Craft breweries on the pandemic rebound
American craft brewers rebounded from the pandemic with 8% annual growth and 24.8 million barrels of beer sold in 2021, new data shows.
State of beer: The increase easily exceeded the overall beer market, Axios' John Frank writes, which grew 1% in 2021, with taprooms and brewpubs returning to life as public health restrictions eased.
- Craft beer — made by small, independent breweries — is now 13% of the overall beer market, up from 12%, according to a report released this week by the Brewers Association, a national trade group.
- A total of 9,069 breweries were operating nationwide as of the end of last year, and openings exceeded closings nearly four-fold.
Yes, but: Craft beer rebounded in part because it tumbled more than the overall beer market during the pandemic as small brewers struggled to shift to packaging and distributing their beer to compete with mega-brewers like Anheuser-Busch and Molson Coors.
- In 2020, overall beer production fell 3%, while craft dropped 10%.
- Moreover, smaller brewers are expected to face even greater supply chain and inflation pressures looking forward.
Flashback: Chatting at a picnic table at his brewery as the scent of toasty malt wafted through the air, Brian Smittle, founder of South Austin's Thirsty Planet Brewing, told Axios that in early March 2020 — in the pandemic before-times — he had orders for 369 kegs.
- The following week, as SXSW was canceled and the world locked down and radically changed, his keg orders dropped to five.
- That same early March week this year? The company was back up to 302 kegs.
What they're saying: Bart Watson, the Brewers Association's chief economist, expects craft beer production to exceed pre-pandemic levels this year, but not all will make it.
- "Even with a bounce-back year, many breweries are still struggling," he told reporters. "2022 is going to be a make-or-break year for many breweries."
By the numbers: Only three of the top 50 largest craft beer companies are in Texas.
- Yes but: The Texas Craft Brewers Guild has at least 50 members in Central Texas, from Hell or High Water in Liberty Hill to Live Oak Brewing in Del Valle.
With the pandemic easing, the chief challenges to the brewery rebounds are the supply line issues — "getting cans and ingredients" — and building back up their personnel, Charles Vallhonrat, the guild's executive director tells Axios.
The bottom line: The craft beer industry is maturing after remarkable growth since 2010 and facing more competition than ever.
- "It's not the cool kid anymore," Watson said, adding that a mature industry needs to constantly look to reinvent itself.
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