When I hear the term “bubble,” it brings to mind the Tech or Dot Com Bubble that burst just after the Y2K Madness. It was here the term entered the lexicon of the American media, who effectively smashed us over the head with it when the Subprime Mortgage Crisis hit in 2008. Today, if there is too much of something, it’s now called a bubble. But that’s not really the definition.
This is especially true of the great fear and loathing that’s been spoken of in hushed tones about an impending “Craft Beer Bubble.” And before I continue, I have to thank our NYC Correspondent Zach who recently wrote a great article on this very topic. And while I agree with a significant part of his argument, I had to respond to this notion of a Bubble.
The Analogy is False
Just as every political scandal or lack thereof (i.e. Benghazi) since Watergate has a “-gate” suffix attached to it, so to any potentially looming economic crisis has this lovely bubble tag being applied. You can call it media hype or fear, but either way, it’s not an accurate correlation to what’s happening in craft beer.
Craft beer’s great strength has been its ability to sustain based on quality, not on false data or inflated value. If half the country’s brewers all simultaneously had quality or ingredient supply issues, then the bubble term could apply, yet it’s very improbable.
Local vs. Macro
If There’s a Fear…
Some Fads Never Die
In the 70’s and 80’s, the concept of a pizza parlor where youth sports teams could hang their hats after practices, play video games and stuff their faces while dads swilled cheap beer, were all the rage. Today many of those chains are gone, but there are still over 74,000 pizza joints in the US today, continuing to grow at a rate of 1,000 per year.
Since the Starbucks IPO in 1992, when they set the boutique coffee world aflame with their dark roasted delights, the number of coffee shops in the US has grown from roughly 37,000 in 1992 to 55,246 in 2015. During that span, only one year saw a retraction of growth (2009), but this segment has continued to grow steadily every year since.
Quite a few successful regional brewers have created small chains to spread their unique neighborhood experience. For I believe it is the haven of the brewpub, an escape from our home technology caves and our connection with our neighbors that has helped compel this growth.
Until demand begins to ebb (which the numbers don’t indicate that happening), the international market will continue to increase, locals will continue to demand it and those who choose to buy it in the store will have an abundance of options.
Beer Bubble photo courtesy of westender.com