Is Craft Beer a Bubble Ready to Burst?

Nobody needs to tell beer distributors that craft beer has become an increasingly popular trend in recent years; if the evidence can’t be found on warehouse shelves, it can certainly be found in the number of SKUs distributors are stocking these days. It seems that fewer and fewer customers are stocking the basics anymore, and everyone wants an ever growing assortment of craft beer. But for distributors, the concept of stocking a small amount of many SKUs can be overwhelming.

Ignoring the trend doesn’t seem to be an option either, with 1 in every 8 beers sold in the United States today being of the craft variety. But with the craft beer market fragmented between more than 4,000 different breweries (each with their own line of products), how do you know which products are worth investing time and money in? Unfortunately, the answer for many distributors has been to continue growing the average number of products in their inventory from 200 in 2003 to nearly 1,000 in 2015. That kind of explosive growth has stretched distributors to their limits and seems to indicate that some craft beer may be a bubble ready to burst.

The key to surviving a bubble burst is to stay ahead of the curve and know for certain which products will stand the test of time and which ones are only temporary movers. That is precisely what Salient’s Margin Minder has been doing for distributors for thirty years. By integrating all sources of data into a single source view of facts, distributors can understand their product portfolio like never before. Visualizing trends over time can show what products may be temporarily cannibalized by craft beer products and which ones are experiencing a decline in sales and may need to be removed from inventory.

Only by connecting these sources of data together and visually interrogating the resulting model can a genuine understanding of market behavior be reached. Armed with these insights, better decisions can be made as craft beer continues either to boom or bust.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.