Ruminations On The Future Of Craft Beer In Chicago and US

A friend of mine who owns a well known craft beer bar here in Chicago posted something on Facebook recently which really caught my attention for a variety of reasons. These are the last three men on earth who have never drank a craft beer.  The craft beer movement ends on the day they order their first IPA.

The gist of his comment was that he's seeing a huge influx of beers coming to him from sales reps each and every week. Reps from distributors come in, bring in loads of bottles of craft beer and "craft beer" to try and he decides if he'll try selling them in his bar. The problem is quite simple: he has limited space in his bar for bottles and kegs. Bottles sit in refrigerators, kegs sit in a walk-in cooler (which I've seen, and it is very cozy in there). He has a finite number of taps to go with those kegs. These are the same issues that any purveyor of goods has to deal with. Target stores can only put so many products on their shelves and if you have a new product you want to sell there, it takes a lot of sales effort to get in the door (I know both through personal work experience in another life, and through a friend who is doing this very thing).

So my craft beer bar owning friend wanted to know if other bars, restaurants, retail stores were seeing this same issue which he described as "putting 20lbs of beer in a 15lb bag". After he posted this, many folks commented, many of them are in the beer business in some way, either as brewery owners, distributor reps, bar owners, etc. The comments ran the gambit but they reinforced what is an underlying question I think about all the time: What is the future of the Chicago craft beer market and the entire craft beer market in general?

There are so many moving parts in the answer to this question, if there actually IS an answer. How many breweries can Chicago support? How do we compete against non-Chicago craft breweries who are moving into our fine city fast and furiously? How do we get Chicago to support its hometown breweries first, much like Portland, Seattle, and all of Wisconsin? When will the growth slow? Is this the crest of the wave? If so, is it wise to open a brewery now?

I'll just answer that last question right now. For me, yes. Even if we had 500 breweries in this city, I'd do it. To me, this isn't about riding a wave. I got in on the ground floor of the craft beer movement in this country. I wasn't the first, but I was definitely there close to the beginning. This isn't a fad to me, this is my life. There is nothing I'd rather do for a living than own a brewery. There's nothing else I CAN do for a living. This is it. I have to do this. I have no choice. So anyone who thinks there are too many breweries in Chicago or in the U.S. or thinks that any new brewery that is coming on board is just following the herd....well...they can fuck off. Do you say, "Another restaurant in Chicago? We already have too many!" No, you do not. We're Americans, we crave choice. The more choice the better. Why would having choices in beer be any different? And specifically in a great metropolitan city like Chicago, I personally EXPECT to have a wide variety of choices for just about everything: food, beverage, entertainment, culture, porn. If I didn't want so many choices, I'd live somewhere with a lower damn cost of living. I should clarify that none of this is referring to my friend, as that was not his point. It's more of a reaction to some of the comments which conveyed, in my opinion, an obtuse understanding of what opening a brewery means to those of us who are doing it or have done it. Let's move on.

Let's talk about supporting local breweries. A few months ago, my friend Jessica Murphy had an excellent post about this on her blog, Girls Like Beer Too. Go into any craft beer bar in Chicago and you will find that almost without exception, Chicago breweries are a minority on the tap handles. Lots of California and Colorado beers, lots of imported beers, but a relatively small number of Chicago beers. And I don't recall being in any craft beer bar where all Chicago breweries were represented at the taps. Bottles maybe, but I personally judge a beer bar by its taps. (I never order bottles. I can get bottles at the store and drink at home for far less money.) So why the lack of support for Chicago breweries compared to Portland et al? Where is the allegiance to the home team? Where is our pride in our Chicago beer culture? Well, I think there are several answers here. First: wait for it....there aren't enough breweries in Chicago! Portland, OR has 40 breweries (including brew pubs) and a population of 1 million. Chicago has 2.8 million people. That would mean we would need approximately 40*2.8 = 112 breweries to have the same breweries/capita. We have less than 20, I believe. Does Chicago have the same appreciation for well crafted beers like the west coast? It should. Chicago was brewing commercial beers before any of those fuckers were!

