Commentary/Conversation | What Will the Next Generation of Indiana Breweries Look Like?

Jake: With all of the growth in beer around the state, what is the next generation of local breweries going to look like? Are we going to see more niche breweries like Union Brewing in Carmel or more production focused like Tin Man in Evansville?

Jim: I think we'll probably see both, though I'm inclined to think that the state has only so much room for production breweries. I may be wrong about that, but we'll see. As for niche breweries, I'm surprised that no one has yet opened a brewery that focuses on German-style beers given Indiana's German heritage, though brewing lagers might be a bit more expensive than brewing ales because of the process involved. Because of that, there might be more incentive to focus on the standard pale/IPA/brown-amber/stout-porter/blonde ale menus that you primarily see.

To take a different tack, I noticed three things yesterday after reading Rita Kohn's recent rundown of new breweries. First, a lot of new breweries are opening in places where there's either no craft brewery footprint or a small craft brewery footprint. I think that's a good thing because it'll allow locals to have a brewery or breweries to call their own. Second, a number of these new breweries are focusing on small batch brewing. I'm not sure what to make of this other than thinking that they're trying to gauge demand before they potentially expand or maybe stay at the same brewing capacity if initial production is sufficient to meet demand. Third, a few of the new breweries are also wineries. I'm guessing that these winemakers are recognizing there's a booming market for craft beer and are seeking to capitalize on that.

It's an exciting time to be a craft beer lover in this state, that's for sure, though I have to say that trying to keep track of all the new breweries is a difficult task these days. There are so many of them.

Jason: I agree with Jim that we will see both production and niche breweries. The battle of production breweries could become bloody as they battle over taps and shelf space. I think that is where we will see breweries come and go. Though, as Jim said, if somebody invested in a brewery that focused on German-style lagers, there is an untapped consumer base in southern Indiana that looks back longingly at the lagers of yore that would probably drink up whatever they produce.

I honestly believe that we will see the greatest amount of success in the small niche breweries. And they don't even have to be breweries with niches or gimmicks. Neighborhoods across Indianapolis and Indiana are looking for a neighborhood brewery to call their own. And the consumer base would more likely forgive mistakes. The learning curve is greater because the consumer feels more connected. They are the front line for the craft beer movement.

Rod: I think we'll be seeing all of the above. It seems like for whatever business strategy you have when opening a craft brewery, you can point to an Indiana brewery that is doing it successfully. For however many people are looking at Tin Man and their unique system of packaging beer, the same number were looking at Sun King and their 16 oz. aluminum cans and plastic kegs in 2009. Union is opening up doing cask only beer, but Broad Ripple Brewpub has featured cask beer as a mainstay of their menu since 1990. If you want to start small with a small system and a tap room, Bier Brewery has been quite successful at blowing through their capacity on a weekly basis. If you want to invest heavily in your brewery with dreams of world domination, that's working out pretty well for Flat12 and Triton so far.

In my opinion, the next generation of craft breweries will be confident. They have to be. If you opened up a craft brewery in 2000 in Indiana, it was risky. The audience wasn't entirely there and you had to do a lot of leg work to convince people that it was worth supporting the local beer business. That's not the case today. Indiana breweries are firing on all cylinders. If you open a craft brewery in 2013, you should know what you're doing. If you're dedicated to the craft and making your concept work, there's no reason it shouldn't. I don't think the next generation of craft breweries will be of any particular variety, but they should be prepared to make a good product, help grow the community and collaborate with their fellow brewers. They're joining a movement. Hoosiers want good beer; they're screaming for it through sold out festivals and increased craft beer sales. As long as we're part of the same movement and not fighting amongst ourselves, there's no reason a good brewery concept should fail.

Jake: I think we are going to see more neighborhood nanobreweries and stylistically-focused production breweries than production breweries seeking domination as we go forward in Indiana. I definitely agree with Jason's assessment that the neighborhood places will likely see more success in the market than an overarching production brewery with a house pale/porter/stout, especially in packaging, because there is a finite amount of shelf space that is already hotly contested. When John Laffler left Goose Island to start his own brewery, he told the Chicago Tribune, "If you go into Binny's, there are 50 well-made beers of the same style. Why the hell would you throw your hat in that ring?"

Well said about confidence, Rodney. With confidence comes responsibility though. The hard work of the existing breweries has gone a long way to lay the groundwork and that needs to be respected. Also, the bar has also been raised from a quality standpoint. The beer drinker is somewhat forgiving early on as the system gets dialed-in for the first few batches, but patience is a fickle beast too. I think the guys from Daredevil are a great example of a successful launch with their Lift Off IPA. The quality has been there right from the start.

Chris: Thinking I have any insight for predicting the future of Indiana Breweries seems like folly.  It's hard to imagine, but 5 years ago, Indianapolis had more chain than local brew pubs and not a single production brewery.  Even Sun King was just a budding idea in a couple entrepreneur's heads.  Who would have imagined the brewery explosion we've seen?  Double so: who would have imagined the brewery explosion we've seen in the midst of the greatest economic calamity anyone reading this blog has ever seen?

With a general economic recovery seemingly taking hold (or maybe not) and craft beer still measuring single digit market share in this state, it seems to me that the sky is still the limit.  I suspect that anyone producing at least a 'B' product and a decent marketing sense is going to do just fine for the foreseeable future in Indiana.