The year in beer: Craft beer review for 2024

Craft has been going through ‘a painful period of rationalization’, says Bart Watson, the organization’s vice-president of strategy and membership.

Why is this? Firstly, demand has slowed: remember, craft is no longer in the meteoric growth phase of the 90s and 2000s and instead is declining (in volumes, craft beer declined 1% in 2023 compared to the year before; although this must be taken in the context of 5.1% declines in the overall beer industry).

Secondly, retailers and distributors are looking to simplify their offerings. Consumers may constantly be on the lookout for new flavors, innovations and ideas – but retailers and distributors are going in the opposite direction.

And thirdly, there’s the competition from other categories – think, in particular, RTD alcohol – which is again pulling the attention of retailers and distributors and leaving less room for craft beer.

Data is yet to be released for 2024, but initial estimates suggest declines will continue.

In the association’s mid-year survey, craft saw an estimated decline in production of 2%. And Q3 scan data suggests weaker performance than the first half of the year – ‘this suggests a full-year number may be weaker than the midyear estimate,’ according to the Brewers Association.

While it’s tough going out there, opportunities do remain for brewers if they follow the trends and make the most of opportunities in the category.

“The conditions facing brewers today are certainly challenging and have led some businesses to make the difficult decision to close their doors for good,” Matt Gacioch, Staff Economist at the BA, told us.

“The past few years have also seen fewer new breweries opening than at any time in the past decade.

“And yet, craft brewers are an optimistic group by nature. Those companies that remain open keep finding new ways to serve their existing customers and engage with new ones. Successfully running any small business is rarely an easy feat, but the dedication, innovation, and passion of craft brewers makes hope for the future of the industry remain strong.”

Looking long term

With so many variables in play, predicting the long-term trajectory of the category is difficult. What is predictable, however, is that there will be change: and so the key for craft brewers is to be able and willing to adapt.

“Understanding that there’s no crystal ball - especially in an uncertain future of potential tariffs, updates to dietary guidelines, etc - we expect to see challenging conditions persist for at least some time into the future,” said Gaciach.

“However, craft brewers have demonstrated their ability to adapt through the past years that presented plenty of obstacles of their own. Despite headwinds, craft beer has managed only slight declines in total production while slowly gaining share of beer overall.

“We expect that craft brewers will continue their track record of ingenuity to weather tough times and will be well-positioned for growth again when conditions allow.”

Craft beer: A new normal

Craft beer boomed in the 90s and 2000s. But the category was already maturing and getting used to a new normal when the pandemic struck in 2020.

This hit on the industry can’t be underestimated. Being small businesses by definition, craft brewers were among the most vulnerable companies.

Many rely on taprooms and the on-trade, which had to close during the peak of the pandemic (as a result, craft beer production dropped 9% in 2020).

The industry largely recovered the following year: only to find itself facing a new set of hurdles across 2021 and 2022, such as rising operating and material costs, supply chain challenges and increased competition.