OT: How many craft breweries is enough???

[cocavaak]

Article in the Camera today says a new craft brewery - FATE - opened in Boulder. Their brewmeister is from the Golden City Brewery. That makes 19 breweries in Boulder - and 10 more are planned!

[MK_]

We'll see. Some of them will likely not make it but it should overall bring up the quality of what is brewed. Not that it's bad at the moment, far from it.

[coxroach]

Getting worse than the MMJ thing

[LittleBitey]

Getting worse than the MMJ thing

Legitimate comparison

[topmounter]

Just wait for RMJ

[TomP]

We'll see. Some of them will likely not make it but it should overall bring up the quality of what is brewed. Not that it's bad at the moment, far from it.

This is how capitalism works. Adam Smith stuff:

If the market demands and is willing to pay for a product, suppliers will continue to enter the market.

At some point supply will exceed demand. At which point prices will fall. Then only the most desirable/highest quality/lowest price suppliers will be able to stay in the market. If craft brewer A needs to charge $4/pint to stay viable (cover costs and make a reasonable profit) and people find cheaper products, or higher quality products for an equal price, craft brewer A will either need to close his doors or borrow money from his parents.

[hirschmj]

How many breweries is enough?

N+1, where N is the current number of breweries, of course.

[coxroach]

This is how capitalism works. Adam Smith stuff:

If the market demands and is willing to pay for a product, suppliers will continue to enter the market.

At some point supply will exceed demand. At which point prices will fall. Then only the most desirable/highest quality/lowest price suppliers will be able to stay in the market. If craft brewer A needs to charge $4/pint to stay viable (cover costs and make a reasonable profit) and people find cheaper products, or higher quality products for an equal price, craft brewer A will either need to close his doors or borrow money from his parents.

That's funny and spot on. Also brings up the question of VC money....ie who bankrolls these things? Even the most loving parent wouldn't cash in a 401k to finance a beer joint. The last time I asked my old man for cash, it brought him to tears (after striking me across the face that is).

[ds2199]

This is how capitalism works. Adam Smith stuff:

If the market demands and is willing to pay for a product, suppliers will continue to enter the market.

At some point supply will exceed demand. At which point prices will fall. Then only the most desirable/highest quality/lowest price suppliers will be able to stay in the market. If craft brewer A needs to charge $4/pint to stay viable (cover costs and make a reasonable profit) and people find cheaper products, or higher quality products for an equal price, craft brewer A will either need to close his doors or borrow money from his parents.

Precisely!

Well said sir.

[dbabuser]

This is how capitalism works. Adam Smith stuff:

If the market demands and is willing to pay for a product, suppliers will continue to enter the market.

Only there are other variables here - how many bars are there currently in Boulder? This isn't a completely new/ standalone market.

[TomP]

Only there are other variables here - how many bars are there currently in Boulder? This isn't a completely new/ standalone market.

Sure, there are lots of different places to get alcohol, food, chase intoxicated women, play foosball, etc.

Economists have formulas for gauging the effect of available Substitute Goods.

A classic example is peanut butter versus hamburger. As the price of hamburger rises, or as a person's finances get squeezed, at some point he/she will substitute a less expensive, less desirable good for a more expensive or difficult to obtain preferred good.

For some people, they'll go to anyplace that has beer on tap. They might opt for a cheaper joint where they can drink pbr or bud. Maybe because it's cheaper, maybe because the women there are naughtier, maybe because it has good mexican food, etc.

Some people specifically dislike craft beers. They would never pay more. For them, a bar that only serves mass-produced domestic beer isn't a substitute good, it's their preferred product.

I'm somebody who will not bother drinking beer that doesn't please my palate. I'll pay $4-5 pint for good beer, but I won't pay a dollar for a pint of Coors Light. (as a wise man once said, I would not wash my dog's ass with Coors Light).

I would argue, based on no real knowledge or research whatsoever, that the craft beer/brewpub market is related to but not tied to the overall market for bars and restaurants. If 100 new sports bars that serve your choice of bud light or pbr appeared tomorrow on Pearl Street in Boulder, the craft beer universe would not feel a sizeable disturbance in the force. Again, that is based on almost nothing but pure opinion and ability to type.

All this crapola is coming from a computer programmer who has some spare time and a 24-year-old BA in Economics from a middle-tier school not noted for the quality of its Economics curriculum. Freely offered, no warranty implied.

[billybobzia]

Its not always about Economics, but sometimes about location as well..

