I think the trajectory for craft brewing is sort of the trajectory that A-B, Miller and Coors have been on for a century, not to mention the European brands. Start small, get regional and go big. Along the way, taste and uniqueness of product declines in order to build brands. Local and regional products are bought, then used for little more than production and warehousing....This is an interesting moment. When I first started writing about beer in late 1997, it was a similar moment--craft brewing had been growing by double digits for a decade, and a number of breweries had made the jump from micro to substantial. In Oregon, Widmer, Full Sail, and Portland Brewing had all invested in much larger facilities. In fact, up and down the food chain, breweries were making decisions on the assumption of future growth.
[O]ne wonders how long the "big" little breweries can make it without succumbing to the beast of advancing brand development. And, with that, what will happen to the local products.
Compare that to the last few years: double-digit growth, lots of new entrants into the market, and a general sense that the ceiling for craft beer was quite a bit higher. Breweries haven't been investing in huge new facilities, but they have been growing. Both Widmer and MacTarnahan's/Pyramid have grown through mergers. Full Sail continues to do robust contract work.
Can we expect a shake-out like the late 90s produced? Probably. But things are quite a bit different now, and here's where I disagree with MR. A decade ago, some breweries did follow the trajectory he describes. In order to appeal to mass markets, they produced safer, blander beer. Other breweries, however, went the other direction. They doubled down on distinctive, rich beers. Over the following years, the shakeout hit the former breweries far harder.
MacTarnahan's is a case in point. For a period during that time, Alan Kornhauser was off leading Pabst in China and the brewery turned to Brett Porter. Portland Brewing (as it was then known) had made its bones on MacTarnahan's, a decent amber ale that was increasingly getting lost in the shuffle. Their other beers were safe and clean, but no one's favorites. Brett produced a series of very distinctive beers and for a while, I thought the brewery was doubling down. Alan returned, though, and Brett's beers were forgotten. The brewery followed Kornhauser's instinct to pursue a strategy that worked for the macros he'd made a career brewing--lowest-common denominator stuff. They thought they could corner the amber market. Obviously, the whole thing was ill-advised and the brewery is now going through that death-spiral of absorption into increasingly larger amalgams of indistinct brands.
I do think there's room for growth in the market. Nationally, just 5% of sales are micro. I have a hunch that all across the northern half of the country there are future drinkers who haven't yet had their first transformative experience with a Sierra Nevada Pale. That number could easily double, providing a huge opportunity for larger craft breweries. The ones that seize the market will be those with distinctive, characterful beer. Shakeouts actually serve a healthy purpose--they weed out the underperforming players. As warmly as I feel toward Portland Brewing, it's proud history, and founders Art Larrance and Fred Bowman, I can't think of an argument to be made for their survival. If Pyramid/MacTarnahan's vanished off the face of the earth, would anyone notice?
The next couple-three years may be tough for middle-sized and larger craft breweries. But it's probably good for the overall health of the market. Darwinian and poignant, but good.