Start-ups warned against bullish decision-making
Record numbers of breweries opened across the US during 2017, despite the sector experiencing its lowest growth rate in years, the Craft Brewers Conference has heard.
Growth of craft beer as defined by the Brewers Association decelerated to five per cent last year, chief economist Bart Watson told the conference in Nashville, Tennessee.
“We’ve had double digit growth rates for six out of ten years and we’ve now settled into a longer term growth pattern in the mid single digits,” he said.
“While it might be disappointing after years of 18 per cent growth, I think this is more realistic as a long-term growth rate and something we should all come to expect.”
Meanwhile, a record 997 new breweries opened across the US during 2017, Watson revealed.
“The combination of more breweries and less growth means that per brewer growth rates slowed even more as that growth has split across more breweries,” he said.
“A lot of the growth is occurring to smaller, newer firms.”
Watson revealed new data showing that breweries that had opened in the last four years grew by 53 per cent during 2017, while breweries that opened in 2015 or earlier grew by just 1.3 per cent.
“To the new breweries in the room, who are experiencing those 50 per cent growth rates, I urge you to build in realistic expectations for your business,” he said.
“While you’re growing fast now, don’t expect that you’re going to beat the odds when so many older or experienced breweries were not able to.”
Added Brewers Association director Paul Gatza: “If you’re a newer brewer, you may not be the new shiny object on the local scene in a few years, so just be cautious.”
Watson revealed that a record 165 breweries had closed their doors in 2017.
Stop bickering over taprooms
Earlier, Brewers Association president Bob Pease called for an end to the infighting between breweries and their customers over their retail operations.
“Direct sales at breweries are ground zero for bringing new drinkers into the category, and this is where excitement in the beer community flourishes today,” said Pease.
“If we can stop the intra-industry bickering over food sales, ‘to go’ sales and tasting rooms, we can continue to expand the base of beer drinkers and build upon the positive beer culture we have all built together.
“The beer drinkers we win over today also go to off-premise retailers, grocery stores, and other bars and restaurants tomorrow. Building the base of beer drinkers can help bring more energy to the beer category,” said Pease.
Pease said the 35th annual Craft Brewers Conference & Brew Expo America has more than 14,000 attendees, 17 per cent of which have come from outside the United States.
“The Craft Beer Revolution has truly become a global happening!” he said.