A Non-Expert’s Pseudo-Scientific Look at the Issue of Brewery Oversaturation in Denver

Note: I’m neither an economist nor a fortune teller.  I am, rather, an observer reporting on what I’ve witnessed in my day-to-day life as a beer geek.  Much of my argument is qualitative, comparative, and when I do use statistics, it’s quite possible that I’ve not considered all variables.  If you want a scientific, straight-forward assessment of the situation, go to your nearest university and enroll in an advanced business class.  If you’d like some interesting talking points to bring up with your drinking buddies, read on.

Brewery oversaturation: an idea that is, itself, oversaturated.  It seems that, no matter where beer geeks click, there’s an internet article either supporting or debunking the notion that there’s too many breweries in America.  It’s the hot-button issue facing today’s craft beer industry and even  casual drinkers can’t help but get sucked into the argument.

While the debate rages on a national level, too few take the time to inspect the issue at a municipal level.  If there’s to be a great “thinning out” of American breweries, would one city be hit harder than another?  Can some places sustain more breweries than others?  What makes certain cities more amenable to the brewery craze?  How would Denver fare in the foretold bursting of the craft beer bubble?  I intend to find out.


The state of craft beer in America

While I aim to keep the focus on Denver, I would like to quickly sum up some of the general data surrounding brewery growth in America.  It may be old news but it’s important to have a basic understanding of the whole before delving into any of the parts.

The Brewers Association (BA) has a graph that, from 1887 to 2013, charts U.S. brewery numbers, the Prohibition Era demise of all things alcohol, and the resurgence of beer through to the present day.  It showed 2,011 breweries in 1887 and 2,538 in 2013: about a 25% increase.  What’s risen by far more than 25% is the populations; in 1887, the country was home to 62,979,766 people while 2013 sees 316,364,000.  Thus, the number of breweries has increased only a little but the number of thirsty patrons has risen exponentially!  1887 boasted one brewery for every 31,490 citizens while today’s ratios are a paltry one brewery for every 124,651 citizens.

Furthermore, while beer in general is declining in popularity, the sub-category of craft beer keeps growing.  Anheuser-Busch and MillerCoors may be feeling the squeeze but the artisanal brewers are flourishing!  Despite that fact, as per a 2012 statistic from the BA, craft beer comprises only 6.5% of the total U.S. beer market.  What does it all mean?  I take it to mean that big, domestic beer brands are slowly dying out, leaving a void in the alcohol market.  Wine and spirits will claim some of that empty space but it still leaves plenty of room for craft beer expansion.

Now, let’s focus on Denver.

Beer: Denver’s identity

Denver is, by most accounts, a craft beer mecca.  We host the Great American Beer Festival, we’re nicknamed the “Munich of the West,” and we’re home to 27 breweries (with many, many more expected to open soon).  Lots of cities and regions have their image tied in with a certain consumable: Philadelphia has cheesesteaks, Kansas City has BBQ, Bourbon County has whiskey, Napa Valley has wine, Seattle has coffee…etc. but, in the Mile High City, we’re known for beer.  It’s a part of what makes Denver Denver.  It’s how we present ourselves to the rest of the nation and, in a way, it protects our fair city from the supposedly looming brewery crash.  Envision a buffalo herd; the strong live on as the weak are weeded out by predators, inclement weather, or the lack of the will to survive.  Now, imagine if all the cities in America are members of the herd and the brewery crash is a pack of wolves.  In this analogy, cities like—I don’t know—Tulsa or Reno or Little Rock are dead meat.  They don’t have a thriving beer scene and they haven’t really put any effort into branding themselves as great beer cities, either; they wouldn’t care if all their breweries closed because beer was never really their “thing.”  The hot spots of American craft beer—Denver, Portland, San Diego…etc.—will stand strong because we have skin in the game; if we lose our beer, we lose our identity (not to mention tourists dollars from people who visit us on a “beercation”).

media-bottlehead (Copy)

Besides loss of face, people in Denver really just like beer a lot and would hate to see any brewery close.  How many breweries is enough, though, even for a town that slings back as much suds as Denver?  It’s hard to say.  How many coffee shops are enough for a caffeine-addicted metro like Seattle?  They have 131 coffee shops in the downtown district alone.  How many ribs and briskets can Kansas City handle?  They have about 100 BBQ joints.  How much wine is in Napa Valley?  They claim close to 400 wineries.  Next to those numbers, 27 is miniscule; if you’re doing something you love, you can never get enough.

