The craft beer market continued its historic decline in 2025, but the brewers in Arizona may be less tapped out than their counterparts in other states, per an industry group.

Why it matters: The persistent downward trend is startling the once-booming industry and forcing brewers to rethink their business models and expand into non-beer beverages.

The big picture: Nationwide, the craft beer industry last year saw a 5.1% decrease in production and 2.9% contraction in U.S. breweries, a new report by the Brewers Association revealed.

Zoom in: Arizona is feeling the pinch too, and declines here are likely in line with national trends, said Andrew Bauman, deputy director of the Arizona Craft Brewers Guild.

• Volume is down, particularly at larger breweries that are more reliant on package sales, he told Axios.

Yes, but: Arizona hasn't been hit as hard because the vast majority of its breweries are smaller neighborhood establishments and most aren't heavily reliant on retail distribution, Bauman said.

• He noted that breweries and taprooms were the most resilient craft beer businesses, per the report.
• "Our breweries are places that you go to, not just a brand you see on the shelf. So that helps us a lot," Bauman said.
• And he added that we've seen expansion with local favorites like Greenwood Brewing, O.H.S.O. and Wren House.

State of beer: The total number of craft breweries nationwide fell to 9,578, as openings declined at a sharp rate and 481 closed shop in 2025, the report shows.

• The decrease in 2025 production is a new high outside the pandemic and follows a 4% slump in 2024.

What they're saying: "While it's probably premature to say the industry has settled into a 'new normal,' there are many indications that we are moving in that direction," Matt Gacioch, staff economist at the Brewers Association, said in a statement.

Have a cold one

The session took a contentious turn this week when Gov. Katie Hobbs threatened to veto bills until Republicans release a new budget plan.

🚫 On Tuesday, Hobbs followed through, vetoing legislation on statewide assessments for K-12 students, the repeal of mental health instruction in schools, and ballot language for school bonds.

• Yes, but: Those bills collectively received zero Democratic votes, so they probably would've gotten vetoed anyway.

Prior to her moratorium taking effect, Hobbs nixed 20 bills including legislation to:

🏫 Opt Arizona into the new federal school voucher-style, tax credit scholarship program.

🎒 Bar schools from permitting students in grades 6-8 from joining student clubs or organizations without a parent's written permission.

🛩️ Require license plates and state registration for "roadable aircraft," AKA flying cars.

Hobbs did sign a handful of bills before her veto streak began, including legislation to:

⚖️ Impose harsher sentencing for fentanyl dealing and for sexual extortion of teenagers.

🔫 Establish regulations for who has authority to modify weapon detection systems at district and charter schools.

📱 Authorize prosecutors to bring manslaughter charges against adults whose texts or online messages encourage minors to commit suicide if children take their own lives.

Elsewhere at the Capitol...

Taiwan Semiconductor Manufacturing Co. is riding the AI boom to the bank.

Why it matters: Much of the Valley's hopes and dreams for high-wage job growth are staked on the long-term success of TSMC's U.S. manufacturing center in north Phoenix.

The latest: The company posted nearly $36 billion in first-quarter revenue, a 40.6% year-over-year increase, chair and CEO CC Wei announced on an earnings call yesterday.

• AI demand is driving the company's wild growth, and Wei said TSMC's customers don't anticipate it tapering off anytime soon.

Zoom in: Wei also confirmed that the company's second Phoenix fabrication plant is still on track to open next year.

The bottom line: Halo Vista — the 2,300-acre "city within a city" development that broke ground this week and promises to bring housing and a technology hub to support TSMC — can't come soon enough.

🅿️ The Scottsdale City Council voted to move forward with the expansion of an Old Town parking structure. (KJZZ)

🤬 U.S. Sen. Ruben Gallego used the F-word in at least 77 X posts between 2020 and the end of March, per a New York Times tally. That's more than any other federal lawmaker by a wide mile. (New York Times)

🪧 A Superior Court judge rejected Maricopa County Attorney Rachel Mitchell's attempt to overturn a pro-free speech "anti-SLAPP" law. (AZcentral)

🔌 Arizona Public Service will no longer cut off power for nonpayment of bills when temperatures hit 95 or above, no matter the time of year instead of just during summer, per a settlement with the AG's Office. (Phoenix New Times)

🗳️ Risa Lombardo, a Green Party candidate for governor, was a Republican precinct committeeman who'd previously sold conservative political merchandise until just before she filed her candidacy. (Arizona Mirror)

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