Is the Craft Brew Industry Fizzling?

Many reports indicate that the craft brew industry may have peaked, including a recent Chicago Tribune article that notes in 2017, while there were nearly 1,000 new brewery openings across the nation, there were 165 closures, a 42 percent increase over 2016, with 116 craft breweries closing that year. That’s not the case in all areas of the country, however. If you just bought one of the Houston homes as so many have recently in this hot real estate market, you’re living in a city that still has a growing industry, most recently ranked at 46th in the nation in terms of number of breweries per capita.

So, while the answer is that yes, there are more and more closures of small craft breweries, there are still some spots where the opposite is true.

Boston Beer: The Face of the Craft Beer Industry

The Motley Fool reported in April 2018 that there are currently 6,300 craft brewers in operation, a number that’s higher than it’s ever been in the country, with the industry remaining on a sustained growth track, but that Boston Beer, the second largest craft brewer behind only D.G. Yuengling & Son, is quickly fading. While its seltzer and tea brands are gaining, its beer is continuing to decline. The industry benchmark for demand based on retailers and distributors dropped 5% in 2017, declining for nine consecutive quarters, while the flagship Samuel Adams brand has fared far worse with a decline for 12 consecutive quarters.

New York Times Op-Ed Explains Some of the Reasons Why

In an Op-Ed by the New York Times in 2017, Jim Koch explains some of the reasons why, while noting that after “years of 15 percent growth, the craft sector is down to the single digits.” Koch states that he’s concerned about a major transformation in the industry and that American consumers will be the biggest losers in the long run due to the dramatic consolidation. The joint venture between SABMiller and Molson Coors that created MillerCoors, followed just months later by the merger of InBev and Anheuser Busch, was approved by the Department of Justice. That resulted in the majority of domestic beer production being placed into the hands of the two mega brewing companies overnight. The price of beer increased and thousands of workers in the U.S. lost their jobs while the two conglomerates were able to move much of their profits offshore and reduce their tax bills.

Laws meant to protect the smaller breweries were eradicated, allowing distributors to turn to the major suppliers rather than smaller, independent craft brewers which hurts not only the smaller craft brewers but beer enthusiasts.

Koch says if this continues, we’re likely seeing the beginning of the end of the craft beer revolution in America.