A thousand more Craft Breweries

[Steve R]

I think its important to note that while a large amount of breweries may be opening, there is plenty of room for growth in certain regions and localities that won't trigger a bubble burst. I'm sure it's going to be hitting the west coast before it's going to impact the Midwest. To paint with a broad brush, we're just getting started in the craft beer scene here. There are tons of cities and neighborhoods around us that don't even have a small brewpub.

Finding the appropriate niche/location and knowing how to grow inside those parameters is probably going to be key to sustainable growth of craft beer.

This is exactly what I'm counting on regarding my "start up in process" we are in a golden tourist location without a craft brewery and our business plan centers around being a tasting room/pub with minimal distribution. I have been very concerned with the micro-brewery proliferation numbers and indeed we are in northern California where there is a hotbed of new breweries "down the hill" so to speak. However I have to count on the fact that our brewery will be at a one stop sign intersection where a quarter million (mostly beer drinking) tourists funnel through each year. We also have a decent size population that is leaving the area to drink elsewhere because the only bar in town is a total back country dive bar and no one wants to go there. A gap analysis shows that over 2 million dollars in adult beverage service is leaving this area each year. I need what, 15% of that?

We also have a very marketable brand name.

I've owned multiple succesful businesses. I've done all the research I can do. We'll be signing leases and loan docs within a month. Wish us luck!

[Shortbus901]

As someone said before, a Brewery in Planning is just someone who has paid brewery member dues to the BA and listed themselves as in planning. I've been one of those numbers for several years now with no real progress to show towards actually starting something. I managed to get a foot in the door here a couple of years ago and put my plans on hold in order to learn the industry a little bit before making a move.

[Wicked Daddy]

There's been talk of "too many breweries" for years now. There are over 2,000 in the U.S. now. Let's just say there are another 1,000 on the way if every dreaming homebrewer get's something running (count me among them - but it's almost done). There are over 7,000 wineries in the U.S.. While the revenue stream may be different from a brewery in terms of $$ per customer, the cost per bottle is also higher; time, land, space, irrigation (if needed), etc. It's a difficult business and the clientele are harder to win. They seem to be doing fine.

3,000 breweries seems like a lot but there is always room for great beer that is marketed well. The failures will not be due to an abundance of competition, it will be from a lack of competence.

[ChesterBrew]

3,000 breweries seems like a lot but there is always room for great beer that is marketed well. The failures will not be due to an abundance of competition, it will be from a lack of competence.

In many states, the barrier to entry is the distribution model along with only so much shelf space/tap space in any given store or restaurant.

I can only speak to Maryland, where wineries are able to get a very low-cost self-distribution permit. Microbreweries, on the other hand, cannot self-distribute.

Craft beer has a lot in common with wine as to the care that goes into the creation of the product, but the typical U.S. beer distribution model is still mostly 6-pack and case-centric to the end consumer.

[lhall]

And the distribution channel is consolidating... seems like two or three announcements a week of another distributor consolidation.

[yap]

shrinking distribution channels (distros getting "full" and not taking on new breweries), crowded shelf space and further strain on the hop and grain market will eventually be what puts the brakes on this industry's growth methinks...

as for when...who knows...

just another random $.02 from someone who doesn't really know what they are talking about...

[ChesterBrew]

...further strain on the hop and grain market will eventually be what puts the brakes on this industry's growth methinks...

as for when...who knows...

I'm guessing the drought is going to make 2013 a very difficult year. Corn prices are already shooting through the roof, and I expect barley will be doing the same.

[DMBC]

My opinion on this matter

Encouraging as these numbers are, I do not think that one pondering opening a brewery anywhere in the United States should base their decision on these projections. E.g. "I should open right now when the market is hot" or "I should wait until the bubble bursts and get equipment for dimes on the dollar." Both of these courses of action carry their own risks and benefits. Someone opening a business needs to sort them out and make an educated decision for the area where they would like to open.

We're in the final stages of opening a brewery in NW Montana. There has been hundreds of business decisions my wife and I have had to make over the course of this past year. Most of them have been based on our considerations for our local area, very few have been based on anything trending nationally. Yes the growth numbers are great for throwing at the bank for a loan, but you'll need a lot more data to convince a banker you're an attractive loan candidate. Local trends, seasonal tourist traffic, target market, beer culture in your town and state, blah, blah, blah.

A brewery is a business, first and foremost and if we want to survive we have to treat it as such. The brewing of beer is just a part of the business. Granted it needs to be a quality product that will be accepted by your target cliental, but so much more goes into it. Most of the so much more is how do you keep your local, key cliental happy and keeping yourself in business through the winter.

I guess what I am saying is if you want to open a microbrewery and have the means, do it. But numbers like this that the BA throws out to make us feel good should not be a large part of why you do it. Honestly we only gave these growth numbers a paragraph or two in our business plan we gave to the banker and still walked away with a loan.

[BullyBrewingCo]

Encouraging as these numbers are, I do not think that one pondering opening a brewery anywhere in the United States should base their decision on these projections. E.g. "I should open right now when the market is hot" or "I should wait until the bubble bursts and get equipment for dimes on the dollar." Both of these courses of action carry their own risks and benefits. Someone opening a business needs to sort them out and make an educated decision for the area where they would like to open.

We're in the final stages of opening a brewery in NW Montana. There has been hundreds of business decisions my wife and I have had to make over the course of this past year. Most of them have been based on our considerations for our local area, very few have been based on anything trending nationally. Yes the growth numbers are great for throwing at the bank for a loan, but you'll need a lot more data to convince a banker you're an attractive loan candidate. Local trends, seasonal tourist traffic, target market, beer culture in your town and state, blah, blah, blah.

A brewery is a business, first and foremost and if we want to survive we have to treat it as such. The brewing of beer is just a part of the business. Granted it needs to be a quality product that will be accepted by your target cliental, but so much more goes into it. Most of the so much more is how do you keep your local, key cliental happy and keeping yourself in business through the winter.

I guess what I am saying is if you want to open a microbrewery and have the means, do it. But numbers like this that the BA throws out to make us feel good should not be a large part of why you do it. Honestly we only gave these growth numbers a paragraph or two in our business plan we gave to the banker and still walked away with a loan.

That's all well and fine if you are opening a restaurant with a brewery in someplace that has winter and the next nearest brewery is two hours away. If you own a brewery and you have had three new breweries opening in a two block radius of your business this year, some of which have questionable quality and/or motives, believe me, you would have a MUCH different attitude. The type of growth we have seen up to this point can't last much less double to allow for the almost doubling of the number breweries that is going to happen this year.