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    Judging by all the hoopla, craft beer joints may be the most exciting thing to hit San Diego since Father Serra built a mission. Journalists and politicians — especially the beer drinkers like a certain popular ex-mayor — like to tout the quality of our sudsy brews, and we’ve gaining a national and even worldwide reputation as a great place to go for a cold one that doesn’t have Miller or Lite in its name.

    This week brought yet another beer “summit” and updated statistics about the big boom in the craft beer industry here. “Local beer boom no bubble, report says,” proclaimed U-T San Diego in the headline for a story published Tuesday. “National University study points to even greater growth for thriving industry,” it added.

    But that’s not exactly what the study says. It’s a snapshot in time, not a prediction of how the industry will hold up nor whether there’s an untapped market (some beer puns are inescapable) nor whether breweries are due for one of those pesky “market corrections.”

    Here are four takeaways from the craft beer study:

    Revenue hasn’t kept pace with growth.

    The new report, released this week by the National University System Institute for Policy Research, touts the big growth in the craft beer industry here: The number of breweries and brewpubs more than doubled from 2011-2013 (growing to 82 countywide), and related jobs jumped by 40 percent to more than 2,200, largely thanks to big brewers that opened big restaurants like Stone Brewing’s sprawling and busy complex in Point Loma.

    At the same time, however, revenue hasn’t grown at the same pace. According to the study, total annual sales at the breweries and brewpubs grew by just 15 percent from 2011-2013 (from $681 million to $782 million).


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    Is the discrepancy between brewery growth and revenue a sign of overreach? Maybe not. Vince Vasquez, the National University researcher who wrote the study, said many of the new breweries opened over the last year-and-a-half and haven’t reached full capacity yet. “Some of them are really small, and they’re not canning. Some aren’t even bottling,” he said.

    They need to ramp up, he said, predicting that “you’ll see more breweries and a lot more jobs before you see more beer being sold.”

    Still, the numbers raise at least the possibility that growth in the industry is surpassing demand, and the study doesn’t provide evidence that more drinkers (and/or more drinking) are possible or probable.

    (For insight into how the industry stacks up versus others in the county, check our handy chart-filled story from September.)

    A strong foundation could help the beer biz survive a storm.

    The topic of a bubble is on brewers’ minds, if perhaps not front and center, and it came up at a beer summit this week, said Vasquez, who’s a craft beer fan himself. “People want to know where San Diego is with that.”

    While the bubble question will go unanswered, Vasquez said the study does provide plenty of evidence that San Diego’s craft beer industry has a strong foundation that will help it weather any financial storm.

    Our region is unusual because of the high number of companies that support the craft beer business by providing ingredients like hops and brewing yeast plus supplies like brewing equipment, Vasquez said.

    “Having them centered here in San Diego and having the beer brewed here makes us fundamentally different from Anytown, USA,” he said. It also helps that breweries here are known for being especially innovative, he said.

    We don’t know if anyone’s busting as craft beer booms.

    A boom in one industry can lead to a bust in another. Could any businesses be hurt by the rise of craft beer? Regular bars, perhaps, or liquor stores? There are other potential costs if brewery patrons are using the roads more to get to breweries — hello, more street repairs — or having more accidents because they drive after a few brewskis.

    The new study doesn’t look into the issue of costs, but Vasquez said it makes sense that craft beer would bite into the sales of companies like Coors and Budweiser. “There are people who are just now getting into beer and beginning with craft beer instead of making the switch later,” he said.

    But the overall negative effect on non-breweries may be small. A 2013 report by Demeter Group Investment Bank finds that while craft beer is wooing drinkers away from regular beer and other kinds of alcohol, craft beer is only predicted to reach 15 percent of the overall beer market by 2020. That amounts to a huge pot of money overall, but perhaps not enough to slice into local bar and supermarket profits.

    There are other factors to consider too. Craft beer drinkers may simply be throwing back more booze overall. According to the Demeter Group report, 30 percent of the growth in the craft beer industry comes from drinkers simply drinking more instead of switching over from another kind of booze.

    And a beer drinker who chooses a local craft beer at a brewery instead of buying a six-pack at the corner bodega may end up pumping more money into the local economy instead of sending some to, say, Anheuser-Busch.

    The next step: understanding beer tourism.

    How many people are coming to San Diego mainly to quaff some brews? Vasquez said he wants to find out. “How many people come here every year for craft beer, how long do they stay, and how much do they spend on hotels? You could come out with some baseline figures that would surprise people.”

    Why the surprise? “Craft beer as a tourism concept is elusive for a lot of people,” he said. “It’s not the same as envisioning wine tourism.”

    But beer tourism definitely exists. In addition to San Diego, places like Boston; Burlington, Vt.; Grand Rapids, Mich.; and Denver woo drinkers by offering tours of breweries. For its part, San Diego puts on annual beer events. And it helps that the press about San Diego’s brews has been gushingly positive both locally and nationally, with The New York Times declaring that “few American regions have more brewing momentum than San Diego County.”

    We can all raise a glass to that — at least while it lasts.

      This article relates to: Beer, Beer Policy, Business, Economy, News

      Written by Randy Dotinga

      Randy Dotinga is a freelance contributor to Voice of San Diego. Please contact him directly at randydotinga@gmail.com and follow him on Twitter: twitter.com/rdotinga

      2 comments
      Manny Chen
      Manny Chen subscriber

      there is so much room for the beer industry in SD to grow.  barrel-aging is the future.  that takes time and a lot practice to get good at.  there is plenty of room to distribute out of state.  people are getting over the InBev and MolsonMillerCoors products, considering they are not even really beer.  and those big boys are realizing they will have to start buying smaller breweries to stem the tide.  however, consumers will reject those brands if they don't keep the production separate, which somewhat defeats the purpose of purchasing the craft brands.

      James Weber
      James Weber subscriber

      Supply and demand. How many brew pubs can the city support?