TJ Walker (podcast/YouTube) argues that America’s craft beer boom has reversed: more breweries closed than opened (first time in two decades) and craft beer sales fell. He cites blind taste tests (Guardian, Popular Mechanics, Washington Post) showing many consumers and experts cannot reliably distinguish craft beers from mass-market beers, and often prefer cheaper brands. Walker interprets this as a storytelling/marketing failure—without a clear unique selling proposition, many craft breweries face unsustainable economics—and warns against starting a brewery solely from passion.
Questions this video answers
Down 4% in 2024.
9,900 breweries (about double the number in 2013).
60% could not tell.
About 33% correct (approximately chance).
More breweries closed than opened in the past year—the first time in about two decades.
Chapters
Craft beers identity crisis. America's craft beer boom is now a bust. The New York Times reports more breweries have closed than opened in the past year. The first time in two decades. A 21st Amendment brewery in San Francisco. The taps are going dry after 25 years. Founders say they were driven by passion, but the business stopped making money years ago. Part of the problem, most drinkers can't taste. Tell one unique beer from another. Double blind taste tests by the Guardian and Popular Mechanics and other publications found that in blind trials comparing, get this, you're not going to believe me, but I am in the section of the show where I report facts. What they found, that is that in blind trials, meaning you don't let people, you don't have to put blinds on them necessarily, but you don't let them know what they're actually tasting. Comparing Budweiser, Coors, Miller and high end IPAs, most people, most people couldn't distinguish them, often rating mass market beers higher. Without clear communication about what makes their products special, craft brewers are stuck with higher cost and shrinking demand. That's a storytelling failure as much as a financial one. So what's the real message here? The craft brewing industry is in a free fall. They're going out of business every day. And the problem is not that people have less spending money or drink less beer. The problem is the little secret. Nobody can tell the difference between most craft beers and Budweiser and the cheap stuff. It's all in the mind. And it's too hard to spread that fantasy generation after generation. Sorry. Okay, let's dig a little deeper here. And I know some of you are saying, well, DJ, that's crazy. I know my IPAs and I know my Stella from Coors Light. That's insane. I know how. Have you ever done a true double blind taste test? That is where someone gathers, for example, six different types of beer. There's no label on it, they know what it is. They then hand it to someone else also who doesn't know which is which. They put it in front of you. They ask you to taste it, write down what it is. And if you think you can pass that test, you might be right. You might have one out of a thousand, one out of a hundred taste buds. But most people can't. And that's the real problem for these, these micro breweries and all this craft beer is it just doesn't taste any different. It seems cooler. You go into a nice craft beer distillery and you see all the distilling thing and it looks cool, it looks Hip. I remember the last time I went to Asheville, North Carolina, it seemed like there were more craft breweries and craft distilleries than there were seven elevens or libraries or churches. And I'm not saying that's a bad thing, but at some point there's just not enough demand because it has to cost more because of old machinery than just going down to the grocery store and getting a cord. Now, I should tell you at this point, full disclosure, I don't really like beer. Now, I'm not a teetotaler, but beer doesn't do much. So if you want to just write me off as a philistine, as someone totally unsophisticated, because I don't share your taste for craft beer, you can do that, but you can't simply ignore data. I've long contended that for most beer, for that matter most liquor, most wine, what's really going on is the phenomena of the emperor wears no clothes. Saying you like a particular beer or a particular wine or a particular liquor or vodka is a way of signaling to other people, look how cool I am. I'm not one of these low level savages who drinks a Coors Light. I drink this nice import. It's a way of signaling. It's a way of showing status and we convince ourselves of that. If you are absolutely convinced 100% that you can taste the difference of all these different beers, I believe you're sincere. I don't actually believe you can do it unless I see you do a double blind taste test. Let me share with you some more of the specifics of what actually happened. Now, again, the sale of craft beer, down 4% in 2024. The US now has 9,900 breweries, double what it had in 2013. There's just no possible way the economics of that makes sense. I'm sorry. In the Guardian blind test, 60% could not tell craft beer from Budweiser or Heidecken. 