Craft beer growth continues, if slower than in past years, but competition is starting to shake out breweries.
This from a report by the Brewers Association, the trade association representing small and independent American craft brewers, marking the release of 2017 data on U.S. craft brewing growth. With more than 6,300 breweries operating during the year, small and independent craft brewers now represent a 12.7 percent market share by volume of the overall beer industry, inching up from 12.1 percent in 2016.
Last year, craft brewers produced 25.4 million barrels, and saw a five percent rise in volume and an eight percent increase in retail dollar value, estimated at $26.0 billion, representing 23.4 percent market share. Most of the growth—76 percent—came from microbreweries and brewpubs. Craft brewing’s growth occurred in the context of a total beer market which dropped one percent by volume in 2017.
“Growth for the craft brewing industry is adapting to the new realities of a mature market landscape,” said Bart Watson, chief economist, Brewers Association. “Beer lovers are trending toward supporting their local small and independent community craft breweries. At the same time, as distribution channels experience increased competition and challenges, craft brewer performance was more mixed than in recent years, with those relying on the broadest distribution facing the most pressure.”
In a blog post a few days after the release of the data, Watson had a cautionary attitude about growth going forward. "Compared to many parts of the U.S. economy, craft’s 5% growth rate is quite strong. That said, it’s probably not as strong as many breweries expected as they built their business plan. Additionally, as the number of breweries has exploded, slowing growth plus more breweries means that per brewer growth numbers have declined significantly."
Other details: in 2017 the number of operating breweries in the country grew 16 percent, totaling 6,372 breweries: 3,812 microbreweries, 2,252 brewpubs, 202 regional craft breweries and 106 large or otherwise non-craft brewers. (Small and independent breweries account for 98 percent of the breweries in operation.) 2017 saw the opening of 997 new breweries, with 165 closings.
In terms of the craft beer market, 2017 closings were concentrated among the smallest breweries, with landlord and rent issues being the top cited reasons of business shutting down, according to Watson.
Recently, the BA also released their annual list of the top brewing companies. The top ten craft brewers, starting with number one, were: D. G. Yuengling & Sons, Boston Beer Co., Sierra Nevada Brewing Co., New Belgium Brewing Co., Duvel Moortgat, Gambrinus, Bell’s Brewery, Stone Brewing Co., CANarchy (a craft brewery collective that includes Oskars Blues Brewery, Cigar City Brewing, Perrin Brewing Company and Wasatch and Squatters) and Deschutes Brewery.