Beer sales have been declining for many years. But microbreweries have been posting double digit sales gains. People were just tired of drinking the big brewery stuff which tastes more like something that you would eliminate in the toilet rather than something you would want to drink.
In fact, some articles in the media have reported that when some of the huge, acquisitive beer companies acquired another brand, they immediately got rid of more expensive ingredients, like hops, and replaced them with cheap stuff. The companies didn’t think drinkers would notice, but they did.
So an increasing number of beer drinkers went to the micro-brewery beer for “real beer.” The huge sales gains attracted capital from private equity/VC firms. As always happens, that soon leads to over-supply. After all, how much beer can a person drink before having to buy new, bigger size clothes.
Here is a chart (courtesy of Wolf Richter, wolfstreet.com) of the soaring number of craft (micro) brewers in the US. The blue line is what is planned right now. Too much of a good thing is still too much.
Now we see the first sign of oversupply, as pointed out by Wolf in an excellent article. Stone Brewery of San Diego is laying off people, something totally unexpected in the industry.
Oversupply is good for the consumer because it lowers prices. And that will make the micro-breweries more competitive with the stuff the large brands are peddling, which they call “beer.” Isn’t there a law about improper labeling?