For example, many agree that the Denver Beer Company doesn't make the greatest beer around, but their location is second to none so they will probably survive, however, if they had a so-so location, they would probably be out of business by now.

Personally, I like the competition that many breweries offers and hopefully it will help some step their game up, I know a few that could use a kick in the pants..

[rmalling]

I see the gap between corporate yellow beer drinkers and independent owned craft beer drinkers becoming wider in the future. Will we ever see a Nascar race with LeftHand logos plastered everywhere? No. Not just because they can't afford it, but also the audience isn't their demographic. Now, Avery on the other hand prolly thinks they deserve a Nascar team or something.

When do you move beyond the craft beer label? Once your brew gets national and advertises in main stream media, I'd say this disqualifies a company from being in the craft family. Just my opinion.

[xcguy]

How many breweries is enough?

N+1, where N is the current number of breweries, of course.

Precisely!

[SkaredShtles]

This is how capitalism works. Adam Smith stuff:

If the market demands and is willing to pay for a product, suppliers will continue to enter the market.

At some point supply will exceed demand. At which point prices will fall. Then only the most desirable/highest quality/lowest price suppliers will be able to stay in the market. If craft brewer A needs to charge $4/pint to stay viable (cover costs and make a reasonable profit) and people find cheaper products, or higher quality products for an equal price, craft brewer A will either need to close his doors or borrow money from his parents.

Don't you get all Econ-101 on our a$$es. This is BEER, man!

[xcguy]

I saw a report on the tube about how "government regulation" affects "small business". One company, their phones stopped ringing a few years ago (I can't remember their product) and their business was hurting. The reason their business was hurting, according to the owner? Government regulation of course.

Next company interviewed was a micro-brewery. Their business was growing, they were hiring. "Government regulations"? They just figured that was a cost of doing businesses, no big deal. Take away what you will from this story but I can tell you that opening a brew pub isn't as risky as some other business. Every time I go into one to do photography, no matter what time, they're busy. People just love to drink good beer and that will never change.

[SkaredShtles]

Economists have formulas

Goddammit. I warned you. I'm gonna have to kick you in the nuts, Sir!

[TomP]

Don't you get all Econ-101 on our a$$es. This is BEER, man!

Now, this is MICRO econ 101. That's the fun stuff. You know I'm right.

It just occurred to me that you haven't told me to shut my whore mouth for a while. You OK?

[SkaredShtles]

Now, this is MICRO econ 101. That's the fun stuff. You know I'm right.

It just occurred to me that you haven't told me to shut my whore mouth for a while. You OK?

Heh. I don't suppose you're another IT guy with an Econ degree?

[TomP]

Heh. I don't suppose you're another IT guy with an Econ degree?

Shut your WHORE mouth!

[coxroach]

To ensure survival, the brewery owners should organize a cartel.

[mountaingoatepics]

When do you move beyond the craft beer label? Once your brew gets national and advertises in main stream media, I'd say this disqualifies a company from being in the craft family. Just my opinion.

Na Man, I still see Oskar Blues as a Craft Brew but they have national media coverage and another brewery started in Brevard, NC..Home of Pisgah National Forest.

Oskar Blues opens a New Brewery in Brevard, NC

Brevard just happens to be my old stomping grounds and where I learned to really Mountain Bike being just 15 minutes from my house.

The riding there is fantastic by the way!



Anyway, is there enough Craft Breweries? I don't think so. I'm always willing to try a new Stout, Scottish, or Red.

The Santa Fe Coffee Stout has become my favorite in the past year.

[dirtydoug]

The market may support it in Boulder but yeah does seem like the market is getting saturated- maybe some venture capitalists but I always like to blame the trusteefarians for Boulder's special economics. Competition is good, compete or go extinct, or it may just not matter cause it get's overblown in the end...but you got to feel like a sucker spending money at a joint whose beer wouldn't win a homebrew competition.

[Walt Disney's Frozen Head]

Not sure it has much anything to do with venture capitalists or trustafarians. In the handful of cases I've seen, it's a simple case of people trying to make a living doing what they like to do. like you said Doug, the market will correct at some point.

I'm pretty sure most of these guys brew well enough to win/place at a homebrew competition. I can only imagine that the biggest hurdles for these guys/gals and their product is consistency and scalability.

Is it better to follow the "make the beer, they will come" model (Avery a good example) or build a shiny new place in a high traffic area w/ high rent?

[cocavaak]

As you say yourself Doug, compete or go away. There are some great beers being made in Boulder and so if any brewery started up that didn't have quality they would indeed go away.