The Year in Review
December 21st is the year’s shortest day; in Portland, nearly two-thirds of our time will be spent in darkness. The sun, if it does make an appearance, will skitter low along the southern horizon. In short, what better day to grab a cup of coffee and settle into a consideration of the dying year?
Not too long ago, I wrote about the overall high quality of beer now available in the US—even in small brewpubs in out-of-the-way towns. Here in the Northwest, there’s no better example of this than Dwinell Country Ales, in extremely remote Goldendale, Washington. This is a town that has a hard time supporting any local watering holes, and even a standard pale-ales-and-stouts brewpub would have been a bold move. Dwinell, though, makes incredibly sophisticated beers, with an emphasis on wild ales. When Goldendale gets a brewery that counts Upright and Block 15 as peers, you know something new is happening in the US. That there is a brewery of this quality also plays a starring role in the biggest business trend of the year—more on that in a moment.
In terms of the beer breweries made in 2018, a few trends emerged. This was the year brut IPAs went mainstream. A year ago, they existed solely as a San Francisco specialty, but by the fall they were so ubiquitous that even Ommegang released an example. (There’s a real question of whether this is the latest _________-IPA to have its brief, shining moment before sliding back into obscurity—like black and Belgian IPAs before it—or will have staying power. My guess is obscurity, but time will tell.)
I don’t know if this counts as a trend yet, but following the huge success of local breweries making “Mexican” lagers, this year saw a wee boomlet in “Japanese” lagers—crisp, highly-attenuated beers made with rice. They seem tougher to make than the corn-based Mexican examples, but pFriem made one I loved.
This was also the year glitter beers had their moment, when breweries really got into CBD, and when the juicy IPAs went as far down the sweetness road as chemistry allowed. But, when any trend swings too far in one direction, it creates a reaction, and this was the year we saw some hazies get a little more bitter. This is a perfect example of culture at work, where that conversation that happens between brewer and drinker resets itself. After years of pushing the envelope on every sweeter, juicier beers, we have discovered you can go too far. Looking forward, we can see the contours of this style beginning to solidify. They will stand on a platform of maximal levels of hop aromatics and flavor, but with increased levels of bitterness, these qualities will come into balance (and, counterintuitively, pop more). It doesn’t take much, and many drinkers won’t even note the correction—but it’s happening.
A few years back, we were wondering if the lager trend was going to hold, and 2018 affirmed it has. A growing percentage of breweries make at least one, and I can’t remember the last time I was in a pub and didn’t find some kind of tasty lager on the menu. Pilsners and more generic light largers are everywhere, but even Vienna lagers and schwarzbiers are available. The kettle-sour trend’s health is less clear. Back in 2015, dry-hopped sours, Berliner weisses, and goses were everywhere. Now they’ve settled into a decidedly niche realm, and the focus seems to be shifting toward lower-acidity “sours.”
The final trend I noticed in 2018 was so small it will never appear in the IRI trend data. Nevertheless, for fans of sophisticated, vinous beers, it was a banner year. I’m talking about mixed-fermentation saisons. Breweries know these things don’t sell particularly well, but they’re devoting serious time and money making them because they’re so damn good. I had stellar examples from a number of breweries. It’s almost emerging as a kind of style: rustic ales fermented with domestic yeasts, then barrel-aged with wild yeast and bacteria, and finally, blended. I’ll discuss some good examples in my beers of the year post.
As all that exceptional beer demonstrates that, if you’re a drinker, 2018 was perhaps the best year on record. If you were in the business of selling beer, on the other hand, things were far rockier. Beer sales were down again in 2018, and the craft segment didn’t budge much. It’s not exactly in recession, but growth is going to be very small. And, because another thousand or so breweries were born in 2018, there was far more competition for that barely-budging volume of beer sold. The market may not have declined, but volumes did for many breweries.
The effect was not equal. Smaller, newer breweries saw nearly all the segment’s growth. Some bigger craft breweries managed to stay flat or hang onto modest growth, but most suffered substantial declines. This is a structural problem, and one that will worsen in 2019.
Take Deschutes, which offers a stark example of the challenges for mid-sized regional or national breweries. For nearly thirty years, Bend’s finest grew steadily through a simple strategy: consolidate local markets and expand slowly. Deschutes became the NW’s biggest brand by the late aughts and sold enormous amounts of beer here. When Deschutes entered under-served new markets elsewhere in the country, it received a warm welcome from locals. (It helped that the brewery had one of the most popular IPAs in the country in Fresh-Squeezed.)
But two trends upended this strategy. First, the overall market slowed, and demand declined. For many breweries, the growth from 2006-2016 happened because of an expanding market. Second, all these new, little breweries started popping up everywhere, even in remote places like Goldendale. Five years ago, there were 3,000 breweries in the US; there are now more than 7,000. That meant those under-served areas started getting their own breweries and it meant Deschutes’ hegemony in the Northwest declined. A few years ago, Deschutes was selling 90,000 barrels of beer in Oregon; last year they sold 69,000. In total volume, the company has declined from a high of 374,000 barrels to an anticipated 315,000 this year.
It’s harder to compete nationally and it’s harder to compete locally.
There were a few things to note from the perspective of the drinker’s experience. One that has just bubbled at the level of suspicion is the increasing cost of beer. The seven dollar pint may not quite be the standard, but it’s no longer a shock. One way breweries and taprooms have concealed this is by offering many different glass sizes—itself an excellent trend. More and more often, I notice that the $6 glass I’m drinking is only ten or twelve ounces—often for a standard, non-specialty beer. Grocery store prices have jumped, too, led by the cachet cans now enjoy. This is an area an enterprising blogger might explore with a data-based post. If Bryan Roth doesn’t do it, I may be forced to.
The 22-ounce bottle seems to be nearly obsolete, but in its place are smaller-format big-beers. Here in Portland, I’ve noticed 500ml bottles replace the 22. They’re still visually larger, good for both specialty as well as session beers, but more easily fit on the shelf with six-packs. The 375ml bottle is less common, but seems to be appearing with some regularity. For consumers, this seems like a generally good thing. Breweries tended to put their biggest, most-expensive beers into 22s, which was not user-friendly to the drinker. There is a dark side to this trend, though. Small breweries used the 22-ounce format to get into retail and make a mint on the high profit margins. Now there are fewer opportunities to enter the retail space, and the margins are lower. That’s going to hurt some breweries that depended on the format, and prevent others from coming on the market. (Oh, and while it’s not yet a full-blown trend, Oregon’s refillable-bottle program was a great experiment in 2018.)
Finally, we have to acknowledge that while the massive proliferation of new breweries is tough on existing breweries, it is fantastic for drinkers. That’s especially true in those smaller, under-served communities I’ve already mentioned—but it’s true everywhere. Large cities have a greater and greater density of breweries, so that each neighborhood now has one. Mid-sized towns like Duluth and Bellingham, which I visited earlier this year, now have vibrant beer scenes that would have made large cities jealous ten years ago. That has fragmented our sense of the beer world, and now it’s harder to have cross-country conversations about favorite beers and breweries, but it makes the experience of the drinker, now able to find exceptional breweries just around the corner, so much better.
If you spend a lot of time with your nose in beer Twitter or blogs like this one, you may encounter more cynicism, hype, and anxiety than you like. But the experience for the average drinker continues to improve. As 2018 winds down, I like to remind myself that outside the bubble, the state of beer in America is vibrant, fun, and healthy.