Showing posts with label expansion. Show all posts
Showing posts with label expansion. Show all posts

Friday, May 11, 2012

Stifling the South

I want to preface my post today with a clarification, basically so I don't have to explain myself later if people get the wrong end of the stick. I like the beers of Sierra Nevada, Oskar Blues and New Belgium.

With that out of the way, let me continue. If I were in the planning stages of starting a brewery over here on the East Coast of the USA, especially in North Carolina, but also Virginia and South Carolina, I would be worrying right now. I would be worrying because all three of the aforementioned businesses are planning to build breweries in North Carolina, all of them clustered in the Asheville area.

On one hand it is excellent news, it will create jobs, which will spur local economies as workers spend their money, so from a economic point of view this development is very welcome. A further benefit that has been mentioned is their beers on the East Coast will be fresher and of a higher quality, personally I am a little dubious on this, but there we go. Certainly they will be cheaper to distribute, but I very much doubt the consumer will benefit from that in any way shape or form, just as the consumer doesn't benefit from the transportation savings of using cans instead of bottles.

My concern then is that these expansionary moves will stifle the local craft brewing industries and that market share which previously supported much smaller operations will be lost to the bigger company. Of course, the economist will say that this is simply the invisible hand of the market, but I have an aversion to invisible hands grabbing small companies by the neck and squeezing the life out of them. Naturally there is the argument that having these big businesses on their doorstep should encourage the smaller local breweries to up their game so they can compete with the big boys, but the question remains will they have the resources to do so?

I can't help but think that this is the first stage in the consolidation of the craft brewing industry, where the bigger companies start to force their way into markets by opening brewing facilities in various parts of the country. While we will see more and more Sierra Nevada, New Belgium and Oskar Blues beers in the supermarket aisles, we will see fewer local brews except at specialty outlets like Beer Run here in Charlottesville.

As I commented on my Twitter feed the other day these expansions are really no different from AB InBev buying up facilities to brew Budweiser in around the world, it's just that the beer is a bit better.

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