For some time now industry experts have been warning of big interruptions to the beer market, and potential sharp retractions to the craft beer segment. Overall, beer has been down considerably the past few years, with craft showing the only significant growth. But, as of late, even the craft side seems to be plateauing. While analysts have been predicting corrections to an utterly saturated market – and wondering how far the growth could go – this hasn’t stopped aspiring brewers from going after their dreams. (Currently there are over 6,000 breweries in the U.S.) Nor has such forecasting prevented multi-million-dollar expansions to meet projected demand and compete with other growing national and regional players.
For the past two years this lurking correction has resulted in consolidations and takeovers. Some of the best breweries sold out to the beer giants, or merged, in anticipation of the bubble bursting. Yet, aside from many “little guys” cashing in, or bracing themselves for the retraction, there have not been many closures of quality craft breweries.
Now, however, come some significant signals confirming the ominous cliff: Stone Brewing Co in California cut back on employees last year. Green Flash, also based in California, will be doing the same. Smuttynose (in New Hampshire) is headed for the auction block ... queue the record coming to a screeching halt.
“Say what?” you say.
Don’t shoot the messenger, but you heard me correctly.
This little bit of potentially sad news is much bigger than you may think, and has “Old Brown Dog” aficionados like myself feeling as though a bomb just dropped. Aside from a potential Smutty shortage, this is big beer news, because a well-established craft brewery may be on its last legs. But, even more so this is a great brewery scouting feverishly for a bail out, indicating that even breweries with exceptional liquid will not be immune to a bloated market.
Producing over 50,000 barrels a year, Smutty is not huge, but produced enough quality beer to be a Northeast standby since the mid ’90s; their smart portfolio included approachable core beers and exciting small batch brews. According to Food & Wine, if they don’t find a buyer by March they will be sold at auction. (Hopefully someone keeps the brand going.)
You can expect more of the same for mid-sized craft brewers that poorly time expansions, or do not remain as financially and innovatively flexible as nano-brewers catering to the consumer obsessed with hyper-local consumption or fantastic and infinite variation as promoted by websites like Untappd. In the meantime, sit back and buckle up for more shakeups, while I crack open a Smutty.
This week’s recommendation: Smuttynose Vunderbar! Pilsner, a clean, refreshing Lager brewed with Germany malt and Czech hops. 4.9 percent ABV. Hampton, New Hampshire
— Colin Hubbell is co-owner of the Green Onion Pub and The Beer Hub in South Utica, New York.