It’s tough out there for craft breweries

Keg stand: The craft beer industry was upside-down in 2024, according to the Brewers Association's annual industry production report published this week.

• Craft brewers produced 23.1 million barrels of beer last year, a 4.0% decrease from 2023, marking the largest drop in industry history outside the pandemic.
• The number of small, independent breweries operating in the US decreased for the first time in nearly 20 years, with 501 closures compared to 434 openings.

Why is the industry in the tank? The numbers represent a maturing and highly competitive marketplace, not a nascent one marked by high-growth, according to the association. And the 2025 outlook isn’t much better, as tariffs on equipment, kegs, aluminum cans, and ingredients like hops and grain are projected to hit small brewers especially hard.

One bright spot: Craft beer’s retail dollar value last year rose to an estimated $28.9 billion, a 3% increase over the previous year. The report attributes this to pricing adjustments (*cough* price increases *cough*) and steady on-site sales performance.

Zoom out: Those with neckbeards are increasingly turning in craft beer cans for hard liquor and High Noons. The overall US beer market saw a production decline in 2024, while the spirits industry experienced a production increase. Revenue from pre-mixed cocktails and spirits-based ready-to-drink cocktails grew YoY, with the segment now accounting for 18% of the total market, up from 8% three years ago.