US craft beer boom continues to slow
Sales of craft beer in the US continued to slow in the first half of 2017, with the sector experiencing continued but much steadier growth year-on-year, according to the latest statistics from the Brewer’s Association.
Mid-year figures from the Brewers Association, the trade group for independent brewers, shows that American craft beer production volumes increased 5% in the first half of 2017.
That’s slightly less than 2016’s mid-year increase of 8% and notably lower than the 16% mid-year production increase of 2015.
“The growth pace for small and independent brewers has stabilized at a rate that still reflects progress but in a more mature market. Although more difficult to realize, growth still exists,” said Bart Watson, chief economist, Brewers Association.
“The beer world is highly competitive and there is certainly a mixed bag in terms of performance. Some breweries are continuing to grow, whereas others are having to evolve their position and nurture new opportunities to ensure they keep pace. Many brewers are benefiting from on-premises and taproom sales, and recent state-based reforms have the potential to help brewers in new regions capitalize on this growth.”
Despite production volumes slowing, the number of craft breweries operating in the US continues to grow. As of June 30, there were 5,562 operating breweries in the US, an increase of 906 from the same time period the previous year. Additionally, there were approximately 2,739 breweries in planning, according to the Brewers Association.
It adds further weight to the caution demonstrated by US stockbroker Goldman Sachs. Last week its analysts downgraded stocks in two of the biggest US brewing companies citing a continued drop in US beer consumption and a shift towards wine by millennials.
The stockbroker downgraded its rating of shares in Constellation Brands from “buy” to “neutral”, causing its value to slide by 1.2% on Monday (July 24). The stockbroker also downgraded Boston Beer Co., rating its stocks as ‘to sell’, causing its value to drop by 5%.
However the Brewers Association is confident about the sector’s future growth prospects, despite millennials apparent taste for wine.
“Craft brewers are beacons of innovation, revitalization and collaboration,” added Watson. “Their contributions to not only the brewing community, but the overall economy, are significant and invaluable. From reforming the federal excise tax to ensuring the right to free and fair market access, opportunities exist to help craft brewers continue to thrive.”