Brewers Association Changes Course: Major Victory for Craft Beer Industry

“If we can get 1 million new craft drinkers to drink 1 pint a week, that’s 200,000 incremental barrels. 5 million new drinkers is 1 million bbls. 
For there to be enough new growth for everyone in this room to succeed, we’re going to have to widen our view and not think about the 13%, but the other 87% that’s out there to capture.”

Bart Watson
Brewers Association’s Chief Economist
2019 CBC State of the Industry Address

Given the hammering that the guys from Crafting A Strategy (CAS) and I took over the last two weeks, this feels pretty damned good. The BA now recognizes that there are A LOT of people to win over to craft. That’s a major victory and a sea change from where things stood when we spoke with the BA execs in the bar I mentioned in my previous blog post

Even better: what just happened is progress.

Now the hard work starts.  We need to be realistic about what craft beer is, and what percent of the market is drinking it today.  Then figure out how to work together, all of the stakeholders combined, in order to right the ship, end the negative rhetoric, and work for success.  Define success as you see fit, but it’s not Facebook likes, as one critic has suggested.  Facebook likes don’t pay payrolls or clear loan covenants.

We are willing to stake our reputations
and take an incredible amount of heat
to move this conversation forward.

Why is this so important?

Short answer:

  1. The negative rhetoric is damaging this lovely business, and exposing us to challenges that should not exist
  2. There is another set of very real, and largely ignored numbers that can help us change course and move forward
  3. We are casting a shadow of our own making over ourselves by excluding other contributors to our sector’s health (I’ve already been yelled at about it, save your breath)
  4. There are very legitimate challenges ahead that are going to require industry wide cooperation.

Long Answer:

What matters is the well-being of our breweries, taprooms, and other craft beer businesses, which we love, and which provide good jobs, benefits, and growth opportunities for thousands of people.  While we pour our heart and souls into them, great beer flows out. We, BA included, have changed the world of beer forever. In that spirit, the BA has been a major contributor to the success, and has enormous potential to help the craft beer industry moving forward.  But there are still issues. The biggest is the BA’s definitions and misleading statistics which undermine us in ways that are being ignored in the current conversation.

I understand that big breweries are responsible for some very shitty practices. But not all are equally culpable.  We need to be wary of bad actors and take them to task as necessary. Somehow, we also need to find common ground, or the one thing we will have in common is bad news.

Remember, we are not alone in making our success.  Forces outside of our business are partnered with us, and they will listen to our negative rhetoric and react accordingly.  Landlords will be less inclined to lease to breweries and may move to more enticing tenants like marijuana businesses.  Banks will tighten lending standards and pile covenants on loans with higher interest rates.  New entries in the form of talented, innovative, and energized entrepreneurs will move away from beer.  Why would we needlessly inflict this on ourselves?

It’s not 2015; times have changed.  The problems on the horizon are shrinking market share from wine, weed, and spirits, and the lack of a unified, strategic plan to deal with challenges that are only now becoming known.  What happens when weed is legal in 30 or 40 states, and an edible replaces a few beers? Let that thought sink in.

There is no doubt a lot of good ideas are yet to be conceived around our challenges.  They will find an audience when we begin to work together as an industry, not before.

On a personal note, I am sorry about pissing people off.   This conversation is about a collective problem, not an individual or company.  I say that, despite the nasty emails and comments I/we have received from people who clearly feel otherwise.

It’s been pointed out repeatedly that we are being dispassionate about a very passionate business.  I am not dispassionate, and we are not dispassionate.  Quite the opposite.  I am passionate enough to lose clients and suffer verbal abuse.    We are willing to stake our reputations and take an incredible amount of heat to move this conversation forward.  The entire point is to bring about progress and grow the craft beer market share.

This is by far the best industry I’ve ever been a part of.  I will spend the remainder of my working life dedicated to making it better by helping independent breweries and small businesses succeed in the face of endless challenges.  It is extremely important, as we tackle those challenges and face down failure, that we recognize and celebrate our wins, both big and small.  While the BA may never admit it, Mr. Watson’s words above are a big win…for everyone.

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Portland Kettle Works is proudly independent, as is our brewery and taproom: The LABrewatory, and we support all other independents in the craft beer industry.

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