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‘Exciting time’ for craft beer industry

by Jon Harris of The Morning Call

A venue hosting an Oktoberfest in a state that already leads the nation in craft beer production, with around 4 million barrels a year, seems like the perfect setting to ask:

Will the craft beer industry keep booming?

That’s the question J.B. Shireman, a director at First Beverage Group, attempted to tackle Friday afternoon at the first Mid-Atlantic Brewers Symposium at ArtsQuest Center at SteelStacks in Bethlehem.

There are more than 4,000 licensed breweries in the United States, with almost another 2,100 in planning, said Shireman, who flew in for the event from Fort Collins, Colo. At the current pace — one brewery opening every 12 hours — Shireman said the country will reach the all-time high of more than 4,100 breweries by the end of the year or early next year. By comparison, there were fewer than 100 American breweries in the late 1970s.

“This is impossible to sustain, right?” said Shireman, who worked at New Belgium Brewing Co. from 1995-09, most recently as head of distribution strategy. “It can’t possibly continue this way or it would all be craft. It’s not going to all be craft, but I can tell you that the future, in my opinion, does not look bright for domestic light lagers, and the gravitation toward artisanal beverages of all kinds continues at a pretty rapid pace.”

Shireman spoke to about 60 people for an hour Friday. First, he went through the history of the beverage industry, using well-timed profanity to grab a laugh, especially as the conversation progressed from the nation’s 2,011 breweries in 1890 to prohibition. “I always say, ‘Leave it up to politicians to screw up a good thing,'” Shireman said right before tackling the rising temperance movement around the turn of the century. Temperance, he added, is a “word for people that don’t like to have fun.”

After getting up to present day, Shireman went through six tiers that affect the craft-beer-brewing industry, which includes consumers, brewers, distributors, retailers, the political environment and non-industry influences.

Consumers today, he said, have an insatiable thirst for variety, evidenced by the record number of craft beer taps around the country. In addition, Shireman said, consumers have a fascination with local products.

“Your need to innovate to supply that variety is imperative,” he told the brewers in attendance. “But it is also very costly. It’s very costly for you guys to make small-batch beers.”

Shireman also provided three tips for how brewers can preserve the value of their operation: invest in quality, go deep in their market but not wide and don’t let other people drive the brewery’s strategy.

“If you can’t support what’s going on in your backyard and a handful of states around you, I find it very hard [to believe] that you’re going to compete well in San Diego or Seattle or Portland,” he said.

Victory Brewing Co. brewmaster and President Bill Covaleski is also president of Brewers of Pennsylvania, the group behind the Brewers Symposium, which also has events planned Saturday morning for its members.

Covaleski likened the event to a localized version of the national Craft Brewers Conference, designed to educate and give brewers a look “beyond the horizon” through leading experts like Shireman.

“The need for education, let’s call it, or at least sharing best practices and sharing advice has been fundamentally important for craft brewing’s growth across the nation,” said Covaleski, whose Chester County-based brewery is on pace to produce more than 140,000 barrels this year, which would be up from the almost 126,000 it pumped out in 2014.

Shireman sees that growth continuing, with craft beer expected to keep wrestling away more market share from the domestic non-craft brewers.

“I think it’s an incredibly exciting time to be in the industry,” he said. “I’ve been in the industry a long time. I’ve never seen it evolve and change and move at such a pace that it is now.

“The beverage industry is anything but boring.”