There’s a lot going on in the worlds of both craft and mainstream beer this month, from new numbers on 2017 production to a tariff that could impact breweries across the United States. Here’s your March Beer Watch.
Craft industry is growing, but slowing down
Boulder, Colo. * March 27, 2018-The Brewers Association (BA)-the trade association representing small and independent 1 American craft brewers-today released 2017 data on U.S. craft brewing 2 growth. With more than 6,300 breweries operating during the year, small and independent craft brewers represent 12.7 percent market share by volume of the overall beer industry.
The Brewers Association just released the 2017 numbers on craft brewery growth in the U.S., and as we might have predicted, the numbers show steady but decelerating growth for the craft beer industry.
Some important takeaways from the 2017 data:
- The retail value of craft beer grew 8% over the previous year, raking in an estimated $26 billion.
- Barrel production increased by 5% as craft brewers produced 25.4 million barrels.
- 997 new breweries opened in the U.S. and 165 closed, a closing rate of just 2.6%.
- Craft breweries provided over 135,000 jobs, an increase of about 6,000 from the previous year.
While the craft beer industry continues to grow, it’s not “exploding” as it once was. A 5% growth rate is certainly a positive thing, but as Brewers Association economist Bart Watson says, prospective brewery owners shouldn’t dive head-first into the business.
“…Craft’s 5% growth rate is quite strong,” Watson said in his analysis of the numbers. “That said, it’s probably not as strong as many breweries expected as they built their business plan… Nearly 1,000 breweries opened, increasing competition while growth decelerated another small notch.”
These numbers shouldn’t discourage prospective brewery owners, but encourage them to develop a solid business plan before entering a market that’s only getting more competitive with each passing year (see the numbers of brewery and brewpub openings and closings over the years here).
Still thinking about opening a brewery in 2018? When I talked to 3rd Wave co-owner Lori Clough last week, her advice to those with dreams of craft brewing was to pay attention to the current trends in the industry and to be more than just a brewery.
“My advice would be to open a brewpub,” she said. “So you have a restaurant to fall back on.”
Mainstream beer sales continue to fall
Anheuser-Busch InBev’s Bud Light bore the brunt of accelerating volume declines in US mainstream lager last year, new analysis has shown. related to Beer & cider, Anheuser-Busch InBev, Constellation Brands, Coors,
While its growth may be decelerating, the craft industry still is growing, which is more than the mainstream beer industry can say. The craft industry grew by about 5%, and the mainstream industry’s numbers fell by that same number.
- Bud Light volumes decreased by 6%.
- Coors Light volumes decreased by 3%.
- And Miller Lite fell by 2%.
Consumer research analyst Pablo Zuanic speculated that the quick decrease in mainstream beer sales could be because of the weather, and because Anheuser-Busch and Molson Coors have been investing more in brands like Natural Light and Keystone Light.
Aluminum tariff is not great for brewers
Beer Institute asks President Trump to provide exemption for imported aluminum used to make beer cans
“This tariff on aluminum will hurt American breweries and beer importers that are employing Americans and producing beer, America’s most popular alcohol beverage. Our nation’s more than 5,000 active breweries are supporting more than 2.2 million jobs and helping to pour more than $350 billion into our national economy.
Craft beer drinkers and brewers who breathed a sigh of relief at the 2017 data might not want to read this next part.
Last week, the Trump administration imposed a tariff of 25% on steel imports and 10% on aluminum imports.
This is not good news for the craft or mainstream beer industries, when approximately 60% of the beer manufactured and sold in the U.S. comes in aluminum cans and bottles, according to Beer Institute CEO Jim McGreevy.
According to the Beer Institute press release, A 10% tariff would be a new $347 million annual tax on America’s brewers and beer importers and could lead to the loss of more than 20,000 American jobs from people whose livelihood depends on the U.S. beer industry.
In a series of tweets at the beginning of the month, Miller Coors expressed their disappointment in the tariff.
Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise. It is likely to lead to job losses across the beer industry. We buy as much domestic can sheet aluminum as is available, however, there simply isn’t enough supply to satisfy the demands of American beverage makers like us. American workers and American consumers will suffer as a result of this misguided tariff.
Whatever comes of this tariff, I’ll be sure to keep you updated in April’s Beer Watch. Here’s FeBREWary’s, if you’re feeling nostalgic for Love on Tap and chocolate cherry stouts.