USA: Vast majority of breweries will survive pandemic

For the first time in modern history, the production of craft breweries and their volume share of the total beer market in the U.S. have declined. Small and independent brewers collectively produced 23.1 million barrels of beer and realized a 9% decline, decreasing craft’s overall beer market share by volume to 12.3%, down from 13.6% the previous year, according to figures released by The Brewers Association (BA), the trade association representing small and independent American craft brewers.

The overall beer market dropped 3% by volume in 2020. Retail dollar value was estimated at USD 22.2 billion, representing 23.6% market share and a 22% decline over 2019.  

“2020 was obviously a challenging year for many small brewers, but also one that proved their resilient and entrepreneurial nature,” said Bart Watson, chief economist, Brewers Association. “In a year where U.S. draught sales were down more than 40%, small brewers found new ways to connect with their customers and keep their businesses running.”

Nevertheless, the number of operating craft breweries continued to climb in 2020, reaching an all-time high of 8,764, including 1,854 microbreweries, 3,219 brewpubs, 3,471 taproom breweries, and 220 regional craft breweries. Throughout the year, there were 716 new brewery openings and 346 closings. While openings decreased approximately 30% compared to 2019, only half of this drop is attributed to COVID. Increasing market competitiveness and maturity were also factors, and the decline was apparent before the pandemic.

“While many small breweries will remain under pressure until they can fully reopen and welcome their communities into their breweries, the 2020 closing rate has remained on par with 2019, suggesting that the vast majority of breweries will survive going forward,” added Watson.

However, the “TTB permits [which is the number of breweries which have applied for operation with the Alcohol and Tobacco Tax and Trade Bureau (TTB)]  increased to 12,714 as of the end of March, but the quarterly increase (182) is the smallest since the TTB started publishing quarterly numbers (Q2 2016)”, Mr. Watson reported on Twitter today.  This “suggests brewery openings will be down over the next couple of years(in case that wasn't suggested already...),” he concluded.

Or, as one of the craft brewers puts it “The pandemic will most likely mark the final turning point in the craft beer movement in the United States.”

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