Craft Brewing Business

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Craft Brewing Business

Labor Day Fun: Why craft brewing businesses rarely fail (and why they are tough work)

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Brewers have to do some serious labor to get things running, but once they do, brewing is one of the best industries to be in right now.

Maybe this isn’t your traditional Friday Fun story, but seriously: Breweries rarely fail. Hooray! That’s pretty fun, right?

Obviously some breweries fail. The number of brewery closings the Brewers Association announces every year usually comes in around 40, which is nothing to gloss over, but when the number of openings each year is now over 1,000, you can see why the folks at Entrepreneur magazine would put the brewery failure rate at “near zero.”

The aforementioned Entrepreneur gave a nice look into why this is the case. You no doubt know some of the reasons: decent margins, early sales, not a ton of barriers to entry and, really, it’s just a booming market with a ton of interest. People want quality local products, they want an experience and they want to drink. Craft beer covers all the bases.

Everyone is writing puff pieces about craft beer these days. And, in the spirit of Labor Day, it was nice that this post from Entrepreneur looked at the flip side of this success: Hard [email protected]#$ing work. Sure, breweries are opening everywhere and staying open, but that’s also in large part to the insane dedication of the individuals that start them. Brewers aren’t just business school grads with get-rich-quick schemes. No, brewers (the best ones at least) do it because they love it, and as Entrepreneur points out, you have to feel this way to really make it work. The barriers to entry the magazine noted:

  • The price of success is brutally hard work, long hours and low pay.
  • Low-capacity starter brewhouses often require owners to brew beer around the clock—many even sleep at their breweries.
  • New brewers “sewer” a lot of product as they struggle to produce consistently high-quality beer.
  • When sales lag, new brewers cut their own pay first.
  • Competition for staff is intense, forcing new brewers to do many jobs themselves.
  • Passion for making beer keeps craft brewers toiling away longer than most entrepreneurs. Often they aren’t succeeding so much as refusing to fail.

So we say, this Labor Day, find some time to raise a pint to yourselves, craft brewers. The success of this industry didn’t happen by accident. You guys and gals helped will it into existence. So, a big “cheers!” from all of us nonbrewing hacks out here who get to reap the benefits.

(But seriously, just the one pint. Then back to brewing, please.)

Reader Interactions

Comments

    • Mic Heynekamp says

      I wonder how many failures aren’t even failures? We expanded but wanted to keep both licenses active until the new facility was up and running smooth. In their closings and openings they reported our opening (new license) and then closing (when retiring old license).

      • Chris Crowell says

        It’s a great point, Mic. The BA might have more details on each closing that would separate the actual “failures” versus a situation like yours, or a retirement, or whatever else. Maybe something to look into more closely.

  60. Karen Hood Grass Williams says

    Well, I know of one such brewery that definitely falls into this category……”you have to love it” in order to make it work is right on the money! Grasslands, here’s to you: Prost!

  80. Danny Danny says

    Does the Brewers Association interview the 40~ companies that fail and ask what they think caused the failure, what they would have done differently, or if the closures were simply due to retiring/reorganizing/moving

    • Chris Crowell says

      I feel like they usually do have an idea as to what happened to the breweries that closed, but honestly don’t know. Good question. Definitely something to look into.

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