With more and more craft brews crowding the shelves, what is it going to take in the future for one to keep its place at the local liquor store? Is there a magic number for maximum density for the industry, or can the industry just continue to grow without major issue? Photo by Kelly L. Fowler

I recently posed the following question: At over 1550 brewers currently operating in a professional capacity in a continually growing industry, at what point do we reach industry saturation? Jumping into the conversation were Matt Simpson, owner of the Beer Sommelier in Atlanta, GA; Nate Dizo, better known as Brewmaster Nate of the Brewmaster Store in Durham, NC; Adam from Massachusetts, known around the Web as Beersage, and the founder of beernews.org; and Michael Smith, a New York architect and craft beer fan who has explored opening a brewpub.

While no numbers were thrown around in an effort to define what saturation really meant in today’s world, some interesting historic perspective was provided, possibly giving us a view of what the future could hold for an ever growing industry.

The US is currently home to roughly 1550 breweries (brewpubs included). What’s maximum density? When are there too many for market?

Matt Simpson: A long time from now, with MANY more. We’re nowhere near capacity. Throughout Europe, they’re on just about every block.

Michael Smith: The Troy and Albany area were a hot bed of brewing before prohibition. There were some 50 commercial brewers in Troy in 1890 (compared to 17 in the entire USA in 1978). That’s about 1 for every 5000 people. The government ruined that – perhaps the single biggest argument for libertarianism.

Ever hear of William Newman Brewing? I believe it was the first microbrewery this side of the Rockies. I think it opened in Albany in 1979 – just after Jimmy Carter took mercy on our souls and passed (repealed?) the home brewer law. Jim Koch got his start at Newman’s. When I rode for the Downtube we would ride over and he would fill any gallon container with beer. Awesome place.

FYI, Brown’s is in Troy and they serve a fine Imperial Stout and a deadly whiskey porter. If you ever have the misfortune to spend a day in Troy. . .or seven years, god forbid . . . you should stop in.

Brewmaster Nate: Still recovering from prohibition. one per 5,000 sounds dead on

Michael Smith: I don’t think that there is an achievable maximum density. Pretty much any family friendly pub could be a brew-pub.

The up front cost of establishing a brewery and a restaurant is the killer. Very few can afford to swing the pub and the brewing costs. It’s hard enough to afford just opening a restaurant. And the brewing part has to make money on its own.

We looked into opening a brew pub in Tarrytown, NY. We even did a Statistical Market Survey. Based upon our information (admittedly not applicable to Maryland), I wouldn’t locate a brewpub in an area with less than 100,000 people in a 20-mile radius unless you had a large 30- to 50-something professional crowd.

We were looking at a 10-bbl system with the help of Mike Kondrat (who passed away in 1998)

Kevin Smith: Interesting – I would have thought that Tarrytown would have been ripe for something like that. The only issue I really see [in] the location [is that] I’m just not sure what facility there would be a good fit.

You probably could have worked fine with a 7bbl system, as long as you were going with more fermentation tanks. That’s the common complaint that I get from the brewers at brewpubs – that they’re limited by fermentation space.

Michael Smith: I didn’t say that Tarrytown wouldn’t have been a good fit. Mike Kondrat worked for The Colorado Brewing Co. in Danbury. They pulled their money out in 2004 and shortly later Mike died of an aneurysm. A brew pub without a brewer is not a brew pub. That killed the plans.

I agree with your comment regarding the 7-bbl system.

But my understanding of the process is too limited – I left it to the experts.

Adam Aka-Beersage: Matt’s right. Though retail shelf space is getting tight in some metros, I think there is plenty of room for

What is the strategy for small beers like Tupper's Hop Pocket, when fighting for marketshare against larger micros? Photo by Kelly L. Fowler

nanobreweries and perhaps even brewpubs to flourish everywhere. New packaging breweries would be a boon in some places. Though I’m not sure the European beer scene is quite like that in the U.S. It could take decades to get there.

Kevin Smith: @Adam – so if we might have an issue, or already are experiencing the issue of Micros fighting for limited shelf space, how important then is establishing your beer as the beer of choice in the local market? I would think that “local” brand identity becomes more and more important as we gain more access to more micros.

Adam Aka-Beersage: I think you’re right for the most part, Kevin. Local seems like a logical, cost-effective strategy for young breweries. As for veteran breweries, I don’t know how they would go about creating a local identity if they’ve skipped that part when they first started. I’ve noticed stores adding more shelves to accommodate more beer over the years though they are running out of room quickly so it will be interesting to see what happens. Though I’m in a hub so-to-speak so not all places have hit that point yet.