Craft Beer Hits 5%! Is it Good, Bad or Both?

or, what to make of all this growth?

i posted this question on facebook thinking to myself, it’s both; good because craft beer is growing it’s market share and more citizens are drinking good, american beer and bad because 5% is a painfully small amount. as evidenced by the comments on the post, others were thinking very different things. some felt that it was all good, ‘craft is growing, that’s all that matters’. some felt that there is a growth/profit over quality concern that belies the upside. one individual rode the fence on this issue stating that even if the quality of the growing craft breweries declined, it would still be vastly better than any megabrewery swill. it’s difficult to argue against that.

this presented a much larger question in my mind, what does the future of craft look like and what are the ramifications of all this growth? having just gotten back from the craft brewers conference i can tell you the consensus there on the future of craft was, different, bigger and not without issues.

one of the biggest issues are the cracks that have been showing in the unity of the craft brewing community. some breweries have become larger than others feel is fair to label as ‘craft’ and this has caused part of the division. another big issue is the growing number of craft breweries. there are currently 2,000 breweries in the U.S. and by some estimates, over 1,000 in planning. this major increase in breweries in planning causes concern over the amount of room in the marketplace for craft breweries.

i think at the root of many of these fears are the emotions of betrayal and competitiveness, both very common and natural emotions. consumers are feeling betrayed because their favorite small brewery is growing and changing and drifting away from part of what made it great in the beginning. brewers are watching stratospheric growth of a few dominant regional brewers and, perhaps instinctually, wanting to get in the game. betrayal and competitiveness are complex issues. as i was pondering the direction of this post, i decided i am not endowed with the wisdom nor global, analytical thinking skills to address these issues for the industry or humanity in general.

so, i will address these questions for iron horse brewery.

betraying our loyal fans by growing? definitely not our intention. it seems to have been a while since i have heard any rumblings of iron horse forgetting its roots, but there was a period in which that concern floated around. now that we are on the cusp of a significant expansion of production capacity, i anticipate another round. change always instigates questions and concerns and complaints. granted, the complaints usually arise from a vocal minority of the fan base, but still they are part of the process.

we are growing, at a brisk pace, and we don’t intend to slow down. why would we reserve our beer for washingtonians exclusively? the answer: we wouldn’t, but washington will always be our first priority. we don’t intend to be a national brand, but we do intend to be one of the first breweries you think of when asked about pacific nw breweries (because that question comes up all the time; insert sarcastic tone). is that too big for you? can we retain our soul at that size? of course we can, i’ve put on 20 pounds since day 1 at the brewery, but i’m still the same beautiful person inside, minus the swollen liver. the nature of one’s values is not determined by size.

as for the issue of competing with other craft breweries – what would you do if you and an amazing team of people that are now practically family built an enterprise that consumers were demanding more from? well maybe you would keep it the way it is. now, what if that team wanted nothing more than to make their careers at this enterprise? do you tell them, ‘sorry, i am not that ambitious and our customers don’t want to see us grow too big’. maybe you would. i can’t. even though staying just as we are would possibly be the easiest and most comfortable path for me, i can’t take it. when i sit down with employees and they say, ‘we love this place, we don’t want to be anywhere else’ i am incapable of saying ‘well, you can stay but the wages will suck and there will be no retirement. instead i say ‘i want you here, and we are going to make sure there will always be a place for you”. a brewery is a commercial enterprise. i want to have one that is a successful commercial enterprise so we can continue to find and elevate people in careers that they love and provide the best beer experiences out there. does that mean we may have to compete with other craft breweries? not until craft reaches 100% of the market share. and by then, everyone will be so happy, it won’t even matter.

does this concern you? do you have specific questions? email me: greg@ironhorsebrewery.com

hugs and kisses
greg