Happy New Year to all our customers! We tremendously appreciate all the support over this last year in Grayslake and the previous eight years in Hainesville. Please don’t think us ungrateful, but the current state of craft beer needs to be discussed.
When we opened as Beer Bazaar back in 2014, craft beer was experiencing the early stages of its modern-day boom. Zumbier was celebrating its second year in business, Mickey Finn’s was operating out of the current location of O’Toole’s in Libertyville, Light the Lamp hadn’t expanded, Only Child (now Copper Turtle) was still brewing out of Northbrook, Art of Beer (RIP OGs) was the only other bottle shop in Northern Illinois. Furthermore, bombers from Solemn Oath and Pipeworks were some of the most sought out brews on the market. Most of all, many of the breweries you have come to love in the last few years, did not exist.
It’s hard to imagine that kind of unsaturated market, but not totally impossible. In recent years, the beer industry hasn’t fully recovered from the pandemic’s impact. When I’ve spoken with brewery employees, many mention taproom attendance has yet to return to pre-covid numbers. Craft beer sales declined by 5% in the first nine months of 2023 (1) and in 2022 beer sales dropped below spirit sales (2). At least 30 breweries in Illinois closed last year (13% of all Illinois breweries) (3). Earlier this month, we lost one of the oldest breweries in Lake County and one we held close to our hearts: Zumbier.
I am no great oracle proclaiming “the craft beer bubble is going to burst” or town crier decreeing that the end is nigh, but it is evident that the industry is struggling. Such prophecies are nothing new for those who remember Jim Koch’s opinion piece from 2017 “Is It Last Call for Craft Beer?” which prompted a slew of rebuttals and differing hot takes(4). I used to be of the mindset that if a brewery can get its local support, it will succeed, but even that is a dated perspective.
Key Factors to the Struggling Industry
Without diving too deep, it boils down to rising expenses, saturation, changing consumer trends and other economic factors.
People are drinking less beer or not drinking at all. At the store, we’ve seen an increase in the sales of hard liquor, mead, non-alcoholic beer, seltzers, ciders, and CBD/THC tonics. Those that are still drinking are trending to higher ABV/proof beverages.
Like all small brick-and-mortar businesses, local breweries are also competing against online stores such as Tavour, selling the hypest “only 4.4 or better on Untappd.” They also compete against the goliaths in their industry: the conglomerate-owned breweries with better hop contracts, deeper pockets, and streamlined processes that enable them to put out products cheaper and then ship it across the country. As such, local breweries are competing amongst themselves to draw from a shrinking basin of craft beer drinkers.
Some of the breweries that initially saw sales increase and profits rise also took the next rational steps into taking loans for expansions in production or location. With production costs and expenses rising across the board (glass, CO2, aluminum, rent, interest, taxes, etc.) and dwindling revenue, it’s all but clear, disaster is in the air (You can read more about the industry’s struggles in the links on the “Resources” section.)
What the Future Holds
So where does this leave us? January is notoriously the slowest month of the year during the slowest quarter of the year, but this year it could spell out the demise for breweries fighting closer and closer to the edge.
Know that we too have experienced difficulties in recent months: not doing as well as we would expect after a major expansion. Both breweries and bottleshops will need your support more than ever in the drier and slower months (January to March). However, where we differ is in the ability to diversify our inventory to remain relevant. We aren’t at the point of abandoning ship, and if things improve with the beer industry, our business will also improve.
If things do not change, I fear we may experience a return to draft menus dominated with macros, imports, and little variation in local selection.
Ways to Help the Industry
So how can you help the industry?
- First is with financial support. When breweries announce a closure or that they are struggling, what often comes next is an outpouring of support, but that only places a Band-Aid on the wound; it doesn’t solve the root issues. Consistent support is what it will take to keep breweries going past the sympathy bump.
- Attending brewery events is another way and by doing so, you are making it worthwhile for them to host them. More and more I’m seeing taprooms having to morph their identity and serve as event spaces to draw in crowds. It costs us and breweries when we pay for a musician and don’t hit a minimum with a food truck (which then comes out of pocket) for a poorly attended event.