Texas craft beer boom fizzles
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The number of breweries in Texas dropped for the second year in a row, per new data from the Brewers Association.
Why it matters: The once-thriving industry is struggling amid a shift away from alcohol consumption, particularly among younger people.
By the numbers: The state lost 20 breweries last year, falling from 440 to 420, after peaking at 445 in 2023, according to the association.
What they're saying: "I have owners send me messages saying we're just barely getting by or we're barely breaking even," Brian Brown, who tracks the North Texas beer industry on his site Beer in Big D, tells Axios.
Zoom in: Texas Ale Project, which billed itself as the first Dallas brewery built from the ground up since the 1800s, kicked its last keg in August.
- The owners haven't said why, but Brown says many older breweries are closing rather than accepting big rent hikes as original leases expire.
New openings are down, too, dropping by more than half since 2023, per data from the Brewers Association.
- High interest rates and the rising costs of real estate and ingredients all contributed to a slowdown in openings, Caroline Wallace, executive director of the Texas Craft Brewers Guild, a nonprofit trade association, tells Axios.
- Plus, new projects struggle to break through in a saturated market where fierce competition for tap and shelf space has made breweries more reliant on filling taprooms and the event business, Brown says.
Between the lines: The industry is seeing a shift from urban to suburban locations, where real estate is cheaper, says Wallace.
- Manhattan Project is building a sprawling production facility in Mesquite, due in early 2027.
- Rollertown Beerworks opened a brewery and headquarters in downtown Frisco last fall. And Farmers Branch's Odd Muse opened a Plano taproom with a full kitchen in April.
🏓 What we're watching: Breweries are rapidly adding amenities to bring customers in the door, Brown says.
- Armor Brewing in Allen added pickleball courts earlier this summer and Tupps Brewery in McKinney installed a soccer field.
What's next: When the Legislature reconvenes in January, brewers will again push a "beers for steers" tax credit, an incentive for the mash-like boiled barley that breweries give or sell to farmers as food for livestock.