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?