Apr 18, 2023 - Economy

U.S. craft beer market fell flat in 2022

Data: Brewers Association; Chart: Axios Visuals
Data: Brewers Association; Chart: Axios Visuals

The nation's craft beer market is at an inflection point.

Driving the news: Independent brewery production remained flat at 24.3 million barrels in 2022, according to an annual report released Tuesday from the Brewers Association, the industry's trade group.

  • The number of new breweries opening decreased for the second consecutive year, while the closings rate increased to 3%.

Why it matters: Outside of the pandemic slump, this is the first time in history the industry didn't see year-over-year production percentage growth, Axios has learned.

  • The association has tracked production since the mid-1980s and the previous low point was 0.7% growth in 2000, the association's chief economist Bart Watson told us.

What's happening: The latest numbers leave major questions about the industry's future as craft beer's core demographic gets older and drinks less full-flavored beer and younger consumers move toward new beverages, such as seltzers and canned cocktails.

  • "Craft is going to have to do what it's always done — reinvent itself for a new generation of drinkers," Watson told us.

Yes, but: A year ago the industry saw an 8% growth pandemic rebound. And this year, craft still fared better than the overall beer market, which saw production volume decline 3% in 2022.

  • Craft also slid slightly forward with 13.2% of overall market share, up from 13.1% the year before.
  • And the number of breweries climbed to an all-time high of 9,552.

What they're saying: "This is not a bubble bursting, this is a maturing market," Watson said.

Between the lines: One reason for the lack of growth is the departure of the largest brewers — most recently Bell's in Michigan and previously New Belgium in Colorado — from the independent beer market. Their growth helped the broader craft industry continue climbing in terms of production.

  • Both companies — and many others, including Goose Island and Lagunitas — were purchased by international mega brewers and are no longer considered "craft" by the association's definition.

The intrigue: Only two craft beer makers landed in the top 50 breweries overall, a list dominated by Anheuser-Busch and Molson Coors.

  • The five largest craft breweries in terms of production were Yuengling; Boston Beer; Sierra Nevada; Duvel Moortgat, which includes Firestone Walker and Boulevard; and Gambrinus, which owns the Shiner brand.
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