Craft beer industry may start to 'flatten'
With production growth outpacing market share, craft beer insiders say newcomers must be more cautious
The potential plateauing of the New Brunswick craft brewing industry may be giving future brewers pause about going all in.
Lloyd Chambers, co-founder of the Fredericton Craft Beer Festival happening this week, said there will always be room in the market for good beer, but the explosive growth the province has seen in the last five years may not last forever.
"We're probably a few years away from getting to the limit where there is probably — I never say too many breweries — but at some point in the next couple of years you'll probably see it flatten out," he said. "And I think that will allow [the market] to stabilize."
Niche Brewing, which launched in December in the Fredericton area, is a reflection of that, said co-owner Rob Coombs. The brewery is starting small, selling only kegs to restaurants and taprooms and avoiding the large overhead of a bigger operation.
"If it had been two or three years ago at opening time, that would have been a better time to go all in," Coombs said. "Now you have to know your place in the market and make sure you're not producing what 10 other breweries are producing."
Chamber said that in 2013, the first year of the festival, only four New Brunswick breweries participated, including Moosehead. Now there are around 30.
This was following a bigger North American trend of people willing to pay more for the higher quality and more experimental taste of craft beer, he said.
The so-called boom had a positive impact on tourism, Chambers said, with the New Brunswick Tourism Department capitalizing on the "craft beer tourism" trend by emphasizing numerous breweries on social media.
Breweries also stimulate the market by hiring construction companies temporarily and retail workers and brewers more permanently, Chambers said.
At this point, he said, production growth may be overwhelming the market.
"Right now there's a huge amount of production that's coming on board and the market share is growing fast for craft beer but not as fast as the production of craft beer," he said.
A more cautious future
Coombs said he and Niche Brewing's other co-owner, Shawn Meek, see the brewery as a three-year project. He said response to Niche's product has been good, so if in three years consumer interest remains the same, he and Meek may consider expanding the operation.
For now, he and his business partner will both keep their day jobs in pharmacy and MRI technology while following their brewing passion cautiously.
With files from Information Morning Fredericton