ON THE RECORD

GBH: You called brewing a “dying art form,” which is an interesting perspective, just because looked at another way, beer quality is sort of at unprecedented levels. Could you elaborate on what you were getting at there?

Brian: Where we’re at today, there are not a lot of barriers to entry. Five thousand bucks, you can get a warehouse, you can get a brew system, and you can be making beer. And that’s happened all over the country. That’s not necessarily a good thing because of the fact that we do have uphill battles and challenges ahead of us with large beer and we still need to get more drinkers in our industry. We all know the craft beer drinker is promiscuous, we all know they drink around, so getting every new drinker in our [industry] is very important for us. And when this new drinker tries a beer that is not properly crafted and is full of issues, that drinker doesn’t go back to craft again. That’s the root of that statement. There’s plenty of room for good beer that’s out there, but not everyone is making good beer, so quality is the root of the statement.

GBH: Are you hopeful the industry will correct itself in that regard?

Brian: I think there’s definitely a windy sea ahead of us and the boats are gonna start rocking. You’ve already seen it with the growth of craft going to almost nothing. But I do think there’ll be more people going to drink good beer, highly crafted beer. So yes, I’m hopeful.

Ken: The quality of everybody in the industry is important to us. The quality of what they do, making beer, drinking beer, as an industry, we need to make sure we’re helping to foster good brewing, good science, because it does come back to haunt you.

Brian: There are too many people who have put too much into what they do to have others come in and just degrade it. There’s lots of really great beer, but the issue is there’s lots of really bad beer out there.

GBH: While that’s going on at home, will this latest Beer Camp project do anything to help Sierra Nevada overseas? You’ve got the pre-existing relationship with Fuller’s, which imports your beer to the UK, now they’re involved in Beer Camp. How does this project boost your presence internationally? [Beer Camp won't see distribution outside of the U.S.]

Brian: The international market is not a big push for us. We did initially, just for trademark protection. We were getting people bootlegging beers over, so that’s the big reason to do it. But there’s still plenty of room in the U.S., so that’s where our focus is—domestic, for sure.

GBH: Where do you see that room to grow domestically?

Brian: I think we’re at 250 million cases now. I think we could probably go to 400 million or so, I think is about where this industry could go. Realistically, there’s probably a bifurcation that’s going to happen. You’re going to get these 6-10 large craft brewers, probably in the multimillion-barrel range to start. [You’ll] get strong locals for sure. Then that middle ground is gonna be hard. The retailer, you see what they’re doing now, discontinuing brands, they’re going back to price-per-inch rationale on the shelf. I think you’re gonna see a lot of discontinuation of SKUs, and I think it’s gonna be entertaining. But there’s still a lot of growth opportunity both at retail and local.

Ken: Some of the largest retailers have already started to ration up their SKUs, and they wanna start local, so they’re putting in some small local players. But then if it’s national brands, regional brands that don’t have the velocity, they’re just cutting them. Some of the biggest retailers are cutting really deep, cutting out some of the largest craft beers.

GBH: So does continued growth for Sierra Nevada domestically inevitably cut off the channel for a smaller brewery at some point?

Ken: No, I think the smallest breweries will be able to find a place in their communities, I think that’s a pretty solid business. You make good beer and you’ve got good service and you’re engaged with your community, people will support you. It’s gonna be the brewer that’s trying to jump through and become a national brand and sell 200,000, [or] 300,000 barrels a year—that becomes the harder thing to be at that size.

Brian: Let’s be honest, the beer cooler isn’t getting bigger. We’re still all fighting for the same 48 feet or 42 feet depending on where you’re at. It’s going to be difficult. But on that shelf, if you look on that shelf, there’s a lot of double ups on some of these large domestics obviously. So that’s where the growth opportunity is going to be, looking at that beer shelf. But it’s not easy. It’s uphill.

—Dave Eisenberg