Jim Dykstra's picture

This full story is available to premium subscribers.

Login / Subscribe
Subscription options for $2, $15 and $25.


Tertiary Beer Businesses Are Booming

Speculation about the craft brewing industry’s inevitable demise has been a real nucleation point for some people, but I’m here to say that this talk is mostly hot air. There are tons of metrics that point to continued growth and/or stability within craft despite the proverbial bursting of the bubble, and as we have seen, craft sales and production were up in 2017, though overall beer sales trended downward.

Today, we’ll use a broader, more generalized gauge of success, but one that is arguably more convincing – looking at the craft brewing industry in terms of it being an ecosystem.

An ecosystem is generally considered healthy when it displays these three attributes: productivity, resilience and diversity, all of which are interdependent.

If an ecosystem is out of balance or unhealthy, the organisms that rely upon it will struggle to survive. This holds true from a beer-brewing perspective – there are a million ways to spoil a batch of beer. Perhaps it's too hot for the yeast to survive, or an invasive species finds its way into the fermentation tanks and upsets the balance; but this maxim is also true of the craft beer industry itself, and the innumerable tertiary beer businesses that have sprung up around it. Think beer delivery services, online beer marketplaces, homebrew shops and so on.

The health of these businesses acts as a barometer for the health of the entire craft beer industry and serves as an indicator of the public's interest level in craft beer. Though not infallible, it's generally safe to assume that if a custom glassware company is selling a lot of IPA- and stout-specific glasses, then the beers that will fill them are selling as well. To put it another way, if brewing companies are the “Great Beerier Reef,” tertiary beer businesses are the clownfish and mantis shrimp that rely on it to survive. Let’s take a look at some of these tertiary entities and see what they can tell us.

The Techno-Beer Businesses

Technology poses near-unlimited options for the future of craft beer. Looming largest are app-based services, which have found ways to solve problems or capitalize on the desires of curious drinkers. Successful models include “beer subscription” services like Tavour, which offer carefully curated selections of rare beers for the subscriber’s perusal in a streamlined format. We also have companies like Drizly, a leader in beer delivery now operating in over 100 U.S. cities and more in Canada and Europe, and which is currently valued at $17 million.

Needless to say, there are services such as Untappd, which currently serves over 5 million users, and is slated to expand to over 100 employees by the end of the year. The catalyst behind this company’s growth is its “Untappd for Business” software, now used by more than 10,000 retailers, including Target and Buffalo Wild Wings. This model shows that beer technology services can be monetized, but more importantly, it indicates the level at which craft beer interest and sales have infiltrated the mainstream.

Finish reading this article by becoming a premium subscriber.
Visit the store now. Options start for only $2.00!