Rise and death for Danish breweries

In response to Knut Alert's Beer Blog: Tougher times ahead for Danish micros.

The shops have been expanding the selection of beers during the last couple of years, but now the selection is shrinking again. This only leaves space in the shops for beer that can be sold quickly. Well it is obvious that the shops will stock beer they can actually sell. This fact leaves a great deal of pressure on the small breweries. Now we see some of the prices are dropping long before the small breweries even break even.

Meanwhile Carlsberg is adding to the pressure by introducing new beers and brands such as Kongens Bryghus, Semper Ardens og their new micro brewery Jacobsen. These new beers and brands makes people come back to good old Carlsberg.
Since the start of The Danish Beer Enthusiasts ale.dk small craft breweries have emerged all over Denmark. Unfortunately the market for special beer has become saturated, not unlike the IT bubble that burst around 2000 with countless companies trying to get your attention and money.

According to dot-com theory, an internet company's survival depended on expanding its customer base as rapidly as possible, even if it produced large annual losses. The phrase "Get large or get lost" was the wisdom of the day. At the height of the boom, it was possible for a promising dot-com to make an initial public offering of its stock and raise a great amount of money even though it had never made a profit. In such a situation, a company's lifespan was measured by its burn rate; that is, the rate at which a non-profitable company lacking a viable business model runs through its capital.

There is so many small breweries and although the market has expanded by approximately seven percent, there are too many now. The curve follows the dot-com in the sense that we have seen a lot of hype and a whole lot of new small companies followed by some consolidation of the market and the death of the breweries with the least successful distribution. This summer will probably be the final breath for some small Danish breweries.

Back then in the good old IT days, I talked about first provers taking over the scene from the first movers. Yes – we will see small Danish breweries go bankrupt, but new ones will immerge to take their place. The marketplace dictates who lives and dies.

Some will survive and be a success because they make great beer, while other will survive on marketing and economic skills alone.

May the good beers stay with us.