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Craft beer is at a “precipice.” Colorado can relate after Boulder Beer closure and New Belgium sale.

Big questions about the beer industry’s future dominated conversations at the Big Beers festival in Breckenridge, but the challenges may only continue

Strange Craft Beer Company head brewer Tim Myers (wearing the leather cowboy hat) chats over a beer at the brewery in Denver on Jan. 16, 2020. (Eric Lubbers, The Colorado Sun)
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BRECKENRIDGE — A beer festival, by its nature, is festive. And the 20th edition of the Big Beers festival that attracted many of the nation’s best brewers to Breckenridge was no exception.

This year, however, the mood seemed less merry.

In between sips of barrel-aged stouts, blended sours and boozy barleywines, the conversation at the marquee event — which features educational seminars and tasting session focused on higher-alcohol beers, Belgian styles or experimental brews — all-too-often veered toward the current challenges facing the craft beer industry.

A panel discussion about the “future of craft beer” sounded worse than a hangover as brewers discussed the flat beer market, increased competition and shifting consumer attitudes.

“I feel like we are losing something,” Paul Arney, the owner and brewer at The Ale Apothecary in Oregon, told me after the session. “It feels like we are at a precipice.”

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The sentiment certainly reflects what it feels like in Colorado at the moment. Just weeks before 2019 ended, the employees at New Belgium Brewing — the iconic Colorado craft brewer — approved the company’s sale to Kirin, a Japanese beverage giant.

The new decade started with Boulder Beer Company — the state’s first craft brewery, founded in 1979 — announcing it would close its taproom doors for good this Saturday. A deal with a contract brewer means the brand will remain on taps and shelves, but only as a ghost of the craft beer’s past.

“It’s the state of the industry,” said Kevin DeLange, the owner of Dry Dock Brewing in Aurora, when asked at the festival about the Boulder Beer closure. “They were the innovators of craft beer at the time. But it became a crowded market.”

Colorado’s veteran brewers are facing the toughest challenges

It’s not a coincidence that the Colorado stalwarts — the ones that helped establish the state as a landmark in the craft beer industry — are bearing the brunt. The same craft beer boom that made New Belgium and counterparts national brands inspired thousands of local breweries, which only added to the competition.

Add to the mix legal marijuana, craft distilleries and a booming hard seltzer market and it becomes even tougher to get consumers attention, said Tim Myers, the founder of Strange Craft Beer Company in Denver, which turns 10 this year. He’s looking at how to get consumers to return to their old favorites breweries, the ones like his that so many people become beer enthusiasts years ago.

The industry, Myers said, “is definitely at a junction point, where the same ol’, same ol’ that we have gotten away with for the last 10 to 20 years is not going to work any more.”

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Andy Parker, the barrel master at Avery Brewing — which sold a majority stake in the company to a Spanish beer maker in April 2019 — offered a similarly blunt assessment at one of the festival seminars: “Unfortunately the marketing is a much bigger part (of selling beer) now, and for a brewery our size, just having the best beer is not enough.”

Mugs belonging to members of Strange Craft’s mug club line the walls in the tap room. Bartender Nikki McQuinn, who has worked in breweries and beer bars for nearly a decade, said that one of the things that sets Strange Craft apart is letting its mug club members take mugs home to be decorated. (Eric Lubbers, The Colorado Sun)

Next to him on the panel, Arney, whose Oregon brewery specializes in old-world styles, pointed to the beer industry’s hot-trend — the colorful cans of hazy IPA packed with hops that too often seems like clones of one another.

“These hazy beers are like comic books: They are fun, they are disposable, but (it means) we are in a culture that doesn’t read any more,” he said.

“That’s not saying (the beers) are bad. Comic books are fun and they are enjoyable and they are a good quick read, but it’s not something you think about,” he explained to me afterward. “And here I am trying to make this beer with a story that ties in history and culture.”

How brewers are looking to survive, if not thrive

To compete in this new beer world, longtime brewers in Colorado are taking steps to remain relevant and diversify.

Earlier this month, Oskar Blues and Left Hand, both in Longmont, refreshed their logos and branding to help them get renewed attention and compete with newer brewers. A handful of brewers, like Dry Dock, Great Divide and Avery, are expanding their offerings with seltzers designed to reach different consumers. And others — including Odell, Bruz Beers, Ska and WeldWerks — are opening new locations to tap into other local markets.

Strange Craft’s list of beers includes names like Fallout Pale Ale, Jean Claude Van Blond and Dr. Strangelove. (Eric Lubbers, The Colorado Sun)

“I think we’re going to see a real divergence in the craft beer demographic,” Kyle Carbaugh, the co-founder of Wiley Roots Brewing in Greeley, said in The Colorado Sun’s annual beer industry survey. “Breweries are going to be tasked with meeting the needs of both consumers simultaneously, offering extraordinarily well executed familiar styles, while at the same time consistently creating new offerings that ‘may not taste like beer at all.’”

Not all in the industry are feeling the pinch. Denver Beer Company announced Wednesday that it is opening a third taproom this year. The new South Downing Street location near the Rosedale neighborhood will feature special brews and a partner restaurant.

The concept reflects an increasingly popular model in a tough industry, where breweries go back to the basics of serving beer at the bar. “We are so beer focused and experience focused,” Charlie Berger, one the brewery co-founders said in an interview.

Denver Beer finished the last year with a 39% increase in retail sales and produced more than 20,000 barrels in volume, the owners said. The expansion of beer sales to grocery stores helped boost the company, as did two new brands launched in the past two years, sister brewery Cerveceria Colorado and a hard seltzer line called O&A. “It’s really basic,” said Patrick Crawford, a Denver Beer co-owner. “We try to make good beer, put it in a can and market it to Denver and try to show them a good time.”

The challenges are only expected to continue 

Even as some breweries thrive, others face more challenges ahead.

Epic Brewing, with locations in Denver and Salt Lake City, closed 2019 with a 14% decline in production volume, its first double-digit decline ever. “I think it’s part of a normal business cycle. It’s tough. Beer is tough,” Dave Cole, the co-owner, told me on the sidelines of the Big Beers festival. “We even had great years of growth and were really strong when others our size were starting to feel the pain.”

Nikki McQuinn pours a mug from the tap at Strange Craft in Denver on Jan. 16, 2020. (Eric Lubbers, The Colorado Sun)

Even before the Boulder Beer announcement, Wild Woods Brewery closed Jan. 11 after seven years in business. Often when a brewery closes, it’s often replaced by another, and the Wild Woods owners said a new operation would take its space in Boulder.

The fact new breweries continue to open their doors is a dynamic that Cole expects to change in coming years. He believes the industry is still over-saturated with investment, but the money will become harder to find and closures will continue.

“That cycle has to play out, and people will realize this (industry) is a lot harder than we thought,” he said. Once they do, “the flow of capital will slow down and business will start to normalize again.”

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