Wednesday, December 23, 2015

What does the future hold for craft beer in the Tampa Bay area?

By now you have heard of the demise of 2 of our local breweries in quick succession.  Is the the death knell for the local craft beer industry?  Probably not.  Coincidence? Again, probably not.

There are over 40 breweries in the Tampa Bay area, with several more planned.  The additional breweries could be a boon to the local economy, but many believe that the market has reached saturation and that they will add to the glut of craft beer flooding the area.  It is true that other metro areas of a similar size across the nation support a greater number of breweries.  Seattle, for instance, has over 100 breweries and many more in the planning stages. But Tampa is not Seattle, and Florida beer drinkers do not compare to the beer connoisseurs of the west coast.  Beer culture is ingrained in Seattle culture and craft beer has been part of their lives for many years, whereas in Florida, the craft beer movement is relatively new and the palates of our citizens are relatively undeveloped.  This fact is easily confirmed by looking at the beer selection in your favorite sports bar or watering hole.... Bud, Bud Light, Michelob Ultra, Coors, etc. still rule the taps.  Ever so often you may see a "craft" beer offering, like Yuengling *wince* or even rarely a Jai Alai from Cigar City.  In Seattle, it is a rare case indeed to visit a bar or restaurant that doesn't have a dandy selection of local brews.

So what does this mean for the future of the local beer market?  The answer is complex.  Were you
around for the real estate boom in the early part of the century? At that time, any inept investor could buy a property, sit on it for six months, and sell it for a sizeable profit.  Then came the crash.  The real estate investors believed that the boom would never end and that the money tree would never die.  The beer market here has been about the same.  The unbridled enthusiasm of the hipsters who 'discovered' craft beer rushed madly to their local brewery and slugged down whatever beer they were told was delicious so that they post online "Look, I'm drinking craft beer.  I'm cool".  The thing about hipsters is that they are fickle and quickly move on to the next cool thing.  The boom will come to an end, if it hasn't already.

The survival of the local beer industry rests squarely on the shoulders of the local brewers and their investors.  As with any business there are three kinds of owners:
1. The owner who generally knows business, but doesn't know THIS business and thinks that they can make a go of whatever they try.  This guy will probably fail when the inevitable bubble breaks.
2. The owner that knows his craft, but really doesn't know how to do business.  This owner can survive if the product that they produce is superior, but often fails anyway due to lack of business acumen.
3. The last is the business owner that knows their craft AND knows business.  This savvy bastard usually survives whatever comes at them.
The brewery failures that have recently occured confirms this observation. One made great beer, but business experience was weak, the other had a good business model, but didn't make great beers.

The nuts and bolts of survival is too complex to be analysed by a cretin like me, but here is the simplified version.  One of two things will happen in the near future with the craft beer industry in Florida, it will either see sales slow and eventually reach a stable sales level or it will contract, with many of the less agile companies closing their doors.

The simplistic answer to what can be done when the slowdown occurs to keep the more business savvy companies brewing are:
1.  No crap on tap.  You already know which breweries will survive, don't you?  It's the ones that you often visit because you love their beers.  You have found yourself skipping trips to the breweries that have 'meh' beer.  The brewers that are producing beers for mass market appeal will fail in the face of competition from the big guys.  Anheuser Busch spent $1.57 BILLION on advertising in 2014.  The type of drinker that drinks mass market beer is a sucker for rhetoric and will always choose to spend $9.00 per 12 pack for mass market beer over $6.00 per craft beer.  The drinkers who will always spend their money on good beer over crap beer will rarely choose mass market style beer.
2.  Advertising.  Ted Turner was once asked how to succeed at business.  His response; "Early to bed, early to rise, work like hell and advertise".  With enough advertising money you can even make an absolute shit beer like Dos Equis sell to suckers.  Of course you can't expect the local guy to shell out $1.57 billion on advertsing, but the wise brewer will try to stir up excitement in their immediate neighborhood by offering incentives, donating to local schools and charities, and getting out to meet potential customers.  There is an old wives tale that says a person must see a product 3 times to remember it's name.  Another school of thought uses the rule of 7, saying that it takes 7 times.  The reality is that studies show it take 12 times for a person to start thinking that a product is pretty good, and that the input must be kept up ad nauseum for our vacant brains to retain the information.  Think about the last football game you watched on TV, how many beer or car ads by the same company did you see during the game? 5?  10?  And that is just ONE game.  Keep up the sales pitch and survive.  Beer festivals are not the answer .... too many brewers clamboring for the dollar of someone who is already going to buy craft beer is a waste.
3. Collective consciouseness.  It is very difficult for a small business to maintain advertising for any length of time.  It's not like the brewer has huge profit margins.  If everyone that is a member of the Florida Brewers Guild pitched in to an advertising pool it would be quite a sum of cash.  The Brewers Guild could then afford to hire an advertising firm to help Florida craft beer producers tap (heh heh) into new markets, at home and abroad.  Let them help honk the horn, ring the bell, wave the flag .... or whatever cliche you can come up with.  It will benefit all involved if all are marketed as a whole.  A tourist from China doesn't even know that they want a craft beer until they are convinced that a tasty beer is exactly what they need.

YOU  can help by continuing to buy and enjoy locally made craft beers and if your lcoal watering hole doesn't carry you favorite beer, ask them to bring it in.

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