The Gathering Armies
Brewers that are too big to keep their heads down and too small to compete on a national scale are already fortifying themselves for the fight ahead. You need money to make beer, and if you want to make both at the same time in a sustainable way, you've got to get bigger, and do it fast.
“Beer is all about economies of scale,” Emerson says. “The bigger you get the lower the cost per ounce of beer. This is fundamental and there is no way around this. So for a normal brewery the pressure will always be there to grow.” Those big-not-huge craft outfits with the war chests to expand already are. Look at Oskar Blues’ North Carolina outpost, Victory’s massive Parkesburg, PA, facility, or Stone’s bi-coastal and German expansion.
“Three years from now, is anybody going to give a shit?”
Then there’s private investors. Jason Notte, a beer industry reporter for MarketWatch, has written extensively
about private equity’s increasing prominence in craft beer, pointing to partial and whole sales at SweetWater, Southern Tier, Uinta, and, most recently, Full Sail
. Private equity is odious to craft purists, who view the financial institutions' goals as an obvious conflict to breweries' independent values. But the impending battle royal for craft beer makes for strange bedfellows, and the bottom line is that PE is a ready source of cash to buy up competition and consolidate your power in the market.