Trouble for Craft Beer?

Craft beer's wild growth over the past ten years might be seeing some settling out. I guess at some point there just had to be too many IPAs out there.

It was just announced that Hanger 24 out of Southern California is laying off about half of their smallish production staff. They aren't huge, nor are they a tiny brewery selling everything out of their brewery, and there's the problem.

It's the same with many premium wineries. If a winery is small enough to sell everything direct-to-consumer they seem to be doing fine. If they are big enough to muscle in on retail shelf space they are doing fine. It's those in between wineries that have always had to fight for retail shelf space with the Gallos and Constellation Brands.

Hanger 24 distributes their beer. I don't know how far and wide, but I've seen their Betty IPA and it's a good beer. The problem is there are so many craft beers fighting for limited shelf space. In California the big boys like Lagunitas, Stone, Sierra Nevada, and Firestone Walker are everywhere.

My local market has a decent selection. Over the years the national brands like Bud have lost shelf space in there to craft brewers. I always see several selection from those breweries listed in the previous paragraph along with other West Coast brewers like Kona, Lost Coast, and Deschutes. But the other slots seem to rotate as there are so many craft beers available.

Are all of those medium-size craft breweries going away? No, but they are going to have to watch their growth and learn where to flatten out their production volume. No doubt there will be consolidation and agreements that help in distribution.