Boom/bust cycle of breweries

Green Room Burgers & Beer will be celebrating being open for business 12 months this Sunday. We’re not exactly a sports venue, but I plan on watching the big game with a pint of Papa Louie’s, hopefully with some friends. Baltimore’s 1960s run first, then play-action deep passing attack vs. the read option of San Francisco. If the 49ers win, it could change football forever: putting the icing on the cake that a running quarterback can be unstoppable, skyrocketing the value of this type of player. This would lead to smaller, faster defenders. This of course would just be part of some giant cycle, leading us down territory we’ve been before (the great Sammy Baugh). In time, this cycle would turn the other direction, leading offenses to target big power backs that could dominate the smaller defenders.

Many in the brewing industry believe we are in some great cycle as well. Instead of smaller, faster players, big brewers see the rise of tiny nano-breweries flooding the pipeline. It is true that there are more TTB applications than ever, and even if a fraction of these open their doors, we will see an explosion of small breweries. Many point to the similar growth in the late 1980s and early 1990s. This is the period that Boulevard Brewery and 75th Street Brewery got going. In fact, check out the DOB of your favorite brewery, chances are it was during this period.

Many breweries did not make it, though. There was an influx of “boutique beer” flooding the market. Consumer backlash against Sage Cherry Wheat and Key Lime Honeysuckle Light Lager caused demand to bottom out. Only the best breweries made it past this time. Sometimes, having the best tasting beer was not enough to help your bottom line. Many restaurants that purchased tiny brewing systems went out of business as they learned that more seats would have helped profits more than a brewery. As mentioned earlier, many brewers and financial advisers believe we are in the midst of this boom/bust cycle once again.

However, I must protest! One of the tenants that I hold dear is that future success cannot be predicted by past results. To do so would be a gross oversimplification. Perhaps I’m missing the forest among all these trees, but I believe we are part of a bigger trend in this country. We are replacing our cheap white bread with bakeries like Farm to Market and Roma. We are replacing our cheap, CAFO beef with locally raised cattle from butchers like Bichelmeyer’s and McGonigle’s. We do this even though the price is more expensive, so that we can be a part of something bigger than ourselves: the support of our community, our health, and our children. (Full disclosure: I source ingredients from Roma and Bichelmeyer’s).

When Adam Smith talked about the “invisible hand” of the marketplace, he did so citing a butcher, a brewer, local business owners who would not send tax revenue and profits oversees to fund a foreign factory. Consumers are becoming more and more educated on the products they buy, and their effect on our community. This education takes time, effort, and is not always pleasant. We may have setbacks, or a bursting bubble. However, I believe we are on the right path.

I believe there is one more thing that will lead us to more local beer: the internet. The home-brewing scene exploded about 10 years ago. I’m sure there are fancy economic models that will explain this in more excruciating detail, but I have a simple hypothesis. The internet has allowed us to share information with each other quickly and without boundaries. There are hundreds of articles, blog posts, videos, and forums that will remedy any problem you may have with brewing. Brewing is shifting from an arcane, almost magical process to something much simpler. I saw with my own eyes the demise of the local home-brew shop expert. Having an encyclopedic knowledge of 1980s brewing techniques is virtually worthless in today’s information age. This will challenge the best of us, as we continue to be inspired and learn new techniques. Thus, we have hundreds (thousands?) of potential brew-masters brimming with knowledge, inspiration, and a desire to work.

The inhibiting factor to this pipeline of amazing brewers is the business side of brewing. Some will chose starting their own business, some will apprentice at a local brewery, some will go to school to hone their technique and knowledge. All of them will be challenged to the brink of their abilities. Some will fail, some will succeed. But hey, once they achieve their dreams, we will have some pretty darn good beer to drink.

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