Bottoms Up

Beer and wine in the Bay Area and beyond

GABF: Party at the End of the World? Economy sucks, but craft beer choogles on

By William Brand
Saturday, October 11th, 2008 at 9:57 am in Uncategorized.

The news this weekend is as grim as it has been for a long time and as I stood at the doors of the Colorado Convention Center last night looking out at the gigantic crowd of beer drinkers at the second  session of the Great American Beer Festival, the title of a Jimmy Buffet album kept running through my mind:  Party at the End of the World.

The Parrot Head was talking about Tierra Del Fuego at the southernmost tip of South America, but I was thinking about all of us today, at this moment, about the rows of bank-foreclosed houses – there’s one on my block – of the crisis in my industry – newspapers. News people I know who have been pushed off the edge of the world into unemployment. And I wondered if this fine, beery weekend in Denver is the last dance.

Are we like those party-going flappers who danced in the new year in 1930 unaware mostly that their world was gone?  Are we headed into oblivion too? Is the world of fine beer gonna’ disappear into a sea of cheap, light lager. The operative word being cheap.  Whew.

Hell of a time for a party, huh?

A craft beer crash? Not quite yet, it appears. But nobody is talking about double digit craft beer sales growth this year.

  • Brewers Association Director Paul Gatza, citing the most recent survey figures from IRI, the Chicago-based sales reporting company and the association’s own survey of 250 craft brewers, says craft beer volume sales are up 6.5 percent this year. That’s down from nearly 11 percent last year.
  • But total beer sales are up a scant 0.4 of one percent and import sales are down 2.9 percent, the first drop for imported beer in 17 years.
  • Wine and spirits have hit a wall as well. Wine sales are 0.5 of one percent and spirits up 1.8 percent.
  • Prices, of course, have risen, and dollarwise, craft beer sales are up 11 percent. The chart below shows sales increases in supermarkets by regions across the country, with  the West trailing the rest of the country percentage-wise.

Last dance? Doesn’t look like it’s started yet. I asked both  Brewers Association founder Charlie Papazian and Stone Brewing (Escondido, CA) founder Greg Koch about the future of craft brewing in coming months and years. They both were cautiously optimistic.

“It’s too early to tell what’s going to happen,” Charlie said.  “Craft brewing volume is still growing. I’m convinced that craft beer will survive  even in  a down market. ”

“Beer is an affordable luxury,” he said. “People might not want to pay $30 for a bottle of wine, biut $10 for a six pack of the really good beer is a price most people will still pay,” he said.

Greg Koch agrees. Quality will win the day, he said.  Good craft beer is a bargain. People will still buy good beer. It’s up to craft brewers to keep the quality high.

Looking back to the Great Depression of the 1930s, Charlie, whose books on homebrewing make him an international guru of homebrew, also believes that homebrewing is going to surge even as the economy sags.

“They’ll get into homebrewing because it’s a way to get cheap beer,” he said. But once they get into, they find out they can make really good beer and they’re off.  More craft brewers are born.

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