Partipants in BizWest's CEO Roundtable for the Craft Beer industry are, from left, George Berg, Berg Hill Greenleaf Ruscitti; Eric Wallace, Left Hand Brewing Co.; Jim Fipp, Berg Hill Greenleaf Ruscitti; John DaVore, EHS&H; Davin Helden, Liquid Mechanics Brewing Co.; Matt Cutter, Upslope Brewing Co.; Ryan Wibby, Wibby Brewing; Mike Madden, EHS&H.

Brewers cope with growing pains while remaining true to the craft

BOULDER — Uncertainty is becoming a fixture of the craft-beer industry, as brewers try to anticipate what changes might come from full-strength beer in grocery stores and increased acquisitions by major corporations.

Fresh off the Great American Beer Festival, four Boulder County brewery CEOs came together to discuss the issues and opportunities their industry faces.

One of the biggest things was the importance of independence among craft breweries. Over the past few years, corporations such as Anheuser-Busch InBev have purchased formerly independent breweries and brought them under their corporate umbrella. The wave of acquisitions has done more than just cause some breweries to go corporate; it’s caused disruption in the market.

“I think the intent is to confuse the consumer into thinking they’re buying independent, craft beer,” said Matt Cutter, co-founder of Upslope Brewing Co. in Boulder. “Then they bring those prices down to a level that we can’t compete at because we’re not nearly as efficient as they are, and they’re trying to squash craft beer in that manner.”

To compete with that, craft breweries across America have banded together. Breweries that are independent are encouraged to declare themselves as such, with a seal on packaging that says “independent.” The hope is that consumers will learn to recognize and look for the seal.

“I think the independent seal is the most important thing we have,” said Ryan Wibby, co-founder at brewmaster at Wibby Brewing in Longmont. “If a consumer doesn’t know the difference, why would they choose something that looks like craft and tastes like craft but isn’t. Distinguishing from pseudo-craft beer is a huge part of this. And it needs a lot of courage from bar owners and restaurants to continue with craft and stay away from big guys like ABI and Coors.”

Even with the independent seal, there’s some frustration at how well corporations have been able to infiltrate the craft-beer market.

“I worry that [we use the term independent] because ABI has stolen the craft name from us,” said Davin Helden, CEO of Liquid Mechanics Brewing Co. in Lafayette. “I hope it helps customers realize what they’re buying, but it feels like we’re having the term craft dissolve in importance.”

There are other concerns craft brewers have. A big question mark is what happens to the industry when grocery stores are allowed to carry full-strength beer in 2019. Up until now, craft-beer sales have been driven by sales on-site or at independent liquor stores. With chain groceries able to sell beer, there’s a concern that it will tank sales at the liquor stores that have boosted and supported craft beer.

“A primary reason we’ve had such a strong culture of craft beer in Colorado is because of independent liquor stores and because of all we’ve done to self-distribute to independent liquor stores,” Cutter said. “It lets the little breweries grow up.”

Another issue is how much more difficult it is to get product in a chain store versus an independent store.

Despite the major changes, it’s still unknown what will actually happen to sales in 2019. In the meantime, the industry is seeing a shakeout of breweries starting to close because of competition in the market.

As craft beer continues to face its growing pains, one thing that is clear is area brewers’ commitment to the craft itself.

“Why does independence matter?,” asked Eric Wallace, co-founder of Left Hand Brewing Co. in Longmont. “To me, craft and independent craft is not just about maximizing ROI or whatever language you want to speak. That’s a necessary part because we’re in business, but it’s not why most of us got into this business. We got into it to save the world through better beer. I think a lot of contemporaries feel the same. We’re part of urban-renewal efforts in thousands of towns in the country. We’re a new community incubator and center where you build community within our tasting rooms and bring people together. We’re using the power of craft beer in that community to support it.”

Participants

Davin Helden, CEO of Liquid Mechanics Brewing Co.; Ryan Wibby, co-founder and brewmaster at Wibby Brewing; Eric Wallace, president and co-founder of Left Hand Brewing Co.; Matt Cutter, founder of Upslope Brewing Co. Moderator: Christopher Wood, co-publisher and editor of BizWest. Sponsors: EKS&H: John DeVore and Mike Madden. Berg Hill Greenleaf & Ruscitti: Jim Fipp and George Berg.