Bubble Talk

At the annual Beer Marketer’s Insight conference in Chicago last week, two industry economists shared the podium together to talk numbers.

Bart Watson from the Brewers Association and Lester Jones, who is leaving a long term post at the Beer Institute to take a new seat at the National Beer Wholesalers Association, were both in agreement in dispelling the bursting bubble talk heard in the industry hallways lately.

Lester commented that of the over 2800 breweries that the TTB reported tax returns on, over 70% made less than 1000 bbls. And 20% made less than 7500 bbls.

Bart pointed out that that while new start-ups accounted for over half of the total craft breweries in operation in 2013; they only made up 5% of the volume.

It is clear that a new model is emerging. Start-ups are predominantly nanos and small micros with a tasting room or a brewpub concept, selling most of their production direct to the consumer. Like restaurants, communities can support multiple breweries of this nature, which would suggest that the total number of breweries that may eventually open up in the US could be much higher than it is today.