U.S. craft brewers face tough battle

Doom and gloom are gripping the American craft brewing movement as sales drop and a worrying number of breweries have closed.

And now Trump’s tariffs will add to their problems, with rising costs of imported grain and aluminium used to make cans.

In its annual report, the Brewers’ Association that represents craft producers says the sector produced 23.1 million barrels in 2024, a 4 per cent decrease on 2023. The craft sector’s market share is flat at 13.3 per cent.

The association defines a craft brewery as one that makes up to six million barrels a year. In 2024 it reports there were 9,861 craft producers. They included 430 new breweries that opened but at the same time 529 closed.

It puts the blame for closures on rising costs and increased competition. The global giants such as AB InBev, Molson Coors and Heineken can demand big discounts on raw materials from their suppliers. This reduces their production costs and means they can sell beer more cheaply than smaller brewers.

The giants have also snapped up a number of craft brewers in a bid to take a slice of the lucrative sector. Anheuser Busch, the American arm of AB InBev, the world’s biggest brewer and owner of Budweiser, has bought Goose Island, 10 Barrel, Blue Point, Breckenridge, Devil’s Backbone, Elysian, Four Peaks, Golden Road, Shock Top and Craft Brew Alliance. The last named includes Redhook in Seattle, founded in 1981 and one of the key early players in the craft revolution.

Molson Coors, a Canadian/American conglomerate, has bought Leinenkugel’s, one of the oldest breweries in the U.S., founded by German immigrants in 1867.

MC announced this year it would close the brewery at Chippewa Falls, Wisconsin, and move production to its main plant in Milwaukee. Members of the Leinenkugel family offered to buy back their brewery but Molson Coors refused to engage with them and Chippewa Falls remains closed.

It ends 157 years of brewing on a site chosen by the family as the soil was ideal for growing both grain and hops.

Heineken followed its usual tactic of buying a 28 per cent share in a brewery and then increasing its stake until it owns the entire business. It followed that practice in the UK with Beavertown and in California it took a chunk of Lagunitas, which brews a popular IPA, and now owns the whole company.

Florida Ice & Farm bought another 19^th century brewery, Genesee of Rochester, New York State, In 2020 FI&F closed the Magic Rock Brewery in Vermont, the eighth biggest craft brewery in the U.S., which had been in operation for 25 years. It moved production to the Genesee plant that now concentrates on own-label brands for supermarkets, including the giant Walmart.

On top of competition from the giant producers, craft companies now have to face Trump’s tariffs. The problems these create can be seen at Right Proper Brewing Company close to Washington DC. It’s run by Leah and Thor Cheston, who are DC residents (pictured above)..

They buy grain from Bamberg in Germany and Fakenham in Norfolk, UK. Aluminum [aluminium] comes from Canada. The Chestons say they will have to pass on the costs of imported goods by increasing prices for their beers.

Brewing industry analyst Aaron Gore (above) says “the independent sector is struggling and the mood is grim. Small brewers have small margins and the business environment is not helped by tariffs.

“Raw material prices are due to rise by a significant amount.”

Aaron is known as “the Ale Chaser” and is a consultant for the craft beer sector as well as cider and mead makers. He says the biggest obstacle facing the craft sector is pessimism.

“The large breweries are divesting all but their most successful craft brands. There’s an accelerated feeling of doom and gloom.”

He adds that many producers are predicting the death of the craft sector and he quotes the poet WB Yeats: “We’re slouching towards Bethlehem.”

He describes tariffs as inflationary and a tax on the importing country.

“They will have an impact on finished goods in the domestic market. Tariffs on grain and aluminum will hurt American canning companies, beer producers and consumers.

“The largest companies can negotiate the best agreements with their suppliers. This means even less supply for small brewers and prices rising even higher and faster.”

Top craft brewers

The biggest craft brewer in the U.S. is also the country’s oldest brewery, Yuengling of Pottsville, Pennsylvania, founded by German immigrants in 1829. Today the family-owned company produces 2.9 million barrels a year. As well as lager, Yuengling is renowned for its Porter, a surprising British/Irish style for a brewery with German roots.

Other names among the Top 50 craft breweries that will be familiar to British beer drinkers are Boston, Sierra Nevada, Brooklyn, Great Lakes, Odell, Alaska, Russian River and Rogue. BrewDog’s American subsidiary is also in the top 50.

The overall brewing industry is dominated by the giants Anheuser Busch, Molson Coors, Heineken, Pabst, Diageo/Guinness and Kirin of Japan.