More Than Half of the Top 50 U.S. Craft Breweries Declined in Sales in 2018

Newly released information from the Colorado-based Brewers Association, the advocacy/trade group for the craft brewing industry, illustrates the pitfalls currently being faced by the country’s larger, regional craft breweries. Although the industry as a whole grew by roughly 4 percent, to an estimated 25.9 million total barrels in 2018, the slowing growth, coupled with a constantly increasing number of total breweries, meant more breweries are struggling to grow (and actively shrinking) than ever. And a disproportionate number of those breweries are larger regionals in the top 50, according to data released by the BA in the May/June edition of its New Brewer magazine.

This was by no means a new development. In fact, it’s the third year in a row that at least half the top 50 regional craft breweries—defined as those producing between 15,000 and 6 million barrels per year—either shrank or stayed flat in terms of growth. In total, 28 out of the top 50 failed to grow in 2018. Meanwhile, in the top 20 breweries, only seven companies managed to post growth—all in the single digits.

It suggests, of course, what we’ve seen in action for years—although growth is still happening when surveying the industry as a whole, that growth is largely in the form of very small-scale micro and nanobreweries. Because the pace of new brewery openings is continuing unabated—something that has worried us in the past, and continues to worry us now—the “overall growth” number has managed to keep its head above water, but that growth number comes with accompanying declines in many of the best-known and most respected breweries in the craft sphere. It’s simply impossible for the majority to grow right now, because there aren’t enough customers to go around.

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Declining breweries included such notable names as the following. Several, such as Dogfish Head and Harpoon, were essentially completely flat overall, rather than up or down.

— D.G. Yuengling and Son (-2 percent)
— Boston Beer Co. (-7 percent)
— New Belgium Brewing (-11 percent)
— Boulevard Brewing (-10 percent)
— Brewery Ommegang (-8 percent)
— Gambrinus (-3 percent)
— Deschutes (-8 percent)
— Artisanal Brewing Ventures (-3 percent)
— Brooklyn Brewery (-4 percent)
— Alaskan Brewing (-5 percent)
— Great Lakes Brewing (-3 percent)
— Flying Dog (-11 percent)
— Full Sail (-13 percent)
— Bear Republic (-15 percent)

There were, of course, some success stories sprinkled among all these concerning numbers. One of the more surprising was Sierra Nevada, which grew production by 2 percent in 2018, to almost 1.1 million barrels, after declining in 2017 and 2016. Other major growers included the following:

— Firestone Walker (+12 percent)
— Bell’s Brewery (+3 percent)
— Canarchy (+3 percent)
— Stone Brewing (+3 percent)
— SweetWater (+2 percent)
— New Glarus (+2 percent)
— Rhinegeist Brewery (+16 percent)
— Three Floyds (+25 percent)
— Georgetown Brewing (+37 percent)

Still, not every regional brewery can be blessed with the local support of a Rhinegeist or a New Glarus, or the national hype of a Three Floyds. There was a time when growth was simply expected of every craft brewery making decent beer. Now, those in the top 50 that are still growing are more like the exception to the rule.

If you’re wondering how “acquired craft” is faring these days, the answer is a mixed bag. Anheuser-Busch InBev has reasons for optimism—the majority of the breweries they’ve acquired, such as Elysian, 10 Barrel, Four Peaks, Golden Road, Karbach, Breckenridge, Blue Point and Wicked Weed all posted growth numbers in 2018, but those numbers were offset by large declines from Goose Island (-7 percent) and Shock Top (-23 percent), making the company’s overall “craft” growth practically flat.

At MillerCoors, meanwhile, it’s almost the same story—Major brands Blue Moon (-4 percent) and Leinenkugels (-15 percent) are in decline, but the smaller and more nimble acquired brands Saint Archer, Hop Valley, Revolver and Terrapin are all growing. Even in the world of corporate beer, the same microcosm is playing out—smaller breweries are cannibalizing any potential growth from the larger breweries in the craft market.

There seems to be little reason to expect any of this to change in 2019. As more breweries continue to open, and consumer enthusiasm for craft beer remains around the same level, there will be more companies competing for the same dollar. For the regionals, tough times likely lay ahead.