MICROBREW'S HEADY DAYS EBB; SECTOR'S DRAMATIC GROWTH OF EARLY '90S MAY BE GOING FLAT.

Byline: David Dishneau Associated Press

The microbrew market is losing its fizz.

This week's merger of three Maryland brewers of full-flavored ``craft-brewed'' beers is the latest sign of a possible shakeout in a market that exploded in the early and mid-1990s.

``It's part of the maturation of the industry and, yes, greater consolidation is beginning to happen,'' said David Edgar, director of the Institute for Brewing Studies in Boulder, Colo.

The institute projects sales growth of less than 10 percent for U.S. craft beers this year, as measured by volume, compared with 26 percent in 1996 and 51 percent in 1995, Edgar said.

In the tightening market, Frederick Brewing Co., maker of Blue Ridge and Hempen beers, announced on Monday its acquisition of two other Maryland microbrewers, Wild Goose Brewery Inc. of Cambridge and Brimstone Brewing Co. of Baltimore, for more than $3.1 million.

Nationally, the industry's slower growth reflects aggressive marketing tactics by mainstream brewers and changing consumer tastes, industry experts said. And most everyone agrees there are too many amber ales chasing too few buyers.

``You have 1,300 companies competing in only 3 percent of the beer market,'' said Michael Goldsberry, marketing coordinator for Pyramid Ales Inc. ``There are just way too many messages out there.''

The Seattle-based brewer sold 6 percent less beer in the first nine months of 1997 than during the same period a year earlier. Goldsberry said Pyramid, now available in 30 states, will concentrate on West Coast sales in the future.

``I don't think it's any different from what's happened to anyone else in the craft beer industry,'' he said.

The industry is still growing, but more slowly. Edgar said new microbreweries opened at a rate of one per week in 1997 compared with two per week in 1996. Brew pub openings slowed to three per week from four, he said.

Meanwhile, 43 microbreweries and brew pubs closed in the first nine months of 1997, outnumbering the 36 that shut down in all of 1996, he said.

``It's only the beginning,'' said Benj Steinman, editor of the trade newsletter Beer Marketer's Insights. ``You've got too many little players competing for too small a piece of the pie.''

Beer wholesalers are distributing fewer microbrews, as well, reflecting incentives offered by mainstream brewers such as Anheuser-Busch Cos. for carrying only that company's products, according to Steinman and Edgar.

St. Louis-based Anheuser-Busch faces a federal antitrust lawsuit in California over such tactics. It maintains such incentive programs are legal.

Beer drinkers may also be losing their appetite for experimentation, said Tony Forder, editor of Ale Street News in Maywood, N.J.

``Craft beer enthusiasts have perhaps decided what they want by now and they aren't going to rush out and buy every new label that comes out,'' he said.

CAPTION(S):

Photo, Chart

Photo: (Color) Sales growth of less than 10 percent is projected for U.S. craft beers, such as these pictured at Canoga Park's Duke of Bourbon.

Phil McCarten/Daily News

Chart: (Color) GROWTH SLOWS

The popularity of microbrews continues to grow, just not as fast as it did earlier this decade

SOURCE: Institute for Brewing Studies