{"id":3292,"date":"2016-04-19T06:00:13","date_gmt":"2016-04-19T11:00:13","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=3292"},"modified":"2016-04-20T14:41:40","modified_gmt":"2016-04-20T19:41:40","slug":"the-continuing-tsunami-2016","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=3292","title":{"rendered":"The continuing tsunami, 2016"},"content":{"rendered":"

\"2015<\/a>In July of 2012, this blog wrote about the coming tsunami, highlighting the number of new beers and packages coming into the marketplace that were projected based upon that summer\u2019s TTB new label filings. \u00a0Distributors and retailers were both concerned about this massive influx of SKUs and ramped up their respective teams to figure out how to address the new model. \u00a0The tsunami of 2012 continues today in 2016.<\/p>\n

The final numbers for 2015 have recently been released and others updated. \u00a0Crafts, which now seem to be defined as any brewery not named ABI or MC, represent 12% of the US beer industries volume. \u00a0The number of crafts, as recognized by the Brewers Association, is 4,269 for 2015. \u00a0That in itself is a tsunami, however, the just recently published TTB number of operating breweries total is 4,824!<\/p>\n

This tsunami of new brewers for 2015 alone was just over 1,500 new breweries or more than four per day opening! \u00a0Albeit, this is a capital-intensive business, the great majority of these new breweries are very small. \u00a0It takes years to develop any scale of volume in a brewery, and without deep pockets, it can be a long, but, highly rewarding and profitable trip.<\/p>\n

If you are still not convinced we are facing a bigger tsunami, consider that the TTB also published the list of brewing permits: 6,080 at the end of the year! \u00a0Here it is by state:<\/p>\n

\"TTB<\/a><\/p>\n

In almost every case that I am questioned concerning the growth of crafts, it usually comes back to the question: “How large will crafts become in the US?” \u00a0To put this into perspective, of the 4,824 operating breweries, 20 breweries constitute 84% of the total US production! \u00a0That means that 4,804 breweries are playing in only 16% of the beer volume!<\/p>\n

These numbers indicate one of two things will happen: either those 20 breweries are going to lose volume; or those 4,804 breweries have to grow, and grow quickly to ultimately survive! \u00a0Of course, what we are seeing is that ABI and MC, and other distributors, are buying into that 16% share by purchasing breweries. \u00a0 ABI alone has acquired eight breweries recently.<\/p>\n

These numbers highlight the overall issue of crafts\u2019 difficulty in getting access to market. \u00a0As we know, almost all of that 84% volume is sold thru either ABI or MC houses. \u00a0There are a several smaller houses around the country that carry either Crown or Heineken that are the same size as ABI or MC, but the number is limited.<\/p>\n

Distributors must be asking, why add more brands when I already sell many of the major brands in that 16% group? \u00a0Just recently a statewide distributor announced he turned down seven new vendors in one month alone! \u00a0Distributors are swamped and vendors are frustrated.<\/p>\n

When Brown in Florida sold a huge part of their statewide craft\/import operation many eyebrows were raised. \u00a0Some pundits made the case that this was due to Brown not having the critical mass to help offset operating costs. \u00a0Consider that Brown was awarded rights to these brands and they sold a portion of their craft\/import business for over $50 million dollars! \u00a0Brown started this model in 2009, and in just seven years flipped it making record returns while keeping some of the territory. \u00a0You might say, Brown did very well.<\/p>\n

The article written in July of 2012 regarding the craft industry tsunami not only continues today, it is accelerating, and with the numbers indicated above, will continue to do so. \u00a0It is the tsunami of 2016!<\/p>\n

Editors note; \u00a0TTB numbers via NBWA chief economist Lester Jones that the industry added 1,500 breweries last year. \u00a0The correct number of breweries added was actually 699<\/span>. (It was explained: In 2014, the count of breweries making more than one barrel was 3,343 but there were 782 that had zero production. But in 2015, they reported as a category of ‘less than one barrel’ of production, which included ‘zero’: those were summed to get 4,824. The apples to apples 2014 comparable total should be 4,125, for an increase in breweries of 699. .)<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

In July of 2012, this blog wrote about the coming tsunami, highlighting the number of new beers and packages coming into the marketplace that were projected based upon that summer\u2019s TTB new label filings. \u00a0Distributors and retailers were both concerned about this massive influx of SKUs and ramped up their respective teams to figure out […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_s2mail":"yes","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2xRTi-R6","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3292"}],"collection":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3292"}],"version-history":[{"count":12,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3292\/revisions"}],"predecessor-version":[{"id":3307,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/3292\/revisions\/3307"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3292"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3292"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3292"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}