I’m about to split for Abruzzo, Italy, for much of August, but I wanted to weigh in on an issue that just won’t go away: Are there too many craft breweries in the U.S., and, if so, will there be another shakeout like there was in the 1990s.
Recall, from 1996 to 2000, nearly 200 craft breweries, including brewpubs and contract operations, went out of business—roughly one-third of the number then in existence. As The New York Times noted back then, 1999 represented the first year that more craft breweries closed than opened in the United States. The whole thing seemed like a fad, “like farting against a gale” as Michael Jackson might have put it (and did put it in 2000, when he explained how he felt sometimes trying to turn people on to good beer).
I do not think we’re headed for another shakeout of that magnitude. Three reasons:
· The level of expertise, both on the business and brewing sides, has never been higher in the U.S. America have more modern small breweries than any other nation in the world, staffed by highly skilled people.
· Largely because of this—and because of the lessons learned in the shakeout of the 1990s—the quality of American craft beer is uniformly fabulous. Consistently good beer is the price of admission to the commercial side of the movement, as the great David Geary once put it to me. He was talking about his earliest days in the mid-1980s; it’s never been truer now.
· No one ever seems to mention this one, but: Money’s cheap. It’s easier than ever before for smaller brewers to get financing, refinancing, tax breaks, property incentives, etc. A fostering financial climate matters. (Of course, I’m aware that that could change, but probably will not for a while—the Fed has said, for instance, it has no intention of upping interest rates until after 2014—meaning that craft breweries starting now have time to get their sea legs.)
· And I’ll throw in a fourth reason, and you’re a part of it: There’s a beer culture now that didn’t really exist in the late 1990s. A relatively few people were hip to what was going on, mostly geographically isolated by a lack of social media or of widespread use of private email. It was a big deal to read something serious about craft beer in a given day (some might argue that’s still the case!).
So, yes, some breweries will not make it out of the next few years; like most industries that produce a consumer product, some will falter. A shakeout or a bubble burst, though? Like the one in the late 1990s? Come on.
P.S.: If anyone knows of any great little breweries in Abruzzo, do drop a line. Ciou.
· Will It Fall? A Look at America’s Brewery Boom [Draft]
· How American Craft Beer’s Growth This Time Around Is Different Than Last Time Around (a.k.a. the 1990s) [TomAcitelli.com]
Pictured: The pale ale from Catamount, one of the 200-some breweries that went out of business from 1996 to 2000.