60%, that's the majority. I know it's not you, but believe me, your friends and the other people at that craft brewery or think they're being cool and hip, can't tell the difference between, yeah, you hate Budweiser. I don't like it either. But guess what? I don't like any beer. So I'm not an objective analyst. Popular Mechanics experts guessed right only 33% of the time. Essentially the same as pure chance. The Washington Post did a test. Miller Lite outranked several high end ip. This is when they just line up a Whole bunch of beers. And they ask people rate them in terms of what do you like? Miller Lite came out first. And I guarantee you, if you go to a nice high end craft brewery and ask people, do you like Miller Lite? How dare you? That's an outrage. What do you think I am, savage? People would say that. And yet when you put double blind test to them, not only can they not tell, they actually preferred Miller Lite to high end IPAs. Now, there's nothing at all uncommon about this in the world of blind taste tests for drinks. I've seen results of blind taste tests for wines showing the most popular wine is a relatively sweet wine made in New Jersey. It won a popularity contest with some of the finest California wines and French wines. Same with vodkas. It's often the inexpensive one because people are buying into a label, they're buying into an image, they're buying into a brand who they aspire to be. It's not really about taste, I'm sorry to say. Breweries that survive, like Sierra Nevada, invest heavily in brand storytelling, not recipes. Now, Sierra Nevada is huge. I've been to their craft brewery in Asheville, North Carolina, and it's a gigantic, beautiful place and it's a whole experience. You do a tasting dinner. I get why they're surviving because they realize it's not really about the beer. It's about creating an image, atmosphere, an experience. People who do that will in fact survive. But I think you can expect to see more and more people exiting this business. It's just saying something is crap. I mean, I'm kind of tired of hearing people just put the word craft on something and expecting you and me to be a rube and say, oh, I'll gladly pay double. I'll gladly pay three times as much. Ultimately, it's about, are you creating something that has a meaningful difference, a meaningful experience? Difference, result, difference. I can't just tell you this is a craft podcast. So instead of getting it for free, you should pay a dollar more for every. Or a dollar for every one of my. I can't just tell you that words have to mean things. And unfortunately, and I know you can say, well, we don't have all the preservatives and coloring, blah, blah, blah. People can't tell the difference between craft beer and regular beer. Now, I may have alienated a lot of you. I may have lost a number of sponsorships. I guess we're not going to see any craft brewing companies advertising on filtered with T.J. walker. That's okay. I give it to you straight. I try to give you the best available information and insight. So what's the real message for you is you do have to worry about are you truly communicating something meaningful to people? There's always a superficial way of luring people in a little better lighting, some logo design on your brewery, restaurant, bar that just looks different than a big chain. There's superficial ways of bringing people in, but at some point, you got to deliver the goods. You have to deliver something that is completely meaningful to be. It's gotta be unique in some way. There's gotta be some advantage. There has to be a unique selling proposition. To look at this from a pure marketing standpoint. And unfortunately, more and more consumers are coming to the conclusion there's just no unique selling proposition to most craft beers. Sorry, I know that offends some people. The other thing is this idea that you should start a craft because this has happened repeatedly, this idea that you should start a craft brewery because you have a passion for beer is one of the lamest possible reasons to start a business. Now, I understand Steve Jobs, many others say, follow your passion. Follow your passion and then you'll never work a day in your life. You'll always be engaged. Yeah, but it's not fun to follow your passion and go bankrupt. It's not fun to follow your passion, go into massive debt, open the doors and have one customer come in. Meanwhile, your overhead for the day was $2,000. That's not a lot of fun. It's very easy to drain your passion out of things when that happens. So I want you to follow. I'm following my passion right now. And I have most of my life. I'm doing this because I genuinely love it. But I didn't have to spend hundreds of thousands of dollars on machinery for a factory to brew my beer or to brew my podcast. There is a difference. When you're following your passion, you have to be candid and honest with yourself and ask you, does anyone else care about this passion? Because if it's just you, that's okay. There's a word for it. It's called a hobby. And there are a lot of people who enjoy the hobby of brewing a batch of beer for their home. I have many friends who do that. They love it. I've tasted it like any other beer. To me, they love it. Nothing wrong with that. So I urge you, if you have a passion for crafting beer, make it in your basement, make it in your bathtub or whatever to do it. But don't. I beg you, don't go to all your family and friends in your local banker and say, please invest in my dream. Give me a half a million dollars so I can start yet another craft brewery, because that's just an expensive hobby.
