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The thing about predictions is that many of them are so damn “predictable,” – continuations of already existing trends that have finally reached critical mass. Much of what we expect to see this year has been brewing for a while now but that doesn’t mean that what’s coming won’t be consequential…
More New Breweries & More Brewery Failures
In 2017 the number of breweries operating in the United States reached an all-time high – and new brewery growth will continue its upward trajectory this year. Happily we didn’t see the number of brewery closings that we expected to see in 2016 – but unfortunately we will this year.
Big Beer’s Acquisition Strategy Will Accelerate In 2017
Clearly AB-InBev’s craft beer acquisition strategy is working for them. And having finally completed their merger with SABMiller they are more powerful than ever…They also now control more craft beer holdings than ever before which will become increasingly problematic for independent craft brewers in 2017.
With unlimited economic resources the world’s biggest beer company intends to dominate retail space and tap lines through distribution making it harder for true independent craft brewers to secure the necessary access to the marketplace.
They’ve the money to advertise their craft beer portfolio nationally – most independents don’t and won’t.
Big Beer’s big money will continue to allow them to lowball pricing on their in-house craft beer brands making it harder for craft breweries with tighter margins to compete effectively.
And with Big Beer’s acquisition strategy fast becoming the “new normal” in the beer biz – many craft brewers who used to trumpet that they’d never sell out to “the man” – will. And we expect to see acquisitions to only accelerate in 2017 – especially the among the mid-sized to larger companies and increased interest from the heritage brewers just looking to get out.
The Canning Revolution Continues
Canning operations take up less square footage, and the cans themselves more efficient and cheaper to ship. And with consumer resistance now having almost completely waned – why not?
Sour Beer Sales Will Sweeten
Sour beers will continue to mainstream…And although we won’t see a Bud Sour this year…look for Big Beer’s craft beer brands to get a little wilder.
More New Craft Beer Alliances
Another defensive strategy that grew in 2016 involved new brewery partnerships and alignments – as well as venture capital plays in differing permutations.
Just a few of 2016’s highlights included:
Stone receiving a $90 million infusion from VMG Partners (and they still had some layoffs).
Pabst doing a sales and distribution only deal with New Holland that we’ll be watching.
Pennsylvania’s Victory Brewing aligning themselves with New York’s Southern Tier under the Artisanal Brewing Ventures banner in an effort to strengthen their mutual positions.
Boston-based Fireman Capital, which already owns Oskar Blues Colorado’s and the Utah Brewers’ Collective (home to Squatters Craft Beers and Wasatch), acquired a controlling interest in Tampa’s Cigar City Brewing.
We promise you that arrangements such as these will accelerate this year, with different combinations and new variations being introduced in 2017.
