Bart's Steady Hand Delivers State of the Craft Beer Industry
Bart Watson took the stage at the Brewers Association conference and reminded everyone why he’s the people’s champ. Now serving as CEO, he returned to familiar ground—donning his Chief Economist hat to deliver the much-anticipated State of the Industry address. With a room full of craft brewers spanning every business model and scale, offering meaningful, actionable insights is no easy feat. Yet Bart, as always, managed to cut through the complexity and deliver clear takeaways that every attendee could bring home.
Bart set up his talk by acknowledging that craft beer’s challenges include both short-term transitory headwinds and long term structural factors, each impacting demand in different ways.
First, that meant touching on where we are:
Craft beer volume declined by 4% in 2024, marking the weakest performance since the COVID era. Yet, 43% of members still grew in 2024.
He shared additional stats that included performance above trend for those offering beyond beer products, noting that 52% of companies who produce alternative beverages grew last year.
Openings 430 (+4.4%) were still outpaced by closing -524 (-5.3%) in 2024, driven heavily by breweries under 500 BBLs in size.
The Craft Equation
Next, Bart shared the Craft Equation to put the craft beer industry’s challenges into perspective:
Number of Craft Drinkers (📈) * How Much They Drink (—) * Number of Craft Occasions (📉)
The percentage of legal drinking age adults who drank craft beer in the past 30 days continues to rise from 9.1% in 2023 to 9.8% in 2024. More people than ever are drinking craft.
How much they’re drinking, despite what you might read in the media, is staying flat.
So if drinkers are up, quantity is flat, what’s driving the decline? Despite there being more people drinking craft beer on occasion, the number of those occasions where they choose craft is losing ground. Why?
They’re drinking more of something else, shifting to other spaces in beverage alcohol, often seeking flavor profiles, over specific styles. The data included a survey of customers who drink alcohol several times per year or more, but do not drink craft beer that often (29%) citing that:
Over 50% don’t like the flavor
30% prefer other beverages
25% prefer other types of alcohol beverages
Bart shared that GenZ is in fact drinking craft, just not in enough occasions. In addition to flavor, local is of interest to young consumers, but this is the “show me” generation that needs to be explained why. In other words, you can’t just say “Drink Local!”. Demonstrate what that means and why they should care.
Short-term Transitory Headwinds
Real Economic Factors, including declining consumer purchasing power and low sentiment, continue to weigh on the industry.. Bart shared that the more affluent craft drinker is often better able to weather these storms, but their price elasticity has gone up in recent year. In other words, they’ve no doubt become more sensitive to price.
Tariffs are the short term wild card and their impact on the craft beer industry is still unknown. While there’s a potential benefit to US craft, as imported brands face significant price hurdles, he reiterated that it’s difficult to see how their impact on consumer purchasing power overall is anything but negative.
Distribution and Retail Landscape was another headwind as distributors and large retailers shift their focus toward larger regional brands that have dialed-in and rationalized their portfolios over the last few years, giving less attention than ever to small brands. This was supported in the annual data that showed regional brewers (-3%) outperformed the trends vs micros (-7%).
Long-term Structural Factors:
Despite what you might read in the headlines, no one factor is pulling down alcohol. Instead, Bart shared an interrelated web of factors that he talked through, including how they intertwine:
While each of these points has the potential to influence the long term health of craft beer, news headlines today may overstate their current impact.
The final message from Bart including a reminder that craft brewers have weathered many down cycles before and the BA is putting forth the resources to do the same in today’s environment. My key takeaways that I would want any craft brewer to leave this well-balanced talk with include:
Opportunities exist through experimenting with flavors outside the stereotypical ones associated with craft, notably IPAs and bitterness.
When doing so, find ways to prioritize flavor over style in your messaging hierarchy
Communicate more of the why, like why consumers should care about local, instead of simply expecting them to.
Focus on ways to get consumers off the couch, while keeping costs under control.
If you’re in distribution, you must put additional resources toward staying relevant.
Despite tough headwinds and shifting consumer habits, Bart Watson’s message was clear: craft beer’s story isn’t over—it’s just evolving. For those willing to adapt, tell better stories, and invest smartly, there’s a path forward. Now’s the time to lean in.