Updated: Dec. 01, 2023, 6:45 p.m.|Published: Dec. 01, 2023, 2:40 p.m.
By Paul Vigna | pvigna@pennlive.com
Carlo DeVito is the former owner of the Hudson-Chatham Winery in Ghent, New York, and the author of more than 20 books, many connected to the craft beverage industry.
His books include “East Coast Wineries: A Complete Guide from Maine to Virginia,” “The Spirit of Rye: Over 300 Expressions to Celebrate the Rye Revival,” Drink the Northeast: The Ultimate Guide to Breweries, Distilleries, and Wineries in the Northeast,” and the recently released “Tennessee Whiskey: How the Volunteer State Became the Center of the Whiskey Renaissance.”
For as far back as I can remember he has been documenting the growth of the Eastern wine industry on his eastcoastwineries blog in addition to being a fixture at a variety of conferences and as a judge at a variety of wine competitions. Part of the fun of following DeVito on Facebook is seeing where his travels take him weekly: When it’s not a family event it’s a trip connected to a wine-related function or to meet a source for whatever book he’s working on next. He puts on plenty of mileage, for sure.
So when he writes a post on Facebook that starts with, “We are at the apogee of the Craft Beverage movement. The Golden Age of Booze. Now begins the slow descent,” it definitely draws attention.
Says Carlo DeVito of his predictions for the craft beverage industry: 'I don’t get a lot of satisfaction from being right in this instance. I have been one of the loudest champions of local craft beverages for more than 20 years, as a producer, and as a writer, editor, and publisher.' Carlo DeVito
In that August 2023 post, he noted that we “have never had as many wineries, breweries, and distilleries as we do now. And probably the same can be said for cideries. Many, many of these that sprouted across the land in the last 20 years, especially the brewery industry. The variety available today speaks of the apogee of empire. We are Rome in 117 AD, at the time of Trajan’s death.”
He made eight points, running through his reasons for the future demise. Edited down, they read as follows:
1. Small mom and pops are slowly being wiped out. They just can’t compete. There are too many Craft Beverage Businesses to compete against.
2. Mid-tier businesses and labels are struggling or falling off. The death of Anchor, the struggles of Ballast Point, the struggles of mid-tier wine labels that are being traded back and forth like unwanted Pokemon cards by the major liquor distributors. The beer industry is the biggest harbinger of all. The big boys keep growing.
3. Baby Boomers are having trouble selling their dreams. So many Baby Boomers followed their dreams and went into the wine or beer or spirits business. But they are all aging out.
4. Brand loyalty is dead! Today, brand loyalty is relatively nonexistent — there are just too many choices.
5. Ratings generators do not drive sales and magazines have not been able to replace readers. A score of 90 points or higher in Wine Spectator or Robert Parker in the 1980s could sell out a vintage in less than a month! Most younger consumers could give a flying you-know-what about scores today.
6. The Foodie Boom is over. Yes, if you’re like me, you are still hanging on. But the farm-to-table thing is much smaller than it was 10 years ago. It’s not the driving force it was in the food world.
7. COVID is over — and so is drinking at home. Sales are medium to small wineries, breweries, and distilleries, that might have thrived during COVID are slowing down. They’re not dead. But they are not moving forward.
8. Mistakes. It’s an easy business to screw up to begin with. But more importantly, it was a boom, and a bunch of people piled on who maybe shouldn’t have. Those people will fall off as well.
“Call it a bust or call it a correction. But due to retirement or exhaustion, or flat-out uncompetitive practices, a whole bunch of businesses that have been hanging on will close,” he wrote. “I’m expecting 10-20%. That’s my guess. But given the massive growth of the industry, I’m figuring that that’s somewhere about 1,500 to 3,000 businesses in the next three to five years. Some will be small and inconsequential. Others will be shocks, like Anchor Steam (whom I mourn).”
His piece drew reactions from around the country, from those who write about the beverage industry to those who are loyal consumers. Few that I saw challenged his assertions.
Changes definitely are afoot, based on data and anecdotes. Colleague Sue Gleiter recently compiled assessments on what’s ahead for the craft beer industry in a story headlined “As a wave of closings hits central Pa., is the craft brewery bubble bursting?” and a couple of sidebars. My story published Thursday interviewed the owners of three well-entrenched mid-Atlantic wineries and their response to changes in customer tastes and the rise in neo-prohibitionism.
'Drink the Northeast: The Ultimate Guide to Breweries, Distilleries, and Wineries in the Northeast,' by Carlo DeVito, published in September 2022. It is one of several craft beverage-related books he has written.
With that in mind, it felt like a good time to circle back to DeVito more than three months after his original piece ran to find out why he decided to write what he did and whether his perspective has been changed by any feedback that he has heard (as you can guess, the answer is “no.”)
Thanks to DeVito (a vociferous fan of the New York Yankees and New York Giants) for returning these answers with more zip than a Tommy Devito forward pass.
Q, What prompted the column was it one closing in particular or just looking around and seeing the landscape in general?
A, I have been traveling a lot. And I go everywhere wineries, breweries, and distilleries. And I talk to owners. Many of them said business was down 5-10%, which might be understandable now that the main brunt of the COVID pandemic had passed, and people were now going back to work. Etc. But I was also noting two more trends.
