The Future of Craft Beer

Dave Infante is an American beer, food, and travel writer who combines a lively style with good research. His recent How the World’s Biggest Brewer Killed the Craft Beer Buzz argues that the accelerated take-over of craft brewers in recent years by “Big Beer”, especially giant AB InBev, has done away with craft beer’s mojo, in effect by co-opting it.

E.g. he notes a recent tag line for Goose Island IPA is, IPA is something you drink, not talk about.  Craft beer has arrived, in other words, if you drink it, ours will do as well or better than anyone else’s.

A quote from the article (but read the whole thing, well-worth it) sums up the flavour:

ABI now had a freer hand than ever to wield the weapons — innovative beers, colorful brewers, and local breweries — once used against it, to shore up its portfolio, neutralize its competitors, and, of course, sell more beer.

He notes that prior to stepping up investment in craft breweries, notably with the marquee Goose Island in Chicago in 2006, Big Beer tried to fashion its own craft brands. The public didn’t twig, presumably because “corporate” was behind it. There were exceptions, such as Coors’ Blue Moon, and Miller’s Leinenkugel, but the Michelob line extensions of 20-odd years ago were mostly a damp squib (which I well remember).

The initial phase of taking stakes in small breweries and devising (mostly) ill-performing craft-style brands was followed by buying craft breweries and maintaining them as separate units. Consumers mostly didn’t notice, or mind who was behind the beer, and the units by and large remain popular with the fan base.

He explains how craft beer started with  Fritz Maytag refashioning tiny Anchor Brewery in San Francisco in the 1960s. Then came the fillip from legalizing home-brewing in 1978. Quoting various industry spokespeople and beer journalists, after an impressive growth to some 7000 breweries, the future is uncertain:

… ABI’s most vocal critics aren’t quite sure … what would happen to America’s 7,000 craft breweries if everyone joins the post-craft world or what ABI is even driving at.


In other words, will Big Beer continue interest in craft beers (barrel-aged as one exemplar) and buy more crafts as existing craft units max out interest nationally? Will this further reduce/water down the idea of craft? Or will its attention turn to different, more lucrative niches, maybe cannabis-infused beverages, and leave the field to thousands of small players looking for more customers?

Also, will large-scale production change the nature of craft products, making them less distinctive than small brewers efforts? (There is some risk here, not so much from scale itself but from related processes like filtration and pasteurization).

Having witnessed the start of craft brewing from the late 1970s, some observations.

I didn’t try every craft-style beer put out by large brewers in the late 90s and early 2000s, but I tried a lot of them. In my view, most were quite bland and did not attempt to enter squarely craft territory. I think the breweries wanted that result, they were not really committed then to great beer as defined in craft terms. Blue Moon was a partial exception, partly because it was so different from anything before (nationally). I attribute Leinenkugel’s success, also noted by Infante, to heavy advertising and a distinctive name.

It took many years for a full-flavoured, frankly craft-tasting ale or lager of real visibility to issue from Big Beer. Budweiser American Ale (2008-2011) was one but by then it was too late (in my view) given the large number of Cascade-flavoured ales in the market. Had that beer come out c.1995 its fortunes might have been quite different – a la Blue Moon…

In a word, Big Beer never really came to the plate with great craft beer; for too long it didn’t want to know. When it decided finally to enter the stakes it went the route of buying up crafts since its own releases years earlier mostly hadn’t worked. There was no point to repeat a risky path. But it could have been different had Big Beer joined the party earlier. It could have played off the fact that distinctive brewing was in its own history, nay its own archives, but few in management saw the potential.

Second observation: craft’s mojo derived in good part from the allure of imports. Many imports – Molson’s beers, Mexican beers – were fairly standard in nature. But since the 1970s there were also characterful or idiosyncratic imports on the shelves, e.g. from Merchant du Vin, many made by large or medium-sized brewers at home. Guinness is the best example, also (all-malt) Dutch Heineken, and Grolsch, big German names like Beck’s, St. Pauli Girl, or Spaten, and British beers like Bass, Samuel Smith, and Watney. Not to mention influential Belgian Trappist beers and other offbeat European styles that became craft standbys (saison). This older tradition of interesting beer made by establishment  companies had lots of fans here including among emerging craft brewers.

