I live in a little homogenized exurb about 30 miles outside of Washington. Way outside of the Beltway. Out in the “real Virginia,” as George Allen once unfortunately put it. And over the weekend my little town had two craft breweries open. That’s in addition to the brewery that opened last year. Which led me to a couple thoughts:
(1) Yay! Beer!
(2) If my little town has three microbreweries, have we reached peak beer?
I’m not a huge beer drinker—I may be the only man in America who made it through four years of college having drunk fewer than five beers. This wasn’t out of any moral objection. It just wasn’t my thing. The first time I really enjoyed a beer I was well into my thirties. I was at a lobster bake on a beach in Cape Cod and I picked up a Sam Adams Oktoberfest, at which point I was basically young Barney Gumble saying, “Where have you been all my life?”
Parenthood—this is just between you and me—has greatly increased my enjoyment of/need for beer. I never have more than one beer in a 24-hour period. Heck, sometimes I’m happy having half a bottle. But I’ve reached the point where I view cracking open a cold one as part of my ritual for closing out a successful day. (Or a disastrous morning.)
Over the years I’ve fallen pretty hard for microbrews and come to regard even Sam Adams as a big, corporate beer. (Though I retain a soft spot for their Oktoberfest. You never forget your first love.) At first it was thrilling just being able to get New Belgium’s Fat Tire at the local supermarket. Then it was awesome finding Dogfish Head pretty much everywhere. Today, my local Wegmans carries such a huge assortment of craft beers that different regions of the country get their own aisles.
And that was before I had not one, not two, but three microbreweries right in my town.
So things are pretty great, beer-wise. So great that over the weekend I was reminded of my early adolescent years. Back then, I was interested in comic books, not beer. And it was a golden age to be buying comic books, because every little town in New Jersey had a comic book shop. Some towns had two.
It was amazing right up until the time it wasn’t-because the comic book industry was actually riding on a bubble so big that when it popped, it almost killed the entire business.
Which made me wonder: Can my little town possibly support three breweries?
It turns out that it’s not just my town. America has gone from about a hundred craft breweries in 1990, to about 800 in 2000, to just under 2,500 breweries today. That’s a . . . pretty steep curve.
Along the way, lots of economist types have worried that the microbrew market is bubblicious. It seems like every year there’s a big piece examining the evidence. As you might expect, the craft-beer industry does not like these pieces. Not one bit. In fact, in a recent post, the Brewers’ Association argued that, if anything, the microbrew market is still underserved and in need of even more breweries.
I have no special insights as to who’s right and who’s wrong on this question. It could well be that craft beer brewing today is like the coffee shop revolution of the 1990s. What looked like a bubble as Starbucks became a major national franchise and independent shops bloomed all over the country turned out to be the establishment of a new culture with its own market. America hadn’t really had a coffee culture before. Now it does. While the growth of that culture was surprisingly rapid, it wasn’t growth based on a market failure (which is a pretty good working definition for what bubbles are).
Or the craft-beer revolution could turn out to be like the comic book shops of my youth. If you had been looking seriously at the comic book market of 1990, the biggest tip-off that it was a bubble wasn’t the price increases of old comics or the mushrooming of comic book shops. It was the decline in quality of the product: Comic books from the 1980s and early 1990s were terrible. Even by the standards of the medium, they were embarrassing. (Trust me. I know from comic books.)
So the real test of the microbrew market will be if these new breweries are any good. Are they creating good, interesting beers? Or are they hiding lousy beer inside super bitter IPAs and devolving into pumpkin-peach ale self-parody?
I think I’ll have to start a long, deep-dive, investigation on the subject. And I’ll report back after the election.