But I don't think sheer numbers is the complete answer. I believe it's a huge part of the answer as it limits what kinds of beers we have access to locally. There's another part of this answer that Chicago breweries need to address: make great beer. Now, we have great breweries. Metropolitan Brewing has carved a fantastic niche with clean German style lagers, which is quite unique not only in Chicago, but for the U.S. in general. Their "Crankshaft Kölsch" is just fantastic and can easily compete with any German version. Half Acre's "Daisy Cutter" is awesome. Revolution is making some terrific beers in their production brewery and shipping them all over the place. But we're competing against Stone, Firestone Walker, Lagunitas (who will soon be a hometown beer), Oskar Blues, and now Deschutes, all well established and universally loved breweries. I see plenty of those beers on tap at any bar, not just craft beer bars. So what does that say? Are their beers better than ours? I guess that depends on who you ask. I love, love, LOVE Firestone Walker and Lagunitas. Two of my absolute favorite breweries, but I would love to replace them with hometown beers of similar styles. The problem is, for the styles of beer they make, I like theirs better. If there's a hop centric beer, I'd take FW or Lagunitas over a hometown beer any day. They're just terrific. They don't make all styles of beers, but the ones they do are just superb. Where's my allegiance to Chicago? The same place everyone else's is probably. I want to drink the best beers I can get. I drink plenty of Chicago beers, don't get me wrong, my larger point is we absolutely have to brew beer that is as good or better than the big guys out west or wherever. I don't expect a bar to offer Chicago beer on tap just because of some sense of hometown allegiance. Bars are a business, just like a brewery, and they have to make money. If they can sell more Firestone Walker than a local beer, then that's what they're going to do, and I don't begrudge them at all.

(Case in point: Deschutes Brewery just made a massive splash in Chicago last month. Hell, I found their beer at a local large chain grocery store on the very limited shelf space dedicated to craft beer. No Half Acre, no Metropolitan, but yes to a brewery that just entered our massive market a few weeks ago! What the hell? Where's the Chicago love?)

Update 2/18/13: I just read Good Beer Hunting's excellent post on Wirtz Beverage Group, the IL distributor for Deschutes. I have to say I am well impressed with their marketing and logistics savvy given that this is their very first craft beer brand. I think Wirtz is going to be teaching other established craft beer distributors a few lessons on how it's done.

Now it seems that everyone and their brother is opening a brewery in Chicago. I keep finding out about new ones in planning all the time. It's going to be a much more crowded marketplace in the next couple of years. I won't lie to you and say it doesn't worry me a bit but in the end, it's going to push me to constantly improve my beers, my processes, and my marketing. That's how capitalism works and regardless of who's left standing, the craft beer drinker will benefit.

So what's going to happen to the craft beer movement in general? Is this a fad? Will we turn back to wine or go cheap and drink the yellow fizzy stuff? Will people get tired of talking about hop profiles and malt backbones? Will the lines at Dark Lord Day ever get shorter? I don't think it's a fad, but honestly I have no idea. The number of breweries opening in the U.S. is at a fever pitch. The rate continues to accelerate. Obviously the rate of growth will slow down and when it does, what then? Can all of these breweries survive and grow? I doubt it. I foresee a lot of closings and consolidations. Typical business cycle stuff. I also foresee the day when craft beer loses its cachet and becomes, well, normal. Growth will continue but slow dramatically. Some breweries will continue to aggressively expand, but mainly, I see cities and town supporting their local breweries much like the days of yore in Europe. Nothing special, just normal and delicious and expected.

Oh, and the big guys will continue to fight off the craft beer onslaught by trying to further put a stranglehold on distribution, completing mergers, producing more fake craft beers with aggressive marketing. The usual. They'll lose, but not for lack of trying.

So that's my viewpoint. I'm sure I'm wrong on several fronts, correct on others. Only time will tell. Regardless, I will continue with this journey and I will make sure that Panic Alarmist Brewing is nimble and ready to adapt to a changing craft beer marketplace. If that means hot models wearing nothing but dynamite themed body paint, well, so be it. No wait, I'm doing that anyway. Never mind.

Cheers.

G