Category: Opinion

my humble and correct opinion

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Bart on 2022 (and 2023)

Before Christmas, Bart Watson, the economics guru for the Brewers Association talked about craft beer in 2022 as well as a dip into what he thinks maybe in store for 2023.

Here are some of the numbers nuggets from his talk….

  • breweries with direct sales are close to 2019 pre-pandemic sales
  • check-ins from Untappd data shows an uptick in ticks from a brewery
  • channel shift due to the pandemic is reverting back
  • around 9,500 breweries in the U.S. now
  • more openings than closings by a 2 to 1 ratio
  • Imperial IPA, Hazy IPA, low to no alcohol beers doing well
  • 2023 openings will probably be lowest in years
  • 2023 distributed craft only breweries won’t grow
  • 2023 some inflation price hikes might hit early in the year

It looks like some tough sledding next year but as the world clicks closer to normal, more opportunities might show themselves.

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Profits and Losses

There has been moving and shaking in the Los Angeles beer world as the clock runs out on 2022.  

First was news that the original owners of Yorkshire Square Brewing in Torrance were leaving and that the brewery is in the hands of the Copley Family who are also involved with Project Barley. 

Then the day after Christmas brought the news that King Harbor Brewing was closing up shop in its three locations after eight years in business.

Will there be a dip on top of three years of pivoting?  The economic situation doesn’t look great for cost of goods plus a labor market that requires more pay with higher turnover.  It is enough to make one look long and hard at opening and operating a brewery.  And I do expect more new in Q1 of 2023.

Obviously, not a rosy picture but I was never under the impression that each and every Los Angeles brewery was going to last forever.  Change is the only constant and maybe turnkey breweries or brewing equipment for sale or rents coming down as landlords choose lower rent over pie in the sky valuations will create a new surge next year or in 2024.

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It’s the Water

Breweries will sometimes tout their water quality but it appears that Foster’s Lager really likes the H2O, read HERE.

Now adding water is not inherently bad. Bourbon and other spirits have calculations to make to reach certain proof points.

But what I will call the Foster’s Two-Step of lowering ABV while also raising prices is pushing it. It may not seem a shock that they are doing it but the reasoning behind is a bit more complicated than corporations are greedy bastards.

Companies will raise prices for two big reasons. One is cost to make the beer. If it is rising, as it has been, they will cover costs which is only natural. The un-natural bit is that many companies see those rising costs or inflation or a bad mood on a Tuesday as cover to raise prices.

As long as a PR VP can lay the blame elsewhere, a company can add a nickel or dime to the price which gives cover to others to do the same.

Now, if companies paid fairly this would be moot. If Foster’s had a quality or taste profile that makes watering down integral, this would be moot.

In the end, what Foster’s and others will find is that they are antagonizing customers while also putting their prices closer to those of craft beer. And that is not the two-step they want.

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The Firkin for November 2022

Both Stone Brewing and Oskar Blues have gone back to their back catalog of beers and re-released beers that had not been on tap or cans for a while.  And while the nostalgic part of me thinks that is a fun idea, I do wonder if the constant stream of new releases from breweries over the last few years will make this idea a non-starter when the hip breweries get to the same age as Stone and Oskar.

Because, you have to build a following for a beer.  You can’t really do that if there were two new beers the previous week and another on the next week.  It is the same long-term issue I have with pre-season seasonals that are off shelves before the season is over.  You disconnect the beer from the time of the year that you are celebrating.

This is not an Old Man Yelling at Clouds post, if a brewery chooses a new, new, even more new path, that is absolutely fine. But that path means that you are bound to lose some nostalgia as well as a chance to have a flagship beer. You will create a new mindset in the customer who will open the door expecting a new beer on tap or in 4-packs.

Maybe the pendulum will swing back to core beers.

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Red Card

I have been slowly piling up gifts for Christmas 2022 but if you are a last minute shopper or have people to shop for across the country, you might want to consider sending a brewery gift card.

MacLeods here in LA is the most recent casualty but I have read closure posts on other beer blogs as well.

Who knows what 2023 will hold but many breweries are still struggling with post-pandemic and then inflation and are still digging out and could use a little extra. So where you can, purchase spend some Xmas money on future beer.

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What Will Happen to Beer Twitter?

It has been a few weeks since the change at the top at Twitter, so I thought I would add my two-cents. I have been happily off Twitter for a good 4+ years. There wasn’t really a single incident that made that decision easy, rather an eventual understanding that the platform was a net negative to learning and having fun with craft beer.

Fast forward to the MuskTwitter where you can’t make fun of the Musk but you can buy a verification from him. But only if you are hardcore. Who knows if Mastodon will run with this chance or some other non-Musked app will take to the fore but boy does the immature part of me want to go all, I told you so.

The push/pull of free speech but heavily monitored because we can’t trust Americans with nice things is never gonna be easy. There will always be people stepping over a line or snowflake conservatives setting up lines only for themselves. No social media will be perfect.

But can a lively, opinionated Beer Twitter (or equivalent) exist? Can it better than an unruly comments section? I have my doubts but I can quickly see what proponents of Twitter say about it and I do not harshly disagree, I just have a darker tint of rose colored glasses.

What I can predict with more certainty is that breweries with limited ad money and limited time are going to look for something safer, something steadier. Most business owners would probably say that, chaos doesn’t sell. More people will lean on the ‘Gram and Facebook and wait until a new app gains critical user mass rather than be associated with that Musky smell.

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TTB 23

Starting next year, The TTB (Tobacco, Tax and Trade Bureau) will be on the lookout for a pair of items that will affect breweries.

  1. Change of ownership will need to be disclosed in a timely manner or penalties will accrue. Might not be a big deal for many but needs to be watched out for.
  2. Pay your taxes or they will hold up any expansion plans to other locations that you have in mind.

Both scenarios could come into play if you do not keep up to date with everything so get your paperwork ducks in a nice row.

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R.I.P. – MacLeod Ale Brewing Company

There were some troubling signs from MacLeod Ale Brewing Company in recent days but today the hammer came down as they announced the closure of both the original Van Nuys brewing operation and the just recently opened satellite pizza and bar in Highland Park.

The reasons cited for the closures:

1] We’re over budget in several categories
2] We have too much debt due to expansion
3] Sudden crash of sales [down 15% in Oct, 21% in November! Bad timing!]
4] Our 2nd location opened too late and is underperforming.

You have to be a risk taker to brew beer commercially and you also need angel investors to backstop when good bets go wrong. Hopefully a new chapter can emerge from the brewery and it employees.