The New Economics of Craft Beer | SevenFifty Daily

For SevenFifty Daily, I tackle the changing economic reality of craft brewing. After several decades of steady and sometimes stratospheric growth, the craft beer industry has seen declining sales for the past few years, thanks to an overcrowded market, changing drinking behaviors, and competition from canned cocktails, spirits, and other new beverage categories.

“Double-digit growth papered over many business issues,” says Bart Watson, the chief economist for the Brewers Association. Last year, off-premise craft beer sales declined nearly one percent while volumes dropped 4.4 percent according to Circana, a Chicago-based market research firm. And the drumbeat of notable brewery closures sounds louder each week.

To better navigate today’s choppy economic waters, breweries are reevaluating production and product mix to stay afloat and better serve a reduced, yet still thirsty consumer base. Creating targeted portfolios through SKU rationalization and recalibrating focus on core ranges, in addition to exploring hard tea and THC beverages, can rightsize operations for the craft brewing industry’s new economic reality.