Is Craft Beer Becoming Uncool?

Late last year, the King of Falling Rock Tap House in Denver (one of the GOAT beer bars), wrote an article bemoaning The Death of The Cool. The piece is an honest account of a pro retailer who has been in the game a long time and had a front-row seat to the changing relationship between breweries and beer bars. There’s a lot to unpack, some of which I disagree with (particularly the 3 Tier System endorsement), and I don’t intend to summarize or critique the article here. Rather, I’d like to focus on its central theme:

I hear “but that’s just business,” but we’ve worked hard these last 4 decades not to be “just business.” The Craft Brewing industry is not about commodity, it’s about community. We did something different with a collaborative and community-based ethos, and that difference was our strength and resulted in success beyond anyone’s expectations.

This “just business” attitude, he argues, is toxic to what’s made craft beer special – it is Killing The Cool. And I agree.

But, while that article focused on the brewery / beer bar relationship (i.e. new breweries no longer respecting “the code” that used to govern their behavior), I think there is a deeper, and darker, force at work that lurks in the character of some breweries.

A movement started by renegades and pioneers making great sacrifices and taking enormous risks is giving way to an industry dominated by business administrators seeking to “expand market share”, “optimize the portfolio”, “maximize efficiency”, and other lifeless abstractions that should be of little concern to the pure craftsman (also an abstraction).

An outside observer will point out that this rotting is completely natural, and it happens in every facet of the universe (it’s the lifecycle). Complaining about it is as useless an indulgence as longing for that band’s “old stuff” or wishing Facebook was still merely a college stalking tool. Craft beer has become mainstream, and, as such, it’s become less cool. As evidence, consider that your neighborhood hipsters now shun craft beer bars in favor of dive bars where they enjoy Miller High Life and Banquet Beers in their insufferable post-ironic fashion.

Craft beer is special, really

We had a reporter contact us recently when she heard about a collaboration we brewed with Platypus Brewing. She hadn’t heard of breweries collaborating, and she was surprised when we told her there have been several collaborations in Houston. She then asked if this is a quirky phenomenon specific to Houston and was further surprised to hear that this is the norm for craft beer all over the U.S. – currently, there are 2,819 collaboration beers listed on Untappd. Through the lens of the businessperson, this is bizarre. Surely, there must be a commercial angle here. And there is – collaboration beers are highly marketable and both breweries typically benefit from a sort of cross-pollination, whereby they adopt each other’s better practices (note: Holler Brewing always benefits more than our collaborator in this department). But there is something else at work – an intangible, spiritual benefit that we get from helping one another. This only exists in beer, and it’s why you don’t see this much collaboration among distillers, butchers, or pharma companies (especially without lawyers and NDA’s involved).

And the collaboration brews are the tip of the iceberg. Most of the help that craft breweries extend to one another does not make the news. When Kathryn and I got into the business, we were welcomed into the community even though we had nothing to offer. Existing breweries took time out of their day to show us around, tell us their stories, and advise us along the treacherous path of starting breweries. They were consciously helping competitors enter their marketplace! Even today, we still reach out to other breweries for help problem solving or to lend us supplies.

This spirit began in with craft beer in the 1980’s, when craft beer was less than 1% of the U.S. beer market. Sierra Nevada and friends were motivated by survival to work together. There were no specs for craft brewing equipment, so they bought dairy tanks and shared their DIY adventures with one-another. Their marketing efforts also benefited one-another: when Sam Adams made a commercial explaining what hops are and what makes their beer better than the status quo, that was a commercial for every other craft brewer, too. “Support your local craft brewery” was a party line the entire industry promoted.

Remarkably, while the necessity for this collaboration has diminished (since Sierra Nevada opened in 1980, the number of breweries in the U.S. has grown from 92 to over 7,000 in 2018), the spirit of collaboration lives on. Many of us were attracted to the industry for this very reason, and we were all initiated with such generosity by our peers and our elders that we know nothing else. Whether we help a neighboring craft brewery is not a calculated business decision – we do it when we can. We’re bound by a code, by a simple contract: Be Cool.

