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Bursting the Myth of the Craft Beer Bubble

History shows that beer has had waves of American popularity that has always been followed by the market collapsing and massive brewery closures. Will that happen once again, and could it happen in Maine?

There are traditional pathways to learning to enjoy craft beer. By and large, Americans still drink macro lagers from large national brands. But more and more people are branching out, and eager to try something different – especially if it is made well in their local area.

Ask any professional brewer and they can generally name one or two specific beers that changed their life forever. The flavor of that craft beer or the experience of enjoying it put them on a pathway to becoming a small business owner and producing their own versions of beer that hopefully will change someone else life.

While visiting Kinsale, Ireland two years ago, I asked Sam Black, co-founder and head brewer of Black’s of Kinsale, what got him into craft beer, home brewing, and eventually starting his own brewery.

His answer shouldn’t have surprised me, but it did. His was Sierra Nevada Pale Ale that he was able to get imported while he was working in Australia. And he is certainly not the only in the industry who credits that particular beer.

It is noteworthy that the first beer that Black’s of Kinsale released in 2013 was an “American style” Pale Ale, and they continue to produce a wide range of hoppy beers that often climb in ABV, in a country that is known for porters and stouts and chooses to tax beer based on the amount of alcohol in the finished product.

With over 4,200 breweries in this country – and on average nearly 2 opening every day – these breweries are settling into neighborhoods and are now being opened by your family and friends.

Who wouldn’t want to support a new local business that is owned and operated by someone you know? It’s the basis for entrepreneurial success, part of what makes this country great.

This 2013 infographic shows that there were 39 breweries in the state with over a dozen in planning. Maine now has over 70 breweries. 

This 2013 infographic shows that there were 39 breweries in the state with over a dozen in planning. Maine now has over 70 breweries.

This is the entire reason for the Buy Local movement, for the success of local farmers’ markets, and the trend of knowing the first name of the producers that you buy directly from. Maine is a state that has always had a spirit of supporting each other within a community.

Beer lovers aren’t the only ones benefiting from this. Nationally, the average age of a farmer is 58.3 and climbing. But in Maine, the number of farmers under the age of 35 have increased by 40%. Younger folks are taking to the land in Maine, a trend that is not being seen nationally.

So despite all of this good news amidst a craft beer renaissance, skeptics often want to know when the other shoe will drop, when we have too many breweries that cannot possibly remain in business. They want to know exactly when the market will be saturated and the bubble will burst.

The prevailing feeling with industry experts is that there is more growth to come in craft beer, and that the “bubble” may not actually exist.

Bart Watson, Chief Economist of the Brewers Association, wrote about this last fall. At that time we had just attained the level of 4,000 breweries in the country. In his article about that achievement, he offered that we’ve really not reached a saturation point for craft breweries.

He noted that new brewery owners and operators tend to be small and local, choosing to locate in neighborhoods or towns. He suggested that the definition of a “brewery” may be changing, bringing back a time when breweries were local and operated in a neighborhood bar or restaurant. And there are plenty of locations in the U.S. where this isn’t even a reality yet.

In a recent article for Yes Magazine entitled Craft Beer vs. Budweiser: How Small-Brewers Are Winning Back the Neighborhood, author A.C. Shilton notes that craft beer brewers work together in a spirit of collaboration, not competition. They are not against each other in communities, it is every small brewer working together against multi-national corporations.

Those big foreign companies are investing in macro beer, and also in craft beer at an increasing rate, to try to take a slice of the $20 billion American beer business.

Julia Herz, craft beer program director for the Brewers Association, made this observation in the article:

Here in Maine, there have been several new breweries open in the past couple of months. Among them are Fore River Brewing (the first brewery in South Portland in over a decade), Bear Bones Beer (around the corner from Baxter in revitalized Downtown Lewiston), Mast Landing Brewing (the first ever in Westbrook), and Lone Pine Brewing (now producing across from the future Gruit brewery in Portland’s East Bayside).

And in a couple of short weeks we will see the opening of Dirigo Brewing, joining Banded Horn in Biddeford.

But just look at some of the other small towns in Maine that have or are getting a new brewery very soon. This is most likely an incomplete list that is in no particular order:

All of these are small Maine communities that will certainly benefit from both residents and visitors to the area. They are opening in towns and helping to revitalize neighborhoods, a modern version of community development.

And in the case of North Haven in the Fox Islands, Maine gets it’s second brewery that you cannot drive to (the other being Monhegan Brewing on Monhegan Island).

In the Maine spirit of buying local in your community and knowing your producer on a first name basis, don’t expect the trend of new Maine breweries to end anytime soon. We can all cheers to that.

Don Littlefield is the General Manager of The Maine Brew Bus. He last enjoyed a La Péché Mortel Édition Spéciale from Brasserie Dieu du Ciel in Montreal. Twitter: @BeerinME