The diversity of beer

Consider, also, the diversity of beer; different varieties of hops, barley, yeast, water, and other ingredients can be combined in myriad different ways and quantities allowing for a wide range of beer styles.  Pilsner and stout are both beers but taste them back-to-back and you’ll understand how dissimilar one beer can be from another.  If a small neighborhood featured an Italian restaurant, a Chinese restaurant, a Mexican restaurant, and a French restaurant, would you say the neighborhood is “oversaturated with restaurants?”  Of course you wouldn’t.  Each establishment offers something that’s not available at the others just as the Belgian-specific River North Brewery offers something you can’t get at the Brett-specific Crooked Stave Artisan Beer Project.  Hell, even when two breweries make the same style of beer they still taste different; Great Divide Brewing Co.’s Titan IPA doesn’t taste much like Breckenridge Brewery’s Lucky U IPA and Copper Kettle Brewing Company’s Mexican Chocolate Stout is worlds removed from Renegade Brewing Company’s Hammer & Sickle.  Coffee, BBQ, and wine enjoy a little diversity but they can’t touch beer’s spectrum.  To exemplify beer’s superior versatility over the aforementioned foods and drinks, contemplate this: one can brew beer with coffee, one can age beer in a wine barrel, and, if you’ve ever had a Rauchbier, you know one can smoke a beer like a rack of ribs, too.  Beer can vary itself even more through the inclusion of non-beer ingredients.  Typically, it doesn’t go the other way; there aren’t too many beer-barrel aged chardonnays on the market.

Next up: Denver vs. the world, expanding breweries, and converting the non-believers

About Chris Bruns

Chris Bruns is a self-professed beer geek living in Denver. Chris spends much of his time brewing beer at home with friends and family, attempting to visit every brewery in Colorado, attending special beer events and festivals, purchasing and assessing the latest releases from local breweries, and blogging about his adventures in the world of craft beer. He is also the Denver Craft Beer Examiner on Examiner.com. Contact Chris by e-mail at chrisdbruns@gmail.com or through his blog at www.beerincolorado.blogspot.com.

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  • http://pintwell.com Pintwell

    I am just curious, how well some of these breweries are doing? What kind of money can you make if you own a brewery? Does it matter because you are doing what you love? Just a quick thought on your last paragraph. Colorado had 127+ breweries for a population of 5.2 million. Or 1 brewery for 40,944 people. We are way ahead of German and Belgium. Does that mean we are “over-saturated” then?

    • moser

      Paonia, CO, has one (nano) brewery for a town of 1,425 (Revolution Brewing, it’s amazing). And people are there, always. Taking into consideration more factors than pure person to brewery ratio is probably important in this scenario–like convenience, distribution, quality, and culture.

    • Chris

      I was thinking a country-to-country comparison there, rather than country-to-state. It’s hard to get a pure apples-to-apples comparison when talking about breweries per capita. Considering the size of Germany, you do have a point that deserves some thought but, as moser mentions, the ratio aspect is but one variable.

      Consider also that Germany, with some exception, is a traditional brewing nation and the beers they brew are mostly the local classics (Bock, Pils, Dortmunder…etc.) while we in America are NOT a traditional brewing nation and we’ll willing brew int he German style, the English style, the Belgian style, the Czech style, and in our own uniquely American style. We have variety like nobody else.

      • http://pintwell.com Pintwell

        I am thinking we should open an American style craft brewery in China. That place would be rocking.

        • Chris

          We’d be blowing minds, no doubt.

  • Alex Miller

    I think that a more important question when it comes to oversaturation of breweries is at what point (if ever) will the consumer realize that some of the neighborhood breweries they love are just not really that good? Some places are more of a “convenience of location” or “an atmosphere that people love” and less of a “this is a high-quality beer”. I think as long as people enjoy a place, whether the beer is actually good or not, it will thrive. Step into any brewery in this town (good beer or not) on a Saturday at 8pm and tell me they’re not doing well.

    • Chris

      I won’t name names but, certainly, some local breweries are better than others. That, however, is my own personal taste and, try as some people might, I can’t be convinced that beer can be judged objectively. What I find bad others my find good and vice versa. Considering that the most popular beer in America is Bud Light goes to show that flavor isn’t really a factor when most people choose their beer; I’ll take bad craft beer before I take that.

      • Alex Miller

        I agree about the objectivity of the beer being NEARLY impossible to define, but as you just said about Bud Light, there are certain beers that are pretty much universally agreed upon as being no good… and I think there’s some even in the craft beer/local brewery scene. Anyway, great article as this is a topic a friend and I have discussed recently as more and more.

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