It seems like we come back to this same question every year. Almost like it is a slow news time or something.
I ran across this article (Will it Fall? A look at America’s Brewery Boom)in the recent Draft magazine (online). Every time there is a huge amount of growth in a niche market, chicken little runs around crying that the sky is falling.
Breweries are businesses, there will always be risk involved in business. It doesn’t matter if the business has been around for over 100 years or if it has been around for less than a couple days. The risk is still there.
The big brewers are losing ground, this has been going on for a good number of years now. The tastes of their core consumer are changing and they need to change to keep up. Of course when a company reaches the level of the big brewers it is slower to react and set new trends. It doesn’t help them that they have lived with little competition for many years now.
The craft brewers are young and new and hip. They have the ability to change to meet the needs of their consumers. But they also are riding a trend. As what happens with trends there will always be people that try to make a quick buck while the money is flowing in their favor.
I am suddenly reminded of Beanie Babies in the early 90s. These things were selling like hot cakes. Demand was enormous. If you wanted to make money with them you needed to buy and sell with no thought to what you were doing. It was a bit like piranha when a cow crosses the stream. But Beanie Babies were a liquid market. There was nothing substantial to back the sales.
How does this relate to the bumper crop of breweries popping up? I know it seems odd to think in these circles like this. But this is reality 101. There will always be the people looking for a quick buck. There will always be the people who jump into an enterprise with no clue what they are doing or how to make it work. This is life, the scenery changes but the way it all works doesn’t.
When it is all said and done, we will still want our beer. The breweries that are looking at this as a long term investment will still be around. The breweries that keep their focus on their customers and their satisfaction will continue to grow. There will be fall out. There is always fall out. This is nothing new.
Where this could hurt us in the long run is when the people who are willing to do what it takes to make it happen decide it isn’t worth it. When they start to believe the chicken littles of the world and believe the hype that this is something new. That is when we will lose all we have gained.
Time for a pint…