Craft breweries across the country produced 23.1 million barrels of beer in 2020, about 9% less than in 2019, while total sales fell 22% to $ 22.2 billion, according to the Brewers Association. This was the first drop in production since the BA began tracking sales and volumes in the 1980s.
Despite this punch, only 346 breweries have closed nationwide, or 4% of the industry, on par with the previous year. In the meantime, 716 new breweries have opened, so despite the effects of the pandemic, there is now an all-time high of 8,764 brewers, with around a thousand more still in the works.
That’s a far cry from the devastation the BA predicted last April, when an investigation showed it was possible that half of all breweries would close if pandemic shutdowns continued.
So, is the pint glass half full? That’s what BA chief economist Bart Watson believes. “There are some things … which are not as negative as we expected when we started following [this]”, he explains.” This is not the dramatic collapse we expected. The small brewers have been able to hold out. ”
The two main reasons breweries were able to stay alive were government funding (breweries received over $ 400 million in emergency aid in 2020) and their ability to quickly change their business model (sometimes from overnight) and start packing beer and selling it for take out or delivery. . The latter point has also helped breweries stay alive as other hotel businesses, like restaurants, have suffered heavy losses.
As 2021 approaches, Watson says he believes the craft brewing industry will recover to some extent, especially during the warmer months, with growth of at least 3-4% and may -be 5 to 6%. This would still leave breweries below their volume levels as of 2019, but it would be a positive indicator.
He also warns: “We are not out of the woods yet. For some breweries, sales may not pick up quickly enough to warrant another year of activity, especially as winter approaches.
“We’ll have a really good idea of that by the end of summer, early fall,” adds Watson. “2021 will make many of these numbers clearer in context. “