Small companies adding value: the rise of microbrewing

January 27, 2010 · Filed Under Food, forecasts 

by Eric Garland

When I wrote Future Inc: How Businesses Can Anticipate and Profit from What’s Next, I chose the future of beer as a case study to illustrate forecasting methodology. The reasons were many. Beer is a 5,000 year-old product, and not as tech-driven as information technology – so you can’t fall back on techno-optimism when thinking about its future. Still, beer is wildly interconnected: it encompasses agriculture, biotechnology, transportation, retailing, government regulation, cuisine, social impacts, and much more. Despite being simple, the changes in the beer industry are rich and interesting. Plus, beer is delicious.

One of the key forecasts I uncovered while researching the book was the rise of microbrewing. The major beer brands around the world were stalling while small, local and national operations were profitably targeting a small and growing segment of beer drinkers and nascent foodies.

Here we are four years later, and the trend has continued apace. This article in the St. Louis Post-Dispatch shows how even in the shadows of the now-Belgian owned Anheuser-Busch, microbrewing is taking off at mid-double digit rates while sales of the majors now dip.

One of the reasons behind this trend actually transcends the beverage market. In our research in the field of economic development, Competitive Futures has learned that the rise in local beers often coincide with resurgences of economic vitality. Local beers become a flag around which communities rally. It often becomes associated with “local success stories” of businesses started in someone’s garage, soon requiring real capital investment in manufacturing infrastructure and jobs with good wages. Local ingredients and traditions are incorporated; cultures are revered. In short, microbrews are successful because they create value on multiple levels – for shareholders, employees, municipalities, and of course, beer lovers.

Now, can large companies create value on this level? Perhaps only if they begin thinking in this superconnected way.

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Comments

  • markjsr
    Great insight. My son is a home brewer. In mid-2008 when I visited Sacramento (2 blocks from the governator), there was a boutique microbrewing restaurant where a party of friends could meet, taste a few samples, start a custom batch, and come back in a couple of weeks to bottle their beer. It resulted in 1/2 dozen cases for family and friends. I think it also signals a resurgence in cottage industry and a return to older "crafts". Perhaps even a roots movement of sorts.
  • The sales are telling the story - up 25 and 35 and 50% year over year! The sector has been over 10% YOY growth for more than a decade - though from a VERY small base compared to macrobrews.

    Forget numbers, though - this is about social connection and fun. Humans are creative and seek social interaction. What better way than through creating your own beer? It's all at once primitive, civilized and modern. Did I mention tasty?
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