Beer Buzz

Beer Buzz: Not From Round Here?…

beerbuzz_Events Adventures_1Things have begun snowballing at a somewhat startling rate in the world of craft beer. In 2012 America had amassed 2,401 craft breweries, according to the Brewers Association. By their most recent count in 2015, that number has grown to 4,225. Such rapid growth has had many people, myself included, talking about the possibilities of a “bubble” and it bursting at some point. I no longer believe in a cut and dry “bubble,” but I do believe dramatic change is coming to the craft beer community, driven by consumers, based on where the beer is produced in proximity to sale/service. I believe, based on our experience at Spec’s and what we’re seeing around the country, that things are moving to be much more local.

First, let’s touch on the idea of a “bubble.” In his 2013 piece on the subject for the Brewers Association, Bart Watson defines a bubble as, “a period of overinvestment where asset prices aren’t aligned with reality.” Essentially, a “bubble” is a belief that things are, and will continue to be better than they are. With many breweries expanding through the construction of additional brewery locations, like Sierra Nevada and New Belgium building East Coast locations in Asheville, North Carolina, it’s easy to start feeling like we’re getting into the realm of risky optimism.

Much of our communal worry comes from past experiences. In the 1990s, craft beer was experiencing huge annual gains and things were booming, much like they are today. However, in 1997 double digit growth stalled, resulting in only 1% growth that year. Looking back you can see similarities to that time and ours. Lots of people are getting into and are excited about craft beer. As a result, a lot of money is going into and, more importantly, coming out of the industry.

After sellouts, consolidations, closings and a much needed overhaul, the craft beer industry recovered from this stall and began another rapid growth. We quickly crossed the “pre-Prohibition” number of breweries, of around 1,200 in 1917, and have now surpassed the even bigger number of 4,131 breweries in 1873. And, it’s in this huge 19th century number that I introduce the topic of this article. In the late 1800s there were forms of transport from city to city for distribution and refrigeration technologies, but they were limited and expensive. These 4000+ breweries were small, local producers servicing neighborhoods and regional communities. It was a beer landscape where most towns and cities of a certain size had a brewery to satisfy local thirst. I believe a dramatic change IS coming. It will not be the bursting of a “bubble,” but it will be a move towards local beer produced by breweries that consumers associate with their community.

We are already seeing a move to local at Spec’s. In 2012 domestically produced craft beer accounted for 50% of beer sales in Houston at Spec’s and 15% beer sales were Texas craft beer. Last year, in 2016, domestically produced craft beer had crept up to 63% of our beer sales in Houston, and 22% of those beer sales were Texas craft beer. Nearly a quarter of beer sales at a Spec’s in Houston is Texas made craft beer. In a market that so many were convinced was “Big Beer Country”, this is evidence of a change.
You don’t need retail numbers to see this move towards local, you can just talk to people in the community.

Established breweries are seeing the impact of this shift towards local craft beer. I reached out to a handful of established local breweries, Saint Arnold, Karbach and Real Ale, to get their point of view. All three share many of the same views and opinions on this shift to local, like the support of local beer from local breweries being a result of that brewery supporting the local community.

(Now, before I get any further, I will quickly address a topic that has likely sprung up in your mind on reading my mention of Karbach in a discussion of local, craft beer. Yes, Karbach was recently bought by ABInbev, a brewery conglomerate that many view as “anti-craft”, and you can count me among them. The day before Karbach was sold, all members of their staff were unquestionably members of our craft beer community. This did not change at the time of the press release letting us all know of this change. They are, and continue to be, people I consider as friends and supporters of craft beer. It is yet to be seen how this change in ownership will influence their impact in the community, but at the moment they are one of the biggest supporters of Houston and Houston beer.)

