With the Iron Hill closure all over beer-related media (American Craft Beer - Craft Beer News, Entertainment, and Lifestyle), many might be made to think that the sky is falling. Especially considering how the first two quarters of 2025 have gone ((Quick Hits: US Brewery Closures Escalate in First Half of 2025). I know that this has been bantered about around here in the past, but, if you all don't mind, I'd like to come at it from a different perspective. Closures are good for the craft beer world. Craft beer has reached market saturation. That, I believe, is a good thing. Better beer is available just about everywhere. Where finding good beer was basically a treasure hunt in the early 2000s, you now can't swing a dead cat without running into a store that carries a lovely selection of craft brands. Hopefully all within their "Best By" dates. Now comes the long-awaited culling. But whose heads are on the chopping block? Here's where it gets interesting. Looking into crystal ball. Here's how I see the next 5 years going. By the end of 2030, I believe the following will happen, and it is based on the following trends: The 2024 top 50 US craft breweries by sales volume National Beer Sales & Production Data - Brewers Association Craft Beer Has Been Flat for Eight Years, and Other Notes — Beervana Let’s Discuss Gallup’s Finding that the Number of American Drinkers is down 19% — Beervana 1) Large production breweries will continue to produce the vast majority of the beer in the segment, with some of them consolidating further to insulate themselves from the overall downturn in consumption. Not many, if any, breweries of this size will close. Though the possibility of buyout is always present, I believe that The Age of Acquisitions is all but finished. 2) Smaller, neighborhood brewpubs/breweries and local/regional breweries with poor business plans and/or the inability to navigate the downturn in the market will continue to close at an increasing rate and will, very probably, end this time period at numbers that resemble those in the 2010s. 3) Imports will see an increase. As the domestic craft market finds its equilibrium point, there will be a resurgence of the import trade to fill the void left by closing breweries, as existing larger production breweries will be hesitant to increase their production volume in order to remain as profitable as possible without the risk of having to pull back in the not-to-distant future. 4) Breweries that have sold out will continue to see a decline in the variety of their brands. As sales get harder and harder to come by, the board of directors of these publicly traded companies will make decisions based solely on sales volume. These "breweries" will eventually cease to exist outside of a handful of brands that were flagships at one time, but not the true definition of the brewery in question as a whole. They will be, essentially, hollow brands. The destiny of the vast majority of brands managed this way. 5) Regardless of anything, including a zombie apocalypse, I will continue to drink beer. (I had to include at least ONE sure thing! ) Do you agree, fellow BAs? What, if anything, do you see happening differently? Or additionally? Happy New Beer Friday and Prost for the last weekend of Oktoberfest!
I don’t have a crystal ball and must admit I don’t think that much about craft beer and the breweries that make them as a matter of study. That said, I have to agree that if a brewery has a bad or even mediocre business strategy then it will likely fail sooner than later. (Regardless of the quality of the beer) On the other hand, if they have a great business model but brew mediocre beers, they will likely also fail sooner than later. Those are simply logical and I know of one instance that trashes the first understanding because they have a meandering business model at best and a lack of a model at worst. Yet they survive and thrive. So. That is why I don’t speculate as a practice; there are always exceptions that force recalculation. I’d rather just drink beer.
I've always thought craft beer an enigma. Mostly because of the massive influence of fad on the industry. The newest one, non-alcoholic beer, is just the most recent iteration. It's the gluten-free beer of the 2020s. Will it last? Who knows? Truthfully, I hope it doesn't. Mostly because non-alcoholic booze is pretty dumb, if you ask me. All I know is that there will be another fad in the 2030s. You can bet on that. All that said, if you take away those novelty things, it's been pretty consistent over the last 30 years. Like it or not, hops define US craft. The "IPA", if you would. I don't like that marketing, but my liking it isn't going to get breweries to correctly label their beers. And don't even get me started on people using the word "adjunct" instead of "additive". Regardless, watching the maturation of the industry is intriguing. At least to me. There will always be outliers on both sides of the Bell Curve. They are certainly interesting case studies, but those that succeed despite doing the opposite of what most would recommend and those that fail despite doing everything "right", are the unicorns of statistical analysis.
