Craft beer industry sees worst ever slump in 2023 production
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The craft beer industry saw negative production for the second straight year in 2023, continuing a downward trend for independent, small brewers.
Yes, but: Craft beer fared better than the beer market as a whole, new data released Tuesday from the Colorado-based Brewers Association shows, and new brewery openings continue to exceed closings.
Why it matters: The once-booming industry's troubling numbers are being closely watched as competition and shifting alcohol consumption habits threaten its future.
State of play: Craft beer went flat in 2022 with no growth for the first time ever sans the pandemic, but the number was later revised downward.
- The minus 1% production decline for last year is the worst on record since the association began tracking industry numbers in the late 1970s
- The overall beer industry, led by mega-brewers like Anheuser-Busch and Molson Coors, saw minus 5.1% production volume, though its retail sales increased 3%.
By the numbers: 9,683 breweries operated at some point in 2023 with the addition of 495 new openings, the data shows.
- The closing rate increased to 4%, or 418 breweries, and openings decreased for the second consecutive year.
- Craft brewers are making about half the beer they can make, one of the lowest capacity rates ever.
The intrigue: Pennsylvania's Yuengling is the largest craft producer in the nation, followed by Boston Beer and California's Sierra Nevada Brewing.
Between the lines: Lower beer sales at taprooms and brewpubs helped drive the negative trend. Also, breweries are making roughly 50% of their capacity, most likely the lowest number on record.
- What's propping up craft beer is lower-priced offerings from the likes of Yuengling and nonalcoholic beer from Athletic Brewing, said Bart Watson, the association's vice president of strategy and chief economist.
Caveat: The statistics do not include seltzers or craft cocktails made by breweries, which is another trend that helped brewers stay alive.
What they're saying: "More breweries are looking to be that beverage company," Watson said, adding that "the idea of what craft beer is has changed a lot over time."