Craft Beer Growth Slows as U.S. Brewery Count Tops 4,600

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Although overall craft beer growth has slowed considerably, production for America’s small and independent craft brewers was still up eight percent through the first six months of 2016, according to a new report from the Brewers Association.

The BA — which represents America’s small and independent brewers and sourced production estimates from hundreds of craft beer companies as part of its annual mid-year review — did not specify exactly how many barrels small brewers have made this year, but the report suggests that more than 13 million barrels of craft beer have already been produced in 2016.

Around this time last year, craft brewers had brewed 12.2 million barrels, according to the BA, and were growing at a 16 percent clip. In 2014, meanwhile, BA-defined craft beer production had grown 18 percent through the first six months of the year.

“While the craft brewing industry is entering a period of maturation, most markets are not near saturation,” Bart Watson, the group’s chief economist said via a press release. “As craft’s base gets larger, as with any industry, it becomes more difficult for it to grow at the same percentage rate. Yet there is still tremendous dynamism reflected in eight percent growth for craft.”

It’s a familiar refrain from Watson, who for months has been hinting at a craft beer slowdown.

“As the industry matures and moves into the mainstream, slower growth is a natural part of that maturation,” Watson told Brewbound in March, adding that slower segment-wide growth in 2015 was largely caused by sluggish sales from craft’s largest players.

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Watson made that point again today, writing in a blog post that there is “clear evidence that any slowdown in growth is primarily centered on regional craft brewers.”

Indeed, sales at grocery and convenience stores for three of the top five BA-defined craft beer companies — Boston Beer, Sierra Nevada and Gambrinus — were down as much as 3 percent through July 10, according to market research firm IRI Worldwide.

Watson attributed those declines to “fewer low-hanging growth opportunities, competition from the large brewers, acquisitions of fast growing breweries, as well as simply a more crowded beer marketplace.”

But regional brewery performance is still just one part of the equation. According to Watson, growth amongst microbreweries – those companies making less than 15,000 barrel annually – and brewpubs are “nearly as strong as ever.”

“We found 30 percent plus growth in breweries that were less than 15,000 barrels last year,” he wrote.

But slower growth hasn’t curbed brewery openings. In fact, a record high 4,656 breweries are now operating in the U.S. as of June 30, an increase of 917 over the previous comparable 12-month period, according to the BA. There are also still another 2,200 breweries in planning, the organization added.

“As long as beer lover demand for craft brewed beer continues to rise, there will be new market opportunities for small and independent craft brewers,” Watson said in a video announcement that accompanied the release.

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