The craft beer bubble has burst, leading to closings and downsizing

The decades-long craft beer boom is now a bubble — and it's set to burst.

Why it matters: The $28.8 billion industry faces a crisis as competition and waning interest lead to downsizing, mergers and closures.

State of play: Last year, craft beer production declined by 4% — the largest decrease in industry history, outside the pandemic — and 2025 doesn't look any better.

• A mid-year report from the Brewers Association, the industry's Colorado-based trade group, indicates that craft volume is down 5% year-over-year, with brewery closings outpacing openings.

The fine print: The definition of craft beer only includes small, independent breweries.

What they're saying: "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," said Matt Gacioch, the association's staff economist.

The big picture: The half-empty mood comes as the industry gathers in Denver for its annual bacchanal, the Great American Beer Festival, which began Thursday.

• Ticket sales are down from the height of the craft beer era, but the festival still expects to draw 30,000 to 40,000 people and 450-plus breweries representing nearly every state.

The intrigue: GABF exemplifies the change.

• A year ago, the festival began adding more experiences, such as live music and games, along with expanded beverage options, such as cider, cocktails, hard seltzers and nonalcoholic beverages.
• This year, the festival will add liquor from 21 distilleries.

The bottom line: "Consumer preferences are evolving and changing," says Ann Obenchain at the Brewers Association, which organizes the festival. "Some are … not always reaching for a beer, and some are drinking less."