Happy New Beer 2018!! (A Craft Beer State-of-Union)

Welcome to the unofficial State of the Union of Craft Beer (or Independent Beer or Micro Beer or whatever someone decides to name this movement next)!
I call it unofficial because I am certainly not the President of this beer culture. I’m not even a Congressman or Senator. I am simply an amateur brewer, blogger and beer aficionado. But I love great tasting beer and have done so for 36 years now. Spending 36 years doing anything gives you a little bit of license when it comes to speaking about the subject. So, I am going to give you my observations about this last year and a little bit of what I see happening this coming year. Again, these are my opinions, or better yet, my conclusions as I will list some facts to back them up.

As was predicted last year, the Macro Beer companies (ABInBev, Molson-Coors, Heineken and Constellation Brands) continued their campaign of acquisitioning craft breweries instead of actually developing good beer.

ABInBev placed both Wicked Weed from Asheville, NC, and Breckinridge Brewery of Breckinridge, CO, under their umbrella to join Goose Island, Land Shark and Leffe as well as 13 others that make up their High End Division.

Molson-Coors acquired Terrapin Brewing of Athens, GA, because they didn’t have the ability to match Terrapin’s skills with their 97 other brands.

Constellation Brands, while not a big beer player and specializing more in wine and spirits, decided they needed to acquire California based Ballast Point Brewing to go along with their smaller stable of 9 brands. Then later in the year, they also acquired Funky Buddha Brewing of Boca Raton, FL.

And Heineken International, with its stable of 119 brands had to add one more so they went after and acquired Lagunitas Brewing, also California based.

All of these Craft Brewer’s were excellent examples of companies who excelled at what they were doing but in order to do more they needed investors. Which is where Big Beer came in and gobbled up opportunities. Only time will tell if their accepting the offers from Macro Beer companies will be harmful or beneficial.
In protest of Big Beer purchasing these companies I, along, I am sure, with many other Beer Snobs, have abstained from sampling or purchasing any of these former greats products. Another form of protest appeared in late October, in the form of the TakeCraftBack Campaign (see add below).

https://www.youtube.com/watch?time_continue=1&v=S-a69ey71vo

This Don Quixote-ish attempt to buy out Macro Beer, while hinting at David versus Goliath proportions was actually done in jest. But I believe it did bring to light the practices that ABInBev and others use daily to keep craft beer from obtaining more of the market. And while thousands of Craft Beer fans (including yours truly) pledged more the $3,000,000 to buy out Big Beer the goal of 213 Billion plus was laughably unobtainable. But everyone knew that going in.

And at the tale end of the year some good news appeared in the form of legislation that would lighten the tax burden of many breweries making it easier for them to purchase each other’s beers and spread across the tap rooms of America.

While this legislation benefits all commercial brewers big and small, Big Beer factors the taxes they were paying into their production costs. Smaller breweries may also do that, but smaller breweries are more likely to take that added available funding and experiment more with making different styles of beers. You’ve already seen that Macro Companies prefer to buy already perfected formulas than to develop new ones.

https://www.brewersassociation.org/government-affairs/craft-beverage-modernization-and-tax-reform-act/federal-excise-tax-overview/

2017 saw a slowdown in new Brewery openings. In fact, many industry insiders are predicting that the trend going forward will be Micro Breweries or brew pubs. The brewery market is becoming over-filled with the number of brands and styles to choose from. So local pubs which may brew their own and bring guest taps will be where you see the growth.

2017 also saw more loss of market share by Big Beer to craft beer, wine and whiskeys. A trend which will probably continue this next year despite Big Beers efforts to buy up market share. Of the $107,000,000,000+ in revenue generated by the Beer Industry in America in 2016, about $23,000,000,000 of that was from Craft Beer, an increase of 10% from the previous years.

Which brings us to now and the future, or at least 2018.

I think you will see a reduction of buy-outs by Big Beer. The amount of dollars invested in craft Breweries does not equal the amount lost in market share, though that may vary from company to company.

I do believe there will be an increase in Brew Pubs and Micro-breweries though even that will slow down compared to the last few years.

I would not be surprised to see Big Beers change tactics and begin investing more in the retail end of the Beer industry, opening their own brew pubs in large populated cities where they can lock out their competitors. But that will only work if they can bring a good offering of cuisine to accompany their products. Otherwise it will be money down the drain.

I would also not be surprised to see Big Beer begin head-hunting for brewing talent and begin expanding their capabilities for experimenting with new styles.
It’s for sure that their current modus-operandi is not working.

Whatever happens, I encourage everyone to continue to support their local breweries and try new beers as often as possible.

Papabear

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