First, in the town across the river from me, Hudson, New York, there had been announcements of new breweries opening. I hang out with a cadre of brewers (and a few winemakers) every Wednesday night. We do a tasting of beers from all over the region and the country. Small sips. Talk about trends, beer, etc. There were 25 craft beverage businesses in one county, not counting two or three new businesses that were still to open. Even with tourism, I couldn’t see how consumers were going to support all of these. We had Hudson-Chatham Winery — we were the first business to open full time and the first winery. Chatham Brewing started in 2007 but didn’t have a real tasting room until a number of years later. We pioneered the industry in the county and were roundly laughed at in the beginning. We were happy to see the industry grow and held summits at our farm to encourage folks. But at these current numbers, if you were visiting one place every Saturday or Sunday, you could only visit one business twice a year each. I knew when we were doing it that would not have made for a good model. That was not sustainable.
I looked around and there were numerous counties and towns with the same reality. All the reasons I cited in my article and the addition of the new temperance movement have made the business more challenging than ever.
Secondly, breweries especially, but wineries too, were finding they needed to add food to be competitive in the marketplace. Totally understandable. But then you’re a restaurant, whether you like to believe it or not. And the failure rate among restaurants is very high. Many of these folks who start these businesses aren’t brewers, vintners, or distillers by trade. Now they’re being tasked as restaurateurs as well. That’s very difficult.
Q, Your feeling, it sounds like, is that this path for craft beverage is inevitable, that it’s not like forces can turn it around. Is that accurate?
A, I am currently working on a 400-year history of brewing in New York State, with four other beer historians, a major project with SUNY — with research cooperation from the Library of Congress, the New York Public Library, and numerous other county and town and city museums and historical societies. The cycles of boom and bust are very prevalent in brewing’s history — and that’s across the board, across America — and that extended to the distilling world as well.
The PA Small Winery Act, which morphed into the super-improved New York Winery Act, which was adopted all across the country, changed the landscape of America. Forty percent of all the wineries in America lay outside California, Washington, and Oregon. People in the beer and distilling circles saw that, and said, “We need to do the same,” and changed the American economy. Entry barriers, which big business had championed for decades, kept small guys out. But with the changes in the laws, it was like the old Sooner days — a land grab in the craft beverage world. Breweries and distilleries were the new thing.
This cycle of boom and bust has happened before. 1865 to 1915 saw one of the largest beverage booms in the country’s history. The free-for-all after Prohibition failed was similar. Everyone and their brother opened a brewery and distillery. Half of them were gone by the 1950s. A large portion of those died during the Beer Wars that culminated in the loss of Peils, Rheingold, and Schaefer in New York City and the loss of almost 6,000 to 7,000 high-paying union jobs in the city in the early 1970s.
Then there was the dissatisfaction of consumers in the ‘80s and ‘90s who wanted something else to drink other than a watered-down, multigrain light Pilsner. And thus the first craft brewing wave of the 1990s. Then the 2000s. And then finally now, the 2010s. At one point there was a correction in the early aughts. And now comes another one. The cycle is always there. That’s what Charles Mckay was talking about. The cycle is always out there. We all think we’re immune. That we’re smarter. We’re not.
Q, You got a LOT of great comments under the post. Does anything in particular resonate and either confirm your thoughts or give you pause?
A, It was interesting, because people assumed, many not having read the article, that I meant the industry would go bust. That was not my meaning. I simply said the boom itself would go bust, and that we would lose a significant number of businesses. I never suggested the industry would die. I think Stephen Beaumont’s retort, that the sky was in fact not falling; instead, it was a correction rather than an epic collapse, is on target. I never was suggesting the industry would collapse, but I must say the target I put up of 1,500 to 3,000 businesses failing — wineries, cideries, meaderies, breweries, and distilleries — was not an outrageous number if you watch the numbers of businesses closing over the last four months. I think it was spot on. I think there have been a lot of folks hanging on to their dreams who have known, deep down, that this environment might have been more competitive and more challenging than its shiny veneer belies.
Carlo DeVito was for years owner and winemaker at Hudson Chatham Winery in Ghent, New York. He still works as a consultant for several East Coast wineries.Paul Vigna
I was also surprised when a number of people agreed with me online. Producers and writers. Those that have been in the business have seen this coming. It’s not going to be the Stock Market Crash of ‘29. But many businesses will simply disappear.
I don’t get a lot of satisfaction from being right in this instance. I have been one of the loudest champions of local craft beverages for more than 20 years, as a producer, and as a writer, editor, and publisher. I know the excitement of following your dreams. I also know how hard it is to grow and maintain. A well-known local magazine called me up for an interview, and the writer told me I was now known as Dr. Doom. I laughed, but it hurt. I want to see this industry thrive. But in all good industries and businesses, it’s absolute Darwinism. The weak, the slow, the injured, the malnourished — they will fall — as prey or from exhaustion. It is survival of the fittest. It’s just like every other business — books, movies, fashion — you can’t be willing to pivot, you must always be looking to pivot. You have to be a little bit paranoid, and someone who’s always willing to experiment. And you have to stay relevant. It’s hard to do.
And in the current environment, like I wrote in the article, it’s very hard. And it’s not just having a lot of money — although it helps. But it’s not the end all, be all. Plenty of people have lost a lot of money. Even experienced beverage industry people look at all the craft breweries that went bust after they were bought by the mega-breweries. A lot of them died. The marketplace is changing constantly.
That said, the industry isn’t going away. It’s a correction. Perhaps a must-needed one.
Paul’s Article:
https://www.pennlive.com/staff/pvigna/posts.html
Carlo’s Original Essay: