A couple weeks ago, I pondered aloud the question: is craft brewing about to enter a bubble of over-growth? The answer, based on current rates of consumption, appears to be no. Based on current trends and consumption patterns, there are a lot of reasons to think that craft brewing has room to grow. That got me thinking: based on current trends and consumption patterns. Fine, but what if the current snapshot is wildly understating the case for growth?
Brewing history has been marvelously volatile. The century-plus dominance of light lagers belies the churn that marked the rise and fall of brewing styles that came before. I love the story of Berliner Weisse, now a nearly-extinct style; yet in the 19th century, it was so popular Berlin could support 700 weisse breweries. In England, porters once dominated the market. Martyn Cornell reports that until 1863, it accounted for 75% of London's sales. A hundred years later, mild accounted for more than half of all draft sales--but it was on the wane. Bitter was already on the rise.
There's no reason to think that American tastes can't similarly evolve. The US has essentially become a light beer country--Bud Light, Coors Light, and Miller Lite all outsell their "full-bodied" variants. Yet macro sales have been flat or waning for years. For the first time, beer feel below 50% of the alcoholic beverage market as macros' sales tanked. In short, things aren't looking great for the makers of cheap beer. (Though they today celebrate 75 years of canning their product.)
At the moment, craft beer is just a niche market, but it's not hard to run a thought experiment in which good beer began to seize major chunks of the beer market. If the rest of the country catches up to Oregon, craft beer would have 12.4% of the market. Of course, the good beer share would be higher, including faux craft, imports, and good macros (like Budweiser American Ale). Say 20% good beer. At what point does beer culture change so that people start expecting better beer? Subtle clues will tell that things are changing, like seeing IBUs rise among macros. It's not hard to imagine that a major macro would go in whole hog and release a macro IPA, complete with a multi-million-dollar ad campaign. Once something like that happened, we could quickly see a change in the drinking preferences of the average American.
Maybe not--who knows? If the history of beer is any guide, it's certainly not out of the question.
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