Bottoms Up

Beer and wine in the Bay Area and beyond

Craft Beer Proves Even Experts Can Be Wrong

By William Brand
Wednesday, October 20th, 2004 at 8:05 pm in Uncategorized.

OAKLAND _ I was cleaning out a filing cabinet the other day and I unearthed an Associated Press clipping from May 11, 2000: “Specialty Beer Market Fizzles,’’ the headline says.
“Just a few years ago, connoisseurs thought small breweries and their tasty, pale ales, amber lagers and dark stouts were going to transform the beer industry,’’ the article says.
“But the country’s thirst for specialty beers has never fulfilled expectations, and many small breweries are cutting back after an industry shakeout. Nationwide, more than 300 brewpubs and breweries have shut down since 1996, the year sales peaked for four of the larges specialty brewers, Boston Beer Co., Pete’s Brewing, Redhook Ale Brewery and Pyramid Breweries. Inc…
“But some closings were inevitable because the market could not support the entry of more than 900 brewpubs and microbreweries over a three year period leading up to 1998, when sales went flat,’’ said David Edgar of the Institute for Brewing Studies in Colorado…
“….I think what you’re finding is this segment of the beer market was more of a flash in the pan,’’ said Skip Carpenter, an analyst at Donaldson, Lufkin and Jenrette in New York.’’
Flash in the pan? Hmmm.
For the statistically minded among us _ Cindy Jones of the Association of Brewers, Boulder, CO, offers this: On Sept. 30, 2004 in the U.S. , there were:
— 1,362 craft breweries (under 15,000 barrels a year). That number includes 936 brewpubs and 371 microbreweries
— 55 regional breweries (up to two million barrels a year) For example, Sierra Nevada and New Belgium
— 20 large breweries (over two million barrels annually).
So far in 2004, 24 brewpubs and five microbreweries closed.
But 22 brewpubs and 15 micros opened. One brewer also reached regional status, Jones said. Sales for 2003 were up 3.4 percent, while big brewer sales slipped slight.
The brewpub closings can be expected, since brewpubs have a restaurant tied to the business and the restaurant business isn’t easy, she said.
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