Craft Beer a Victim of Its Own Success

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Currently, the craft beer market is worth $19.6 billion, but that number is on the decline as big beer brands are gobbling up small craft breweries every chance they get.

2016 saw decreased growth for the once-booming American craft beer market. Brewers nationwide reported a volume increase of only 6% compared to 2015, which is a dramatic decline from the double-digit growth the industry had for the previous five years. The Brewer’s Association reported that in 2015 the volume growth was at 13%, and 18% in both 2013 and 2014.

But now, according to the Brewer’s Association chief economist Bart Watson, that period of exceptional growth is most likely over now that the craft beer market is maturing. Not to mention the fact that these little markets are being acquired by global brands giving them an offer they cannot refuse. This means their production numbers are now part of the big brand’s statistics, instead of the craft beer market.

For example, Anheuser-Busch InBev, known primarily for their Budweiser brand beer, acquired so many small breweries in 2016 that a full 1.2 million barrels were taken out of the craft beer industry production rates. While this acquisition just adds more revenue to the U.S.’s $108 million beer market, some beer lovers are wondering who exactly is benefiting.

It seems that the larger brands are only acquiring these small craft breweries as a way to compete with an ever-changing market.

“As the overall beer market remains static and the large global brewers lose volume, their strategy has been to focus on acquiring craft brewers,” Watson explained to Forbes.

Craft beer hopped onto the beer scene within the past 10 years as a way to promote fuller-flavored, more unique beers as a way to compare with larger brands such as Molson Coors, Constellation Brands, and Anheuser-Busch InBev. Add to the fact that craft beers are made in small batches by regional brewers, and beer lovers nationwide are enticed by drinking something seasonal, special, and developed by a small business.

Increased supermarket competition is also to blame for this decline in craft brewing. A full 5,000 brewers have to battle it out for decent shelf space, and since craft beer is so popular, it’s almost as if now craft brews are a dime a dozen.

This increased pressure from all sides caused 97 breweries to shut their doors last year.

So where do brewers go from here? No one really knows, because unfortunately, it seems that craft beer is its own worst enemy.

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