Jan 212020

This week, MillerCoors announced the closing of its Irwindale brewery which comes as no surprise for beer industry people. Pabst Brewing Co. has an option to purchase the brewery but their window to exercise this option is short. Pabst’s response might give the industry an insight of the brewer’s future.

A day after the MC announcement, a local Ft. Worth brewer, The Collective Brewing Project, announced it had closed. The Collective Brewing Project, founded in 2014, was noted for their wild and sour beers. The timing of both closings is ironic in that the industry is simultaneously experiencing the cessation of both one of its largest and smallest breweries.

It will be a while before the industry publishes its final 2019 numbers, however, we do know that there are currently over 8,000 working breweries in the States. What will be interesting is the ratio between the number of breweries opening verses the number of breweries closing. For years the number of those opening has dwarfed the number of those closing, however, that difference has recently narrowed. The day is coming soon when we will experience more closings than openings. 

Aside from the dramatic size difference between MC and The Collective Brewing Project, the two breweries have one thing in common: neither brewery is selling beer.  If they were selling, the plants would not be shutting down. MC does have the funds to keep their brewery open, but they are obviously trying to stay ahead of the costs and maintain production capacity at their other two breweries. The Collective Brewing Project probably has a similar sales trend, however, the owners may have decided that enough is enough and they want to limit their financial exposure by pulling out. Neither brewery is growing or offering beers that consumers are eager to purchase. 

The new leadership at MC seems to grasp reality and has started to adjust the company to ensure the structure fits the current sales and market position. This does not mean that each quarterly financial statement that reports a loss of sales will be followed by a statement of MC’s increase in market share. Traditionally, MC looses sales, but increases share of market with their light beers, but this only means their losses are less than AB’s losses.  

Like more and more struggling breweries who finally call it quits and move, on MC and The Collective Brewing Project did what each had to do. People will lose their jobs, money will be lost, dreams will end, but that is the beer industry today. Needless to say, 2020 will be interesting, but the condition of the industry in 2030 will really be attention-grabbing.

Sometimes we stare so long at a door that is closing that we miss the fact that another that is opening.

 Posted by at 7:00 am
Jan 072020

One week into a new decade, the 20s, is for me, the start of my seventh decade in the beer industry. This might seem a little misleading as I started in the last year of the sixties and this is only the first year of the twenties.  It still works out, however, to seven decades!

This is 401st post since starting the page. While the blog began as a comment on a handful of industry topics, the response from readers that first summer was quite positive, and I have continued writing about past and current matters.  The thought was that the industry might consider looking at issues in a different light. While the subscriber base, which has contained itself to beer industry readers, continues to grow as posts should pass 200K views in 2020.

So, what can we expect and what will the beer industry look like in 2030? Go back to 2010…did anyone think that there would be over 7,000 operating breweries today? Did anyone know what a seltzer was much less see the coming explosion of seltzers? The major domestics continued to lose volume and share as many of their line extensions had seen only minor success. 

A decade can be defined by the changes in the industry.  Take, for example, the 60s, a decade in which AB and Schlitz battled for industry leadership while other nationals, like Pabst and Falstaff were just hanging on. The 70s could be defined as the decade of Light beers and the beginning of the end of the regional beers. The 80s brought the close of big brewers like Schlitz, Pabst, and G. Heileman with Coors expanding east and regionals began the process of consolidation. The 90s could be best known for the rise of Corona and the beginning of crafts. In the 00s, we remember the crafts’ growth, the selling of AB, and the merger of MillerCoors. Finally, the last decade as highlighted above, saw the growth of breweries and the beginning of seltzers. It could also be defined as the end of the big AB and MC brands, but we will know for certain in 10 years. Toward the end of the last decade, a number of large, successful craft breweries had sold to foreign owners, while many medium and small crafts had closed, downsized, or modified their business model.

The famous John Kenneth Galbraith, once said, “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” We will know in 10 years and while I will address these beer industry changes as they happen, it will no longer be on a weekly basis, but instead when the time is right.  I plan to periodically write on beer industry issues and the posts, when written, will still be published on Tuesday mornings.

Again, thanks to all the readers and the interesting and kind comments sent to me over the years, but it is time to scale back. Who knows, you might still hear from me for many months to come, but maybe not. Until the next post, let us see how this decade unfolds.

I haven’t quite gotten the hang of this retirement thing.

 Posted by at 7:00 am