Evolve, Die, or Sell. The Constant Changes, Challenges, and Hyper-locality of Craft Beer in 2019
Evolve, die, or sell. Brett Myces.
This seems to be the theme for the larger craft breweries in 2019.
20 years ago, craft beer was only made by a handful of breweries who stayed close to their territory, similar to professional wrestling in the 70’s and 80’s. You had Sierra Nevada and Anchor in the Northwest, New Belgium, Oscar Blues, and Left Hand in the Rockies, Shiner in Texas. BLVD, Goose Island and Schlafly conquered the Midwest. There was Yuengling, Dogfishhead, Boston Brewing rounding out the Northeast, with Sweetwater in the Southeast. (Sorry if I'm missing any breweries in this list) As these breweries have grown and expanded their distribution footprint they are selling their beers against each other while also trying to keep the thousands of local up-starting breweries, from taking their market share. It was easy to keep the local breweries at bay when you had the brewing experience, marketing, and distribution. Now social media does the free marketing, these local brewmasters usually have a decade of experience, many at the aforementioned breweries, and crowlers and small canning lines make distribution easier. All of which has led to the crunch on the larger craft brewers. Read my recap on the evolution of the top 50 craft breweries and you’ll see the mergers and acquisitions over the past decade.
So lets get to the news of 2019. We had Dogfish Head and New Belgium sold, and Ballast Point got re-sold for a LOSS. In 2015, Ballast Point was sold for 1 Billion dollars to Constellation Brands, owners of Corona and Modelo, now it’s been sold to Kings and Convicts brewing, based in Chicago. There was also the cancelled expansion of Great Divide. They sold most of the land it acquired in 2013, at a great profit, I might add. Is it a sign of their owners cashing out and taking the golden parachute or is it evidence in the changing nature of consumers beer habits? I personally think it is the latter.
The craft brewing movement has been constantly expanding over the last 30 years. Don’t get me wrong, I love New Belgium, and miss their Shift Pale Lager, but their beer gets hidden in the massive aisles of the liquor stores. I’ve always had a soft spot in my heart for Dogfish Head after the Myces road trip to Dover in 2010 and thoroughly appreciate their creativity, then Ballast Point, I never really saw their beers until they went corporate. The problem is there is too much beer to drink already. If I want to drink something new, I’m going to try the local guys. The last time I was walking through the liquor store I found beer from Mark Twain Brewing in Hannibal, Liberty Cap in St. Joseph, Cock-A-Doodle Brews in Lone Jack, and Crown Valley from St. Genevieve. That’s not even mentioning the big players in KC, St. Louis, Springfield, and Columbia. Per the brewers association, over the last half decade the number of breweries has almost doubled, but the market share has increased “only” 5% from 19% to 24%. This increase is awesome, but the bigger breweries at the top are the ones really feeling the pinch. Everyone wants local, whether it’s farm to table food, Charley Hustle shirts, and of course the most local and fresh beer possible.
It’s the same phenomenon with the tap handles at most restaurants, the good beer bars with 50+ tap handles being the exception. Everyone is selling beer that is exceedingly local with the exception of the multinational conglomerate, watered-down, cheap-beers on tap. I’d love to get a fresh Fat Tire on draft, it’s just hard to find, and I don’t want one bad enough to drive around 40 minutes looking for it. Speaking of which, Flagship February is just around the corner.
If you aren’t dying like Tallgrass, McCoy’s, or Rock and Run, (Let me pause to wipe away a few tears), selling or merging, then it is time to evolve and get creative. Hence, BLVD starting their Fling Cocktails, Sam Adams owning Truly Hard Seltzer and Angry Orchard. Even Schlafly is getting in on the action with a hybrid Mead/Spritzer known as Boomerang.
So what does the future hold? Will we see breweries scale back some distribution and focus solely on their home market, similar to the New Glarus model of only selling within your home state, which is one helluva business model.
Are we going to continually see more mergers and acquisitions at the top, while the locality of the beer getting closer and closer to your house. Is there any creativity left in the market? Only time will tell.
For more of your reading pleasure, check out KCHopTalk, and follow these links
Craft Brewing Business
American Craft Beer on New Belgium
American Craft Beer on Ballast Point Sale
Beer Baron on New Belgium
Cheers,
Brett A. Myces
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| The Ballast Point Sculpin Collection |
So lets get to the news of 2019. We had Dogfish Head and New Belgium sold, and Ballast Point got re-sold for a LOSS. In 2015, Ballast Point was sold for 1 Billion dollars to Constellation Brands, owners of Corona and Modelo, now it’s been sold to Kings and Convicts brewing, based in Chicago. There was also the cancelled expansion of Great Divide. They sold most of the land it acquired in 2013, at a great profit, I might add. Is it a sign of their owners cashing out and taking the golden parachute or is it evidence in the changing nature of consumers beer habits? I personally think it is the latter.
 |
| The beer that made New Belgium famous |
The craft brewing movement has been constantly expanding over the last 30 years. Don’t get me wrong, I love New Belgium, and miss their Shift Pale Lager, but their beer gets hidden in the massive aisles of the liquor stores. I’ve always had a soft spot in my heart for Dogfish Head after the Myces road trip to Dover in 2010 and thoroughly appreciate their creativity, then Ballast Point, I never really saw their beers until they went corporate. The problem is there is too much beer to drink already. If I want to drink something new, I’m going to try the local guys. The last time I was walking through the liquor store I found beer from Mark Twain Brewing in Hannibal, Liberty Cap in St. Joseph, Cock-A-Doodle Brews in Lone Jack, and Crown Valley from St. Genevieve. That’s not even mentioning the big players in KC, St. Louis, Springfield, and Columbia. Per the brewers association, over the last half decade the number of breweries has almost doubled, but the market share has increased “only” 5% from 19% to 24%. This increase is awesome, but the bigger breweries at the top are the ones really feeling the pinch. Everyone wants local, whether it’s farm to table food, Charley Hustle shirts, and of course the most local and fresh beer possible.
It’s the same phenomenon with the tap handles at most restaurants, the good beer bars with 50+ tap handles being the exception. Everyone is selling beer that is exceedingly local with the exception of the multinational conglomerate, watered-down, cheap-beers on tap. I’d love to get a fresh Fat Tire on draft, it’s just hard to find, and I don’t want one bad enough to drive around 40 minutes looking for it. Speaking of which, Flagship February is just around the corner.
If you aren’t dying like Tallgrass, McCoy’s, or Rock and Run, (Let me pause to wipe away a few tears), selling or merging, then it is time to evolve and get creative. Hence, BLVD starting their Fling Cocktails, Sam Adams owning Truly Hard Seltzer and Angry Orchard. Even Schlafly is getting in on the action with a hybrid Mead/Spritzer known as Boomerang.
So what does the future hold? Will we see breweries scale back some distribution and focus solely on their home market, similar to the New Glarus model of only selling within your home state, which is one helluva business model.
 |
| New Glarus' Logo, can you tell they are marketing to Wisconsin? |
For more of your reading pleasure, check out KCHopTalk, and follow these links
Craft Brewing Business
American Craft Beer on New Belgium
American Craft Beer on Ballast Point Sale
Beer Baron on New Belgium
Cheers,
Brett A. Myces
