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Stop Panicking: The US Hasn't Reached Peak Craft Beer

The US is now home to more than 4,000 breweries, and some doomsayers believe that the bubble will soon burst. But don't worry—your craft IPA is safe and sound.

by Petey Menz
Oct 7 2015, 6:00pm

Photo via Flickr user clehault

On September 25, the Brewers Association announced that the number of American breweries had passed 4,000, just over a year after the 3,000-brewery mark was reached. Soon enough, the United States might have more breweries than it's ever had—the number peaked in 1873, when there were 4,131.

"[Growth is] accelerating, which is pretty amazing given that we're starting to move into uncharted territory for the number of breweries,"said Bart A. Watson, chief economist for the Brewers Association. "You would maybe expect a little more of a slowdown."

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Indeed, people have been predicting a craft beer slowdown—or perhaps something more dramatic—for years. In June 2013, Daniel Fromson, writing for the New Yorker, noted that the pace of brewery openings had slowed in beer-friendly Vermont, suggesting that "[Vermont] is hitting its saturation point—that states, like people, can eventually have enough beer." Later that year, various publications voiced pessimism: headlines included "Will It Fall? A Look at America's Craft Beer Boom" (Draft Magazine), "The Craft Beer Market Has Exploded, And Now Brewers Are Worried About A Collapse" (Business Insider), and "The Craft Beer Bubble: When Will It Bust?" (Paste Magazine).

In 2014, when the Brewers Association announced that the number of breweries had topped 3,000, Bon Appétit weighed in with a piece called "America Now Has Over 3,000 Craft Breweries—and That's Not Necessarily Great for Beer Drinkers." In the article, Dogfish Head founder Sam Calagione was quoted as saying, "We're heading into an incredibly competitive era of craft brewing,"and that "there's a bloodbath coming."

So far, none of those apocalyptic predictions have come to pass. According to data from the Brewers Association, even the number of breweries in Vermont ultimately increased.

"[Thinking] of this as some sort of bubble …is just incorrect," Watson says. He emphasizes that many of these new breweries are locally focused and will only produce a small quantity of beer. While he maintains that competition between breweries will increase, he believes that there's still plenty of room for these smaller breweries.

"There are still large parts of the country that have nowhere near the number of breweries per capita that we see in leading states and leading areas," he says. "I think there are thousands of opportunities still out there."

Other beer experts agree that the United States has not reached a craft beer saturation point.

"It's easy to think there is when you're in a city like New York or Portland or Denver, where there's a brewery on every corner," says William Bostwick, beer critic for the Wall Street Journal and author of The Brewer's Tale. "There are still places that don't have their little neighborhood brewery, and I think they could use it."

Even in more saturated areas, small breweries may find that demand for locally brewed beer is high.

"Right now, we're a tiny brewery, but we still can't brew enough beer," says Josh Stylman, a founder of Brooklyn-based Threes Brewing, which opened in late 2014. According to Stylman, Threes Brewing is currently planning an expansion, though they will remain focused on the local market. "The aspiration is to be a self-sustaining local business and have a lot of fun doing it," he says.

Having hosted comedy shows, concerts, and poetry readings in their Gowanus brewpub, Threes Brewing exemplifies the community involvement that small breweries can engage in.

"We've got about 8,000 square feet that's accessible to the public," Stylman says. "We feel it's kind of incumbent on us to be a rec center."

About 200 miles north in Somerville, Massachusetts, Aeronaut Brewing Co. is pursuing a similar strategy. "We dropped out of MIT to create a community space that would be powered by beer sales," says co-founder Ben Holmes.

While this community engagement may be one path forward for small breweries, Bostwick says that these outfits have another advantage: the freedom to create surprising new beers.

"These days you're gonna see sour beers, or wild-fermented beers, or beers made with things other than hops: locally foraged herbs, spices, fruits," Bostwick says. "All sorts of things that you can't do when you're a huge, hundred-thousand-barrel operation."

According to Bostwick, this widespread experimentalism distinguishes today's craft breweries from those of the 1990s, when a similar craft beer explosion did lead to a crash.

"A lot of the breweries that opened up riding that wave shut down," Bostwick says. "But a big reason for that is that they were making bad stuff. Chances are when you go to your local brewpub, you're not going to see what you saw in the 90s, which was an IPA, a pale, a brown ale, and a porter. And the pale was full of diacetyl, the brown ale was way too sweet, and the porter was overly roasted, and the IPA had cheesy old hops."

Like Bostwick, Watson doesn't think that a craft beer crash is coming. But he does think that brewery closings will eventually increase—although he doesn't consider that a problem.

"Nobody freaks out when restaurants close. We've reached a place where you see openings and closings be more or less similar," Watson says. "And at some point the brewing industry is going to reach that as well."

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