Independent hope in craft brewing

In the American craft beer world, we recognize that things are changing. Growing sales have never been as difficult as today, and multi-national breweries have been buying once-independent breweries… who continue to make the same quality beers in their breweries that they had prior to becoming slices of bigger pies.

All seemed right in the world of craft brewing until recently, when suddenly everything went wrong for so many companies. Breweries growing double-digit positive growth year after year hit the wall, suffering from over-expansion and new competitors from all sides. And we’re seeing that the measure of brewery leaders is not what they say, not how polite and thoughtful they are, but it’s how they act. And it’s clear that going forward, they must remind us that over-confidence is a dangerous co-product of success…success in brewing must be re-earned every week. I think that means staying and thinking ‘small’, except for exceeding expectations of demanding beer aficionados. The essential advantage in the business of craft brewing, now probably better identified as ‘independent brewing’, is coherence and how all the parts work together at breweries spanning this country. We certainly know our beer portfolios. The Brewers Association, in developing its recent, iconic “Independent” symbol for packaging, aligns breweries with a well-understood and uniform market position, and leads the way these breweries will play deliberately, led by conscious decisions made by their leaders. See:

www.brewbound.com/news/cbc-brewers-association-tackles-independence-big-beer-day-1

Independent brewing could use a Moore’s Law. George Moore got the world’s attention when he published his article in 1965* which forecasted that the number of components which could be mounted economically on a standard chip was doubling every year, and he published that he foresaw his estimate would be the case for a decade…it’s actually been 5 decades with marginal tweaks along the way. And we have seen a version of that in the past two decades with independent breweries, not a doubling every year of course, but steady aggressive growth especially in the smaller breweries below 20,000 bbl/annum. So many high-tech companies see Moore’s Law as an imperative- they must keep up or lose advantage. We’re fortunate in brewing, as we really have modest punishment for failing to innovate.

I used to think of Ken Grossman or Kim Jordan as our Gordon Moore. But they are just so busy at doing what they are doing within their own company frameworks. Brewers may recall when Brewers Association Charlie Papazian and others suggested a goal that craft beer would account for 20% of beer sold in the USA in a specific timeframe. A nuanced, yet reasonable and revised goal can now be seen. From a look at the historical growth in the US alone but expanded over the world, I think that breweries can realize a 5/7 rule: between now and 2023 , the share of craft and craft-like beer sold globally will double every five years, and the share supplied by independent breweries will double every 7 years. It’s Ok if you want to call that “Moore’s Law misappropriated by Jaime”, but if they weren’t so busy it would otherwise be Jordan’s/Grossman’s Rule.

I’m hopeful that the Brewers Association will reach out to brewing associations in other countries and extend use of the independent logo as a universal mark. And revise their forecast from ‘20% in 20’ to 5/7 or whatever Bart Wilson calculates-through that is better than what I think (5/7). I expect that independent breweries will mimic what Richard Dawkins called the ‘extended phenotype’ which for birds is his framework of how well-constructed nests compared to shoddily-built ones will enhance evolutionary odds. To a bird species, it comes down to “Nest Tech”. For an independent brewer, the ‘extended phenotype’ is “Indy Tech”…which has heritage and independence at the same level as quality and taste. This is not to disparage those breweries whose owners chose to become acquired**…it’s just that the process and benefit of having made that decision yields business advantages not extended to independents, so the latter could use a benchmark as well as a recognized symbol as a compass and a sign that distinguishes.

* https://cis.upenn.edu/~cis501/papers/mooreslaw-reprint.pdf

** Ya' know, if I owned a brewery and someone came up and said, "Nice brewery you got. I'll buy it." I'd personally buy that person dinner and talk.