{"id":4353,"date":"2017-09-28T13:15:13","date_gmt":"2017-09-28T18:15:13","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=4353"},"modified":"2017-09-28T13:01:31","modified_gmt":"2017-09-28T18:01:31","slug":"the-best-way-to-guarantee-a-loss-is-to-quit","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=4353","title":{"rendered":"The best way to guarantee a loss is to quit.."},"content":{"rendered":"

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

In the summer of 2012, these pages ran a post on the coming tsunami regarding the number of projected new SKUs and craft breweries being constructed. \u00a0Now, five years later, it appears that the tsunami has blown itself out.<\/p>\n

Last week, Brett Cooper, of Consumer Edge Reports, stated that SKUs have dropped from a high of 13,238 to 12,786, down -3.4%. \u00a0That is the overall number of all beer products being produced, and when one looks at the number of craft products produced, that translates to 9,021, this too a negative trend, down -5.7%, from a high of 9,537 SKUs.<\/p>\n

Brett calls this drop “a period of rationalization” in beer SKUs which seems to be occurring across the board. The only exception is the economy segment, in which new SKUs are driving this division.<\/p>\n

These recent reports verify what many industry pundits have been saying for some time, that the industry is on track for consolidation or even contraction. \u00a0More and more, crafts are not selling out, but closing down. \u00a0Many are actively seeking buyers. \u00a0Just this past week, the 29-year-old taproom, Pacific Coast Brewing, in Oakland, announced it was shutting down, citing uncertainty on future leases.<\/p>\n

So the question is, when, or at what point, does a craft brewer call it quits? \u00a0Much, if not all, of the PE or even JV money has dried up. \u00a0This situation makes it even harder for even an established brewery to find an exit.<\/p>\n

In last week\u2019s post, we highlighted a market in Florida in which there are five craft breweries and taprooms, all five are unable to expand, and now actively looking to sell. \u00a0If the five breweries were to consolidate into one operation, that operation would be very successful. \u00a0Unfortunately, that scenario most likely will not come to fruition as the surviving brewery would not be able to handle the debt incurred in the purchase of all four breweries.<\/p>\n

Consider how or what the buyer might do with their taprooms? \u00a0The revenue would disappear if the taprooms were closed; the equipment could be sold, but the building leases, if not leased, would have to be addressed. \u00a0There are simply too many moving parts.<\/p>\n

This is not to say that if one or two of these operations were at the point of no return, perhaps some type of deal could be reached, but would that just be a short term remedy? \u00a0Two sick operations combined does not make a one healthy operation.<\/p>\n

After decades of ownership, when a family-owned distributorship is sold, the selling family must deal with their emotions. \u00a0The same can be said of these brewery owners. \u00a0Investors want a return and are simply not willing to continue to reinvest in a craft that has hit a wall. \u00a0Many of these investors want out, and are willing to limit their losses in order to accomplish the exit.<\/p>\n

The industry\u2019s current situation has been forecasted for some time, and it appears this forecast is coming into fruition. Many now will say, enough is enough, now is the time to close the door. \u00a0The end for many crafts is inevitable.<\/p>\n

The best way to guarantee a loss is to quit.<\/p>\n

 <\/p>\n

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

In the summer of 2012, these pages ran a post on the coming tsunami regarding the number of projected new SKUs and craft breweries being constructed. \u00a0Now, five years later, it appears that the tsunami has blown itself out. Last week, Brett Cooper, of Consumer Edge Reports, stated that SKUs have dropped from a high […]<\/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-18d","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/4353"}],"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=4353"}],"version-history":[{"count":7,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/4353\/revisions"}],"predecessor-version":[{"id":4361,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/4353\/revisions\/4361"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}