The Brewers Association, which represents the nation’s small and independent breweries, just released data showing that the craft beer industry continued to enjoy growth in 2017, despite a decrease in overall beer sales nationwide. While the total beer market dropped 1 percent by volume last year, craft beer saw a 5 percent rise in volume, an 8 percent increase in retail dollar value, but just a small increase in percentage of overall market share. The nation’s 6,300 craft breweries now account for 12.7 percent market share by volume of the overall beer industry, up from 12.4 percent the previous year.
To clarify, the Brewers Association describes a craft brewery as being “small and independent,” two subjective terms that the organization defines using its own arbitrary standards. I grow weary of explaining it, so you can learn more about the topic here.
In 2017 the number of breweries in the U.S. grew 16 percent, totaling 6,372 breweries. Of those, 3,812 are defined by the Brewers Association as microbreweries, 2,252 as brewpubs, 202 as regional craft breweries, and 106 as large or otherwise non-craft brewers. Small and independent breweries account for 98 percent of the breweries operating in the U.S today.
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
sponsor
Last year there were 997 new brewery openings and only 165 closings— a closing rate of just 2.6 percent. Combined with already existing and established breweries and brewpubs, craft brewers provided more than 135,000 jobs, an increase of greater than 6,000 from the previous year.
You can read the entire press release here. It includes some information about the methodology.
Craft Beer Growth Defined
It’s always good to hear that the craft beer industry continues to grow, regardless of how you define the terms craft beer and growth, it’s always good to hear that six new breweries opened last year for every one that closed, and it’s always good to hear that the industry created 6,000 more jobs than the previous year, but it is clear that the growth of the craft beer industry has plateaued in recent years. After an impressive spurt in growth, things have slowed to a crawl since 2014.
In 2013, craft beer accounted for just 7.8 percent market share by volume of the overall beer industry. In 2014 that number grew to 11 percent, an impressive leap. In 2015 it grew to 12.2 but in 2016 it only grew to 12.3. As I reported above, in 2017 that number grew to 12.7.
Good or bad, we can probably attribute some of this stagnation to the largest craft breweries, like Boston Beer Company and Sierra Nevada, which are exponentially larger than the vast majority of other American craft breweries. There have been plenty of reports lately about how those craft beer gorillas have suffered lower sales in recent months. Then again, I’d like to believe that if someone decides that they are no longer going to buy Sierra Nevada Pale Ale it’s because they’ve decided to drink a different craft-brewed pale ale.
A few years ago there was a saying bandied around the craft beer industry: “20 by 20.” The vision of achieving 20 percent market share by the year 2020 now seems unrealistic. Still, you never know. Maybe we are ready for another growth spurt.
To throw a different kind of shade on the whole situation, these happy numbers also reveal that the largest, least-independent breweries in America sell 87 percent of the beer. America’s 6,372 small and independent breweries are still getting swamped by the 106 breweries that are not small and independent, even if those beer behemoths are seeing decreased sales. It’s frustrating to hear that just 2 percent of the breweries in the nation sell a whopping 87 percent of the beer.
Last year the news was full of headlines about the big beer companies suffering declining sales. Craft beer lovers glowed at the sight of headlines like Not America’s Beer? Budweiser Sales Down and Dilly Dilly is a hit but Bud Light sales are stuck in a rut. So while that was happening a growth rate of just .4 was all craft beer could manage? It seems like this would be a good time to gain some ground on the 2-percenters.
In other words, we have work to do. Let’s aim for 25 percent by 2025.
All of the information above is conveniently explained in the infographic below, provided by the Brewers Association.
The craft beer market is pretty crazy. It seems like the new start ups are shoving out other craft brewers rather than taking share from the big guy.
Closings are the story – up 72% from last year. Many more to come.