Empty beer glass on a table in a dark bar, pub
After a decade-plus of unprecedented growth, the craft beer industry is starting to experience some growing pains that are, well, sobering.
As Forbes.com previously reported, over the first half of 2023 craft beer sales numbers declined by 2% according to the Brewers Association — the first time the industry saw a decline other than in 2020 since these stats have been tracked.
In one way, the reasons for craft beer’s diminishing sales are complex and range from still lingering pandemic disruptions to an intense growth rate in recent years that was never sustainable, and from general inflation to lifestyle trends around healthier living. But in another sense, the reason for the rough patch craft beer has encountered is simple: people are drinking other types of alcohol instead.
“The number one reason why people say they’re drinking less craft [beer] isn’t because they’re watching their waistline or watching their wallet, it’s because they are drinking more of some other type of beverage alcohol,” said Bart Watson, chief economist for the Brewers Association, during a webinar discussing the results of the Brewers Association’s mid-year survey.
Other reasons respondents said they were drinking less beer included opting for a healthier lifestyle overall, cutting back on overall calorie consumption, drinking more non-alcoholic beverages, the economy and more. But these other concerns were at most half as common as drinking other types of alcohol, according to the survey.
Craft beer tasting – Beautiful colorful beer sample at a microbrewery
Watson said other types of alcohol are “the primary competitor that craft has to think about.” He added, industry insiders should be thinking about growing demand “in the context of ‘We need to take share from other parts of beverage alcohol.’”
The challenge for craft breweries is how exactly to do that as the movement away from beer extends beyond just craft beer. In 2022 consumers in the U.S. spent more money on spirits than they did on beer for the first time. A recent Gallup poll found that beer was still hanging on as the most-consumed alcoholic beverage with 37 percent of respondents saying they drink beer most often compared to just 31 percent for liquor and 29 percent for wine. However, the number of beer drinkers is down considerably from high points during the 1990s and 2000s when close to half of respondents said beer was their preferred drink.
One way to reverse this trend might be to reignite interest in draft beer as beer served on-tap inherently offers a more unique, can’t-be-missed experience for consumers. The problem for the craft beer industry is that draft beer is also, not exactly hopping these days.
“We hear from craft breweries that their distributors have deemphasized draft,” Watson said. However, he sees a renewed focus on draft as vital to the industry’s success. “This is a place where we need more community input and engagement,” he added. “[We] would love to hear member ideas: If you’re growing draft in your marketplace what are you doing.”
