Making economics interesting: Beer in the wine aisle

I’ve steered clear of the recent “wine-ification” of beer kerfuffle because I don’t have anything to say I haven’t already (New Beer Rule #7: Beer is not the new wine was written back in December of 2007, thus predating about half the breweries in the United States).

But today Mike Veseth, who I’ve mentioned here many times (including about his fine book, Wine Wars, and that he has another, Extreme Wine, on the way) asks the question: Is Craft Beer the Next Big Thing in Wine?

Remember the context and that the discussion revolves around economics. And it pretty much starts with an answer to the question he asks in the headline.

(Yes) — if you are thinking about things in terms of market spaces. The wine market space and that of craft beer are increasingly overlapping as craft beers infringe on wine’s turf (and low alcohol wines threaten to do the same for beer). And if the common battlefield isn’t huge at this point, it is certainly growing and warrants attention.

Much of it won’t appear new if you’ve been reading the beer compared to wine discussion for the past several years. But, you know, not everyone has. So it’s worth taking the time to move from Point A to Point B and so on with him. Words like innovation (“Innovation is a hot topic in the beverage business these days and craft beer presents more opportunities for innovation and product development than most wines if you are aiming at that market segment.”) and complexity are used. It’s interesting to read what somebody who does not live in the beer aisle has to write about beer.

So craft beer has a lot in common with wine and maybe a couple of advantages. With these products more widely available and a growing customer base that is ready and willing to experiment, I think it is plausible and wine and craft beer will increasingly share market space and must take that competition into account.

Something to think about.

And one quick side note:

At the end he suggests that some wineries might start to brew beer. Of course, that’s already happened. There are several wineries across the country who already do brew beer. Notably, in 1997 Korbel Champagne Cellars started Russian River Brewing in northern California and hired Vinnie Cilurzo as brewmaster. Six years later, Korbel decided to get out of the brewing business. Natalie and Vinnie Cilurzo bought the brand and started a brewpub, then a production brewery, in Santa Rosa. Do you think Korbel wishes it could take that decision back?

, , , ,

4 Responses to Making economics interesting: Beer in the wine aisle

  1. Alan March 19, 2013 at 2:20 pm #

    One somewhat elementary but still complex question is where are these two products actually on the same shelf. Here in Ontario they can sit side by side on a government store so lustre from wine’s legacy (and LCBO branded resources) get extended to the newly lengthening beer shelves. But in nearby NY state it is illegal for them to be together under the same roof. Yet in Maine they can be in the same store but it is usually a grocery store without the cache… or the branding resources for each compete with laundry detergent. Hard to cross-pollinate when you are not in sufficient geographic and financial proximity.

  2. Bill March 19, 2013 at 2:36 pm #

    I would think Russian River’s sales would be a pretty small percentage of Korbel’s sales? Isn’t Korbel the second-largest producer of sparkling wine in the states? So, no, I don’t think they’d want that decision back.

    I think Alan’s points are good. Further, I suppose craft beer competes for a chunk of the same customer base as does wine, but… I’m going to guess that a huge percentage of Americans who buy wine see it as an accompaniment to a meal as well as something that can be enjoyed on its own. And I’m going to guess that despite the best efforts of Garrett Oliver and hosted beer dinners and the like, a huge percentage of Americans who buy craft beer see it as something to be enjoyed on its own, but not as something to be enjoyed with food. Folks might want it to be seen that way, and perhaps someday it will, but not yet. So craft beer and wine might compete for the same consumers, but the former isn’t going to supplant the latter. Really, until folks automatically see beer as a mealtime beverage, your tag and Rule will hold true — beer is not the new wine.

  3. Pivní Filosof March 20, 2013 at 1:21 am #

    I don’t know how are things over there, but I know that at least in Spain many of the people who now drink alternative beers are people who “don’t like beer”. They are often wine drinkers who, in some cases due to prices and value for money, have partially switched to what some people will call “craft beer”. So yes, I think we can speak about an overlap in the markets at some level.

  4. Jordan Elpern-Waxman March 28, 2013 at 1:31 am #

    Beer still has a way to go before it can compete with wine for share of beverage at the dinner table, but the trends are in the right direction. In New York City, often the harbinger of culinary trends for the rest of the nation (yes, you can thank us for cupcake shops), top restaurants and chefs are getting into beer. In 2009 Daniel Boulud – owner of one of 11 restaurants in the entire US to be awarded three Michelin stars – opens DBGB, a restaurant known for its beer menu and employing a full-time Cicerone as its beverage director. In 2010 Mario Batali’s Eataly opens in NYC; with a dozen restaurants featuring the range of Italian cuisines, the crown jewel is the rooftop Birreria Eataly (a brewpub! From an Italian celebrity chef!). In 2011 Garrett Oliver’s Oxford Compendium to Beer wins the UK’s most prestigious food and beverage publishing award, the André Simon. Tom Colicchio writes the forward (he also opened Colicchio & Sons in 2010, with 28 taps, and did a pop-up beer garden in the summer of 2011). In 2013 veterans of Momofuku and DBGB open Torst with Evil Twin brewer Jeppe Jarnit-Bjergsø, and become the newest hot thing in Brooklyn. The top-rated beer bar/restaurant in NYC, according to Beer Advocate? Danny Meyer’s 11 Madison Park, where the pre-fixe menu run a cool $195 and cocktails are $16. Down the coast in DC Greg Engert wins Sommelier of the Year from Food and Wine magazine – for his beer list at Birch & Barley.

    My own company, BeerDreamer, is creating craft beer and artisanal food tasting packages – we call ourselves craft beer for foodies. Our website is so basic at the moment that I’m a bit embarrassed to post it here, but sign up at beerdreamer.com to be notified of our [soon to come] full launch!