The COVID-19 pandemic put hard times on the U.S. craft brewing industry in 2020, as production declined for the first time in the modern craft era, the Brewers Association (BA) announced today.
The BA, a not-for-profit trade representing small and independent craft brewers, shared that production at U.S. craft brewers who meet its craft brewer definition — those who produce fewer than 6 million barrels annually and are less than 25% owned by a non-craft brewer — collectively produced 23.1 million barrels in 2020, a decline of 9%. The number of barrels produced by craft breweries had steadily grown in recent years, from 24.3 million barrels in 2016 to a peak of 26.3 million barrels in 2019.
One caveat: These are preliminary numbers, so they may change. BA chief economist Bart Watson, who will host a press conference with the media today and BA members on Thursday, will share more insights on the BA’s website and a full industry analysis will be published in the May/June 2021 edition of The New Brewer magazine.
Craft’s overall share of the beer market declined to 12.3% in 2020, down from 13.6% in 2019 and 13% in 2018.
The BA noted that the overall beer market, not including FMBs and hard seltzers, declined 3% last year, to 186.1 million barrels (down from 191.6 million barrels in 2019). However, factor in those fast-growing products, and the industry ended 2020 up 1%.
The retail dollar value of craft beer in 2020 was $22.2 billion, a 22% decline compared to 2019. Craft beer’s dollar share of the market was 23.6%
“2020 was obviously a challenging year for many small brewers, but also one that proved their resilient and entrepreneurial nature,” Watson said in the press release. “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.”
In 2020, 8,764 craft breweries operated at some point during the year, which breaks down to:
- 3,471 taproom breweries, which produce beer for consumption on their own premises and package beer for to-go sales, but do not operate restaurants;
- 3,219 brewpubs, which produce beer primarily for consumption on their own premises and operate on-site restaurants;
- 1,854 microbreweries, which produce fewer than 15,000 barrels annually and produce packaged beer for distribution;
- 220 regional craft breweries, which produce between 15,000 and 6 million barrels of beer annually, mostly for distribution.
Taproom breweries had the most growth in 2020, with 505 more in operation than in 2019, followed by brewpubs, with 199 more in operation than in 2019. The number of microbreweries declined by 204 from 2019 to 2020, and there were 20 fewer regional craft breweries in 2020.
The number of craft breweries operating in the U.S. has climbed from 5,622 in 2016, an increase of 3,142 breweries in the five-year time span.
The BA uses the following definitions for its classes of members in its bylaws:
- Taproom breweries sell more than 25% of their beer onsite and “do not operate significant food services;”
- Pub breweries, or brewpubs, sell more than 25% of their beer onsite and offer food;
- Packaging breweries sell more than 75% of their product offsite.
The 716 brewery openings in 2020 more than doubled the number of brewery closings (346,of which 343 were craft breweries), something Watson found promising.
“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,” he said.
The rate of brewery openings declined by 30% compared to 2019, but the BA attributed this to “increasing market competitiveness and maturity,” and noted that “the decline was apparent before the pandemic.
According to the BA, craft breweries accounted for more than 138,000 direct jobs, a decline of 14% compared to 2019 staffing levels. The pandemic led to many companies cutting staff last year.