Craft Beer's Ultra-Competitive, Jelly Bean Reality

Before I launched this blog in 2011, I had observed the trajectory of craft beer dating to the 1990s. Those were quaint times, thinking back. There weren't that many breweries and, to a large extent, you mostly knew who they were and what they were good at.

That began to change after the financial crisis of 2008. It was around that time that the brewery count started to tick upward wildly. One of the stats I included in Portland Beer was that Portland's brewery count had increased 40 percent between 2009 and 2012. It continued to rise from there.

The national numbers are similar. Between 2009 and 2012, the total craft brewery count rose from 1,698 to 2,420, according to the Brewers Association. Between 2012 and 2015, the count nearly doubled, ending at 4,628. Between 2015 and 2018, another 2,718 opened. Total craft breweries at the end of 2018: 7,346.

Those stats, unless you look at the detail, obscure something significant about the structure of the current market. Between 2009 and 2018, microbrewery growth was off the hook....more than 4,000 opened during that period. Framed differently, for every microbrewery that existed in 2009, there were roughly eight by the end of 2018.

Brewpubs, which had formed the backbone of the industry for several decades, saw subdued growth by comparison. Between 2009 and 2018, around 1,500 brewpubs opened, an increase of about 150 percent. Regional brewery growth was miniscule, an increase of less than 200.

In effect, the craft beer landscape was transformed. Today's industry is dominated by small breweries that focus almost exclusively on beer. Brewers Association stats have shown that those breweries are creating the bulk of industry growth. What they share is that they rely on beer sales to stay in business.

That scenario has made differentiation the name of the game. You have to make yourself known somehow. That's one reason we're seeing packaging with wildly colorful labels and creative designs. If your packaging is dull and unengaging, consumers are less apt to notice you next to other shiny stuff on shelves.

There's also the beer itself. Differentiation means playing around with experimental ingredients and names. Where it once meant using different hops or malts, it now means almost anything. Have you tried Fudgesicle Ale? How about Fruit Loops IPA? What about Donut Lager? You simply must.

The result is that shelves in beer stores have turned into jelly bean showcases featuring wild packaging, experimental ingredients and crazy beer names. The fact is, a lot of consumers are simply looking for what's trendy and new. Anything to capture their interest.

What's hot today probably won't be hot tomorrow. Brand churn is in overdrive. If you're a brewer, you best be thinking about the next wacko beer you plan to produce and market. It better have unusual ingredients and a fancy name. The packaging better be eye-catching.

The result of the new reality is that craft beer is increasingly fad-driven and trendy. Social media has helped with that, for sure, by facilitating the spread of images and banter. The question is, do these themes add up to this being a healthy or unhealthy market? Asking for a friend.

The answer depends on your point of view, I suppose. To me, it looks like an increasingly saturated market in which many (perhaps most) of the players are desperately vying for the same customers by tossing all kinds of ideas out there and hoping something sticks, if for only a minute..

How's that going to work out? We shall see.