Texas craft beer market drops nearly 9%
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Texas' craft brewing market is on the decline, as closures outpaced openings last year and production slipped.
Why it matters: The once-thriving industry is now struggling amid shifts in alcohol consumption, particularly among younger people, and brewers are looking for ways to adapt.
By the numbers: Texas craft beer production reached 1.369 million barrels in 2024, an 8.7% drop from 2023, according to new data from the Brewers Association.
- With less production comes a smaller economic impact for Texas — about $4.7 billion in 2024, a 10.6% drop from 2023.
What's happening: Texas saw 29 craft breweries close and just 22 open in 2024, per the Texas Craft Brewers Guild, mirroring national trends. Openings in Texas slowed by more than half since 2023.
Zoom in: Central Texas lost several craft breweries last year, including Stonewall's Bluemont Vineyard and Brewery, Tanglefoot Brewing in Temple and Last Stand Brewing in South Austin.
Yes, but: David Kulczar of Craft Beer Austin, a group that's been tracking breweries in Central Texas since the pandemic, says there's not a central theme when it comes to brewery closures in the Austin area.
- "Anything from bad business ownership, over expansion, bad luck, bad location" can impact breweries, Kulczar tells Axios.
- "Some of it's definitely demand ... but I don't think that's changed to the degree that that's driving closures as much as some of the other issues."
Zoom out: Nationally, craft beer production hit 23.1 million barrels in 2024 — a 4% decline from the previous year and the largest drop in industry history outside the pandemic.
- The number of small independent breweries operating in the U.S. decreased for the first time in 20 years, with 501 closures compared to 434 openings.
What they're saying: Consumers have a lot of beverage options to choose from these days — like seltzers, CBD and THC beverages and nonalcoholic brews — Caroline Wallace, executive director of the Texas Craft Brewers Guild, tells Axios.
- That leads some breweries to pull back on limited seasonal releases and focus on flagship beers and best-sellers, which can lower production, Wallace says. Some are even ramping up production on their own line of seltzers instead.
- "We definitely have some breweries that their beer production has declined because they've … chased those newer beverages," she says.
What we're watching: The 2025 outlook for the craft beer industry doesn't favor a rebound. Small brewers are being hit especially hard by tariffs on equipment, kegs, aluminum cans and ingredients, such as hops and grain.
- The combination of factors is leading breweries to delay expansion plans, raise prices and absorb losses, Gacioch says.