The latest set of industry stats illustrates the US craft beer market continues to punch above its weight: realizing 8% volume growth (against overall beer market growth of 1%). But it also faces the challenges of a maturing sector – plus the economic headwinds felt across the industry.
On-trade
Breweries, bars, and restaurants continued a ‘long and unsteady recovery’ in 2022, notes the association.
While total on-premise sales bounced back to their previous trends, draught beer is still recovering.
"Small and local brewpubs and taprooms proved nimble during continued supply disruptions, faring better than micros and regionals fighting for shelf space in an increasingly competitive distribution climate," reports the Brewers Association, the not-for profit trade association dedicated to small and independent craft brewers.
Meanwhile, climate change and persisting supply and ingredient disruptions and shortages continued to plague brewers throughout the year.
Drawing on the learnings from 2022, the Brewers Association predicts that in 2023:
- Brewery openings will be the lowest in over a decade
- Distributed craft volume will not grow
- Supply chain will remain rocky, but collectively average prices will come down from 2022 peaks
- Total brewery employment will increase
Although the 2022 barley harvest improved, the severe depletion of stocks in 2021 kept supplies tight and prices high in a dynamic and changing market. 2022 hop acreage declined slightly in the US, while the European harvest was the worst in decades, reports the association.
Added to the challenges in recovery have been disruptions in the supply of aluminum cans and CO2.
“Riding through a challenging and competitive year, taprooms and brewpubs found ways to innovate and keep customers coming through the door, while brands with a retail presence continued to compete with other beverage alcohol choices for shelf space,” said Bart Watson, chief economist, Brewers Association. “2023 will be a reset for many brewers as they return to more conscious and thoughtful innovation to balance customer demand and adapt to supply chain fluctuations.”
BA initiatives
Both nationally and on the state level, the Brewers Association highlights its work to ensure small brewers have ‘equitable access to markets, fair tax rates, and sensible regulations.’
“In the fight for fair treatment for craft brewers, we submitted comments to the Department of the Treasury on wholesaler consolidation, unfair state franchise laws, and restrictions on direct-to-consumer (DTC) sales,” reports the organisation.
“We joined fights against lowered excise taxes for ready-to-drink canned cocktails (RTDs) in Arizona, New Jersey, Washington, and Vermont and grassroots advocacy in Illinois, New Jersey, California, and Colorado. The BA will continue to support direct-to-consumer shipping, protecting existing allowances in states such as California, and bringing the practice to states currently without.”
Another initiative from the Brewers Association is its mentorship program: with the association connecting more than 100 mentors with entrepreneurs and professionals looking to develop their knowledge and skills and now seeking to break into the craft brewing industry.
With its fourth cohort now complete, the program has hosted 124 mentees and 102 mentors.
And 40,000 attendees convened after a two-year hiatus for the 40th anniversary Great American Beer Festival in Denver in October.
“The maturing craft industry continues to grow more competitive, facing both internal business pressures and externally the continued growth of new beverage alcohol competitors,” said Watson. “While these challenges are daunting, craft brewers are known for their innovation and flexibility, and will need both as they evolve to meet the next generation of beer lovers with new beers and new occasions.”
The 2022 Year in Beer report can be found here.