Founders of crafts had gone to Britain, Belgium, and Germany and were wowed by such beers there. They could have had a similar influence on the domestic lines of large North American brewers but it didn’t happen that way. Indeed when those big brewers took licenses to make, say, Danish Tuborg, or Carlsberg in Canada, the products tasted different than at home.

Small breweries were prized originally because they offered an alternative to mass-market 1970s beer. It really was all about the beer, or “liquid” in the industry cant reported by Infante. It took years for the small aka craft mantra to become established – the “cultural” angle mentioned by Infante – and it was never an end in itself. The interest of Big Beer in craft really fulfills the wish of early campaigners to get better beer from them. Well, now they’re doing it.

There will always be a market for innovative, great, local beer from small shops. Craft isn’t being sapped from brewing but the field is broader now, a marker of success of the good beer revival. When big shops use small brewery names and imagery to sell the stuff that’s a legitimate beef but at day’s end, it’s business. Business thrives on advertising. Advertising has always meant a certain amount of exaggeration, it’s the nature of it. The old Creemore Brewery (pre-Molson-Coors) used to say, “100 years behind the times”; that was exaggeration too, so it can work both ways.

The way forward is to focus on the “liquid”, the taste, the styles – get it right, get it better. Be nimble. Small players will always have a place, ultimately maybe 10,000 can if they master that matrix. In this sense craft will never die and certainly in the 40 years I’ve observed it, it’s never been in a more healthy state.



2 thoughts on “The Future of Craft Beer”

  1. I agree there will continue to be a good market for smaller local breweries. I think people really like having a beer with a local ID, a brewery and pub they can visit, and I don’t see the mega brewers taking over that niche. Market pressures may hurt some local breweries, but I think they will persist overall.

    Big craft breweries like Sierra Nevada and Sam Adams are probably fine for now, although I fear that down the road they may be exposed to the kinds of investor pressures, family squabbles, or bad bets on capital expansion that often lead to consolidation.

    I suspect the breweries that fall in the middle are probably at the highest short term risk to their independence. They lack local credibility outside of their immediate area, don’t have a lot of leverage with big distributors and retailers, but still have pretty significant costs. I don’t expect all of them will go away, but they will need something more than a standard IPA and a pumpkin beer to stay afloat.

    Having said all that, I’m not convinced mega brewers will continue to expand into the craft market at the current rate. It’s still barely more than a rounding error for most of them, and big corporations like standardization and regularity. Maintaining multiple sub-brands may be a hassle for HQ, and bean counters may decide that what they really want is one or two premium names they can bundle with their regular beer and call it a day. They may find that taking brands like Goose Island or Lagunitas to a much higher level is harder than they think. We’ll see.

    • Thanks, all well put and I agree. One way for the mid-market crafts to better protect themselves may be merger. Reduce those costs you mention, trim brands to a core of the strongest with ongoing one-offs and innovation. It has happened before in the brewing industry, in UK, US, Canada…

      The craft bubble, not so much brewers but the comment constituency, tend to view crafts as sacred cows. Why? 20 or 35 years is a great run for any business. They don’t last forever… The deal with BBC is a great outcome for Sam C and family, plus he is still in brewing and working with another independent. I fail to see what’s wrong in any of that.

      But finally, from a consumer standpoint, large brewers are making good beer again. It’s a validation of what craft beer struggled for, and those too who supported quality imports. How can we say now this is wrong somehow? And there is still plenty of room for creativity in local markets. We have Goose Island and Molson Coors brewpubs downtown in Toronto and they make good beer but are hardly swamping out the indies, same thing at LCBO and increasingly at TBS. Tap access at bars here is another issue and should be improved for indies, I favour a close look at that and how to improve the position of indie players.

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