A year after recording the first production decline of the modern era, U.S. craft brewers were back in black in 2021.
The Brewers Association (BA), a not-for-profit trade organization representing small and independent craft brewers, shared that production at U.S. craft brewers who meet its craft brewer definition collectively increased production +8%, to an estimated 24.8 million barrels of beer in 2021.
Although 2021’s numbers marked an improvement from the pandemic-induced declines of 2020, when craft production fell -10% (revised from -9.3%), it was still 1.5 million barrels short of craft’s peak of 26.3 million barrels produced in 2019.
“Craft brewer sales rebounded in 2021, lifted by the return of draught and at-the-brewery traffic,” BA chief economist Bart Watson said in a press release. “However, the mixed performance across business models and geographies, as well as production levels that still lag 2019, suggest that many breweries remain in recovery mode. Add in continuing supply chain and pricing challenges, and 2022 will be a critical year for many brewers.”
Notably, these numbers are preliminary and Watson will provide additional insights in the weeks ahead, including during the 2022 Craft Brewers Conference in Minneapolis May 2-5.
Market Share Tops 13%, Retail Dollar Value Nears $27 Billion
The production growth pushed the overall craft beer market share by volume to 13.1% in 2021, up nearly 1% from the 12.2% share of the beer category in 2020.
Craft beer retail dollar value was estimated at $26.9 billion in 2021, accounting for 26.8% market share of the beer category and +21% growth compared to 2020 when the retail value of craft beer declined -22%, to $22.2 billion. The BA attributed the stronger dollar sales growth compared to volume growth due to channel shift back to on-premise retailers, which offers higher average retail value.
The overall beer market increased volume +1% in 2021, not including flavored malt beverages and hard seltzers. Add those in and the total taxed-as-beer market increased +2%.
Number of Craft Breweries Hits Record High – 646 Openings, 178 Closings
The number of operating craft brewers reached an all-time high of 9,118, up from 8,764 in 2020, which breaks out to:
- 1,886 microbreweries (+32 vs. 2020), those producing fewer than 15,000 barrels annually and produce packaged beer for distribution;
- 3,307 brewpubs (+88, vs. 2020), those producing beer primarily for consumption on their own premises and operate on-site restaurants;
- 3,702 taproom breweries (+231 vs. 2020), those producing beer for consumption on their own premises and package beer for to-go sales, but do not operate restaurants;
- 223 regional craft breweries (+3 vs. 2020), those producing between 15,000 and 6 million barrels of beer annually, mostly for distribution.
Taproom breweries posted the most year-over-year growth, followed by brewpubs, microbreweries and regional craft breweries.
The total number of operating breweries in 2021 was 9,247, an increase from the 9,025 in operation in 2020.
The days of 1,000-plus new breweries opening appear to be gone. In 2021, 646 new breweries opened. The number of openings declined for a second consecutive year, which the BA attributed to “a more mature market” as well as “ongoing pandemic challenges and rising interest rates.”
The number of closures declined year-over-year, with 178 shutting down compared to 346 closings in 2020. The BA said the slowdown in closures was “helped by a combination of better sales numbers and additional government relief through the Restaurant Revitalization Fund.”
“While the boom in breweries of a few years before has certainly slowed, the continued growth in small breweries shows the solid foundation of demand for their businesses and beers,” Watson said in the release.
According to the BA, craft breweries accounted for more than 172,643 direct jobs, a +25% increase from the 138,000 direct jobs in 2020. Those numbers reflect a rebound from the job cuts during the early months of the pandemic.