Not to be a buzzkill, but the question — in wake of a recent report that the local craft beer industry continues to see solid growth — had to be asked…
Is a craft beer bubble inevitable?
Joe Taffer thinks so — at least on a national scale. The star of Spike TV’s “Bar Rescue” recently told Cheers Magazine that the movement is losing its luster.
“I think that about 60 percent of craft beer basically sucks,” he said. “I’ve been to a lot of the facilities. They’re not exactly clean. They’re rookie-run. The problem is that people are now looking at craft beer as an investment opportunity. They’re getting into it to make money.”
That’s going to cause the bubble, he predicts. “That’s why I think there’s going to be a wash out in craft beer over the next two years. Half of the craft breweries are going to disappear. And the word ‘craft’ will become known more for spirits.”
Goodbye Mighty Miracle Moondog IPA? (We actually made that name up …)
Vince Vasquez begs to disagree. He’s the author of the recent report by the National University System Institute for Policy Research, showing that the local craft beer scene is still thriving.
In 2015, revenue increased by $125 million to $851 million. And the number of breweries and brewpubs grew to 114. That number, in 2011, was just 37.
How can that kind of growth be sustained, though? Lower the drinking age to four?
Nope. The growth should continue because of the millennials, he said. They’ve been reaching the drinking age as craft beer has been evolving and they continue to fuel its expansion.
People are very brand loyal, he said. People try their first drinks and they stick with them. In short, people are not likely to go from Mighty Miracle Moondog IPA to Coors Light.
Thirty-five percent of beer drank in San Diego last year was craft beer, which is a pretty solid number, he noted. Portland does even better — at 45 percent.
However, the industry is facing challenges, he said. For one, he doubts that growth will continue to be as robust as it has been in the past.
Secondly, the big beer companies are not exactly sitting on the sidelines and watching their market share get clobbered.
They’re buying up the competition. Local craft brewery Ballast Point last year was sold for a cool $1 billion to Constellation Brands, a major player. And Saint Archer was sold for $35 million to MillerCoors.
The big beer companies are also creating their own brands, such as ShockTop, an Anheuser-Busch product that critics say is a cheap imitator of true craft beers. Look at a bottle of ShockTop and there’s no mention it’s brewed by the beer giant.
Anheuser-Busch is also getting heat for starting a brewpub in the East Village called the 10 Barrel. Local craft beer makers say customers won’t know they’re patronizing a big corporate creation, instead of homegrown one.
“There’s a lot of anxiety (over these trends),” Vasquez said.