As an advocate and lover of the craft beer scene, I have become alarmed at the sign of the times in the industry. It has been known for some time that people, in general, are drinking less beer. In fact, I just read something today that says even the younger generation of Germans have gone away from beer. Scheisse! That same trend is at work here in the US too. My own son and his friends are proof of this trend. Craft beer is about 13.3% of the beer market, which is a dent in the big boring brewers, but not enough apparently. Production has been down and a decrease in the number of breweries has shaped the business for the past two years. 2024 saw a 4% decrease in beer volume and 2025 is on pace for a 5%+ decrease over 2024. Last year 529 breweries went out of business and the numbers for this year might be sobering when it is all said and done. I suppose that economics says this was inevitable. The microbrew craze had been going strong for 40 years and downturns happen. Perhaps, in some places, microbreweries were overdone, not sure on that, but it seems possible. If you look at my outdated pictures above, these are from www.vinepair.com and show the huge growth in breweries from 250 in 1990 to 7,190 in 2016. Today it has grown to 9,269, but declining daily. Other economic factors have played a role too.
Most beer historians pin the start of the craft beer scene on the 1965 purchase of Anchor Brewing in San Francisco by Fair Maytag. Ironically, Anchor just announced this week they were done forever. They've been purchased several times and also said the were done several times, but they were both the beginning and the end. In 1978 the legalization of home brewing may have really been the impetus. Homebrewers now had the ability to take their craft to the people and if you look at the beer choices back in 1978, the beers your father was drinking, you probably would've been craving something new too. In my own group of friends, I was the only one immediately drawn to anything other than the crap we drank in high school and college. Oops, did I say I drank in high school? I meant in college after I turned twenty-one. Nevertheless, all of the rest of them were very late to the party and have barely crossed the threshold. I've had to drag them to breweries and try other stuff. It was always about volume and ease of drinking. Watered down Miller Lite's and Coors Light's were easy to swallow, but nearly void of any taste. Both of my brothers were also drawn to craft beer and they both were home brewers, one quite successfully. It was all about the taste for us. The US was primed for a craft beer lift-off. Now, 40 years later, after almost no let up in the craft beer industry, economics have caught up. Inflation, Covid, supply-chain issues, the cost of insurance, property, the price of aluminum, the cost of labor, and even to a smaller degree, tariffs, have all played a part in the retraction we see today. Some of it makes complete sense, but is still a total bummer to someone like me who basically builds my vacations around going to breweries every day. In reality, I also fall into the trend of drinking less. I may go to breweries every day on vacation, but most the time it is for one or two beers.
I found a pretty good source of information on the craft brew industry. It's the Brewers Association, their website is www.brewersassociation.org They have everything from industry statistics to the pay scales, to trends and marketing strategies. There's just a ton of good information here and if you want to join, there's even more. There a fun tab where you can see data by state and even look up your favorite brewery. Their mid year analysis was a mixed bag of good and bad, but mostly bad news. Here's a sample explaining the reasons for declining beer sales.
Retailer and wholesaler rationalization, increased competition for limited shelf space, and consumers becoming tighter with their proverbial pocketbooks are all contributing to craft contraction in the off-premise channel where the bulk of beer is sold. This bears out as well in the Beer Purchasers Index where craft has remained in contraction territory for over three consecutive years.
This decline in beer volume occurs in a difficult moment across the beverage alcohol universe. Per Wine & Spirits Wholesalers of America SipSource data, spirits volume was down 4.2% over the 12 months ending May 2025, while wine was down 7.7% for the same period.
Overall, the results of this midyear survey indicate that for many breweries, the challenges they’ve faced over the past few years have either continued or accelerated. Some breweries that found marginal growth in 2024 experienced slight decreases in the first six months of this year.
Many brewers have also swapped out beer producing capital for other products. This could be food, merchandise or other things to help offset declining sales. Many of us can't contemplate our local brew pub going under, but it does happen. Frankly, I'm surprised we haven't seen a large conglomerate come in and buy a swath of breweries, but I hope it never happens. As we see in the UK, it chokes off the creativity of the business. I do think that more small craft breweries should team up and buy ingredients, etc in much larger portions at a discount and leverage their strength rather than going it alone.
I did find an interesting response to an article that was recently written in the New York Times. The piece was a reaction to some interesting attacks on the industry and what the writer thinks is killing the business. The response was well thought out and articulate, non confrontational and productive, agreeing with some of the issues, just not the reasoning behind them. One I found particularly interesting was how the NYT writer thought the World Doesn't Need Any More IPA's. I had to laugh because if you read my blog, I totally agree. My insistence on this is I'm just fatigued and really not a fan of IPA'S, in general. Some are good, most are not, but that's just my taste bud's opinion. The response, written by Matt Gacioch, the Staff Economist for the Brewers Association, was really based all on economics, and it should be. Here's what he said; IPA is what sells (at least in the off-premise). Per the most recent 3 Tier Beverages/NIQ numbersOpens in new window, the IPA style group (inclusive of IPA, double IPA, hazy IPA, etc.) made up 51.3% of craft dollar sales over the past 52 weeks. The next closest style group in IPA’s rearview was wheat ale at 9.2% of dollar share. Setting aside IPA’s volume dominance for the moment, it’s also one of two style categories taking share from the year prior (up from 49.9%). The only other growth style group in craft is lager, up from 8.1% to 8.4%. Proving my taste buds are not dollar driven as a craft brewer should be. I've never disagreed that IPA's are top sellers, it's obvious they are, but I do think it says a lot about craft beer drinkers fundamentally. They drink for the taste and want easy drinking, refreshing beers that have more flavor than the big boring brewers yellow ales. The award winners and popular beers are the more normal, good tasting beers, that people drink a couple and go home. Yes, there are categories where dark beers and experimental brews win awards, but most brewers flagships are IPA's and lighter wheat beers. A few ales sneak in there too. However, that is what is great about the craft brew industry, there's something for everyone. The big boring brewers offer a standard and a light and only because the beer revolution has dug into their pockets for 40 years, they will occasionally try something new for a short time. Then they rebrand or repackage their standard beer and all is right with the world. The volume drinkers all pile into their new can or color scheme and wake up hung over again. Craft beer drinkers are more sophisticated and the crazier the name or can art, the more we want to try it. You'll eventually find one that speaks to you, that says this is me, but you're always open to trying something new, always. Let's face it, some experiments totally suck. Too bitter, too thick, too far out there, but it's also why craft beer is the best.
The whole impetus for this blog was somehow I got on the algorithm for brewery news. For about a week straight the story every day was about another brewery closing. Several I had actually been to. I had known about the decline in drinking for some time, so this wasn't all that surprising, but I decided to jump in a little deeper and see what I could find. The economics were also not surprising as I live that every day in my real job. Most industries that face downturns can trace it to too many choices chasing too few dollars, but other factors always exacerbate the problem. Here you have a social phenomenon hitting the industry at the wrong time, when costs are way up. There is some uncertainty on the economic horizon and the beer business has its share of it. As drinking slips in popularity you're already seeing a surge in things like THC beers and nootropics in nonalcoholic beverages that seem to be a hit. There's probably too many breweries for a downturn, but some states clearly don't have enough. So, there is room for growth. I actually see that when the comeback comes, moderate drinkers will not be going back to the big boring brewers. That's their grandparent's boomer beer. Zzzz. Bud Light will never recapture what it lost. I'll continue to do my part and stop by as many craft brewers as possible and spread the word.
Cheers!
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