Everyone in the Pool! The Rush for a Craft Beer Business

pool-swimming-summertime

Thanks to a few recent posts on the Great Recession and the possibility of the “craft beer bubble” I’ve been thinking a lot about beer industry lately. I couldn’t help but chuckle when I caught this tweet from ABC/ESPN business reporter Darren Rovell recently:

I believe that Rovell’s tweet is mostly tongue-in-cheek, but I also think there’s some credence to what he’s saying. Not necessarily of whether the “boom was done” – craft beer sales are strong and brewery numbers are growing – but rather how anyone thinks they can get into the craft beer industry.  To once again paraphrase DigBoston‘s Heather Vandenengel: It used to be about making great beer to make money, now it’s a matter of whether operating brewers have the money to make great beer.

beer-craft beer-brewery-business

The magic lamp for your own business?

That’s why I’m a little dismayed to see the Brewer’s Association pumping up the release of the second edition(!) of their Guide to Starting Your Own Brewery by Dick Cantwell. Or, you can simply head over to Amazon and find a handful of books that will teach you how to open your own craft beer business.

I am not against people pursuing their passions and I’m certainly not against the idea of more (good) beer. I am against providing people with a spark of an idea that for the low, low price of $95 you can buy a book that will guide your path to going pro.

My feelings are a bit exacerbated by an online certificate program available through Portland State University in the “Business of Craft Brewing,” which promises that “[b]y the end of the program you will have an investor-ready business plan for your own craft beverage business.”

Sigh.

Just like any other beer-loving fool, I want this industry to thrive as much as possible. I just get a little weary when people get into craft beer because … well … they can.

So what happens if our taxi driver starts that brewery? Does he succeed? Does he make lousy beer? If it’s the former – wonderful. If it’s the latter – no matter how small a brewery – it reflects on the industry and not just one person or business.

If we live in a climate where everyone wants to make and sell craft beer, is that a good thing?

+Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac

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15 thoughts on “Everyone in the Pool! The Rush for a Craft Beer Business

  1. I think I’m in the same place as you: equal parts excited and apprehensive about all these breweries popping up. I worry that the market will reach saturation pretty soon, and after sales either plateau or decline we’ll see either a ton of smaller places close or a market where starting a new brewery will be damn near impossible.

    What really intrigues me is what all these breweries opening – and some succeeding – represents. America is finally starting to take real beer seriously, and that is a great thing.

    • I saw this quote yesterday from fellow beer blogger John Kleinchester: “Craft Beer is not a fad or a trend. It’s a return to normalcy.” (that quote originally via Garrett Oliver) Historically speaking, it couldn’t be truer!

      What I worry about is the industry turning into some kind of “snake oil” business where people can simply sell beer by calling if “craft,” regardless of its quality. That goes for the Big Boys right down to the start-ups. I suppose it’s arguable if that’s a serious problem right now, but it doesn’t mean it’s something not worth thinking about.

      I’m with you – I couldn’t be more thrilled to see so many people who wantto get involved enter the business.

  2. I think if the majority of new brewers come in with the goal of being the next DFH, Sierra Nevada, Sam Adams type company then they are setting themselves up for failure. But if there goal is simply to make great beer, a good living, and be part of the local community then they’ll be okay. Union Craft Brewing here in Baltimore seems like the perfect new brewery template. They make great beer and want to earn a buck, but they don’t have their eyes set on world domination. They integrate themselves into the community and as a consumer you really feel like you’re part of their success. It’s a cool dynamic and for me maybe the most important thing a new brewer can learn. The beer and the community should be the goal. The business should be the icing on the cake.

    • Well put! It made me think of this: As the number of breweries continues to climb all over the country, is world domination even possible any more?

      As you point out – it’s not that big of a deal so long as you have a strong community and strong community support. We’re inching back to the “good ol’ days” of neighborhood breweries, which I like.

    • To a certain extent, I think I agree with BBB on this one. I have started to conclude that the breweries that are going to get thinned out are the ones who are overextending themselves (geographically, facility-wise, etc.) at the wrong time. I think those who expanded intelligently will be fine. I also think the local guys who didn’t get carried away will be fine as well. (I also think/hope that quality will have something to do who fails…but, unfortunately, that might not necessarily always be the case). For now, though, I guess people can just place in service way more capacity than they’ll ever need and contract the excess capacity to the cab driver’s craft beer company.

      • Absolutely … and I just hope that these books and courses – while certainly helpful – don’t offer delusions of grandeur to someone who pines for domination. The way the market continues to shape, local is incredibly important. That’s why I think there’s value in homebrewers who manage to go pro. Most of the time, I’d imagine/hope they have a network of friends/allies that know them or know of their brew. They’re already ingrained in the community (and beer community).

  3. Great beer and passion are the table stakes for getting into the public brewing business, but if the brewer can’t get the beer to the customer or run a business, whats the point? Many new brewers I’ve met get this. Don’t underestimate them.
    I’d respectfully disagree with your bubble premise. I think the craft beer market can be much bigger, with small to medium brewpubs and breweries that cater to some extent to niche and local consumers. American craft beer for the most part has only explored one style of beer. as Americans brew more Belgian and German style beers, I believe different niches will open up. Even (gasp) in fine dining.

    potential

    craft beer business is

    • Chuck – some great points! Thanks for bringing them up and adding to the conversation.

      One of the things I’ve enjoyed the most in seeing the rise of breweries around the country is that it seems most new business owners have some sort of background passion or history with beer. That’s not to say it wasn’t the case before, but as the craft beer community grows there’s more support than ever.

      I certainly believe interest exists for more (good) craft beer, but it does put me off a little when we tell people you can take an online course or read a book and you’re all set. To me, that seems like taking advantage of the craft beer boom, not (100%) necessarily with the most true intentions.

      Historically speaking, were just getting back to normal, when there were breweries or brewpubs for neighborhoods and towns all over. I think that’s something worthy to aspire toward again!

      • Bryan,
        I agree with your comment about the expensive books and classes trying to cash in on aspiring home brewers. It was bound to happen. None of the business stuff is rocket science, however. It’s sort of starting a business 101: have a business plan, establish a brand, understand your market, and get to know the distribution channel. The great thing is that in craft brewing people seem more than willing to help out newcomers. The main thing, of course, is to make great beer. If you do that people will seek you out. It doesn’t have to be on a grand scale either. You can contract brew and self distribute, or you can set up a small brewpub with a relatively small investment. It’s important to approach it as a business, though: establish your brand and be able to articulate it, understand your market and what kinds of beer they want to drink. The difference between home brewing and commercial brewing is that the commercial brewer expects to make some money brewing beer, whereas the home brewer is just doing it for the pleasure of making beer.

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