Is The Cool in danger?

But, how do you ensure that the Cool is conserved? Isn’t this “collaborative and community-based ethos” an opportunity ripe for harvesting by a cynical capitalist not interested in performing his side of the contract? For example, someone could don the façade of a member of the craft beer movement: “Brewed locally by local, passionate people who love beer more than anything!” In addition to the welcoming, trusting community of brewers and retailers, they also enjoy the respect and patronage of customers that their forebears earned for them (i.e. they earn business by customers doing their part to “support their local craft brewery”).

In return, this secret operative might decide not to stay Cool. He bullies (or bribes) local bars into getting rid of his fellow brewers’ products in favor of his. After capturing a share of the local market, he sells his brewery to The Dark Side, and that was his plan all along. This is a well-executed business plan (“just business”), and it’s also an act of treason. It’s totally uncool.

But it’s not the only way to drain the Cool. In fact, there are a vast sea of offenders betraying the cool in more insidious ways. The most common is the brewery’s owners deciding to sell a product that they themselves wouldn’t buy (like hard seltzer or low-carb lager). Or deceptive marketing – like calling a kettle-sour a “wild ale” and charging 3x the going rate for a kettle sour, or presenting an unaged 3-week scotch ale in a 750 mL bottle and making it look barrel-aged. Or, there’s the Holy Sin: selling beer that you should have dumped down the drain but didn’t “because it will still sell”.

A narrow-minded business person might be proud of such “achievements”, but they come at the expense of the rest of the industry by blurring the line between craft beer and plain-old consumer packaged goods companies like Procter & Gamble and AB InBev.

In common among all these behaviors is that they expose a dominating commercial interest in the character of the brewery. In other words, you only need to observe a brewery doing one of these things one time to reveal that, “They’re just in it for the money”. Some of these players are incarnations of the cynical capitalist described above, whose hope is to grow quickly and cash out – in such cases the owners typically are more interested in “branding” than in beer or brewing. Others might have a perfectly noble aim but are constrained by a weak balance sheet (“I know I shouldn’t sell this bad beer but I’ve got bills to pay!”). While we might sympathize with the latter, we must recognize that both camps are equally dangerous to The Cool.

Where do we go from here?

The optimist in me believes that there’s a redeeming feature in the system – that craft beer, in general, is not profitable. This has been masked in the last decade by an explosion in demand, but supply is quickly catching up, as the Brewers Association’s economist Bart Watson observed recently that the gap between brewery openings and closings is starting to converge.

While there are exceptions, there is a clear trend toward smaller, “hyperlocal” breweries, where the successful ones are more like dentist’s offices than they are like tech companies. In such a small brewery, there might be enough profit to feed the mouths of the owner-operators and a few employees, but nobody gets paid without working, and nobody is getting a G-6. Either by choice or by bankruptcy, the cynical capitalist will leave the industry in search of something more profitable, like hard seltzer.

If I’m right about this, the Cool might hang around a bit longer, but we still have to work to preserve it. As a brewery, we have to maintain discipline with regard to the product we make: Would we want to buy this product at this price? Is the quality of this product honoring the legacy of those before us and respecting those around us? We also need to maintain our collaborative spirit in the presence of increased local competition – keep collaborating, and we’ll show the community what’s great about craft beer.

And, harkening back to one of Black’s main ideas, we ought to pay the beer bars their due respect – that beer bar opened long before we were here, and they paved the way for us. Some competition between us is inevitable, just as it is with other breweries. And, just as with other breweries, we should endeavor to collaborate where possible (and legal).

What I’m Saying Is

By joining this club of craft beer, and sharing in all its glorious benefits, we implicitly agreed to Be Cool, even if it costs us. Should we ignore this sacred covenant, may the Beer Gods have mercy on our souls.

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