks (https://goo.gl/FkrDza). As you can see on the map, there are still many areas not served by a local brewery. In my area of Campbell Count, KY the nearest brewery is Mash Cult in Party Town with the next closest in the state being Rooster, over 80 miles away in Paris. I’m sure there’s plenty of space for more local breweries/taprooms in this economy. For a bigger distributing brewery things are definitely getting tougher though.
It seems like staying relevant in this market means hosting events (Braxton), high-profile bottle releases (MadTree), and focusing on the local community (Woodburn). There are many breweries that are just too far away for me to visit often but I’m more likely to travel to a brewery tapping a new special beer than one that isn’t. People like new and exciting and I’m curious to see how the local breweries keep that up going forward.
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I don’t think MadTree’s success and popularity has much to do with high-profile bottle releases. First off, it’s been a few months since they did one. Secondly, it’s a rather small selection of beer nerds who really care about those bottle releases enough to take off work on a Thursday or wake up early on a Sunday. There are far more people drinking what’s on tap at the Brewery Saturday night or with PsycHOPathy in their Kroger shopping cart every Sunday.
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This is a very good article and is thought provoking for sure. As one of the owners of one of the new guys coming to town (Brink) I thought I’d share our perspective. I appreciate Scott’s comments for sure. As one of the pioneers in Cincinnati — it is funny to type that given they’re only four years old — the landscape of craft beer has undergone tremendous change in that short amount of time. Competition has exploded and the business model has changed.
It’s no secret that one of the 4 owners of Brink lives in Denver (me!), one of the most competitive beer towns in the country. When we started our business plan more than three years ago, one of the trends that I saw occurring here in Colorado was the emergence and success of the neighborhood focused/limited distribution tap room model. At that time I felt confident that Cincinnati would experience the same change and that definitely seems to be playing out.
In Denver there are over 70 breweries with a Denver address, and dozens and dozens more in the suburbs and outlying municipalities. For years, like Cincinnati is doing now, article after article was published about the coming doom. Perhaps this day is coming yet, but so far not a single brewery has closed in the last three years. In my view, the reason that the competition hasn’t culled the herd is because the tap room focused tap room changed the culture of the city. Now when you grab a beer with your buddies, the first question is what brewery should we go to? I frequently see baby showers and young kids birthday parties being hosted at breweries. I’m starting to see that same change take place in Cincinnati.
Many of these articles are written by beer outsiders who tend to think of the term “brewery” as that out dated image of a giant building with smokestacks pumping out millions of gallons of beer year. The definition has evolved to mean many different businesses and models. As long as a brewery new or old can offer new recipes to keep things fresh (with or without flagships), and can get the support of their neighborhood, I feel confident they can be successful for years to come.
Like Scott, we dont and wont have a lot of dollars to throw at marketing, branding, or hosting large scale events. We believe that our tap room will be an asset and that we will strive to make the best beer possible. We’re betting that will be enough to meet our goals. We wont be able to hire a PR firm to keep our name fresh in the minds of the beer drinkers in the city, but we hope that if you poll someone in College Hill, 100% of them will mention the name Brink.
We firmly believe that the small brewers of the city working together, collaborating, and promoting each other’s businesses will lead to success for all.
-John McGarry
Owner/Captain
Brink Brewing Company
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