The Session #102: The Landscape of Beer

The SessionThe first Friday of August means it’s time for another round of The Session, the long-running collaborative “Beer Blogging Friday.” This month’s Session is hosted by Allen at Active Brewer, and the topic is “The Landscape of Beer“:

Our topic this month is, “The Landscape of Beer“. How do you see that landscape now? What about in 5, 10, or even 20 years? A current goal in the American Craft Beer Industry is 20% market share by the year 2020. How can we get there? Can we get there?

Whether your view is realistic or whimsical, what do you see in our future? Is it something you want or something that is happening? Let us know and maybe we can help paint the future together.

Would it be cynical for me to imagine a future of increased fragmentation in the market? In this case I’m defining “fragmentation” to mean more and more nanobreweries (which seems to be the trend from what I’ve been seeing out here in the Pacific Northwest) leading to an ever-changing, sometimes random rotation of beers available on tap at any given time. Why nanos? Simple, it’s a much lower barrier to entry. And then the fact that the average American craft-beer-drinking attention span seems to be that of a hummingbird further pushes beer drinkers to constantly seek out new beers from new breweries, feeding this brewery growth in the marketplace, furthering the cycle. As the craft beer market share increases over the macros, it’s easy to imagine all of these thousands of small breweries chipping away at it, a few gallons at a time, with the monolithic brewing companies slowly dying the death of a thousand papercuts.

Yeah, it’s an odd mixed metaphor vision of things but right now the number of new breweries entering the market is growing at a furious pace and it’s a struggle to keep up with it all. I mean let’s be honest, here in Central Oregon alone we have 28 breweries (and at least four cideries) and as the “Bend Beer Guy” even I can’t keep up with all their latest developments—I’d have to be visiting (and/or drinking beer from) a brewery a day, every day, for a month just to keep in the loop! You go to bigger beer-active cities, and frankly I don’t know how any one person could keep up with it all on a reasonable basis.

I don’t see this as a bad thing; diversity is good for the market. I mean, if I can find locally-brewed beer in a random small town or region then I’m excited to try it. But it’s important to remember that quality and sustainability are important, too, and not every one of these breweries will survive long-term. And I’m not even getting into consolidation and acquisition, which is also playing a big part in shaping the future beer landscape.

That’s what I’m seeing: the macros, a few very big craft breweries, regionals, and the increasing fragmentation of the market by many nanos (punctuated by the occasional larger brewery—10 to 30 barrels). Naturally there will be cycles of shakeout and collapse as well, but I’m less inclined to try to predict those compared to what I see actively happening around us now.

Is there an upper limit to the number of breweries? That I don’t know, but I’m fairly confident we have a ways to go yet.