NBWA president gives his take on the ‘craft beer bubble’

Earlier this week, we posted a craft brewing distribution feature, which included insight from Craig Purser, president and chief executive officer of the National Beer Wholesalers Association. In our discussion, I asked Purser what he thought about the often discussed topic of the “craft beer bubble.” Is the market hitting a saturation point, from the distributor point of view?

Here was his thoughtful response:

“I think any time you have rapid growth like what you’re seeing out there now, with 2,500 brewers, and some say 500 or 600 more coming, there’s that risk. You don’t know how well thought out all of those brewers are. I know there is a lot of capital out there and people are interested in the industry, and any time you are attracting folks that are not necessarily experts in the field — the investors, owners and operators —  there is risk. That’s something we’ve got our eye on.

“We’ve seen marketplaces in other consumable goods become saturated and bubbles burst. I think there may be some of that as it relates to the individual brewers out there, but I don’t think it will happen as it relates to the category. I don’t think people will wake up one day and say ‘I liked craft beer, but I want to go back to drinking only premium lagers.’ I don’t think the American consumer is going to do that, and we haven’t seen that with other consumables — haven’t seen it with coffee or fresh food.

“Even against the back drop of a five-year run of economy that was awful, all through that craft continued to grow and those larger brands suffered — even as folks were worried about employment and working men and women stretched their budgets. So, I’m optimistic about the craft beer segment, but I think there will be a correction as it relates to the number of players.

“We can’t measure ourselves exclusively by the number of brewers, but we can recognize that there is a lot of room for a lot of people, but at the end of the day — and I like oatmeal stouts — but exactly how many oatmeal stouts can the marketplace withstand? I don’t know the answer to that.

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“When distributors are taking on these brands, they are helping people establish and make them available to be sampled and tasted and tested, but for some of these products, getting it right is difficult. Sometimes you can make the best beer in the world, and if you don’t have a sound business plan and opportunity to create that pull to match that push you won’t be successful. Likewise if you don’t have the portfolio mix or the thing that makes your product distinct, it’s not a certainty to success.

“As we see some of the more mature craft brands behave in the marketplace, I think we’ll see that some of those small brewers of today may become the big brewers of tomorrow.”