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Craft beer segment shows steady 5% growth with 2,739 more breweries planned

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Mary Ellen Shoup

By Mary Ellen Shoup+

09-Aug-2017
Last updated on 09-Aug-2017 at 16:11 GMT2017-08-09T16:11:32Z

More growth exists for microbreweries and brewpubs, says Brewers Association's chief economist ©iStock/katyenka
More growth exists for microbreweries and brewpubs, says Brewers Association's chief economist ©iStock/katyenka

The US craft beer market saw volume production increase 5% for the first six months of 2017, a slowdown from 8% volume growth in the comparable period last year, according to the Brewers Association mid-year 2017 growth report.

As of June 30, 2017, there were 5,562 US breweries in operation, an increase of 906 compared to the same period last year, with an additional 2,739 breweries in the works, according to the Brewers Association.

“The growth pace for small and independent brewers has stabilized at a rate that still reflects progress but in a more mature market,” Bart Watson, chief economist, Brewers Association, said. “Although more difficult to realize, growth still exists.”

“The beer world is highly competitive and there is certainly a mixed bag in terms of performance. Some breweries are continuing to grow, whereas others are having to evolve their position and nurture new opportunities to ensure they keep pace,” he said.

Microbreweries and brewpubs show most growth

The slowing craft beer production volumes are mainly due to regional breweries, which are far more reliant on distribution, and as a result, continue to grow at a slower rate than microbreweries, according to Watson.

“But for micros and brewpubs, there is still plenty of growth showing up in the survey. Breweries who produced less than 15,000 barrels last year were up about 25% in the mid-year survey,” he said.

This trend of faster growth for smaller breweries has played out in the state of California where microbreweries and brewhouses are benefitting from on-premise sales.

From a general production standpoint, California reflects the overall US craft beer market growing at 5% to 6% for the first half of the 2017 compared to the same period last year. In-state sales share, however, increased faster with closer to 10% growth representing 68.5% of overall state craft beer sales compared to 60.3% last year, according to the Brewers Association.

California microbreweries and brewpubs increased volume production by almost 100,000 barrels year-over-year, of which 4% was exported and the rest was sold in state.

“Part of this is due to growth among microbreweries and brewpubs, who sell just about everything they make in California,” Watson said.

“We can see the continued importance of at-the-brewery sales,” Watson added.

“The growth in tavern use is another clear sign that visiting breweries is something people are interested in doing for part of their beer enjoyment experience.”

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