Friday, January 31, 2014

So Much Choice, What to Drink!

It is no secret that America is in the middle of a beer renaissance, when the leading craft brewers are appearing on main stream morning talk shows on the big networks, it is beyond a fad. The United States used to be the laughing stock of beer, especially in beer-centric Europe. Today that is not the case, with 2700  breweries in the US and at least 600 in the planning, it is a booming business. What do these choices mean for consumers and what does it mean for brewers?

In Northern Virginia, which includes the Washington, DC and Maryland markets, we have access to well over 250 different breweries whether they are distributed to this area or they are local breweries. It seems like every week we are seeing more and more out of state craft breweries entering our market as well as distant in-state breweries expanding their footprint to the Northern Virginia market. We have more choice today than ever before. Brand loyalty is harder and harder to come by and the quality of product is getting higher and higher. Consumers are eager to try as many different beers as they can and the choices are almost limitless.

I don’t think there will be a bursting bubble, but I see some breweries failing in certain markets, or at least certain products. People are supporting more and more local products by showing up at tasting rooms and looking for more local beers on tap. But when a brewery breaks into a new market, they really need to do their research. Take Cigar City for example, they recently broke into the Northern Virginia Market with their Jai Lai, Hopped on the High Seas, and Florida Cracker, a Belgium wit.  Since there is not a world class locally produced IPA, their Jai Lai sells out quickly, as does their one-offs Hopped on the High Seas. But their Florida Cracker is still sitting on shelves. Port City Brewing Company, a local 3-year old brewery brews a world class wit that won the 2013 Gold Medal at the Great American Beer Festival is a local favorite. At the same price point, it’s hard to justify buying the out of state beer that is not as good.

On the other hand with so much choice, what is the future of the local brewery? I see tasting rooms as the place for consumers to get all the local beer they want and going to bottle shops to pick out the out of market beers that are interesting products not available at the local breweries. So perhaps there is room for all of this choice and all of the local breweries. The bubble is not on the amount of breweries and markets, but rather shelf space and tap-line space. There is only so much real estate for these products, so the local breweries will thrive through their tasting rooms as well as through their distribution channels.

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