Half of the U.S.'s 50 largest craft brewers experienced flat or declining sales, according to Brewers Association's chief economist Bart Watson. As he outlined, the larger craft breweries are increasingly squeezed in the middle between large brewing conglomerates and small upstarts with a strong local identity. Since large brewing groups are on the one hand buying up iconic craft breweries to include them to their widespread distribution network and on the other hand new craft breweries are still opening up every day, the battle for consumer’s attention and shelve space in supermarkets becomes more intense.
Four of the Brewers Association’s list of the top five craft breweries in the U.S. (D.G. Yuengling & Sons, Boston Beer Company, Sierra Nevada Brewing Company and Gambrinus Company) saw declining sales last year.
Hardest hit among them was Boston Beer Company, selling 210,000 fewer barrels (about -246,000 hectoliters) of beer in 2016. Even worse off was Wisconsin’s Minhas Craft Brewery, which is ranked 12th on the list, selling 274,454 fewer barrels (about -322,000 hectoliters). Minhas, which is one of the oldest breweries in the United States founded in 1845 and was renamed in 2006 from Joseph Huber Brewing Company to its new owners Ravinder and Manjit Minhas, relies heavily on contract brewing for other brands.
According to the BA’s report, the top five craft brewers produced more than half of all top 50 craft brewers’ production last year — 7.7 million barrels (9.0 million hl). This makes clear how dramatic the new situation will shape the industry.
As Watson already said earlier, “the craft brewing industry is entering a period of maturation. As craft’s base gets larger, as with any industry, it becomes more difficult for it to grow at the same percentage rate.” This seems especially to be true for the larger independent players in the market, which need to expand into new markets without relying on an own strong sales force like major players with a larger product portfolio.