Craft Brewery Saturation Point: Not If But When

[ScrewyBrewer]

Four years ago I had to drive an hour to drink draft beer from a local craft brewery, today there are at least 5 new breweries within a 30 minute drive from where I live. The smallest brewery is a 1 barrel system and the largest brewery is a 50 barrel system. In my mind it's not if there will be brewery closings in the area but when. This is my take on the craft beer breweries in the New Jersey shore area.

[RayF]

Will history repeat itself? Correct me if I'm wrong here. Before prohibition, the way I understand it, most breweries were of the smaller type (what we call craft today) until they started to merge into the big breweries we know today. Back in the day most breweries were of the smaller scale type, each region had its own versions of beer, which we now have again.

[Beer-lord]

I've often wondered the same thing because what goes up, must come down, right?

[John Sand]

I think it's definitely a bubble. Not long ago, I was proud of the dozen breweries in my county. Now there are 19, with more in the works. We don't have that many townships, though we do have over 1 million people. So, there will be a contraction, and more consolidation. Some of the fascination is a fad (cigars came and went, food styles, etc) But we'll never go back to just 100, or even a thousand breweries. The horse has left the barn, people want great beer. I expect I'll always have micros within easy driving.

[ScrewyBrewer]

I've gotten to know several brewery owners in the area here and it's really interesting to hear their take on the the process of opening a brewery. Two owners I spoke with had spent 2 1/2 years preparing to go into the brewing business. It's hard enough guessing at what the marketplace will look like a year from now, but I remember in 2013, when they first started the process it looked nothing like it does today. The competition for tap space at bars is so fierce right now that a few of the brewers aren't even brewing IPA's, which were a staple of any brewery's lineup not long ago. In fact another large brewery is slated to open this Spring, not far from the fabled 'Stone Pony' of Bruce Springsteen fame, as if the market wasn't already crowded.

[Rebel_B]

Four years ago I had to drive an hour to drink draft beer from a local craft brewery, today there are at least 5 new breweries within a 30 minute drive from where I live. The smallest brewery is a 1 barrel system and the largest brewery is a 50 barrel system. In my mind it's not if there will be brewery closings in the area but when. This is my take on the craft beer breweries in the New Jersey shore area.

Different markets, different saturation. I live in a county with some 82 local craft breweries ( http://washingtonbeer.com/breweries/ ). Local distilleries are numbering 14 currently. Could be a bubble ready to burst, but local laws make it relatively easy to open up a small brewery. I'm sure there will be breweries closing & eager young home brewers buying their equipment & setting up new breweries as well. Not nearly as risky as opening a restaurant!

[Stinkfist]

I def think it is more of a quantity of beer than it is the number of breweries, you need to look at how much beer the breweries pre prohibition were making per the population to today's, it won't be direct since we as a country may drink more?

But breweries today def produce way more beer than the pre prohibition breweries

[mashani]

Rebel B, last time I was in your parts, I met dudes that brew pico sized batches in their garage, and that stuff ends up on tap at a handful of pubs, and folks can go sample in their back yard if they want. And those dudes last I knew were not looking to upsize, they were just happy doing what they were doing. That's how some folks do it in the UK and other places in Europe. Small batches that just end up in local pubs, no big affiliation, and no desire to have one.

EDIT: They did not brew IPAs for the most part, mostly more like what the Brits would call "Real Ale". I'm sure that helps them get tap space. Something unique and tasty.

[Rebel_B]

Rebel B, last time I was in your parts, I met dudes that brew pico sized batches in their garage, and that stuff ends up on tap at a handful of pubs, and folks can go sample in their back yard if they want. And those dudes last I knew were not looking to upsize, they were just happy doing what they were doing. That's how some folks do it in the UK and other places in Europe. Small batches that just end up in local pubs, no big affiliation, and no desire to have one.

EDIT: They did not brew IPAs for the most part, mostly more like what the Brits would call "Real Ale". I'm sure that helps them get tap space. Something unique and tasty.

Yup, many are content to brew the beers they love, share samples, & make a bit of $.

[RickBeer]

It will be tough to determine how much fallout is the result of saturation, and how much is the result of poor business planning or poor business skills. In Ann Arbor, there are a huge number of restaurants per capita. There is a lot of turnover, sometimes in less than a year. Some is location, location, location. Some is poor business planning, like the "square food place" (I joke, but not far from it) that there was never a market for. Some are just lousy business people that spend a fortune renovating a spot, then open, and close at 9PM in a market dominated by college students... Major coffee place just closed in under a year and they shut their door at 9PM each night.

We've had a plethora of craft breweries open in the general area (still I think Grand Rapids is the largest concentration). Many are beer only, no food, bring your own if you want it. To me, given that munchies go with beer (especially to sop it up), no food is a mistake. Some have limited hours (like 4PM - 10PM weeknights, but not where the college crowds are). Some are very specialized, like sours only, or Belgians only. Most do little to no Marketing, which is an enormous mistake (says the marketer). Even some in Grand Rapids have out of date websites with broken links. If you build it, they will come, but only if you have it somewhat current and relevant. If you're too lazy to keep it current and working, at least answer your phone or I won't come (and I didn't while in Grand Rapids on our brewery tour).

So when they close, WHY will be a big question with no easy answers, but at least around here I don't think saturation will be too high on the list.

[FedoraDave]

I think it's definitely a bubble. Not long ago, I was proud of the dozen breweries in my county. Now there are 19, with more in the works. We don't have that many townships, though we do have over 1 million people. So, there will be a contraction, and more consolidation. Some of the fascination is a fad (cigars came and went, food styles, etc) But we'll never go back to just 100, or even a thousand breweries. The horse has left the barn, people want great beer. I expect I'll always have micros within easy driving.

I tend to think this is the most accurate assessment. A lot depends on the location, of course, and within the NY/NJ/CT tri-state, where John, Vince, and I live, the population density is a factor.

There will be a saturation point, and craft brewpubs will come and go, but the phenomenon won't disappear from the landscape, any more than the other fads, such as cigars and food styles, have disappeared. There may be fewer of them, and they may be harder to find, but they'll be there.