Search “craft beer” and “decline” together and you’ll encounter page after page of doom-and-gloom articles declaring the industry dead and buried. The average American consumer, it would seem, has made like known craft beer naysayer Anthony Bourdain and moved on from artisanal stouts and independent IPAs. But the truth isn’t quite so dramatic: Craft beer is a maturing industry like any other, experiencing some contraction after years of explosive growth. The numbers don’t look great, but it’s important to remember this isn’t a dying industry, but a changing one. Unfortunately, for the time being, those changes are coming with some falling sales and closing breweries.
Data from the Brewers Association, the main promotion and lobbying organization for the craft beer industry, shows craft beer sales dropped by 2% in the first half of 2023. Circana, a market research firm tracking grocery, retail, and convenience stores, found craft beer sales fell 3.3%, or about $158 million, in 2024 in a study of its own. That year, according to the Brewers Association (BA), was the first in almost two decades that more breweries closed than opened — at 399 out of around 9,700, it’s a small percentage, but the comparison to the 335 openings is notable. In order to understand how we got here, it’s important to look back at the history of American craft beer, which includes a relatively recent fever pitch that would have been virtually impossible to maintain.
The history of craft beer in America
The story of craft beer starts with homebrewing. The lingering effects of the Prohibition meant there were only around 100 breweries in the United States by the 1970s. Most people got their beer from a few behemoth producers like Anheuser-Busch and Coors. Those mass-produced lagers left many thirsty for variety, especially if they’d traveled to places like England, Germany, or Belgium and tried some of their nuanced ales and lagers. In 1978, President Jimmy Carter legalized homebrewing for the first time since before the Prohibition, and enthusiasts got to work. Many of these homebrewers began going pro, opening seminal breweries like Anchor Brewing Company, Sierra Nevada, and Samuel Adams, and introducing American drinkers to some of the best-known and best-loved beer styles. By 1990, there were nearly 200 breweries operating taprooms and brewpubs.
Over the decades, craft beer grew and evolved with different trends, like the soaring popularity of bitter West Coast IPAs during the early 2000s, followed by sweeter hazy IPAs in the 2010s. For many fans, craft beer became a lifestyle, with annual events like the Great American Beer Festival; beer-rating, -discussing, and -trading forums like BeerAdvocate, Untappd, and the now-defunct RateBeer; and, especially during the hazy boom, people waiting in hours-long lines to snag limited releases. By 2020, craft beer was everywhere: Nearly 8,300 breweries meant nearly every city had a few local taproom options, and supermarket shelves were lined with fruited sours and pastry stouts.
Craft beer has declined before
Perhaps the best reminder that the current struggles of the craft beer industry are par for the course when it comes to an industry of small, independent businesses is the fact that we previously saw a dip in the 1990s. Some of the best breweries in the United States opened their doors in this decade, like Allagash Brewing Company and Dogfish Head, both in 1995. But there was such a boom, in fact, that the industry became overly saturated. Consumers had gone from having no craft beer options and not much knowledge about beer styles, to — depending on where they were in the country — lots of choices to figure out. And in the rush to join this movement on the rise, many breweries launched and produced beer without much experience or know-how, or quality control measures in place. That meant mediocre and even bad beer entering the marketplace, which turned some imbibers off this whole “craft beer” thing.
Nearly 200 breweries closed during the late 1990s, which sounds like nothing in our current state of having thousands nationwide. But in 1990, as confirmed by data from the Alcohol and Tobacco Tax Bureau (TTB), there were about 250 breweries, and in 1999, there were 1,991. That means two things: One, that 200 breweries was a pretty significant percentage of the entire industry at the time, and two, that the number still managed to keep growing, with closures not deterring hopeful owners and brewers. Thanks to them, American craft beer was revving into high gear.
What’s behind craft beer’s challenges now
If craft beer set out for a relatively smooth ride to success throughout the first couple of decades of the 21st century, what threw a wrench in the works? It was really a perfect storm of factors. First, breweries have been hammered by rising costs at every turn. What started as supply chain chokeholds during the early pandemic never really let up. Ingredients for everything from the beer itself to food a brewery might serve in the taproom are pricier, as are things like the tall aluminum cans craft breweries prefer. If tariffs go into effect this year, that aluminum could become even more cost-prohibitive. Plus, breweries’ would-be customers are feeling the squeeze, too, cutting back on discretionary spending like pints out or four-packs in the face of inflation and the rising prices of necessities like groceries and gas.
Added to that is changing consumer behavior and preferences. People got used to staying home more during the pandemic, and an increasing emphasis on wellness ever since has motivated many to drink less alcohol. And when they do drink, they’ve got so many more options than they did even five years ago. Ready-to-drink cocktails and hard seltzers, teas, and juices now compete for the same shelf space as beer, and rather than geeking out over beer-style nuances, shoppers are driven by things like flavor, calories, sugar, alcohol, and prices, boosting cross-category imbibing and erasing category loyalty.
The future of craft beer: Not over, just different
In 2025, craft breweries are facing a ton of obstacles, and having to compete with not only more fellow breweries than ever, but those aforementioned categories. While wine and spirits are struggling as well — also due to factors including costs and people imbibing less — many demographics are shifting and drinking less beer and more spirits, or instead seeking out things like cannabis beverages. Breweries, however, are showing resilience, flexibility, and that signature creativity that put craft beer on the map.
Some are reapproaching the lineups of what they brew, focusing on a thoughtfully curated lineup of flagship beers that people know, love, and can continue to rely on. Others are expanding into other categories they’re passionate about or that are popular now, joining instead of trying to beat spirits, wine, cider, and more. Breweries are making some of the best canned cocktails out there, and meeting consumers where they’re at with non-alcoholic beers, sparkling hop waters, and even hemp beverages. Breweries are also leaning toward being local gathering hubs rather than chasing lofty distribution goals, and are motivating people to go out with exciting events and experiences from book clubs to drag shows to bonsai-growing classes. While craft beer might look different today than it did five, 10, or 20 years ago, an industry built on innovation and determination can’t be considered down for the count.
