Is Craft Beer Killing the Neighborhood Bar?

Eno Sarris, November 05, 2015

A recent article by CNBC about the death of the neighborhood bar wanders into a little casual speculation at the end. Maybe the neighborhood bar is dying, and maybe craft beer is turning the knife. There should probably be more caveats in the article, because the evidence seems specious. 

Let's bullet point the evidence in case you don't want to read the article

  • U.S. neighborhood bars are closing at a rate of more than six per day
  • Here are five states that are losing bars at a rate of 1+% a year, maybe (the graph is unclear)
  • The overall on-premise market measuring outlets where alcohol is sold is growing
  • The neighborhood bar's decline has coincided with a surge in craft beer drinking
  • "If you think about the neighborhood pub, it's not really in a position to offer 35 beers on tap"

If you put it that way, it reads fairly flimsy. The first data point has no context -- how many are opening per day? The second graph, if it is of bar growth (it could be of GDP growth, the labels are incomplete), also has no context. Are the five states with the most growth making up for those losses? Those five states -- Kansas, Arkanas, Michigan, Virginia, and Indiana -- averaged a GDP growth less than half the national rate in 2014. Perhaps the economy is the main driver there? 

And then you get to the second half of the piece. 

If beer sales are up, and overall on-premise sales are up, there's an answer that's virtually screaming its way out of the data. Maybe we're not doing a great job classifying establishments these days. Does the neighborhood bar by definition not have food? The idea that places serving food are selling the bigger portion of the beer dollar seems to suggest that food is important to drinkers. In Palo Alto, I know from experience that it's much easier to get a liqour license if you are either a brewery or a pub with food. Perhaps that's what's going on here, we're just classifying bars as breweries and brew pubs and restaurants with beer more. 

Honestly, given all that, it's hard to go on without answers. But let's say it is true that bars are closing. Not every bar has to have 35 taps. My favorite craft bar -- The Rose & Crown in Palo Alto -- has ten or so taps, and it's easier to keep them all moving and clean and fresh that way. Beyond that, it's really not that hard to run enough taps to keep even a guy like me happy. It's a weird idea that drinking craft beer, which has fomented excitement and sales in the beer industry, would be a solely specialized affair, or one that occurred more often at restaurants than bars. 

Maybe, if the breweries opening their own bars is killing the "place with meh beer and maybe one good tap," maybe we just don't care enough. If this is actually happening, that's what we are saying with our dollar.

And what's missing from our lives if it's happening? Do you want community? Get it wherever you drink. Do you want proximity? I'm sure you can find a bar. Do you want craft beer? It's everywhere. Do you want a dart board? I have my darts and pool spot -- The Kilowatt -- in San Francisco, and my craft spot has darts down here. 

Oh The Kilowatt? It has a few craft beers on tap, but it's just a local spot, really. And it's thriving, and has been so for decades, right across from one of the more expensive craft beer bars in San Francisco, Monk's Kettle. (It takes all kinds.) (Maybe sales is a better measure than number of bars opening and closing.)

Maybe we're not measuring this right. Maybe our definitions aren't quite right. Maybe bars without food are dying. 

None of this reads as too concerning to your average craft beer drinker, I'd guess.