Buckbean Brewing to Close: This Is a Glimpse Into the Future. **UPDATED**

Buckbean Brewing will be closing its doors forever at the end of this month.  February 29 will be the end of this brewery.  This was reported by Adam over at Beernews.org.  You can see his article here.

Jim and I have warned about this before, and it looks as though the future is upon us.  With all the new craft breweries opening up, some will necessarily have to close.  The market for craft beer is large, and growing, but the industry will eventually hit a saturation point and you will see lots of closures and mergers.  Change is built into the system.

So, although some will be devastated that this is happening, it is sure to create winners and losers.  The winners won’t mind at all.  You can argue that Buckbean produced marginal beers, but ultimately it was a combination of costs vs demand that led to their demise.  Gotta keep that demand up!  If you’re gonna survive you have to keep pushing outwards.  At least that is what it looks like from this vantage point.

RIP Buckbean.  The story at Beernews also said there were three other breweries that closed within the last two weeks, but no word on who they were.  Has anyone heard?  If so let us know in the comments.

-Don

UPDATE: Looks like the count continues to grow.  Adam now reports it is up to 6 breweries/brew pubs that have closed in the last 2 weeks.

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12 Comments on “Buckbean Brewing to Close: This Is a Glimpse Into the Future. **UPDATED**”

  1. February 10, 2012 at 5:34 pm #

    One brewery closing means that your economic forecasts are correct? Well, if that’s the case, sign me up CNBC!

    • Don
      February 10, 2012 at 5:38 pm #

      I don’t remember doing any economic forecasts Zac. But what it does mean is that it is perhaps a little tougher for a brewery to make it as supplies get more expensive and market forces come into play. Brewers are going to have to play like business men eventually, and not all breweries will be created equal, or even get their fair share of the pie if they don’t market and be aggressive in their outreach for market share.

  2. johnking82
    February 10, 2012 at 6:16 pm #

    He has links to all the breweries closing over the past few days…one was bee creek a little up north in IN.

    • Don
      February 10, 2012 at 6:20 pm #

      Crazy times, but I guess this is bound to happen when you have a boom like we just experienced. It is a correction to be sure, but that doesn’t mean we are in for a crash, just a thinning of the herd.

  3. February 10, 2012 at 7:25 pm #

    Its happened here in MD–making a major change in my drinking habits–and will probably happen again. To succeed one has to have both brewing smarts and business smarts (a long term plan doesn’t hurt either.). Even if you don’t like many of DFH’s brews for instance, you’ve got to admire the whole DFH package–they’ve got it happening!

  4. February 12, 2012 at 1:56 pm #

    No offense Don but I don’t think this closing or any of the other recent ones are an indication of saturation. These breweries closed because they weren’t doing good business. As an example of this I point to the three visits I made to Reno this past year. Reno is of course the home of Buckbean and a fairly large city that only has 3 breweries, now 2. Saturation in that market is certainly not an issue.

    In the three visits I made to that area I did not find a single Buckbean handle at any of the restaurants, bars or casinos that I visited. I was specifically seeking them out as I had not had anything from them and wanted to try it. I decided to look them up on my GPS and visit the brewery and hope for a tasting room. Unfortunately the address listed for the brewery on the map was not correct so either they moved and didn’t update their map profile or they never bothered to create an accurate profile to begin with. Last thing was a phone call. I dialed them up but no one answered the phone even though it was a Wednesday about 4pm so you’d expect someone to be around. This last visit was in September, long before their announced closing. I can only arrive at one conclusion, they were not operating a good business.

    One of the other closures this past week was Bavarian Barbarian Brewing. You probably remember these guys from the rate beer/BeerAdvocate thread last year where the owner and head brewer tore into the ratings culture. While there are lots of problems with the ratings culture and the “tickers” of the world make operating a brewery tough any business owner that doesn’t take the time to reflect on any criticism is not doing themselves or their business any favors. Perhaps if they had looked at those ratings and considered changes or adjustments to recipes, business practices, etc then perhaps this willingness to hear the voice of the people would have won them enough fans to keep operating.

    This idea that we’re reaching a saturation point I think is just wrong. You need only look at Bend, OR to see that saturation is a long way off. Bend is not much larger than Meridian, ID yet it supports more than a dozen breweries and there are more slated to open this year. The same could be said for Portland, OR, the Front Range in Colorado, Western North Carolina, Michigan etc etc. Businesses that operate in sound financial ways, produce a quality product and respect their customers will succeed. Those that neglect any or all of these principles will not. Its as simple as that.

    • Don
      February 12, 2012 at 2:40 pm #

      I definitely agree with you Rick, and said as much in the post. I think Buckbean did a lot of things wrong, starting with making mediocre beer, and then having a social media presence but not backing that with marketing on the ground. The on the ground marketing being more important to the bottom line. Those are the things that killed Buckbean IMO. However, this notion of saturation is an interesting one. While I agree that certain markets are not completely saturated with breweries, I think breweries will need to be more adroit at navigating the marketing waters in their local area, regionally, and nationally to make it. What I was trying to express (and obviously I did so poorly) was that the days where one could just open a brewery and it would do well because it is a craft brewery are fast going the way of the dinosaur and it will take business acumen and savvy to thrive.

      So basically I think we are on the same page, but I’m an idiot and I’m lazy too, and in my rush to get the story out I didn’t fully express my thoughts. 😉

      • February 12, 2012 at 3:01 pm #

        Saturation is a topic that I feel pretty strongly about and that may have come across to boldly in my comments.

        When I was working on the business plan for Brewforia I would get a lot of questions from people about our plans to open multiple locations here in Boise. People just couldn’t believe that Boise could support a beer store since we already had the Co-Op. Today we have 3 beer stores, the Co-Op, an expanding craft beer selection at all the supermarkets and Whole Foods and Huckleberries both getting ready to open yet, as far as I know all the outlets are doing just fine.

        I don’t know why but people want to treat beer differently than other consumer products. In 1996 the Idaho Statesman did a story on Moxie Java, a local coffee chain opening its 4th location. The issue was whether or not Boise could support 4 coffee shops. Flash forward to 2012 and we now have almost 120 coffee shops in the valley and probably more to come.

        Beer is one of the biggest consumer products on the planet but craft beer lovers I think are very insecure about its future. This insecurity keeps them from looking at this product as they would pizza or burgers or other products. No one ever ask do we have to many pizza places or to many fast food restaurants. Sure, we’re going to have breweries open and close but I don’t think saturation will be behind any of those closings.

        PS. Don, you’re neither an idiot or lazy I just probably didn’t mind my tone.

  5. Brewfun
    March 2, 2012 at 4:22 pm #

    If there is a shakedown on the horizon, it is due to the same circumstances that happened in the mid 90’s. Essentially, Craft Breweries can become their own worst enemies.

    Simply, when a business is expected to be a cash cow and little attention is given to flavor and marketing, the brewery will fail. What do you see touted on TV for major breweries? How “light” the flavor is and how cool it is to be associated with it. On this blog, what counts as great? Rip-your-lips-off flavor and “coolness” of the brewery story.Just two extreme ends of what creates thoughts of success in two very different markets.

    Somewhere in the middle are breweries that are not paying attention to either part of the formula. Beer that is just OK, and very little push. Often, a fear to grow. The average ROI for breweries is somewhere around 7 to 8 years. During that time, breweries have to add staff and equipment to keep up with demand. Those that don’t learn how to manage aggressive growth while maintaining quality will find themselves hurting, or worse; failing.

    Saturation is not an issue. There is lots of room in the pool.

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