It will take another 6 to 8 months for the Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB) to issue a report on the beer industry for 2024. However, we are inclined to be interested in the most recent industry report card to make a forward-looking assessment relative to the overall health of craft beer. Craft beer has an aura of community and familiarity that is appreciated when we find a brand or taproom that soothes the soul. Therefore, we hope they survive during any turmoil.
Consumers have reduced their consumption of beverage alcohol products. Wine was the first sector to notice a pullback in consumption. Craft Beer came into the Pandemic years with a decade of annual double-digit growth. But, with a business model built upon taprooms to a significant degree, the Pandemic significantly impacted bottom lines. Also, wellness trends and economic considerations added to the woes of the maturing craft beer sector.
In 2023, the Brewers Association reported that the macro beer industry experienced a -5.1% decrease in beer production (2023 versus 2022). That represents a drop in production in 2023 vs 2022 of 164.6 million barrels and 174.3 million barrels respectively. (Source: TTB report/May 2024)
What is important in this data is that Craft Beer had a decrease in barrel production of just -1.0% to 23.4 million barrels.
According to TTB data, in 2023 there were 7,752 total breweries. The Brewers Association reports 9,906 breweries of which 9,700 were classified as Craft Breweries. Approximately 145 breweries were categorized as large macro/non-craft breweries. The craft category indicates a slight increase over 2022.
The difference in TTB and Brewers Association brewery numbers may be attributed to definitions. For example, TTB counts primarily locations and not locations that do contract brewing for private label small batch beers, locations that are partnerships, and breweries that may use shared or contracted facilities.
A layman’s definition of a craft brewery is a craft brewery is characterized by its smaller production scale, independence from large beverage corporations, dedication to traditional brewing methods, commitment to variety and quality, and a strong connection to the local community. The latter point explains why craft beer has a focus on taprooms and brew pubs. Using TTB brewery numbers, 67% of breweries in the U.S. produce less than 7,500 barrels of beer annually.
The months with the largest production of beer from all breweries in March, June, July, and August. Preliminary TTB data issued on October 29, 2024 for the first 8 months of 2024 shows total beer production of 110 million barrels. 2023 production for same 8 months was 114 million barrels. In essence in the first 8 months of 2024 versus 2023 beer production is down approximately 4%. That is inclusive of the total industry.
Cheers!
