A record number of breweries opened or went out of business in 2017, according to statistics released this week by the Brewers Association.
An estimated 997 new breweries opened, and 165 closed, the Colorado-based craft beer trade group announced. Both are highs since the American beer industry was jolted by the birth of craft beer in the late 1970s.
The country had 6,266 breweries in 2017, the Brewers Association said — a stark contrast to just 10 years ago, when the nation had about 1,500 breweries.
Brewers Association chief economist Bart Watson said the volatility is “a natural function of a maturing industry.”
With 2,500 more breweries planned, he said, the industry is likely to see more fluctuation.
“It’s a competitive marketplace,” he said. “I think we’re going to continue to see that closings number continue to rise.”
But Watson described the state of craft beer as fundamentally strong, driven in part by the growth of the smallest breweries.
Craft beer nudged upward to 12.7 percent of the American beer industry; for the past two years, it was 12.1 percent. As recently as 2013, it was less than 8 percent.
Craft beer grew 5 percent in 2017 in terms of overall volume — a slowdown from the previous year. In 2016, craft beer volume grew 6.2 percent, which ended a six-year run of double-digit annual growth.
The combination of more breweries opening and slowing growth led to an industry crash in the late 1990s, but Watson said craft beer is girded against a similar outcome in the coming years.
“The fundamental demand for craft beer is stronger than it was back then,” he said. “The affinity of the brands the brewers have built is stronger than back then.”
Also, he said, while larger regional brewers struggle to stand out on crowded store shelves, smaller brewers have thrived — and will continue to do so — by selling beer to consumers in brewery taprooms.
The Brewers Association once set a goal of craft beer commanding 20 percent of the industry by 2020, an idea from which it retreated last year. Watson said the goal “was always aspirational.” The biggest reason that it won’t be met, he said, is simple: acquisitions.
Any brewery with more than 25 percent ownership by a big beer company does not qualify under the Brewers Association’s definition of a “craft brewer.” Therefore, breweries that once figured into the statistics — such as Lagunitas, Ballast Point, Founders and 14 breweries owned by Anheuser-Busch and Miller — no longer do.