I imagine today’s beer industry is not dissimilar to the beer industry my father encountered in the 1950s and 1960s. While the beer industry of my youth (1980s -1990) were dominated by big national brands which all more-or-less tasted the same, his beer industry was one of strong local and regional breweries with unique characteristics battling against up-and-coming national brands. I remember my father telling me the big national brewers were soon going to dominate everything, and that would be the nail in the coffin for smaller breweries. But of course, if you live long enough, you can see that Madam History, like all beautiful women, occasionally gets bored with herself but is too lazy to think of something new, and so repeats herself. Simba called it the “Circle of Life.”
Industries consolidate in the name of cost efficiencies and the wonders of mass production. And then, when there is nobody left to buy,the consumer wakes up and says, “Hey, I want more choice.” And then the industry de-consolidates. Happened in coffee. Happened in chocolate. And it’s obviously happening in beer with the craft beer renaissance. And it will even happen on the international beer stage. You watch: In the next 10 years, I believe, AB InBev will be broken up and sold off in pieces, because the pieces will be worth more than the whole. Why not 20 years? Because that bitch Madam with her iPhone and Twitter gets bored more easily and quickly these days.
But through it all, there has remained one constant: the beer distributor. Yes, beer distributors have consolidated and become more sophisticated, but they still perform the same function: consolidating orders, selling, delivering and merchandising beer. Since Prohibition repeal, distributors have had to master the art of diplomacy—keeping all of their various beer suppliers happy. Because they have consolidated, they now have to master a very important new task: managing all of the new brands and packages that are coming down the pike at a furious rate. It’s daunting, but with technology, doable. But why bother? It’s all in vain. Are my dancing girls here yet?
Craft brewers have their own challenges today. The main one being raising capital for increasing capacity. If I were a young brewer today, I’d leverage up to the hilt and buy as many tanks and bottling and kegging lines as possible. Because if the world ends, it won’t matter, anyway. If it doesn’t, well, it’s always better to dig a deep hole and climb out of it than to just rest on your laurels. In reality, we very well may end up with too many breweries again at some point, which will facilitate a shakeout and consolidation among craft breweries.
I guess I’m going to keep churning out my paper, chronicling those who actually accomplish things in this great industry. You know, just in case.
