Despite pandemic, more craft breweries are operating now than ever

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It wasn’t looking good for craft breweries this time last year. On-site and draught sales were way down, and half of breweries indicated in a survey that they’d have to close for good if stay-at-home orders were extended into June. Plus, about 10,000 craft brewery workers nationwide were laid off in the first few months of the pandemic.

At the time, Bart Watson, economist for the Brewers Association (BA) — the Boulder-based trade group for the country’s 8,000-plus craft breweries — said hundred of breweries could close in 2020, but cautioned that many would have closed anyway; that is, the pandemic would’ve only hastened their closures.

Now, new data from the BA bears out the impact of the pandemic on the craft brewing industry.

In 2020, small and independent brewers produced about 23.1 million barrels of beer — which marked a 9% decline from the year prior. As production was down, so was revenue, about 22% from 2019. And, jobs were down too, 14% from the year before.

But, again, this decline was expected. It was a unique year, with unique challenges. And the silver lining is that maybe it wasn’t so bad as those earlier projections anticipated.

“2020 was obviously a challenging year for many small brewers, but also one that proved their resilient and entrepreneurial nature,” Watson says. “In a year where U.S. draught sales were down more than 40%, small brewers found new ways to connect with their customers and keep their businesses running.”

In fact, breweries continued to open in 2020, reaching an all-time high of 8,764 across the country. That breaks down to 716 openings and 346 closings, about only half of which can be attributed to the pandemic — market competitiveness was another main factor, which was evident before 2020. Watson says government financial support was a big contributor to keeping the number of closings low.

“While many small breweries will remain under pressure until they can fully reopen and welcome their communities into their breweries, the 2020 closing rate has remained on par with 2019, suggesting that the vast majority of breweries will survive going forward,” he says.

Though there were fewer openings than in years prior, one interesting aspect of the data is that taprooms (which sell 25% of beer on-site) surpassed brewpubs (which have a food component) as the highest growth category.

The BA also tracks “breweries in planning,” which can be anything from a person with a business plan to a brewery that’s already secured a space and equipment. Watson says there are about 1,000 such breweries the BA knows about, and he anticipates “a large number of breweries to open in 2021.”    

For the full data set, visit brewersassociation.org

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