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Brewers Association: 20% market share by 2020 for craft beer now a ‘long shot’

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Mary Ellen Shoup

By Mary Ellen Shoup+

28-Mar-2017
Last updated on 29-Mar-2017 at 10:50 GMT2017-03-29T10:50:49Z

With 5,302 breweries operating during 2016, craft brewers represent 12.3% market share by volume of the overall beer industry. ©iStock/RSTalley
With 5,302 breweries operating during 2016, craft brewers represent 12.3% market share by volume of the overall beer industry. ©iStock/RSTalley

The Brewers Association recorded 5,301 operating craft breweries in the US last year, up from 4,548 in 2015, representing a 0.1% market share increase from 12.2% to 12.3% (by volume).

Craft beer volume production was slightly more positive with a 6% growth rate between 2015 and 2016, producing 24.6 million barrels last year. Craft beer dollar sales increased by 10% within the same time period.

However, the volume growth was less than half of what the Brewers Association saw in years past when craft beer volume increased by 17.6% and dollars sales surged by 20% between 2012 and 2013, according to IRI data.

“The era of 18% growth rates is probably over. This is because the industry is maturing and it’s a lot larger,” said Bart Watson, the Brewers Association's chief economist, during a telephone press conference.

“Having those kind of growth rates in an industry this size is going to be frankly near impossible going forward.”

The 2016 figures do not include craft breweries acquired by large commercial brewers (who are no longer defined as craft by the Brewers Association).

20% market share goal was strictly ‘aspirational’

The Brewers Association had set a goal in 2014 of securing a 20% market share of the total US beer market by 2020, but has now tempered that outlook.

“I think in many way having that goal was very useful in framing how we thought about what we do in the marketplace,” Watson said.

“In terms of achieving, I think that certainly is a longshot at this point.”

Competition among small and independent breweries is much higher as seen by the rising number of brewery closings. Along with the 826 brewery openings in 2016, there were 97 closings, an increase from 78 in 2015 and Watson expects that the figure to be slightly higher in 2017.

Becoming a regional craft brewery like Sierra Nevada or the Boston Beer Company will be extremely rare, but not impossible, Watson said.

“It’s not coming to an end, but it’s going to be much more challenging,” he said. “Any brewery that does that is going to have to be exceptional at this point.”

 

Positive takeaways from craft brewery numbers

While craft beer growth may be tapering off as the market continues to mature, the industry still varies by geographic location. For example, Texas and Florida who are relative newcomers to the craft beer scene compared to other states saw higher growth rates last year than the industry average.

Craft beer sales in convenience retail channels significantly increased as well, according to Watson.

Additionally, the presence of craft breweries is much more spread out than it was 10 years ago with nearly 80% of all US adults living within 10 miles of a craft brewery, the Brewers Association found.

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