If you haven’t read my article, The State of San Diego Craft – 2015, you should. This will be a series of posts where I share the complete and full statements from 20+ amazing individuals that contributed to my work. I’m going to start with those that I used in the article and then release the rest in alphabetical order. Today we’ll be starting with Alex Horne from Intergalactic Brewing. His stance is a call for new breweries to be cautious and realize that making great beer is only the beginning. I think that’s a great message. I hope we won’t see any great beer makers close but I can also see how easily it could happen if the market does get over saturated.
I don’t know if I’m an alarmist here but I’m not very confident in what’s going to be happening in SD Craft Beer as we keep going along. At some point, potentially soon, there will be too many breweries fighting for too little space, and even ones making good beer will fail. I think their is this perception that you can open and expect to be the next St. Archer at some level. It takes way more than great beer to become that successful, and sadly a lot of breweries are not even making good beer now. While I still maintain that San Diego beer is the best in the world, there has been a lot of mediocrity to open in the last 2 years and I don’t see it slowing down, actually I see it getting worse.
It really comes down to expectations for those opening a brewery and that’s where I see the problem. If everyone who is opening expects to distribute thousands of barrels and bottle/can beer right out the gate, there is going to be a glut of beer in the market in those sectors. Or similarly if everyone just wants to open a nano/tasting room in North Park (or similar crowded area) it’s going to be tough to start and you are going to impact other breweries negatively to the point where both could fail, even if one makes great beer.
Failure is good for any healthy industry, it weeds out the weak. But there has been far too little failure, far too much bad/mediocre beer produced recently that I think there could be a backlash from consumers and a rash of closings of not just the bad breweries.
This fear arises from too many breweries too quickly snuffing out a growing and great brand that couldn’t get traction because too many brewers diluted a market. Then consumers realize the mediocre beer for what it is, want the great brand they used to enjoy, but it’s gone belly up because they invested poorly in an expansion that didn’t account for 200 breweries in the county.
It’s grim but it could happen. Smart business planning is essential to a brewery because its a business first beer maker second. Business relies on great products, but even great products at the wrong time and place don’t make it.
In the end what I’m saying can easily be nullified by good business practices and great beer. But, it took AleSmith over a decade to make money. If they tried that today just on the quality of their beer, I don’t know if it works out the same way. Great beer isn’t the only key to success now, so potential breweries be aware of new market limitations.
Alex Van Horne, Intergalactic Brewing
Next up is the legendary Nate Soroko. He’s not worried:
Last year and a half has been a whirlwind nationally and locally. Big beer is knocking, craft beer is no longer a revolution, it’s become an evolution. Stone, Ballast, Dogfish, Firestone…are recognizable brands to even non beer people.
In the trenches I don’t feel a panic or people scared of macros as much as some people think. There are still people that are brewing who plan to stay independent. There are bars who want to stay with the craft breweries and promote the craft. People think that the sale of a few breweries is a warning shot. I don’t. I think it was inevitable, but much like the farmers market vendor or any niche market there are going to be people that will stay small and local. Craft beer started by people who wanted better beer and shunned the corporate oversight.
People keep talking about how craft beer is new and macros are giants who have been around for a hundred years or so. Beer has been brewed for thousands of years by monks, farmers and pharaohs long before miller or abinbev and will continue to be brewed by people who just wanna drink what they want.
Nate Soroko, Modern Times & Toronado