All three share many of the same views and opinions on this shift to local, like the support of local beer from local breweries being a result of that brewery supporting the local community. I think it’s Lennie Ambrose, Marketing & Events Director at Saint Arnold who really hits the nail on the head for why the average consumer goes local when he said, “For me, the main reason that people have become hyper local is because there are so many better options than there were five years ago.”

st arnold local beerIn the last few years, we have seen the release of several really impressive items and series from these three breweries. Saint Arnold has definitely been at the forefront of innovation in Houston beer with the addition of the Icon Series and Bishop’s Barrel Series, which has now been made available to retailers. Add to that daily drinkers like Saint Arnold Art Car, 5 o’Clock Pils and recently released, soon to be canned, Pub Crawl Pale Ale. Karbach’s F.U.N. Series and now BBH, including all of the tasty variations, has also brought some excitement to town, and should have some fun new additions coming down the pipeline this year.

It’s easy to see why consumers would stick to Houston area breweries, but I’m on board with Brad Farbstein, President of Real Ale Brewing Company in Blanco, TX, when he says, “We at Real Ale feel like we are local to the State of Texas”. Understandably, Brad, and many of the other brewery folks I questioned have a hard time quantifying “local,” but he argues “local, it’s a sentiment not a measurement,” when he says of his brewery, “what isn’t local about a pioneering brewery that has been making great craft beer for the last twenty years, and only sells their beer in a single state?” And who would argue against that? So for the sake of the brevity of this article, I will quantify “local” as being from the state of Texas, even if Louisiana is closer to many of us than West Texas.
I believe Lennie’s original comment was a justified compliment to the numerous delicious options produced in Texas, but it also touches on the expanse of choice we now have. Being overwhelmed by choice is the complaint I hear more often than not at the Smith Street location. At these times, I believe people go for familiarity, a name they know because of experience in the local market. This goes back to a brewery’s involvement in the local community through events at bars and restaurants as well as charity and outreach.

So, with a market so overwhelmed with choice, and having several well established breweries, why would anyone dream of opening a new brewery in this market? I think these established breweries have covered most of our “everyday drinking” beer needs, but specialty and niche things are still a largely untapped market. It’s for this reason that I reached out to Brent Daniels, Co-Founder and Director of Sales & Marketing at B-52 Brewing Company in Conroe, TX. Brent says they saw this move towards local and its impact on consumer’s desire for variety in the local market. It sounds like they’re shifting towards this desire for specialty products from consumers when he said,

“Fortunately for us, that’s exactly what we’re passionate about. I think we’ve finally figured out exactly who we are as a brewery and that clarity has been really helpful. We have a lot of exciting things planned for 2017 and can’t wait to share them with the community.”

All of these comments and actions are in response to you, the consumer, and your support –  or lack thereof –  so this article would be of little(r) value if I didn’t have some consumer comments. So I turned to the kids over at Houston Beer Guide to get some of their opinions on this move towards local. Kenneth Krampota points out many of the points I’ve made above, but makes special effort to point out that, “Getting a fresh Yellow Rose as opposed to a two month old larger craft IPA just tastes better.” Which brings up an interesting point; does fresh/local automatically win out? Brad Farbstein had the best response to this when he said, “If two beers are both of high quality, made consistently, & a good value then in my opinion “local” wins out, but not before the first three expectations are met.” Craft beer is, and always will be, a “Survival of the Fittest” market. You, the consumer and your purchases dictate who stays and who goes. This again, is why I believe local is where we are moving, because I as a consumer find it easier and more enjoyable to spend money with someone I feel an attachment to, rather than a faceless entity. Joshua Frink touched on this when I asked his thoughts, saying, “At a local brewery, the owner might be the one giving the tour and the brewer might be the one pouring beers. The people working there are invested in seeing it succeed, not only for a paycheck, but because they are passionate about what they’re serving.”

Unnecessarily long story short, I don’t see craft beer as a “Tower of Babel” set to topple, but I do see it as a constantly changing community. Houston, and Texas as a whole will continue a move towards local because of a growth in selection, quality and consistency as well as things like value and freshness. So our pledge to you is that every March, while we celebrate Spec’s Texas Beer Month, you will be able to taste miles and miles of Texas beer through our ever-growing selection of local labels.

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