It’s the first Friday of the month and that means it’s time to kick off another round of The Session! This month Derek Harrison of It’s Not Just the Alcohol Talking is our host, and he’s asking a provocative question: Is craft beer a bubble?

It’s a good time to be in the craft beer industry. The big brewers are watching their market share get chipped away by the purveyors of well-made lagers and ales. Craft breweries are popping up like weeds.

This growth begs the question: is craft beer a bubble? Many in the industry are starting to wonder when, and more importantly how, the growth is going to stop. Is craft beer going to reach equilibrium and stabilize, or is the bubble just going to keep growing until it bursts?

I’ve seen arguments to both sides of this question, but I also live in an area with perhaps a unique outlook: Bend, Oregon, currently home to 16 brewery operations (Central Oregon overall has 22) with a good number more getting ready to open. So I think it’s fair to say that if there’s a craft beer bubble, Bend is likely the poster child for it happening.

Bend is no stranger to bubbles: back in the mid-2000s (from roughly 2004 through 2007 you may remember) Bend was one of the country’s most prominent examples of the real estate bubble—home prices skyrocketed, investments in real estate drove the market up further, and when the bubble burst, Bend was hit particularly hard. So to see this explosion in new breweries is to bring that to mind and long-term residents might start getting twitchy when you suggest there’s a bubble.

But of course that frames the question for Bend: is there a craft beer bubble here? It’s plausible: not only do we have a higher per-capita number of breweries that most anywhere else, there is also a significant economic investment in beer to the point that beer has become one of our tentpole industries—no kidding! You don’t have to just drink beer: we have the Bend Ale Trail, the Cycle Pub, the Bend Brew Bus, a number of great festivals, the fifth-largest craft brewery in the nation, growler fill stations (which in fact started here), and a city which has professed willingness to help any and all new breweries get started.

A few years back, I was pretty convinced we had to be at our saturation point for breweries, and then Boneyard, and GoodLife, and Brew Werks, and Below Grade all came along. And all have done really well. And then Central Oregon went and doubled that number! Now… now I’m not sure enough to be able to call a saturation point anymore, because the breweries keep coming, and they keep doing well, and they keep growing.

Here’s the thing about bubbles: people on the inside of them have such a hard time recognizing there is, in fact, a bubble until it’s too late and it bursts. I may be on the inside of just such a bubble because I look at Bend now and I don’t see where the end is. Maybe beer here will continue to grow! But then look back at what I just wrote and if you swap out any mention of “beer” with “real estate” for the previous decade, then it seems pretty clear that yes, there is a beer bubble here. Which leaves me torn.

But… while that may be true on a microcosmic scale for Bend, I actually think on a macrocosmic scale—the whole nation overall—craft beer as a whole is not a bubble. For all the talk about craft beer’s runaway growth it’s easy to forget that, nationwide, it accounts for only 10% or less of the overall beer market! Whereas the real estate bubble wasn’t confined to a tiny segment of housing—say, ranch-style bungalows—while the overall market languished or even declined (which we see happening in beer overall); it was a bubble that affected the entire industry.

In the bigger picture I think not only is there not a craft beer bubble, but that which we are (arbitrarily) calling “craft beer” has plenty of room to grow and keep growing until it does reach an equilibrium of some sort. I have no idea how long that could take, but I do think where that’s going to happen is not with the production breweries struggling for tap handles and shelf space in a tightly competitive market, but rather with small, in-house brewpubs that serve on premise only and stay under 1000 barrels per year. Those are your local restaurants, your neighborhood hangouts, that can make just enough beer to sustain themselves and still offer up something unique to beer drinkers.

With that model I think you can have many, many breweries even in smallish region; perhaps that’s happening in Bend and Central Oregon to an extent, which would explain the explosive growth in breweries here. Looking over my list, there are probably 8 or 9 of the 16 in Bend that are all or primarily in this brewpub format (though a few of those offer up bottles locally and not all brew on premise). So that seems hopeful!

And perhaps in the end, the only bubble we should be worrying about are the bubbles on the top of our beer…