No doubt, things are tough out there. Every craft brewery, from the smallest to the largest, fights some of the same battles. But craft beer is a resilient little bugger. Unlike mega-sized corporate breweries, a craft brewery can change course and adapt as new challenges arise. A new report from the Brewers Association (image source for the above) suggests that breweries are restrategizing to meet the circumstances.
A wise business person recently told me that he recreates his business plan once every five years. That’s how his beer-focused businesses have survived the decades. It makes a lot of sense, especially if you’re talking about a business involving craft beer. Looking back, 2015 was vastly different than 2010. Looking forward, 2025 promises to look much different than 2020. Pandemics aside, the craft beer industry reinvents itself every few years. Adaptation is key for survival.
Brewers Association’s 2024 Year in Beer Report
The Brewers Association (BA), a trade organization representing the nation’s small and independent brewers, just released its annual year-end report. It talks a lot about resiliency and adaptation.
Bart Says…
“Craft has been going through a painful period of rationalization as demand growth has slowed and retailers and distributors look to simplify their offerings or add options for flavor and variety outside of the craft category,” said Bart Watson, vice president of strategy and membership, Brewers Association. “That said, breweries have reacted to these changes by focusing on distribution, continuing to innovate in their taprooms and brewpubs, creating groups and partnerships, and offering a wider range of beverages in their portfolios.”
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Regarding the taproom innovations, Watson noted, “Brewers that are finding ways to stand out can still drive traffic to their locations. But even the most successful breweries must work harder than in the lines-around-the-block era.”
Regarding the other challenges, Watson said, “The coming year brings additional uncertainty with potential tariffs and rising costs, retailers and distributors still looking to simplify and cut SKUs, and possibly new dietary guidelines for beverage alcohol.”
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Here are some other highlights from the Brewers Association’s 2024 Year in Beer Report.
Number of Breweries
According to the Brewers Association, the number of small and independent breweries operating in the U.S. in 2024 totaled 9,736. That’s an astonishing number. The graph below illustrates that the growth spurt between 2010 and 2020 was remarkable and unsustainable. Although the pandemic took its toll on the craft beer industry, we lost surprisingly few breweries, and the number of breweries kept rising.
Open and Shut
Across 2024, the Brewers Association tracked 335 new brewery openings and 399 closings. It’s a slow decline but still a low percentage of closings. Last year, the BA predicted that closings would more greatly outpace openings. I guess they were wrong, but the days of three new breweries opening every time one closes are long gone.
Jobs and Economic Impact
The craft beer industry supported about 460,000 jobs in the U.S. in 2024. Craft beer’s contribution to the nation’s economy totaled over $77.1 billion. The value of the overall U.S. alcoholic drinks market is $307.5 billion, per Statista. About 25% of the alcoholic drinks market is now craft beer, according to my math.
Trends in 2024
NA beer went boom in 2024. It’s been growing slowly, a trend we all expected to fade, but the popularity of non-alcoholic beer skyrocketed in 2024, with scan dollars up a remarkable 30% from January to October. Brewers are improving at making the stuff, and consumers are digging it. Go figure.
Focussing on success. For the last decade-plus, it’s been all about innovation. Not long ago, consumers were interested in whatever beer or beer style was new and different. As a result, we endured trends like milkshake IPAs and pastry stouts. The BA says that breweries today focus more on the products and the models where they’ve succeeded. While innovation and creativity have always proven strong suits for craft beer, we’ve seen the limits. We’ve learned that innovation and creativity are well spent on the beer business, not just the beer itself.
The craft beer experience. The BA notes that more breweries are embracing new ways to enhance the customer experience at their taprooms and brewpubs. This might include adding non-beer beverages to the menu, like cocktails and wine. It might involve offering more non-alcoholic options, more family-friendly activities, and more community outreach events. Perhaps you’ve noticed an uptick in special events like trivia nights, live music, yoga+beer sessions, etc. Breweries are creating reasons for you to visit the taproom beyond the beer.
What 2025 will bring. Two key points. Changing consumer habits will likely continue to reshape the market. Tariffs are a big concern, as I outlined in a previous post. The former is business as usual; consumer habits constantly change. Brewers and consumers will feel the pain if the latter comes to pass.
“Brewers are experiencing critical challenges at the crossroads of a high-cost environment paired with slowing growth,” said Bart Watson. “To grow in 2025, brewers must do what they do best: adapt. They also will need to continue to do the hard work to find ways to tell their story and differentiate their brands against the competition.”