To a great extent, I agree. I don't recognize most of the breweries that are shuttering. Probably because most are local breweries whose beers were never intended for a wide distribution. These kinda hurt, though: Anchor Brewing Company | San Francisco, CA | Beers | BeerAdvocate Hair Of The Dog Brewing Company / Brewery And Tasting Room | Portland, OR | Beers | BeerAdvocate BridgePort Brewing Co. / Brewpub | Portland, OR | Beers | BeerAdvocate Portsmouth Brewery | Portsmouth, NH | Reviews | BeerAdvocate
OK, I will play along. The recent announcement of the complete closure of Iron Hill is very disappointing news for the employees of Iron Hill. In an article, I read that 1,400 people are affected over the many locations. I also learned that back in 2016, Iron Hill was ‘bought out’ to a significant degree: “A&M Capital partners took a majority interest”. It would seem that the ‘cost’ of A&M Capital taking control was an aggressive plan for expansion. It would not surprise me that this was part (mostly?) of creating an unsustainable business for Iron Hill. “Closures are good for the craft beer world. Craft beer has reached market saturation.” It sure does seem that craft beer has “reached market saturation” and if indeed that is the case than a certain number of closures is to be expected. As to which specific businesses will be closed will be dependent on a number of factors with one of those factors being how well capitalized a given business is and how large of a debt load they are carrying. Are the larger, distributing craft breweries in a ‘better’ positioned to still be in business in 2030 vs. the plethora of smaller craft breweries? Each company is its own unique business and local market conditions and financials (e.g., debt load) will be important considerations. At a high level it seems to me that the craft breweries who have a significant amount of direct to consumers sales, both via draft and direct canned sales, are in a better economic position. When a brewery sells you a draft pint (e.g., $7) or a four-pack (e.g., $14) to take home they are realizing HUGE profits here. In the distribution model the brewery sells their beer at a much lower price since the other businesses (e.g., Wholesale Distributor, Retailers) need to apply their markups to the final consumer sale price. As regards imports increasing, yeah I don’t see that happening. The consumer demands for imports have been greatly decreasing over the decade at the many retailers in my area. It seems that present day craft beer consumers are of the locavore mindset with supporting locally produced beers being a priority. Nobody has a crystal ball here so we all get to speculate. The market will decide who is still around 5 years from now. Cheers!
Thanks, Jack! I knew you were a fun kinda guy. It seems that private equity investment in a craft brewery almost assuredly spells disaster for the company invested in. The two seem incompatible. Obviously not every time, but in a lot of circumstances. The profit margins that you speak of for the small craft breweries, especially the ones that self-distribute and skip two tiers of the three-tier system, is the problem. They are just not realistic as business models. I know it's a bit of a stretch, but I think it's possible. Truthfully, it's wishful thinking on my part more than anything. Maybe I'm alone in this sentiment, but I liked when there were more options at the beer store and on-tap.
I fully expect that you'll see more breweries diversifying because "just beer" doesn't seem to cut it in such a saturate market. That will mean more breweries that sell food, make seltzers, RTDs, etc. Beer and just beer is a risky investment in a generally risky sector with a high failure rate for businesses to begin with.
Different beer market and totally different customer base, but I've found it interesting that of the dozen or so breweries still existing from the dawn of the craft era (1976) - when the US total hit bottom at 50 - most of the survivors a half century later were in or near the bottom 1/2, capacity wise. re: Pabst - Are they really a "brewing company"? Note, too, in regards to the concept that "quality" is part of the equation - the above list of survivors include a couple of brewers notorious for inferior beer.
When I hear of new small breweries opening, I always think, "WTF are you guys thinking? If you want to burn your hard-earned money, just give it to me instead!"
I agree the market is saturated and that many breweries will go under. It saddens me to see the investments in new craft breweries which will not succeed But I do beloveds long term there will be a shakeout and there will a consistent set craft breweries which will continue to exist. We will all benefit that in the long term we will have better beer to drink.
Just a trivial comment. If you include Pabst and Huber/Minhas as survivors, Genesee/Fifco should be included -- or do you know something about the Genesee brewery fate that I don't know (with Fifco selling most of its other US assets)!
From my limited perspective, I have fewer preferred beers readily available today than I did 20 years ago. Already trending downhill, at least for styles I like.
Ah-ha! Good catch. Thanks! That's an old jpeg - I probably made that graphic during the "North American Breweries" era or maybe during the "High Falls" period? Here, I'll create a fix... just take some Scotch brand tape (as seen in pale yellow in the image above) and put it over that section! Yeah, I'm not sure I do- thus the yellow highlighting and question mark. A "brewing company" without a brewery? Sort of the inverse of City - 4 old-line breweries without a brand.
Ironic story here in Connecticut. Two mediocre to poor beer breweries just went out of business. Two well known, well respected breweries with really good beer purchased thier facilities. High hopes for those that are now in great digs.
I'm here to drink EXCEPTIONAL beers only!! I hope everyone who intentionally began a beer business with a mediocre beer product fails horribly and suffers the realities of capitalism. I have 0 sympathy for people who want to introduce a mediocre product to an already HYPER-SATURATED market.
But to the question.. closures are good in a saturated beer market.. leaves room for a higher quality/innovative product to come into market.
My crystal ball says AB-InBev will go belly-up and all of their employees will have to learn to code. It also foresees a downturn in the REAL oversaturated and hopefully unsustainable market, viz. seltzers, ciders, RTD cocktails, and hard (fill in the blank). And the Bengals and Vikings in the Superb Owl, book it. Apropos of nothing, I wonder what Temu's return policy is on defective crystal balls.
