Beer Industry Climate

The beer industry changed dramatically in the late 1970s with the advent of the first craft breweries, legal changes that allowed small breweries to serve consumers from their own taprooms, and a long, gradual change in consumer tastes. By the 2000s, the craft beer industry was booming, with 12 years of double digital growth from 2004 through 2015.

That tidal wave of growth will never be repeated. Consider these facts, courtesy of Information Resources Incorporated:

  • Craft beer growth dropped in 2016 to 6.7% from 15% in 2015. While this is still excellent, the mature western region (including the hotbeds of Seattle, Portland, and Denver) grew only 3.7%. And as a harbinger of things to come, craft beer grew only 1.7% in January of 2017.
  • At the same time, competition continues to increase with over 5,000 breweries in the US, 6,789 different beers sold in retail, and 1,385 new beers introduced in retail in 2016.
  • The big boys (AB InBev, SAB Miller, MillerCoors) continue to put more stress on the distribution and retail systems for all craft breweries by developing their own beers in the “craft” style and purchasing craft breweries,.
  • 28 of the 100 top brewers reported retail sales¬†declines¬†and more than half of the top 15 craft brewers lost market share (even while many recorded sales growth) in 2016. Large breweries are suffering as the number of breweries continues to increase, consumers continue to search out “local” tastes, and retail shelf space is unable to keep up.
  • Small brewers find it hard to compete in retail and are left only selling via their tap room. In 2016 when looking at IPA sales, which dominate beer styles, the top 10 brewers accounted for 52.5% of retail sales.
  • Beer as a whole is under threat from hard ciders, hard sodas, and hard seltzers; from the wine industry which is now selling wine in cans and even had the first wine ad during the Superbowl in 40 years; and from the marijuana industry, where according to a new survey 50% of US adults have tried marijuana, 10% have purchased it legally, 40% said they would purchase it if it became legal in their state, and 27% said they would decrease or eliminate their consumption of beer if they could take up legal marijuana smoking.

But for us, the beer glass is still half full rather than half empty. It just means you might have to be a little more proactive in your marketing.