Is the beer bubble about to burst?

Prompted by the wonderful outlining of the Modern British Beer Culture by Matthew Curtis, my braincogs started spinning. So much has changed and developed in the last 5 years – even since I started this blog only a few years ago the whole face of British beer has changed.

Last September, The Telegraph reported the number of breweries in Britain to have broken 1,400 – that’s an 80 year high. CAMRA’s Rog Protz had this to say:

“Britain now has more breweries per head than any other country and the range of beers on offer is the best in the world, ranging from the palest golden ale to the darkest, pitch-black stout,”

 

This amounts to around 11,000 beer choices in the UK alone – don’t get me wrong, that’s phenomenal and is going to keep me busy for a while – but are we nearing a bubble burst, akin to the dotcom boom or Lehmann Bros?

The state of play

In my day-life I work in marketing. Youth marketing to be a bit more specific. And that means I do research about millennials (because, yes, I do have to research myself apparently) and Gen Z, those lucky young, spritely things who have yet to pickle their livers and wake up freezing in a bush three towns over.

We have lots of new breweries and an almost infinite about of beer to try on one hand, and on the other we have lots of fine young things hitting the pubs or about to be legally allowed to. A match made in heaven? Well… Not from what the data says.

It was recently quite widely reported that my generation (in their 20s) aren’t hitting the clubs at much. In fact, in the last 10 years the number of nightclubs in the UK has dropped from over 3,000 to just 1,733 (I am glad that Amadangerous shut down though). That is a pretty significant number, so what’s the reason? The Independent looked into it and asked digital agency TH_NK what was going on:

Millennials favour experiences over stuff and nightclubs should benefit from that. But Millennials also realise that their time is the scarcest resource they have, so why would they spend their precious time revisiting the same experience every weekend?

Ramzi Yakob, Senior Strategist

It seems we’re a bit more of a discerning bunch, chasing new experiences, trying new things, showing Facebook and Instagram just how unique we are (if you can’t tell, I’m not one of them). But for anyone who has spent time around people who are in their early twenties, or knows what Oxford Dictionary’s word of the year was for 2015 (really depressing hint: it’s not a word) you’ll know the amount of time that is generally spent cultivating an online highlight reel of their life. Would anyone really want to be seen visiting the same place week in and week out? I mean, how dull would that Instagram account be?!

Books like this exist for people like me

Books like this exist for people like me

Luckily, it’s my generation who also appreciate craft and individuality, perhaps more than any generation before us. We’re also a bunch of pretentious so-and-sos, which has been the ultimate gestation conditions for nurturing and exploding the craft beer industry in the UK. The demand for choice, transparency and anything craft has been huge – not just in the alcohol industry but everywhere (that’s for my other blog).

However – although we’re into our craft, we’re also bloody terrified. Mainly of life in general and the fact that only a very small percentage of us can actually adult (and yes, we do use adult as a verb). We are going to really struggle to buy property or anything really, considering we’re meant to be tucking £800/month away for retirement, too. We’re (I use this term loosely for this sentence) a lot more health conscious – we’re all chasing photoshop’d body ideals, Men’s/Women’s Health magazine diets and, well, Gwyneth Paltrow can just sod off:

In a study by the Office for National Statistics, less than half of young people reported drinking anything in the previous week, compared with two-thirds of 45- to 64-year-olds – many of whom are in all likelihood under medical advice to please cut it out, or at least do the nation the favour of lying about it in surveys…. But a report compiled by the Demos thinktank last year found health to be the most common reason given for this abstemiousness.

The Guardian

So if that’s the way my lot are going… What’s the lifestyles of the next lot looking like..?

Gen ZzZzZz

A quick disclaimer after the ramble. All of this is generalisation. Research, surveys, yadayada are all relatively subjective and colouring whole generations with a single brush is never going to account for every possibility. The next set of research is very US focused as well… So there’s that.

To give as brief an overview as I can on the Gen Z research I’ll be paraphrasing a Sparks & Honey trend report that can be found in 57 easy to digest slides as well as several studies presented at the Youth Marketing Show 2016(!). It paints the picture of a much more mature and conscientious generation. Over a quarter of them are already volunteering and many of them claim they want to make the world a better place. Having been brought up through all the recent climate change chatter of the last 10 or 15 years it appears these kids are shouldering the responsibility early to improve not just the environment but their communities, macro and micro.

One of those lovely slides

One of those lovely slides

And what do you have to do before you can help the world? That’s right. Help yourself. These kids are even more health conscious, money conscious and all round respectable than the previous generations. There’s a much more ingrained value of money and what it can do, much less instant gratification. Skipping a few pub trips with friends a week isn’t that much of a big deal when they’re saving to go and build schools in third world communities. There’s also a dissolving of ‘brand loyalty’, there’s much more shopping around for the best value deal regardless of supplier – as long as they feel what they are buying into reflects their values. It’s all weirdly complicated.

This means hangovers are out, binge drinking is on the decrease (this is a very good thing) and the savviness and drive to save money means regular trips to the local will likely keep declining. If these trends hold fast, it could be a pretty bleak outlook for beer and alcohol in general – reduction in consumption and healthier alternatives could mean a sharp, near devastating drop in demand.

However, it’s not all terrible news.

Creation > Consumption

One big thing that keeps cropping up is entrepreneurship. Plenty of this generation want to start their own businesses. They’re the first true digital natives – they’ve grown with technology, they harness it quickly, they all already produce content on social media, many have their own blogs. Smartphones can take photos, make videos – free apps allow them to be cut together. This is a generation of makers. But not only creators, this is one of the first generations that are truly embracing sharing. Sharing knowledge and ideas, equipment and skills. We’re currently seeing it in technology – the whole world is becoming more and more open.

It’s no surprise that homebrewing and microbrewing has increased hugely in popularity. UBREW in London is one of the first open breweries that charges membership and allows those members to use the equipment there to make their own beer as well as offering courses. Yes, at the moment this is premium service – but soon, there will be groups of likeminded people effectively crowdsourcing to have the opportunity to collaborate and create. Bottleshare groups are popping up all over the country, homebrewing collectives already exist, sharing ingredients, recipes, hints and tips is a widespread practice but usually in a very localised sense.

Take those ideas and (sorry, another marketing term coming up) scale them. Make them national, continental, global. Organise it, share it, track it and optimise it. Technology and this core sense of collaboration will open up endless opportunities for creativity, community and a global economy based not necessarily on purchase or transaction but time and knowledge.

The bubble will burst, but with new ideas

The industry is under tremendous pressure already with brewers hiking prices, multiple pubs closing on a weekly basis and demand for certain types of ingredients waxing and waning. But brewing is stable and still aggressively growing. I don’t think we’ll see a huge change to that in the next 5 years.

However, I think there will be a shift. With the next generations demanding more transparency and individuality the big beer cos will suffer – more discerning customers will rather spend more money on less alcohol if they believe in the people producing it. Better yet, they’ll make it themselves as they will know the source of everything in it.

The magic of technology

The magic of technology

Sharing spaces like UBREW will lead the way. There will be global involvement, sharing of ideas and procedures as well as ingredients to create ever more unique beers – tailored directly to the brewers taste or desire for trying new things. Microbrews will exist and flourish but in these open, shared economies of makers.

Technology will not only improve the communication within the maker industry but will allow brewing to be more accurate, more optimised, ultimately cheaper and will allow “testing” to be much more satisfying.

Beer will no longer be a commodity. Beer will be an experience, one open to anyone who’s interested. It will bring communities together, locally and globally.

Beer’s not going anywhere, we don’t have to worry about that.

Drop us some thoughts!