Should you start another craft brewery?
I understand that this sort of question amounts to treason in some craft beer circles and for that I apologize. I love breweries and I hope they take over every open storefront in America.
According to our friends over at the Brewer’s Association, there were 2,722 brewing operations running in the United States at the end of 2013. This includes registered brewpubs, microbreweries, craft, and larger domestic operations. That’s 2,722 places you could potentially buy beer. That is, by almost anyone’s standards, a lot of beer options.
Most of the larger metropolitan areas in this country have an enormous variety of craft beer available for your standard consumer. I live in Washington, D.C and this city’s beer selection has improved exponentially over the past 5 years alone. I’m spoiled for choice as it is (most of the time).
Why is your brewery going to be so good? Why should you try to open a brewery when so many other people have also opened one? Why do you want to participate in this “bubble”, as some experts have come to call it?
Market forces dictate that you’d be riding a wave of brewing euphoria that’s likely to keep building over the next few years. Year-over-year demand has grown along with supply for the past 15 years, and breweries are finding it hard to completely satisfy their consumer’s admirable thirst. This is all good news. If you’re a good brewer, then you can probably make it work.
But let’s do some “math” (this is back-of-the-napkin stuff, so please don’t hold me to it) to back up our point:
There are roughly 200 million people who are legally able to drink in this country. That’s 21+.
Of this 200 million, about half of them don’t really drink that much. (> 1 drink per month). We’ll exclude them from our calculations for arguments sake. That leaves 100 million people who are part of your potential market.
We can’t really determine who “loves craft beer” or anything like that, but overwhelmingly our national drink is most definitely beer. We drink a lot of it. Almost 21 gallons each annually. Which makes us 16th in the world for per capita consumption. We clearly need to step it up.
Since most (around 93%) of beer consumed in this country isn’t craft, but rather made from the big domestic brands like AB, Miller, etc, that leaves about 7% for the craft industry. This 7% was about 15 million barrels of craft beer sold in the United States in 2013.
Craft beer consumption is growing at rate of 15% year-over-year in the past few years and there’s a lot of room to grow yet.
Right now, about 1.5 gallons of your annual quaff is dedicated to craft beer. And that percentage is growing, in relation to the total amount beer enjoyed per person. And this doesn’t account for the fact that craft beer drinkers are enjoying a lot more than 21 gallons of beer each. And that 21 gallon figure assumes that everyone in the U.S is drinking 21 gallons of beer (every single person), which they aren’t, as we figured out above. And these craft beer drinkers are drinking a lot more craft beer as a percentage of their total annual intake of beer VS your typical American consumer.
Forget all that gibberish. My point is simple. We are living in golden age of craft brewing and I think that we are going to continue to grow into a country of brew enthusiasts who choose to move beyond overly-carbonated-see-through-light-yellow-lager and into flavor and the great community support of getting beer from your local brewery.
We are not going to run into a brewing bubble anytime soon, and I think the haters are always going to hate. Breweries will face the same challenges that all small business face. Finding a path to consumers. Gaining mindshare. Positioning their products correctly. Iterating their products to meet quality standards. Running their businesses efficiently and productively. But they’ll continue to do it successfully and we hope to support them in any way we can.
So…ostensibly, the answer is yes. Go ahead and start that craft brewery. There should never be a dearth of craft brewing, and there should never be a time when such entrepreneurial activity should be discouraged. Craft beer is, in this writer’s humble opinion, one of the purest expressions of community spirit and the great local small business that powers this country.