Brooklyn Brewery took over St. Benjamin Brewing in Kensington as part of their Brooklyn Mash series Thursday night, bringing in some of the East Coast’s most prominent beer leaders to discuss the “State of Craft Beer” as the industry heads into the future.
Consisting of Victory Brewing’s Bill Covaleski, Sam Calagione of Dogfish Head, Brooklyn Brewery’s Steve Hindy, John Holl of All About Beer magazine, and Tim Patton and Christina Burris of St. Benjamin, Thursday’s panel seemed confident about, but wary of, craft beer’s future.
After all, there is plenty of room for growth in the booming craft beer world, with just 4,000 breweries nationwide for a population of more than 300 million in the U.S. However, recent developments like a changing business landscape, industry consolidation, and the effect of big money in the craft beer world could cause some drastic changes as the industry grows.
“We were beer people first, business people second,” Dogfish’s Calagione says. “Those of us shoulder-to-shoulder don’t look alike anymore. There’s a lot of folks that are gaining market share in craft beer that aren’t beer first and business second.”
That trend is likely to continue, as larger beer companies continue to buy up craft brewers as a way to break into that segment of the market. As a result, Brooklyn’s Hindy says, craft beer may quickly become a “get rich quick scheme.”
“The people who are buying those craft breweries are all about co-opting this industry and dominating this industry,” he says. “And that could happen some day.”
Golden Road Brewery, for example, defines that argument well. Started in 2011, the brewery was recently purchased by Anheuser-Busch InBev, making it the fifth craft beer company purchased by the conglomerate in as many years. SABMiller, meanwhile, purchased the two-year-old Saint Archer Brewing Company in September.
As a result, it appears that the era of developing breweries to sell them has arrived in craft beer. And for Thursday’s panel, the consequences there could be dire, with consumers potentially facing an onslaught of inauthenticity and sketchy backstories in the future.
“I see it like chess,” St. Benjamin’s Burris says. “I see the big guys buying up these brands, hiding them, knocking them off the board as best they can to get where they want to be.”
With AB InBev and SABMiller now merging, that issue could possibly only get worse. InBev, for its part, is the world’s largest brewing, while SABMiller is the world’s second largest brewer. Together, they reportedly will earn half of the industry’s profits, and they will own about one-third of all beers brewed on Earth.
And with a size like that, it will be easier and easier for the big beer guys to blur the lines of what is and is not a craft brewery. As a result, over the next decade, that consolidation could push out true craft brewers and drive quality down.
“Anything that moves in that direction is probably going to narrow the opportunities for artisinal products to reach a marketplace,” Victory’s Covaleski says. “As [the industry] consolidates, that looks like difficulty.”
In that way, the could erode the connection consumers have to their beer, in terms of them thinking about Calagione when they purchase Dogfish Head, or Covaleski when they buy Victory. So, over the next decade, the money could end up driving the industry, rather than the personalities that helped develop it, losing something more personal in the process.
However, as Calagione sees it, the future does remain bright. So long as new breweries could be just fine — if they maintain an obsession with three important factors, that is.
“If you’ve got the three legs of the tripod — obsession with quality, consistency, and being well-differentiated — the world is your oyster,” he says.